In a stark revelation, the Food and Agriculture Organization (FAO), a United Nations agency, has disclosed that the global food and agriculture system inflicts a staggering $10 trillion or more in “hidden costs” on the global economy each year. These concealed expenses result from unhealthy dietary choices, greenhouse gas emissions, and undernourishment, as announced on Monday, Nov. 6
The FAO conducted an extensive analysis encompassing 154 countries to ascertain the actual expenditure associated with the agrifood system. The results were disquieting, with the global quantified hidden costs reaching a colossal $12.7 trillion in 2020, constituting nearly 10 percent of the world’s gross domestic product, according to the FAO’s estimations.
“The future of our agrifood systems and, indeed, of our planet hinges on our willingness to acknowledge these true costs and understand how we all contribute to them,” underscored FAO Director-General Qu Dongyu.
The comprehensive study unearthed some disconcerting findings. A staggering 73 percent of these hidden costs are intricately tied to unhealthy diets, predominantly comprising ultra-processed foods, fats, and sugars. Such dietary patterns have led to an alarming rise in obesity and non-communicable diseases like diabetes. Consequently, these health challenges have translated into losses in labor productivity, further intensifying the overall economic burden.
More than 20 percent of these concealed costs are attributed to environmental factors. This encompasses emissions of greenhouse gases, the use of nitrogen, water consumption, and alterations in land use practices. The profound impact of these environmental issues accentuates the urgency for sustainable and environmentally responsible practices in the global food and agriculture sector.
Low-income countries bear the brunt of these hidden costs, with such expenses accounting for a staggering 27 percent of their GDP, significantly higher than the 11 percent for middle-income nations and less than eight percent for wealthier countries. This disparity underlines the critical need for international efforts to address and alleviate these economic and health disparities.
The revelation of these hidden costs underscores the urgency of implementing measures to rectify the global food and agriculture system. The FAO’s call for acknowledging these costs serves as a clarion call for more sustainable and health-conscious practices, not only for the betterment of the global economy but also for the well-being of our planet and its inhabitants.