ROMA – This very refined study of theFood and Agriculture Organization of the United Nations (FAO) which involved 156 countries confirms that hidden costs in global agri-food systems amount to approximately 12 trillion dollars per year. Of this amount, approximately 70% (8 thousand and 100 million dollars, or if you prefer 8.1 trillion dollars) derives from unhealthy eating habits and are linked to worrying non-communicable diseases (NCDs) such as heart disease, stroke and diabetes, far outweighing the costs related to environmental degradation and social inequalities. The State of Food and Agriculture 2024 (SOFA), builds on the 2023 edition to provide even more in-depth analysis, using real cost accounting to expose the full range of costs and benefits associated with the production, distribution and consumption of food, including those that do not reflect in market prices, the so-called “hidden costs and benefits”.
The tracks for a change. The report updates these cost estimates, divides them by food system types, and lays out a path for transformative change in our food systems. The study details how global hidden costs are largely driven by hidden health costs, followed by hidden environmental costs, in most industrialized agri-food systems in upper-middle and high-income countries. Examining health impacts, the report identifies 13 dietary risk factors. These include insufficient intake of whole grains, fruits and vegetables; excessive sodium consumption; and a high intake of red and processed meat, with notable differences across various agri-food systems.
Hidden costs according to the type of agri-food system. Historically, agri-food systems have moved from traditional to industrial, each with different outcomes and hidden costs. For this reason, the report explores how hidden costs manifest themselves in different types of agri-food systems around the world. To facilitate the analysis, the research introduces a typology that categorizes agri-food systems into six distinct groups:
– prolonged crisis
– traditional
– expanding
– diversification
– formalization and industrial.
A focused understanding of the challenges. This framework allows for a focused understanding of the unique challenges and opportunities inherent in each system, enabling the development of tailored policies and interventions. For example:
1) – Diets low in whole grains: they are the main food risk factor in most agri-food systems, in systems of prolonged crisis (those experiencing prolonged conflicts, instability and widespread food insecurity) and in traditional systems (characterised by lower productivity, limited adoption of technologies and chains of the shortest value)
2) – Low intake of fruit and vegetables: the main concern is a low intake of fruits and vegetables.
3) – The high sodium intake: is another significant issue that shows an upward trend as agri-food systems evolve from traditional to formalized, peaking in the latter and then declining in industrial systems.
4) – The high consumption of red meat: On the contrary, the high consumption of red and processed meat increases steadily during the transition from traditional to industrial systems, where it ranks among the top three food risks.
The hidden costs of environmental impact: 720 billion dollars. In addition to food risks, the environmental impact of unsustainable agricultural practices contributes substantially to the burden of hidden costs. The costs associated with greenhouse gas emissions, nitrogen runoff, land use changes and water pollution are particularly high in countries with diversified agri-food systems, where rapid economic growth is associated with consumption patterns and evolving production, reaching an estimate of 720 billion dollars. Formalized and industrial agri-food systems also face significant environmental costs.
Poverty and malnutrition in traditional systems. However, countries facing prolonged crises bear the highest relative environmental costs, amounting to 20 percent of their GDP. Social costs, including poverty and undernutrition, are more widespread in traditional agri-food systems and those affected by prolonged crises. These social costs represent 8 and 18 percent of GDP respectively, highlighting the urgent need for improved livelihoods and integrated humanitarian assistance, development and peacebuilding efforts. SOFA 2024 highlights the importance of adapting to local contexts and capturing stakeholder priorities. This is illustrated through case studies representing different countries and types of agri-food systems, including Australia, Brazil, Colombia, Ethiopia, India and the United Kingdom. A call for collective action
In short: more sustainable agri-food systems. Overall, the report calls for a value-based transformation of agri-food systems to make them more sustainable, resilient, inclusive and efficient. This requires going beyond traditional economic measures such as GDP by using real cost accounting to recognize hidden costs. With this approach, decision makers can make more informed choices that improve the social value of an agri-food system, recognizing its essential roles in food security, nutrition, biodiversity conservation and cultural identity. Achieving this transformation also requires bridging sectoral divides, aligning policies on health, agriculture and the environment, and ensuring that benefits and costs are shared equitably among all stakeholders.
Today’s choices will determine our future. “The choices we make now, the priorities we set and the solutions we implement will determine our shared future. The truth
change begins with individual actions and initiatives, supported by enabling policies and targeted investments. Transforming global agri-food systems is critical to achieving the Sustainable Development Goals and ensuring a prosperous future for all,” said FAO Director-General QU Dongyu.
There is a need for collective action. The report highlights that this transformation requires collective action, involving primary producers, agri-food companies, governments, financial institutions, international organizations and consumers. While addressing hidden costs will result in uneven impacts across different affected social groups, countries and implementation times, supporting policies and regulations can help minimize disruptions, particularly for small producers and agricultural businesses, promoting early adoption of sustainable practices and protecting vulnerable social groups.
Key recommendations include:
1 • Provide financial and regulatory incentives to promote the adoption of sustainable practices along the food supply chain and to limit power imbalances between stakeholders in agri-food systems.
2 • Promote healthier diets by enacting policies that make nutritious food more affordable and accessible and
reduce hidden health-related costs.
3 • Encourage reductions in greenhouse gas and nitrogen emissions, harmful land use change and biodiversity loss through labeling and certification, voluntary standards and two-way initiatives diligence at the sector level.
4 • Provide consumers with clear and accessible information on the environmental, social and health impacts of food choices, while ensuring that vulnerable families can also benefit from the change.
5 • Harness the significant purchasing power of food supplies across institutions to reshape food supply chains and improve food environments, coupled with comprehensive education on food and nutrition.
6 • Guarantee an inclusive rural transformation that overcomes certain historical models while avoiding the worsening of
hidden environmental, social and health costs during transitions.
7 • Strengthen governance and civil society to create an enabling environment to accelerate innovations for sustainable and equitable agri-food systems
What is SOFA. It is a comprehensive annual overview of topics related to FAO’s mandate. It places particular emphasis on emerging areas of development, such as agri-food systems and digital technologies in agriculture. This is the first time the flagship publication has focused on the same theme for two consecutive years, highlighting the urgency of a transformation of the agri-food system to ensure a sustainable future.
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