Agrifood systems. Cover the journey of food from farm to table – including when it is grown, fished, harvested, processed, packaged, transported, distributed, traded, bought, prepared, eaten and disposed of. They also encompass non-food products that constitute livelihoods and all of the people, activities, investments and choices that play a part in getting us these food and agricultural products. In the FAO Constitution, the term “agriculture” and its derivatives include fisheries, marine products, forestry and primary forestry products.1
Agrifood systems transformation. For the purpose of this report, agrifood systems transformation is the process by which the functioning of agrifood systems is changed to make them more efficient, inclusive, resilient and sustainable for better production, better nutrition, a better environment and a better life, leaving no one behind.2
Agricultural support. The monetary value of gross transfers to agriculture from consumers and taxpayers arising from government policies that support agriculture, regardless of their objectives and economic impacts.3
Capital. The economic framing of the various stocks in which each type of capital embodies future streams of benefits that contribute to human well-being (see also “stock”, “human capital”, “natural capital”, “produced capital” and “social capital”).4
Human capital. The knowledge, skills, competencies and attributes embodied in individuals that facilitate the creation of personal, social and economic well-being.4
Natural capital. The stock of renewable and non-renewable natural resources that combine to yield a flow of benefits to people.5, 6
Produced capital. All manufactured capital, such as buildings, factories, machinery and physical infrastructure (e.g. roads, water systems), as well as all financial capital and intellectual capital (e.g. technology, software, patents, brands).4
Social capital. Networks, including institutions, together with shared norms, values and understandings that facilitate cooperation within or among groups.4
Corporate social responsibility (CSR). A business model that enables a company to be socially accountable to itself, stakeholders and the public. Through CSR, companies consciously assess and manage their economic, social and environmental impacts, going beyond compliance with regulatory requirements and extending into actions that further social good, beyond the interests of the firm and the requirements of law.7
Cost. In common usage, a cost is the monetary value of goods and services that producers and consumers purchase. However, there are situations where such a definition is not helpful. Economists distinguish between the following types of costs:
Abatement cost. The monetary cost to reduce a hidden cost from capital change. Can also refer to the minimal monetary cost of reducing hidden costs to a certain level given a costed portfolio of actual or potential abatement measures.8
External cost. A cost incurred by individuals or a community as a result of an economic transaction in which they are not directly involved. The difference between private costs and the total cost to society of a product, service or activity is called an external cost.9
Hidden cost. Any cost to individuals or society that is not reflected in the market price of a product or a service. It refers to external costs (i.e. a negative externality) or economic losses triggered by other market or policy failures.
Private cost. Costs paid by a consumer to purchase a good or by a firm to purchase capital equipment, hire labour or buy materials or other inputs. These costs are included in production and consumption decisions.9
Social cost. The decrease in economic value to society from a capital change. Estimated in monetary terms by an economic valuation of the decrease.8
Cost–benefit analysis. A process for calculating and comparing the benefits and costs of a given policy or project, based on assigning a monetary value to all the associated activities. It is used to evaluate the feasibility or profitability of projects and public policy interventions. It aggregates the costs and benefits in different periods to a single value using a discount rate, assigning lower weight to the costs and benefits as they happen further into the future.4
Decision-makers. Those who determine or influence which, when, where and how levers, such as policies and investments, are activated. They include key private, public and civil society agrifood systems actors, as well as donors, governments, local authorities, international organizations and academia.
Dietary pattern. The combination of foods that form diets in context and time. Dietary patterns are contextual, driven by factors of food access and affordability, but also by culture, traditions, values, preferences and other considerations.
