Obesity, nitrogen emissions or undernutrition… Current agri-food systems impose hidden costs on health, the environment and society amounting to more than 10,000 billion dollars per year, estimates the United Nations United Food and Agriculture Organization (FAO).
The agency is undertaking this quantification exercise for the first time, for 154 countries, in its annual report on the “World Situation of Food and Agriculture”.
The True Cost of Food
The aim is to have better information on “the true cost of food” to make possible adjustments in terms of taxation, subsidies, legislation or regulations.
According to FAO calculations, around 73% of hidden costs are linked to poor diets – too high in fats, sugars or ultra-processed foods. It can cause obesity and diseases such as diabetes, which in turn lead to loss of productivity. These problems particularly affect higher income countries.
Around 22% of hidden costs are linked to the environment, with the FAO counting nitrogen and greenhouse gas emissions, changes in land use such as deforestation or water use. All countries are affected and, according to the FAO, these costs are probably underestimated.
The hidden costs linked to the poverty of people working in the agri-food sector and undernourishment, a little less than 5% of the total, weigh particularly heavily in low-income countries.
10% of global GDP
According to the organization’s analysis, hidden costs reached $12.7 trillion in 2020, or about 10% of global GDP once differences in the cost of living between countries (at power parity) are taken into account. purchase). They weigh much more heavily in low-income countries, where they represent 27% of gross domestic product, compared to 11% in middle-income countries and 8% in high-income countries.
The FAO recognizes, however, that some data is missing and that certain impacts are excluded, such as exposure to pesticides, land degradation, antimicrobial resistance or food poisoning.
It is also complicated to evaluate criteria such as the use of pesticides to increase productivity, which can both reduce poverty but also lead to ecological degradation in the long term, notes the organization.
To make its estimates, the FAO also claims to have integrated “hidden benefits” while recognizing that certain notions, such as cultural identity linked to food, cannot be monetized. Taking into account all these elements that could affect its analysis, it nevertheless considers “very likely” that the hidden costs amounted in 2020 to “at least 10,000 billion dollars”.
Would taking into account all the hidden costs of food production cause prices to jump? It depends on the hidden costs targeted and the instruments used, answers the report. They weigh much more heavily in low-income countries, where they represent 27% of gross domestic product, compared to 11% in middle-income countries and 8% in high-income countries.
For example, it is possible to impose taxes or regulations on farmers or food manufacturers to encourage them to move away from less virtuous environmental practices, while giving them advice on how to limit these costs, says the organization.
If public money is used to promote healthier and more sustainable diets, this does not affect household budgets. But “in the long term, improved public health leads to increased productivity and can translate into higher incomes for households,” the FAO also gives as an example.
Having completed an initial estimate of hidden costs, the organization plans to dedicate its 2024 annual report to in-depth targeted assessments, with the aim of highlighting the best ways to act.