Hidden Costs In Nigeria’s Food System Hits $105bn – FAO

The environmental, health and social hidden costs of Nigeria’s agrifood system were at least $105.13 billion in 2020, a new report by the Food and Agriculture Organisation (FAO) has revealed.

The hidden costs of global agrifood systems was worth about $12.7 trillion, according to the 154-country study, which makes a case for true cost accounting to guide policy.

It said although the current food systems provide nourishment and sustain the economy, they also impose huge hidden costs on health and the environment.

The report found that lower-middle-income countries show the highest variation in the distribution of quantified hidden costs.

“In Nigeria and the United Republic of Tanzania, social hidden costs are associated with poverty and undernourishment, dominate, while in Pakistan, Vietnam and particularly Egypt, it is those from unhealthy dietary patterns causing obesity and NCDs (non-communicable diseases), as more commonly seen in high-income countries,” it said.

Nigeria accounts for 0.8 percent of global hidden costs of the world’s food system, and 51.1 percent of total hidden costs in West Africa ($205.89 billion).

Hidden costs are presented as costs to individuals or society, not reflected in the market price; a monetary measure of losses attributable to declines in productivity or to environmental damages that are comparable with GDP purchasing power parity, which is based on market transactions, according to the report.

It said: “Underpinning the unsustainability of agrifood systems are costs that are hidden behind price tags and go unaccounted for by agrifood systems actors. These hidden costs – including water pollution, biodiversity loss and NCDs – are driven by negative externalities and other market failures (or their spillovers), as well as by policy and institutional failures.

“The key to transitioning agrifood systems towards sustainability is to measure and value these hidden costs across the environmental, social and health dimensions.”

The FAO report, which represents initial estimates, is the first to disaggregate these costs down to the national level ensuring they are comparable between countries across cost categories.

The organisation said it will dedicate two editions of The State of Food and Agriculture to the same theme, for the first time.

Next year’s report will be centred on in depth targeted assessments to recognise the best ways to mitigate them.

Taxes, subsidies, legislation and regulation are among levers that the report urges governments to pull to change agrifood systems and to address the climate crisis, poverty, inequality and food security.

FAO director general, QU Dongyu,said: “In the face of escalating global challenges: food availability, food accessibility and food affordability, climate crisis, biodiversity loss, economic slowdowns and downturns, worsening poverty, and other overlapping crises.

“The future of our agrifood systems hinges on our willingness to appreciate all food producers, big or small, to acknowledge these true costs.”

“I hope that this report will serve as a call to action for all partners… and inspire a collective commitment to transform our agrifood systems for the betterment of all,” Dongyu added.