FAO Urges Transformation of Local Agri-Food System to Cut Hidden Costs

Tue Nov 14 2023
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ISLAMABAD: The United Nations Food and Agriculture Organization (FAO) recommended on Tuesday the transformation of the local agri-food system to reduce its hidden costs and ensure quality, nutrient-filled food for everyone.

During the launching ceremony of the FAO report on the 2023 edition of The State of Food and Agriculture (SOFA), Country Representative Ms. Florence Rolle stated that per capita food consumption in Pakistan was estimated at $1 per day, which was costlier and consumed more resources.

Despite being an agrarian economy, Pakistan still imports food commodities worth $9 billion annually. FAO is working to reduce the hidden costs of food through collaboration with various stakeholders and efforts to enhance production efficiency, said Assistant FAO Representative (Programme) Dr. Amer Irshad.

The FAO revealed the staggering hidden costs of current agri-food systems, reaching an alarming $10 trillion annually, nearly 10% of the world’s GDP. This comprehensive study covering 154 countries highlights the multifaceted impact of hidden costs on health, the environment, and society.

The 2023 edition of The State of Food and Agriculture (SOFA) notes that over 70% of these hidden costs originate from unhealthy diets prevalent in high- and upper-middle-income countries, contributing to obesity, non-communicable diseases, and substantial labor productivity losses.

A significant portion, one-fifth of the total costs, is environment-related, attributed to factors like greenhouse gas and nitrogen emissions, land-use change, and water use, posing a global challenge with underestimated scales due to data limitations.

Low-income countries bear a disproportionate burden, with hidden costs exceeding a quarter of their GDP, highlighting the severe impact on poverty and undernourishment.

Pakistan’s Agri-Food System Bears $161.8 Billion in Hidden Costs: FAO

For Pakistan, the total quantified hidden costs of the agri-food system amount to approximately $161.8 billion, constituting around 15% of the country’s GDP. These costs are categorized into environmental ($28.9 billion), social ($20.9 billion), and health ($112 billion) dimensions.

The report advocates for governments to utilize true cost accounting, emphasizing that addressing 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 true cost accounting transparently and consistently.

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