Islamabad, The Food and Agriculture Organization of the United Nations (FAO) has released a groundbreaking report revealing the hidden costs of current agrifood systems worldwide, amounting to a staggering $10 trillion annually. This figure represents nearly 10% of the world’s GDP. The comprehensive study, which encompasses 154 countries, highlights the profound impact of these costs on health, the environment, and society.
According to United Nations Information Centre, Islamabad, over 70% of these hidden costs are attributed to unhealthy diets, predominantly in high- and upper-middle-income countries. These diets contribute to obesity, non-communicable diseases, and significant labor productivity losses. Additionally, about one-fifth of the total hidden costs are related to environmental factors, including greenhouse gas and nitrogen emissions, land-use changes, and water use. These environmental costs pose a substantial global challenge, with their scale often underestimated due to data limitations.
The report indicates that low-income countries bear a disproportionate burden of these hidden costs, exceeding a quarter of their GDP, thereby exacerbating poverty and undernourishment. To address these challenges, the SOFA report advocates for the adoption of true cost accounting (TCA), urging countries to conduct regular, detailed analyses and implement strategic actions to mitigate these hidden harms.
In Pakistan, the total quantified hidden costs of the agrifood system amount to approximately $161.8 billion USD (2020 PPP), which is around 15% of the country’s GDP. These costs are further broken down into environmental, social, and health dimensions, with unique challenges highlighted in each category. For instance, Pakistan’s environmental hidden costs are 10 percentage points lower than those in lower-middle-income countries, whereas health-related hidden costs show a 9-percentage-point increase.
The report emphasizes the necessity for governments to utilize true cost accounting, highlighting that addressing issues like the climate crisis, poverty, inequality, and food security requires a transformative approach. It calls for innovative research, data investments, and capacity building to scale the application of TCA transparently and consistently.
As the FAO unveils the hidden costs of agrifood systems, it underscores the urgent need for global awareness and action, calling on stakeholders at all levels to contribute to transforming agrifood systems towards sustainability.