Latest FAO report reveals hidden costs of agri-food systems

Najnowszy raport FAO ujawnia ukryte koszty systemów rolno-spożywczych

The FAO’s latest report, titled “The State of Food and Agriculture 2023,” reveals a startling reality: our global agri-food systems, which are essential to sustain life and countries’ economies, generate huge hidden health and environmental costs. These costs, estimated to be at least $12 trillion. per year, which is equivalent to about 10 percent. of global GDP, shed new light on the challenges facing modern agriculture and food production. This detailed report from the United Nations Food and Agriculture Organization. The Food and Agriculture Organization’s report, which includes analysis of data from 154 countries, highlights the urgent need to review our current agricultural and food practices in the context of their long-term health and environmental impacts.

FAO report – the true cost of agrifood systems

The FAO report, based on an analysis by Dr. Steven Lord of Oxford, focuses on the real costs associated with sustainable agrifood systems. The document introduces key concepts of hidden costs, which are related to environmental, health and social impacts. It proposes True Cost Accounting (TCA) to accurately assess these hidden costs. The implementation of this approach is to proceed in two stages: starting with TCA assessments at the national level to raise public awareness, before moving on to more detailed and targeted analyses that will prioritize potential solutions and directions for transformation. The initiative, which represents the first attempt to conduct national-level evaluations in 154 countries, aims to enable more efficient and informed management of agri-food systems.

Unhealthy diets and rising health costs

The FAO report specifically notes that more than 70 percent of the These hidden costs are driven by unhealthy diets characterized by a high intake of highly processed foods, fats and sugars. These eating habits lead to widespread health problems, such as obesity and non-communicable diseases, which significantly affect productivity losses at work. The problem is most pronounced in higher-income countries, where the availability and accessibility of such products contributes to serious health problems on a large scale.

Uneven distribution of hidden costs

The FAO report also highlights the uneven distribution of hidden costs around the world. Low-income countries are the hardest hit, with hidden costs accounting for more than a quarter of their GDP. This contrasts with the situation in middle (less than 12 percent) and high-income countries (less than 8 percent), where these costs are much lower. In middle- and high-income countries, right after environmental issues, unhealthy diets have the greatest impact on lowering productivity in agrifood systems. In low-income countries, on the other hand, they are mainly due to social problems related to malnutrition and poverty.

Environmental costs

Environmental factors, according to the FAO report, account for 20 percent of the of the total hidden costs of agri-food systems, which translates into $2.9 trillion. According to the FAO, this figure is likely an underestimate. Among them are greenhouse gas emissions at each stage of the supply chain, including climate costs associated with food and fertilizer production and energy consumption. In addition, they include nitrogen emissions from both primary production and wastewater pollution. The use of the so-called. blue water, leading to shortages, declines in agricultural productivity and labor, as well as malnutrition and changes in land use, results in ecosystem degradation.

More than half (52 percent) of these environmental costs are due to nitrogen emissions, mainly from runoff into surface waters and ammonia emissions into the air. The remaining costs are divided between greenhouse gas emissions (30 percent), land use change costs (14 percent) and water use (4 percent). These costs are a burden for all countries, but lower-income countries bear twice the costs of middle- and higher-income countries.

FAO’s call for global action

United Nations Food and Agriculture Organization. For the first time ever, the Food and Agriculture Organization will devote two consecutive issues of “The State of Food and Agriculture” to the same topic. This year’s report presents preliminary estimates, while next year’s report will focus on in-depth, targeted assessments to determine the best ways to mitigate them. Governments can use various levers to adjust agri-food systems and achieve better results overall. These include taxes, subsidies, legislation and regulations.

The report calls on governments to use true-cost accounting to transform agri-food systems and address the climate crisis, poverty, inequality and food security. He notes that in order to scale the use of real costing, innovations in research and data will be needed, as well as investments in data collection and capacity building to make decisions in a transparent and consistent manner.

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