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  • Publication | 2024

The State of Food and Agriculture 2024: Value-driven transformation of agrifood system

Global Food and Nutrition Security

Unhealthy dietary patterns drive $8 trillion in annual hidden costs of global agrifood systems 

The State of Food and Agriculture 2024 report confirms that hidden costs within global agrifood systems amount to approximately $12 trillion annually. Of this figure, around 70 percent arise from unhealthy dietary patterns and are linked to alarming non-communicable diseases (NCDs) such as heart disease, stroke, and diabetes, far exceeding the costs related to environmental degradation and social inequalities.

The report builds on the 2023 edition to provide an even more in-depth analysis, utilizing true cost accounting to expose the full range of costs and benefits associated with food production, distribution, and consumption, including those that are not reflected in market prices – the so-called “hidden costs and benefits”. The report updates those cost estimates, divides them by agrifood system types, and charts a course for transformative change in our agrifood systems. The study details how global hidden costs are largely driven by health hidden costs, followed by environmental hidden costs, in more industrialized agrifood systems in upper-middle- and high-income countries. 

In examining health impacts, the report identifies 13 dietary risk factors. These include 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. 

To facilitate analysis, the research introduces a typology that categorizes agrifood systems into six distinct groups: protracted crisis, traditional, expanding, diversifying, formalizing, and industrial. This framework allows for a targeted understanding of the unique challenges and opportunities inherent to each system, enabling the development of tailored policies and interventions. 

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For instance, while diets low in whole grains are the leading dietary risk factor across most agrifood systems, in protracted crisis systems (those experiencing prolonged conflict, instability, and widespread food insecurity) and traditional systems (characterized by lower productivity, limited technology adoption, and shorter value chains), the primary concern is a low intake of fruits and vegetables.  

High sodium intake is another significant concern, exhibiting an upward trend as agrifood systems evolve from traditional to formalizing, peaking in the latter and then decreasing in industrial systems. Conversely, high consumption of processed and red meat steadily increases throughout the transition from traditional to industrial systems, where it ranks among the top three dietary risks.  

Beyond dietary risks, the environmental impact of unsustainable agricultural practices contributes substantially to the hidden cost burden. Costs associated with greenhouse gas emissions, nitrogen runoff, land-use changes, and water pollution are particularly high in countries with diversifying agrifood systems – where rapid economic growth is coupled with evolving consumption and production patterns – reaching an estimated $720 billion. Formalizing and industrial agrifood systems also face significant environmental costs. However, countries facing protracted crises bear the highest relative environmental costs, equivalent to 20 percent of their GDP. 

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SOFA 2024 underscores the importance of adapting to local contexts and capturing stakeholder priorities. This is illustrated through case studies representing diverse countries and agrifood system types, including Australia, Brazil, Colombia, Ethiopia, India, and the United Kingdom. 

A call for collective action 

Overall, the report calls 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 utilizing true cost accounting to recognize 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. 

The report stresses that this transformation requires collective action, involving primary producers, agribusinesses, governments, financial institutions, international organizations, and consumers. While addressing hidden costs will result in uneven impacts across stakeholders, countries, and timeframes, supportive policies and regulations can help minimize disruptions, particularly for small-scale producers and agribusinesses, by promoting early adoption of sustainable practices and protecting vulnerable social groups. 

Key messages: 

  1.  Global hidden costs: The estimated global hidden costs of agrifood systems exceed $10 trillion at 2020 purchasing power parity (PPP), emphasizing the need for strategic actions. 

  2. Health-related costs: Unhealthy dietary patterns account for 70% of all quantified hidden costs, with low whole grain intake, high sodium intake, and low fruit intake being major risk factors. 

  3. Agrifood systems typology: Industrial and diversifying agrifood systems have the highest hidden costs, dominated by health-related costs. 

  4. Transformation strategies: There is no single transformational strategy, and historical transitions from traditional to industrial systems have varying outcomes and hidden costs. 

  5. Environmental: Environmental hidden costs are largest in diversifying agrifood systems. However, countries in protracted crisis are the most burdened by environmental hidden costs, when considered as a share of their gross domestic product (GDP) (20 percent). 

  6. Social Costs: Social hidden costs are prevalent in traditional and protracted crisis agrifood systems, accounting for 8 and 18 percent of GDP, respectively. These costs – driven by undernourishment and poverty – emphasize the importance of raising livelihoods and bridging the humanitarian–development–peace nexus. 

  7. Health hidden costs: Health hidden costs are relevant across all agrifood systems categories. The leading dietary risk related to non-communicable diseases is low consumption of whole grains. 

  8. Dietary guidelines: Food-based dietary guidelines should account for dietary patterns in formalizing and industrial agrifood systems that have diets high in red and processed meat as well as sodium. 

  9. Transforming agrifood systems: Transformation will improve well-being, but benefits and costs will be unevenly distributed across different stakeholders, countries and time frames.

  10. Stakeholder involvement: Everyone has a role to play in driving agrifood systems transformation, and integrating efforts is crucial. 

  11. Power imbalances: Power imbalances in global food supply chains can shift the burden of change onto vulnerable parties, such as producers, who end up facing higher regulatory costs and downward price pressures. In contrast, the benefits of change may be reaped by parties who avoid or pass on additional costs. It is possible to minimize business disruption by staying ahead of anticipated regulatory change and adopting early on sustainable and fair practices. 

  12. Consumer influence: Consumers can influence agrifood systems through purchasing decisions. Financial incentives, information and educational programmes, and regulations can support this shift. 

  13. Institutional purchasing power: The significant purchasing power of institutions can reshape food supply chains and improve food environments. By encouraging consumption of sustainable and nutritious foods, these institutions can influence consumption patterns over generations. 

  14. Targeted assessments: Targeted true cost accounting (TCA) assessments – from product and value chain to national – can help decision-makers assess priorities and manage trade-offs.