Hidden Costs Of Agrifood Systems And Recent Trends From 2016 To 2023

This background paper to The State of Food and Agriculture 2023 examines the annual hidden costs of agrifood systems across 2016–2023 for 154 countries. Hidden costs include environmental hidden costs from greenhouse gas emissions, nitrogen emissions, land-use transitions, and blue water withdrawals; social hidden costs associated with undernourishment and poverty; and health hidden costs from unhealthy dietary patterns. The expected value of hidden costs is around 13 trillion 2020 purchasing power parity (PPP) dollars. This is equivalent to approximately 10 percent of global gross domestic product (GDP) PPP in 2023 and around 35 billion 2020 PPP dollars per day. Environmental hidden costs averaged around 3 trillion 2020 PPP dollars over the 2016–2023 period; health-related costs averaged 9.3 trillion 2020 PPP dollars; and social hidden costs averaged 560 billion 2020 PPP dollars. Health hidden costs are the largest across all world regions, apart from sub-Saharan Africa, where costs from poverty and undernourishment prevail. Hidden costs also report an upward trend from 2016 to 2023, driven primarily by health hidden costs.Overall, hidden costs place a disproportionate burden on low-income countries.Left unchecked, these hidden costs will depress future growth and development. However, these hidden costs do not reflect the GDP PPP loss that may be avoided by transitioning to more sustainable agrifood systems. In other words, while these may be avoidable, the quantified hidden costs do not indicate the costs of transitioning to alternative systems. Subsequent studies are needed to quantify these.

This background paper to The State of Food and Agriculture 2023 reviews the methods used, as well as the data required, to estimate the hidden environmental, social and health costs associated with agrifood systems. The studies analysed are based on the true cost accounting approach, which can facilitate improved decision-making by policymakers, businesses, farmers, investors and consumers. The reviewed studies demonstrate that hidden costs of agrifood systems are considerable, and that action is needed at global, national and local levels. To apply true cost accounting at the country level, the methods developed must be downscaled and the data limitations overcome. This review goes through each cost category – environmental, social and health – and proposes approaches to deal with them, with a focus on country-level estimates and analysis, especially in data-scarce countries. Where data are not available or time is limited, methods combining secondary data are suggested. In some cases, the suggestion is to collaborate with research centres.The paper further argues that, when addressing hidden costs in agrifood systems, trade-offs may arise, which may require the use of more complex tools, such as partial and general equilibrium models, to analyse their impacts on different areas. In general, the extent of the compromise will be minimized if there are at least as many policy instruments as there are objectives. For example, if a country seeks to restore fish stocks and address rural poverty, restricting catch alone could increase poverty in the artisanal fishing community. Adding income support, however, could allow both objectives to be met.

This background paper to The State of Food and Agriculture 2023 introduces true cost accounting (TCA) as an approach to measure and value the costs and benefits generated by agrifood systems in order to facilitate improved decision-making. The paper is based on a systematic review of existing TCA approaches and of relevant case studies in agrifood systems. Guidance on conducting TCA is provided, especially in relation to data collection. The paper ends with a discussion on scaling and harmonizing TCA for agrifood systems transformation. Based on a systematic literature review, the paper describes seven TCA approaches and identifies nine case studies deemed most relevant to policymakers in agrifood systems. It then proceeds to describe the different stages and steps needed to undergo a TCA study, such as: setting the boundaries of their assessment; determining the materiality of indicators; and estimating data points that are not readily available. The latter is particularly important given that a lack of (robust) data at low cost is potentially the main barrier to applying and scaling up TCA, especially in middle- and low-income countries.Because a TCA study requires a substantial amount of data to be collected, it is important to start with the data that are available and use this to determine which data points are crucial to answering a given policy question, to then focus on refining the available data points and filling in missing data points that are essential to the analysis. Another important bottleneck to scaling up TCA is the issue of harmonization, which the paper argues is impeded by the number of approaches available. As future steps for scaling up TCA, harmonization by integrating methodologies and adopting shared principles, ideas and requirements, is thus recommended.

This book features a comprehensive foresight assessment, exploring the pressures — threats as well as opportunities — on the global agriculture & food systems between now and 2050. The overarching aim is to help readers understand the context, by analyzing global trends and anticipating change for better planning and constructing pathways from the present to the future by focusing on the right questions and problems. The book contextualizes the role of international agricultural research in addressing the complex challenges posed by UN 2030 Agenda and beyond, and identifies the decisions that scientific leaders, donors and policy makers need to take today, and in the years ahead, to ensure that a global population rising to nine billion or more combined with rising incomes and changing diets can be fed sustainably and equitably, in the face of the growing climate threats.