Healthy diets. Diets comprising four key aspects: diversity (within and across food groups), adequacy (sufficiency of all essential nutrients compared to requirements), moderation (foods and nutrients that are related to poor health outcomes) and balance (energy and macronutrient intake). Foods consumed should be safe.10
Dietary risk factors. The estimated burden of non-communicable diseases for adults aged 25 and older associated with consumption of fruits, vegetables, legumes, whole grains, nuts and seeds, fibre, seafood omega-3 fatty acids, omega-6 polyunsaturated fatty acids, calcium, milk, sodium, red meat, processed meat, sugar-sweetened beverages and trans fats. These dietary risk factors can be harmful (e.g. sugar-sweetened beverages), meaning they increase the risk of disease; protective (e.g. fruits and vegetables); or with mixed effects depending on the amount consumed and the disease outcome in question.11
Disability-adjusted life year (DALY). A universal metric that allows researchers and policymakers to compare very different populations and health conditions over time. DALYs equal the sum of years of life lost and years lived with disability. One DALY equals one lost year of healthy life. DALYs allow us to estimate the total number of years lost due to specific causes and risk factors at the national, regional and global levels.12
Elasticity. Price elasticity of demand gives the percentage change in the demand of a good per percentage change in the price of the same good. Price elasticity of demand is almost always negative, but is generally expressed in absolute value (without sign). When the price elasticity of demand is above 1 (in absolute value terms), demand is said to be “elastic”, that is, demand changes proportionally more than price. When the price elasticity of demand is below 1 (in absolute value terms), demand is said to be “inelastic”, that is, it changes proportionally less than the price.13 For example, soft drinks are typically considered an elastic food item, because if the price increases, demand decreases significantly, as consumers can easily switch to other beverages, whereas bread is considered inelastic because even if prices increase, demand decreases only slightly, as it is a staple food item.
Environmental, social and governance (ESG). Refers to the three pillars – environmental issues, social issues and corporate governance – of reporting frameworks aimed at capturing all the non-financial risks and opportunities inherent in a company’s day-to-day activities. There is no standard ESG reporting framework, but reporting is typically done by publishing a sustainability report and, increasingly, by disclosing data online.14
Externality. A positive or negative consequence of an economic activity or transaction that affects other parties without this being reflected in the price of the goods or services transacted.4
Fiscal space. The scope a government has to undertake discretionary fiscal policy (e.g. agricultural support) within existing budgetary plans without endangering market access and debt sustainability.15
Food literacy. The knowledge to understand and evaluate food-related information associated with the social aspects of food: how it is produced, where it comes from, who grows it and how these things affect our health.16
Food security. A situation in which all people at all times have physical and economic access to sufficient, safe and nutritious food that meets their dietary needs and food preferences for an active and healthy life.10
Food supply chain. A connected series of activities encompassing the primary production of food from crops, livestock, forestry, fisheries and aquaculture, along with the value-adding activities of storage, transportation, processing, wholesale, retail and food service. This definition differs from that of “food value chains” as proposed by FAO (2014) by excluding food consumption and disposal.17
Flow. A cost or benefit derived from the use of various capital stocks.4
Gender wage gap. Difference between the average daily male and female wages for the same type of work as a percentage of the average male wage.18
Hidden benefit. Positive impact on society of a product or economic activity that is not reflected in its market price.19
Institutional procurement. The long-term process of acquiring goods and services that are essential to institutional operations. Procurement focuses on building strong and mutually beneficial relationships between buyers and suppliers. Unlike purchasing, procurement processes consider the value of the transaction as a whole, not just the price of the goods or services.20
Malnutrition. An abnormal physiological condition caused by inadequate, unbalanced, or excessive intake of macronutrients and/or micronutrients. Malnutrition includes undernutrition (child stunting and wasting, and vitamin and mineral deficiencies) as well as overweight and obesity.10
Market failure. A situation in which the allocation of goods and services by a free market is not efficient, often leading to a net loss of economic value to society, that is, the full benefits of the use of social resources are not realized. There are many types of market failure, including demerit goods, externality, market power, missing markets and public goods.
Materiality. Generally defined as a measure of how important a piece of information is when making a decision,21 or the importance, worth or usefulness of something.22 In the context of true cost accounting, it reflects significant economic, environmental and social impacts that substantially influence the assessments and decisions of stakeholders. An impact may be considered material if measurement and communication of the impact have the potential to alter decision-making processes.22
Double materiality. Applied to the private sector (i.e. businesses and investors), it is the principle that businesses and investors must disclose not only how they are affected by sustainability issues, such as climate change (“outside in”), but also how their activities impact society and the environment (“inside out”).
