Why is it in the news?

• Food and Agriculture Organization (FAO) released State of Food and Agriculture (SOFA) Report 2023.
• For the first time, FAO dedicates two consecutive editions of SOFA to the same theme.
• The 2023 report presents national-level True Cost Accounting (TCA) assessments to uncover hidden impacts of agrifood systems. The 2024 report will focus on in-depth targeted assessments to identify ways to mitigate these impacts.

Key Findings

• Global quantified Hidden Costs (HCs) of agrifood systems amount to 10 trillion dollars or more.
• HCs arising from dietary patterns lead to diseases and lower labour productivity, particularly in high- and middle-income countries.
• Environmental HCs constitute over 20% of quantified HCs and are equivalent to almost one-third of agricultural value added.
• HCs, estimated at 27% of Low-income Countries’ GDP, are associated with poverty and undernourishment.

Need for True Cost Accounting (TCA) Estimation

• Measure the actual impact of complex Agri-systems.
• Make responsible decisions and improve sustainability.
• Improve the performance and resilience of Agri-systems.

Factors Affecting Current Functioning of Agri-food Systems

• Institutional policy and distribution lapses.
• Free riding.

Challenges in Calculating True Cost

• Lack of political will.
• Resistance to change.
• Data availability and its quality.