India’s total hidden costs of agrifood systems were around $1.3 trillion annually, largely driven by unhealthy dietary patterns and dietary risks associated with non-communicable diseases, found the State of Food and Agriculture 2024 report by Food and Agriculture Organization (FAO) of the United Nations.
These dietary risks stemming from high consumption of processed foods and additives and low consumption of plant whole foods and beneficial fatty acids form over 73 per cent of the total hidden costs of agrifood systems in India, showed the report released on November 8, 2024.
The dietary patterns are linked to alarming non-communicable diseases (NCD), such as heart disease, stroke and diabetes, far exceeding the costs related to environmental degradation and social inequalities.
“In traditional agrifood systems of India, healthier diets and avoiding a western-style diet trajectory of overconsumption of sugars, salt and processed foods account for roughly two-thirds of the avoided health and environmental hidden costs,” it pointed out.
The State of Food and Agriculture report analysed the quantified hidden costs for 153 countries, covering 99 per cent of the world’s population.
A hidden cost associated with food production, consumption, and distribution, as per the report was defined as any cost to an individual or society that is not reflected in the market price of a product or a service.
Thus, overconsumption of processed foods and additives in India had a hidden cost of $128 billion (at 2020 purchasing power parity), while low consumption of plant whole food and fruits and beneficial fatty acids had a combined hidden cost of $846 billion annually.
In examining health impacts, the report identified 13 dietary risk factors. These included insufficient intake of whole grains, fruits and vegetables; excessive sodium consumption; and high intake of red and processed meats, with notable differences across various agrifood systems.
The other major contributors to hidden costs included social costs like poverty among agrifood workers (driven by distributional failures in agrifood systems, leading to low productivity and wages), environmental costs like emission of greenhouse gases (GHG) along the entire food value chain from food and fertiliser production and energy use and nitrogen emissions at primary production level (ammonia and nitrogen oxide emissions to air, nitrogen runoff and leaching) and from sewerage.
Health hidden costs by dietary pattern (in $million, 2020 purchasing power parity)
Dietary risks associated with non-communicable diseases
India’s hidden costs were third largest in the world, after China and the United States — $1.8 trillion and $1.4 trillion, respectively.
In fact, globally, the dominant quantified hidden costs were those arising from unhealthy dietary patterns that lead to diseases and lower labour productivity.
Overall, the hidden costs of agrifood systems amounted to approximately $12 trillion annually, the analysis involving 156 countries found. Of this figure, around 70 per cent ($8.1 trillion) arose from unhealthy dietary patterns.
These health-related costs exhibited considerable variation across countries, but were most prominent in high- and middle-income countries.
The 2024 SOFA report built on the 2023 edition to provide an in-depth analysis, utilising ‘true cost accounting’ method to expose the full range of costs and benefits including those that are not reflected in market prices. The 2024 report updated the previous cost estimates.
Overall, the report called for a value-driven transformation of agrifood systems to make them more sustainable, resilient, inclusive and efficient.
“This requires going beyond traditional economic measures like GDP by utilising true cost accounting to recognise hidden costs. With this approach, decision-makers can make more informed choices that enhance the societal value of agrifood systems, acknowledging their essential roles in food security, nutrition, biodiversity conservation, and cultural identity,” it said.
Some key recommendations from the report included:
• Providing financial and regulatory incentives to advance the adoption of sustainable practices along the food supply chain and to limit power imbalances between agrifood systems stakeholders
• Promoting healthier diets by enacting policies that make nutritious food more affordable and accessible and reduce health related hidden costs
• Incentivising reductions in greenhouse gas and nitrogen emissions, harmful land-use change and biodiversity loss through labelling and certification, voluntary standards and industry-wide due diligence initiatives
• Empowering consumers with clear, accessible information about the environmental, social and health impacts of food choices, while ensuring even vulnerable households can benefit from change