By Muhammad Amaan
The so-called hidden costs of global food systems amount to around 10 trillion dollars a year, around 10 per cent of global gross domestic product (GDP), the Food and Agriculture Organisation (FAO) said in its report on Monday.
The State of Food and Agriculture report said these hidden costs are mainly caused by unhealthy diets and environmentally damaging agriculture.
The Rome-based organisation said this year’s report looked into the true cost of food for sustainable agrifood systems.
The report introduces the concept of hidden environmental, health and social costs and benefits of agrifood systems and proposes an approach true cost accounting (TCA) to assess them.
By far, the largest share of these costs, more than 70 per cent, is caused by an unhealthy diet, according to the report.
It said the ever-increasing proportion of fat and sugar as well as ultra-processed foods in many people’s diets was problematic.
“This leads to obesity and other diseases, which not only puts a strain on healthcare systems, but also causes losses in labour productivity.
“Another reason for the true global economic cost of current food systems is environmental, according to the FAO.
“Greenhouse gas emissions and nitrogen deposition as well as unsustainable water consumption contribute to this,” said the report.
It noted that low-income countries were particularly affected by this health, environmental and social costs.
“In order to reduce these immense costs and to quantify the costs properly, the FAO is calling for regular analyses by politicians and businesses.
“Governments could, for example, use taxes, subsidies and regulation to adapt current food systems the report says.
“This would allow the true cost of food to be recognised and redirected in order to make food systems fit for the future.
“In 2024, the FAO would like to identify more concrete ways of reducing hidden costs,” the report stated.