Non-communicable diseases (NCDs). Medical conditions that are not transmissible directly from one person to another. They tend to be of long duration and are the result of a combination of genetic, physiological, environmental and behavioural factors.23 The main types of NCDs are cardiovascular diseases, cancers, chronic respiratory diseases and diabetes.24
Nudge. Any form of choice architecture that alters people’s behaviour in a predictable way without restricting options or significantly changing their economic incentives.25
Nutritious foods. “Safe foods” that contribute essential nutrients, such as vitamins and minerals (micronutrients), fibre and other components, to healthy diets that are beneficial for growth, health and development and guard against malnutrition. In nutritious foods, the presence of nutrients of public health concern, such as saturated fats, free sugars and salt/sodium, is minimized, industrially produced trans fats are eliminated and salt is iodized.10
Political economy. The social, economic, cultural and political factors that structure, sustain and transform constellations of public and private actors and their interests and relations over time. It affects the type of political and institutional reform needed to enable and facilitate policy support.26, 27
Public goods. Products that one individual can enjoy without reducing the amount available to others (e.g. roads, public parks, clean air and other basic societal goods). In other words, they are non-rivalrous and non-excludable.28 The private sector has little incentive to produce public goods, resulting in underproduction and market failure.
Purchasing power. A measure of the amount of goods and services that can be purchased with a given amount of money.
Prevalence of undernourishment. Percentage of the national population experiencing undernourishment, as calculated by FAO et al. (2022).10, 29
Resilience. The ability of individuals, households, communities, cities, institutions, systems and societies to prevent, anticipate, absorb, adapt and transform positively, efficiently and effectively when faced with a wide range of risks, while maintaining an acceptable level of functioning, without compromising long-term prospects for sustainable development, peace and security, human rights and well-being for all.30
Scenarios. Representations of possible futures for one or more components of a system, including alternative policy or management options.31
Simulations. Quantified scenarios generated using simulation models that are simplified representations of reality that use mathematical formulations to assess potential impacts and/or generate projections. Such projections can be used for backcasting (e.g. what policy mix is required to reach a stated objective) and forecasting (e.g. how close to the objective a given policy mix would deliver).32 Examples of simulation models include global economic models or Excel-based calculators such as the FABLE Calculator.
Stock. The physical or observable quantities and qualities that underpin various flows within the system, classified as being produced, natural, human or social (see also “capital”).4
Stunting. Low height-for-age, reflecting a past episode or episodes of sustained undernutrition. In children under five years of age, stunting is defined as height-for-age less than −2 standard deviations below the WHO Child Growth Standards median.10
Sustainable diets. Diets with low environmental impacts and which contribute to food and nutrition security and to healthy life for present and future generations. Sustainable diets are protective and respectful of biodiversity and ecosystems; culturally acceptable; accessible, economically fair and affordable; nutritionally adequate, safe and healthy; while optimizing natural and human resources.33
True cost accounting (TCA). A holistic and systemic approach to measuring and valuing the environmental, social, health and economic costs and benefits generated by agrifood systems to facilitate improved decisions by policymakers, businesses, farmers, investors and consumers.34
True pricing. The process of incorporating hidden costs into transactions to improve transparency and decision-making. The goal of true pricing is to eliminate or reduce hidden costs as much as possible and ensure affordable and healthy food is accessible to people, in alignment with the right to food.35
Undernourishment. The condition in which an individual’s habitual food consumption is insufficient to provide the amount of dietary energy required to maintain a normal, active, healthy life. For the purposes of this report, hunger is defined as being synonymous with chronic undernourishment. The prevalence of undernourishment is used to measure hunger.10
Undernutrition. The outcome of poor nutritional intake in terms of quantity and/or quality and/or poor absorption and/or poor biological use of nutrients consumed as a result of repeated instances of disease. It includes being underweight for one’s age, too short for one’s age (stunted), dangerously thin for one’s height (wasted) or deficient in vitamins and minerals (suffering from micronutrient deficiency).10
Voluntary standards. Non-mandatory rules, guidelines or characteristics about a product or a process developed by private-sector actors, representatives of civil society or public-sector agencies.
Wasting. Low weight-for-height, generally the result of weight loss associated with a recent period of inadequate dietary energy intake and/or disease. In children under five years of age, wasting is defined as weight-for-height less than −2 standard deviations below the WHO Child Growth Standards median.10
