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Book (series)True cost accounting applications for agrifood systems policymakers
Background paper for The State of Food and Agriculture 2023
2023Also available in:
No results found.This background paper to The State of Food and Agriculture 2023 introduces true cost accounting (TCA) as an approach to measure and value the costs and benefits generated by agrifood systems in order to facilitate improved decision-making. The paper is based on a systematic review of existing TCA approaches and of relevant case studies in agrifood systems. Guidance on conducting TCA is provided, especially in relation to data collection. The paper ends with a discussion on scaling and harmonizing TCA for agrifood systems transformation. Based on a systematic literature review, the paper describes seven TCA approaches and identifies nine case studies deemed most relevant to policymakers in agrifood systems. It then proceeds to describe the different stages and steps needed to undergo a TCA study, such as: setting the boundaries of their assessment; determining the materiality of indicators; and estimating data points that are not readily available. The latter is particularly important given that a lack of (robust) data at low cost is potentially the main barrier to applying and scaling up TCA, especially in middle- and low-income countries. Because a TCA study requires a substantial amount of data to be collected, it is important to start with the data that are available and use this to determine which data points are crucial to answering a given policy question, to then focus on refining the available data points and filling in missing data points that are essential to the analysis. Another important bottleneck to scaling up TCA is the issue of harmonization, which the paper argues is impeded by the number of approaches available. As future steps for scaling up TCA, harmonization by integrating methodologies and adopting shared principles, ideas and requirements, is thus recommended. -
BookletRevealing the hidden costs of agrifood systems in Small Island Developing States
Insights from The State of Food and Agriculture 2024
2025Also available in:
No results found.Agrifood systems are essential for providing nourishment, sustaining livelihoods and shaping cultural identities. However, they also generate significant environmental, social and health hidden costs that are not reflected in market prices. These costs stem from unsustainable practices that contribute to climate change, natural resource degradation and the unaffordability of healthy diets. The 2023 and 2024 editions of The State of Food and Agriculture apply a true cost accounting (TCA) approach to estimate these costs, revealing that global hidden costs likely exceeded USD 10 trillion (PPP) in 2020. This report presents the 2024 TCA estimates for 12 Small Island Developing States (SIDS) – a diverse group of countries in terms of geography and income levels, facing unique vulnerabilities due to their size, remoteness and exposure to environmental shocks. The national-level estimates presented here offer a foundation for more in-depth and targeted assessments, supporting stakeholders in identifying priorities and guiding action towards more sustainable agrifood systems. -
Book (stand-alone)True cost accounting for cocoa, coffee, maize, livestock, palm oil, rice, soybeans and wheat
An overview of key commodities under the Global Environment Facility’s Food Systems, Land Use and Restoration Impact Program
2025Also available in:
No results found.Agrifood systems impose significant environmental, social, and health-related externalities that are not reflected in market prices, contributing to unsustainable development and threatening planetary boundaries. True Cost Accounting (TCA) is an emerging tool for quantifying these "hidden costs" and informing policy reforms toward more sustainable food systems. This document supports the Food Systems, Land Use and Restoration (FOLUR) Impact Program by synthesizing TCA-based evidence for eight key commodities: cocoa, coffee, maize, livestock, palm oil, rice, soy, and wheat. It identifies major externalities such as GHG emissions, biodiversity loss, water and soil degradation, child labor, and insufficient farmer incomes, and highlights mitigation strategies including agroforestry, climate-smart practices, and organic farming. While data availability varies across commodities and regions, the evidence suggests that external costs can far exceed market values, particularly in livestock and cocoa sectors. The findings are intended to support FOLUR country teams and stakeholders in shaping policies for nature-positive production and consumption, and to inform public communication and advocacy efforts.
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