Many people worldwide lack adequate access to clean water to meet basic needs, and many important economic activities, such as energy production and agriculture, also require water. Climate change is likely to aggravate water stress. As temperatures rise, ecosystems and the human, plant, and animal communities that depend on them will need more water to maintain their health and to thrive. Forests and trees are integral to the global water cycle and therefore vital for water security – they regulate water quantity, quality, and timing and provide protective functions against (for example) soil and coastal erosion, flooding, and avalanches. Forested watersheds provide 75 percent of our freshwater, delivering water to over half the world’s population. The purpose of A Guide to Forest–Water Management is to improve the global information base on the protective functions of forests for soil and water. It reviews emerging techniques and methodologies, provides guidance and recommendations on how to manage forests for their water ecosystem services, and offers insights into the business and economic cases for managing forests for water ecosystem services. Intact native forests and well-managed planted forests can be a relatively cheap approach to water management while generating multiple co-benefits. Water security is a significant global challenge, but this paper argues that water-centered forests can provide nature-based solutions to ensuring global water resilience.

We all witness, in advertising and on supermarket shelves, the fierce competition for our food dollars. In this engrossing exposé, Marion Nestle goes behind the scenes to reveal how the competition really works and how it affects our health. The abundance of food in the United States--enough calories to meet the needs of every man, woman, and child twice over--has a downside. Our over-efficient food industry must do everything possible to persuade people to eat more--more food, more often, and in larger portions--no matter what it does to waistlines or well-being. Like manufacturing cigarettes or building weapons, making food is big business. Food companies in 2000 generated nearly $900 billion in sales. They have stakeholders to please, shareholders to satisfy, and government regulations to deal with. It is nevertheless shocking to learn precisely how food companies lobby officials, co-opt experts, and expand sales by marketing to children, members of minority groups, and people in developing countries. We learn that the food industry plays politics as well as or better than other industries, not least because so much of its activity takes place outside the public view. Editor of the 1988 Surgeon General's Report on Nutrition and Health, Nestle is uniquely qualified to lead us through the maze of food industry interests and influences. She vividly illustrates food politics in action: watered-down government dietary advice, schools pushing soft drinks, diet supplements promoted as if they were First Amendment rights. When it comes to the mass production and consumption of food, strategic decisions are driven by economics--not science, not common sense, and certainly not health. No wonder most of us are thoroughly confused about what to eat to stay healthy. An accessible and balanced account, Food Politics will forever change the way we respond to food industry marketing practices. By explaining how much the food industry influences government nutrition policies and how cleverly it links its interests to those of nutrition experts, this path-breaking book helps us understand more clearly than ever before what we eat and why.

Public support mechanisms for agriculture in many cases hinder the transformation towards healthier, more sustainable, equitable, and efficient food systems, thus actively steering us away from meeting the Sustainable Development Goals and targets of the Paris Agreement. This report sets out the compelling case for repurposing harmful agricultural producer support to reverse this situation, by optimizing the use of scarce public resources, strengthening economic recovery from the COVID-19 pandemic, and ultimately driving a food systems transformation that can support global sustainable development commitments. The report provides policymakers with an updated estimate of past and current agricultural producer support for 88 countries, projected up until 2030. The trends emerging from the analysis are a clear call for action at country, regional and global levels to phase out the most distortive, environmentally and socially harmful support, such as price incentives and coupled subsidies, and redirecting it towards investments in public goods and services for agriculture, such as research and development and infrastructure, as well as decoupled fiscal subsidies. Overall, the analysis highlights that, while removing and/or reducing harmful agricultural support is necessary, repurposing initiatives that include measures to minimize policy trade-offs will be needed to ensure a beneficial outcome overall. The report confirms that, while a few countries have started repurposing and reforming agricultural support, broader, deeper, and faster reforms are needed for food systems transformation. Thus, it provides guidance (in six steps) on how governments can repurpose agricultural producer support – and the reforms this will take.

This book explains how True Cost Accounting is an effective tool we can use to address the pervasive imbalance in our food system. Calls are coming from all quarters that the food system is broken and needs a radical transformation. A system that feeds many yet continues to create both extreme hunger and diet-related diseases, and one which has significant environmental impacts, is not serving the world adequately. This volume argues that True Cost Accounting in our food system can create a framework for a systemic shift. What sounds on the surface like a practice relegated to accountants is ultimately a call for a new lens on the valuation of food and a new relationship with the food we eat, starting with the reform of a system out of balance. From the true cost of corn, rice and water, to incentives for soil health, the chapters economically compare conventional and regenerative, more equitable farming practices in and food system structures, including taking an unflinching look at the true cost of cheap labour. Overall, this volume points towards the potential for our food system to be more human-centred than profit-centred and one that has a more respectful relationship to the planet. It sets forth a path forward based on True Cost Accounting for food. This path seeks to fix our current food metrics, in policy and in practice, by applying a holistic lens that evaluates the actual costs and benefits of different food systems, and the impacts and dependencies between natural systems, human systems, agriculture and food systems. This volume is essential reading for professionals and policymakers involved in developing and reforming the food system, as well as students and scholars working on food policy, food systems and sustainability.