The Hidden Price of Food: Revealing the True Costs of Agrifood Systems

Author: Janice Man

Editors: Jenneffer Tibaes, Sarah Anderson, Wanja Nyaga

Acknowledgements: NNEdPro Global Institute for Food, Nutrition and Health; International Academy of Nutrition Educators (IANE); BMJ Nutrition, Prevention & Health; Author of the Article – Davis et al.; ChatGPT. 

The 2023 State of Food and Agriculture report focuses on unpacking the full impacts and dependencies of agrifood systems, going beyond traditional measures to reveal the hidden costs that food production and consumption impose on the environment, health, and society. It emphasises the need for a holistic assessment of agrifood systems to better understand these interconnected challenges and guide more sustainable policies.

At the core of the report is true cost accounting (TCA), a framework that captures not only the market value of food but also the external costs often ignored in decision-making. These include greenhouse gas emissions, land degradation, water use, malnutrition, and healthcare expenses associated with dietary choices. By translating these impacts into monetary terms, TCA makes them visible and comparable, helping policymakers and stakeholders weigh trade-offs more effectively. 

The findings reveal the scale of the issue: the global hidden costs of agrifood systems are estimated at US$12.7 trillion (2020 PPP), roughly 10% of world GDP (Gross Domestic Product). Even under conservative assumptions, these costs are at least US$10.8 trillion, and potentially much higher. This staggering figure highlights the urgent need for transformation, as current food systems are not only inefficient but also unsustainable and inequitable.

By quantifying these costs, the report provides a strong evidence base for reform. It demonstrates how subsidies, policies, and investments can be reformed to mitigate negative impacts while enhancing benefits, such as healthier diets, reduced emissions, and fairer labour practices. The analysis also underlines the importance of cross-country comparisons to identify where interventions could have the greatest effect. 

Finally, the report positions this edition as a starting point for future action. The FAO plans to expand on this work in the 2024 report, offering more detailed case studies and practical examples of TCA in action, especially in countries with limited data and resources. This continuity signals a broader shift toward integrating true cost approaches into global agrifood policy and decision-making. 

Read the full study here. 

Method 

ChatGPT was used for sectioning the topics in this blog and to clean up grammar. 

References  

Davis, B., Mane, E., Gurbuzer, L.Y., Caivano, G., Piedrahita, N., Schneider, K., Azhar, N. et al. 2023. Estimating global and country-level employment in agrifood systems. FAO Statistics Working Paper Series, No. 23-34. Rome, FAO. https://www.fao.org/3/cc4337en/cc4337en.pdf  

FAO. 2022. The State of Food and Agriculture 2022. Leveraging agricultural automation for transforming agrifood systems. Rome, FAO. https://www.fao.org/3/CC7724EN/CC7724EN.pdf  

Kraak, V.I., Swinburn, B., Lawrence, M. & Harrison, P. 2014. An accountability framework to promote healthy food environments. Public Health Nutrition, 17(11): 2467–2483. https://doi.org/10.1017/S1368980014000093  

HLPE (High Level Panel of Experts). 2017. Nutrition and food systems – A report by the High Level Panel of Experts on Food Security and Nutrition of the Committee on World Food Security. Rome, FAO. http://www.fao.org/3/a-i7846e.pdf  

UNSCN (United Nations System Standing Committee on Nutrition). 2016. Impact Assessment of Policies to Support Healthy Food Environments and Healthy Diet – Implementing the Framework for Action of the Second International Conference on Nutrition. Rome. https://www.unscn.org/uploads/web/news/document/DiscPaper3-EN-WEB.pdf  

Capitals Coalition. n.d. The Capitals Approach. In: Capitals Coalition. [Cited 8 December 2022]. https://capitalscoalition.org/capitals-approach  

FAO, IFAD, UNICEF, WFP & WHO. 2022. The State of Food Security and Nutrition in the World 2022. Repurposing food and agricultural policies to make healthy diets more affordable. Rome, FAO. https://doi.org/10.4060/cc0639en  

Ewert, B. & Loer, K. 2021. Advancing behavioural public policies: in pursuit of a more comprehensive concept. Policy and Politics, 49(1): 25–47. https://doi.org/10.1332/030557320X15907721287475  

Cesareo, M., Sorgente, A., Labra, M., Palestini, P., Sarcinelli, B., Rossetti, M., Lanz, M. et al. 2022. The effectiveness of nudging interventions to promote healthy eating choices: A systematic review and an intervention among Italian university students. Appetite, 168: 105662. https://doi.org/10.1016/j.appet.2021.105662 

Elwin, P., Amadi, E., Mitchell, E. & Hunter, P. 2023. Financial markets roadmap for transforming the global food system. In: Planet Tracker. https://planet-tracker.org/wp-content/uploads/2023/03/Financial-Markets-Roadmap-for-transforming-the-Global-Food-System.pdf  

Riemer, O., Mairaj Shah, T.M. & Müller, A. 2023. The role of true cost accounting in guiding agrifood businesses and investments towards sustainability – Background paper for The State of Food and Agriculture 2023. FAO Agricultural Development Economics Working Paper, No. 23-13. Rome, FAO.  

Meybeck, A. & FAO, eds. 2014. Voluntary Standards for Sustainable Food Systems: Challenges and Opportunities – A Workshop of the FAO/UNEP Programme on Sustainable Food Systems. Rome, FAO. https://www.fao.org/3/i3421e/i3421e.pdf  

Pernechele, V., Fontes, F., Baborska, R., Nkuingoua, J., Pan, X. & Tuyishime, C. 2021. Public expenditure on food and agriculture in sub-Saharan Africa – Trends, challenges and priorities. Rome, FAO. https://www.fao.org/3/cb4492en/cb4492en.pdf  

TEEB. 2018. TEEB for Agriculture & Food: Scientific and Economic Foundations. Geneva, Switzerland, UN Environment. https://teebweb.org/wp-content/uploads/2018/11/Foundations_Report_Final_October.pdf  

Gemmill-Herren, B., Baker, L.E. & Daniels, P.A., eds. 2021. True cost accounting for food – Balancing the scale. London, New York, Routledge.