A global imperative


In a recent analysis by the Food and Agriculture Organization of the United Nations (FAO), the true toll of the current agri-food system has been unveiled, revealing alarming implications for human health, the environment and the society at large. This interconnected web of activities, encompassing everything from farming to disposal, now carries a staggering hidden cost estimated at $10 trillion annually, nearly 10 per cent of the world’s GDP.
According to a news report published on these pages, the 2023 edition of “The State of Food and Agriculture (SOFA)” emphasizes that over 70 per cent of these hidden costs in agri-food systems stem from unhealthy diets prevalent in high- and upper-middle-income countries. This contributes to a myriad of issues, including obesity, non-communicable diseases and substantial labor productivity losses.
Environmental repercussions account for a significant portion, constituting one-fifth of the total costs. Factors such as greenhouse gas and nitrogen emissions, land-use change, and water use pose a global challenge, yet their true scale remains underestimated due to data limitations.
The burden falls disproportionately on low-income countries, where hidden costs exceed a quarter of their GDP, exacerbating poverty and undernourishment. For Pakistan, these costs amount to approximately $161.8 billion, which constitute around 15 per cent of the country’s GDP, with an emphasis on health-related hidden costs.
The world governments have been urged to take pragmatic steps towards utilizing true cost accounting, which require a transformative approach. It calls for innovative research, data investments and capacity building to scale the application of true cost accounting transparently and consistently.
The call to action is clear – countries and private sectors must conduct regular, detailed analyses followed by strategic actions to mitigate these hidden harms. True cost accounting is advocated as a pragmatic approach, emphasizing its role in addressing the climate crisis, poverty, inequality and food security. The distribution of hidden costs in Pakistan, particularly in the environmental realm, underscores the complexity of the agri-food system’s impact on the nation’s economy and society.
As the FAO unveils the hidden costs of agri-food systems, the imperative for global awareness and action intensifies. Governments worldwide are urged to take transformative steps, emphasizing the need for innovative research, data investments, and capacity building to transparently and consistently apply true cost accounting. Stakeholders at all levels are called upon to play a pivotal role in steering agri-food systems towards sustainability, as the world grapples with the consequences of an unsustainable status quo.