The Hidden Costs of Agrifood Systems: A Global Dilemma

The FAO’s flagship report reveals the staggering impact of hidden costs on global agrifood systems

A new report by the Food and Agriculture Organization (FAO) has shed light on the hidden costs of agrifood systems, revealing their significant impact on global economies and societies. The report, titled “The State of Food and Agriculture,” provides a comprehensive analysis of the hidden costs and benefits associated with the production and consumption of food. These hidden costs, which account for nearly 10 percent of global GDP, have far-reaching implications for issues such as health, the environment, and poverty. The FAO aims to raise awareness of these costs and encourage action to steer agrifood systems towards greater sustainability.

Unveiling the Hidden Costs

The report identifies unhealthy diets as the primary driver of the hidden costs, accounting for over 70 percent of the total. Unhealthy diets, characterized by the consumption of ultra-processed foods high in fats and sugars, contribute to obesity and non-communicable diseases, leading to labor productivity losses. This trend is particularly prevalent in wealthier countries. Additionally, approximately one-fifth of the hidden costs are attributed to environmental factors, including greenhouse gas emissions, land-use change, and water use, affecting all countries. Low-income countries bear the brunt of these hidden costs, with more than a quarter of their GDP impacted, compared to less than 12 percent in middle-income countries and less than eight percent in high-income countries. The report also highlights the significant hidden costs associated with poverty and undernourishment, particularly in low-income nations.

The Call for Action

To address the hidden costs of agrifood systems, the FAO emphasizes the need for regular and detailed analysis by governments and the private sector using true cost accounting. This approach allows for a comprehensive understanding of the costs and enables effective mitigation strategies. While previous attempts at measurement have been made, the FAO’s report is the first to disaggregate these costs at the national level, ensuring comparability across categories and countries. The agency calls for action from policymakers, private-sector actors, researchers, and consumers to transform agrifood systems through investment and innovation. This transformation will require measures such as taxation, subsidies, and legislation to address issues related to the climate crisis, poverty, inequality, and food security.


The FAO’s report on the hidden costs of agrifood systems serves as a wake-up call for global stakeholders. The staggering impact of these costs on economies, health, and the environment necessitates immediate action. By adopting true cost accounting and implementing targeted mitigation strategies, governments and the private sector can work together to transform agrifood systems for the betterment of all. The FAO’s commitment to dedicating two consecutive editions of the report to this theme highlights the urgency of the issue. It is now up to decision-makers, researchers, and consumers to heed this call to action and pave the way for sustainable and inclusive agrifood systems.

Watch more: YouTube Video