State of Food and Agriculture Report – 2023

November 10, 2023

India’s total hidden costs of agrifood systems have reached approximately $1.1 trillion, making it the third-largest contributor in the world, following China and the United States, as revealed by the State of Food and Agriculture report by the Food and Agriculture Organization (FAO) of the United Nations. The report, which assessed 154 countries, was released on November 6, 2023.

Understanding Hidden Costs in Agrifood Systems

Hidden costs in agrifood systems encompass various factors, including:

Environmental Costs: These include expenses associated with greenhouse gas emissions, nitrogen emissions, water usage, and land-use changes.
Health Costs: Hidden health costs result from losses in productivity due to unhealthy dietary patterns.
Social Costs: These costs are linked to poverty and productivity losses associated with undernourishment among agrifood workers.

Global Perspective on Hidden Costs

India’s share of these hidden costs accounted for 8.8% of the global total, which amounts to $12.7 trillion. China contributed 20%, and the United States contributed 12.3% to the global hidden costs, according to the FAO’s report. While there may be some uncertainty in the global estimated figure, even with this uncertainty, the costs are estimated to be around $10 trillion.

Breakdown of Hidden Costs in India

In India, the burden of disease, stemming from productivity losses due to unhealthy dietary patterns, accounted for the largest share of hidden costs, representing 60%. This was followed by the social cost of poverty among agrifood workers at 14%, and the environmental cost of nitrogen emissions at 13%.

Top 10 Countries with Environmental, Social, and Health Hidden Costs (in millions)

China: Total hidden costs – $2,555,424
USA: Total hidden costs – $1,576,469
India: Total hidden costs – $1,123,226
Russia: Total hidden costs – $533,602
Brazil: Total hidden costs – $503,069
Germany: Total hidden costs – $328,407
Indonesia: Total hidden costs – $319,515
Japan: Total hidden costs – $267,867
UK and Northern Ireland: Total hidden costs – $255,421
Mexico: Total hidden costs – $249,713

Key Findings

Globally, the dominant quantified hidden costs arise from dietary patterns that lead to diseases and lower labor productivity. These health-related costs are most prominent in high- and middle-income countries. Unhealthy dietary patterns accounted for 80.2% and 85% of total costs in the top two countries, respectively. In these countries, the second-highest hidden agrifood costs were nitrogen emissions and land use.

Implications for Decision-Making

The report underscores the urgent need to factor these hidden costs into decision-making processes to transform agrifood systems. The interactions between agrifood systems and the environment, economy, nutrition, health, and society are closely linked to the UN-mandated Sustainable Development Goals (SDGs), particularly SDG 1 (no poverty), SDG 2 (zero hunger), and SDG 3 (good health and well-being).

Variation in Hidden Costs by Income Level

The majority of hidden costs were generated in upper-middle-income countries (39% of total quantified hidden costs) and high-income countries (36% of total costs). Lower-middle-income countries accounted for 22%, while low-income countries contributed 3%.

Environmental Costs and Their Composition

Environmental costs, which are likely underestimated, accounted for about 20% of total quantified hidden costs caused by agrifood systems globally. More than half of these costs were associated with nitrogen emissions, followed by greenhouse gas emissions, land-use changes, and water use.

« Previous Post Next Post »