Olive oil production line at a factory in Italy
AFP news agency reported on November 6 that the Food and Agriculture Organization of the United Nations (FAO) said that the food and agricultural system adds at least $10,000 billion in "hidden costs" to the global economy every year.
The FAO study analysed 154 countries to reveal the “true cost” of the agri- food system, with hidden costs stemming from unhealthy diets, emissions and malnutrition.
The global hidden cost is estimated to be around US$12.7 trillion in 2020, accounting for nearly 10% of global gross domestic product.
“The future of our agri-food systems depends on being willing to acknowledge these real costs and understand how they all contribute,” said FAO Director-General Qu Dongyu.
Research shows that 73% of the hidden costs are linked to poor diets, high in processed foods, fats and sugars, which contribute to obesity and non-communicable diseases such as diabetes. The consequences include lost productivity, the FAO said.
More than 20% of hidden costs are related to environmental issues including greenhouse gas and nitrogen emissions, water use and land use change.
Low-income countries are hardest hit by these hidden costs, accounting for 27% of GDP compared with 11% in middle-income countries and less than 8% in rich countries.
According to Carbon Pulse, citing expert Andrea Cattaneo, who led the research team, FAO hopes that countries can rely on preliminary estimates to improve.
Switzerland, along with other countries, is working with the FAO to try to do this, he said, while Canada and the Rockefeller Foundation in the US have previously carried out related studies calculating the real costs.
A second study will be conducted next year with more countries assessing the best ways to reduce their potential costs. Mr Cattaneo hopes the dual study approach with comparable results will encourage governments to join in.
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