Food & Climate
The hidden costs within global agrifood systems amount to approximately $12 trillion annually, according to a refined study by the Food and Agriculture Organization of the United Nations (FAO) involving 156 countries.
Of this figure, around 70% ($8.1 trillion) arise from unhealthy dietary patterns and are linked to alarming non-communicable diseases (NCDs) such as heart disease, stroke, and diabetes, far exceeding the costs related to environmental degradation and social inequalities, according to the study which seen by “Food & Climate” platform.
The study about the hidden costs within global agrifood systems details how global hidden costs are largely driven by health hidden costs, followed by environmental hidden costs, in more industrialized agrifood systems in upper-middle- and high-income countries.
Health impacts
In examining health impacts, the report identifies 13 dietary risk factors. These include insufficient intake of whole grains, fruits, and vegetables; excessive sodium consumption; and high intake of red and processed meats, with notable differences across various agrifood systems.
To facilitate analysis, the research introduces a typology that categorizes agrifood systems into six distinct groups: protracted crisis, traditional, expanding, diversifying, formalizing, and industrial. This framework allows for a targeted understanding of the unique challenges and opportunities inherent to each system, enabling the development of tailored policies and interventions.
For instance, while diets low in whole grains are the leading dietary risk factor across most agrifood systems, in protracted crisis systems (those experiencing prolonged conflict, instability, and widespread food insecurity) and traditional systems (characterized by lower productivity, limited technology adoption, and shorter value chains), the primary concern is a low intake of fruits and vegetables.
High sodium intake is another significant concern, exhibiting an upward trend as agrifood systems evolve from traditional to formalizing, peaking in the latter and then decreasing in industrial systems.
Conversely, high consumption of processed and red meat steadily increases throughout the transition from traditional to industrial systems, where it ranks among the top three dietary risks.
Beyond dietary risks, the environmental impact of unsustainable agricultural practices contributes substantially to the hidden cost burden.
Costs associated with greenhouse gas emissions, nitrogen runoff, land-use changes, and water pollution are particularly high in countries with diversifying agrifood systems – where rapid economic growth is coupled with evolving consumption and production patterns – reaching an estimated $720 billion.
Formalizing and industrial agrifood systems also face significant environmental costs. However, countries facing protracted crises bear the highest relative environmental costs, equivalent to 20 percent of their GDP.
Social costs
Social costs, including poverty and undernourishment, are most prevalent in traditional agrifood systems and those affected by protracted crises. These social costs represent 8 and 18 percent of GDP, respectively, highlighting the urgent need for improved livelihoods and integrated humanitarian, development, and peacebuilding efforts.
SOFA 2024 underscores the importance of adapting to local contexts and capturing stakeholder priorities. This is illustrated through case studies representing diverse countries and agrifood system types, including Australia, Brazil, Colombia, Ethiopia, India, and the United Kingdom.
The study Key recommendations include: Providing financial and regulatory incentives to advance the adoption of sustainable practices along the food supply chain and to limit power imbalances between agrifood systems stakeholders.
Promoting healthier diets by enacting policies that make nutritious food more affordable and accessible and reduce health related hidden costs.
Incentivizing reductions in greenhouse gas and nitrogen emissions, harmful land-use change and biodiversity loss through labelling and certification, voluntary standards and industry-wide due diligence initiatives.
Empowering consumers with clear, accessible information about the environmental, social and health impacts of food choices, while ensuring even vulnerable households can benefit from change.
Harnessing the significant purchasing power of food procurement through institutions to reshape food supply chains and improve food environments, combined with comprehensive food and nutrition education.
Ensuring inclusive rural transformation that leapfrogs certain historical patterns avoiding the worsening of environmental, social and health hidden costs during transitions.
Strengthening governance and civil society to create an enabling environment to accelerate innovations for sustainable and equitable agrifood systems