Campaign code: TCF
Everything about the True Cost of Food
Nature & More is launching the first campaign ever with True Cost Transparency for organic fruit at the point of sale. The externalised costs of food production globally amount to 4.8 trillion USD every year. Wouldn’t it be great if we were able to put a monetary value on soil degradation, water pollution, climate change and other so-called externalities? Nature & More is now offering exactly that. On this page we explain the details of our approach. Organic isn't too expensive, conventional is too cheap! We did the math.
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We put together a list of Frequently Asked Questions and answers. Find it here.
The problem: cheap food is actually very expensive
From the use of artificial fertilizer and pesticides to the effects of soil degradation, water pollution, climate change and the obesity epidemic to name just a few, our current food system has a significant number of hidden costs to the natural environment and human health. Experts from around the world agree that these very real costs far outweigh the benefits of "cheap" food.
Preliminary FAO assessments of the true, global cost of food estimate that annual environmental costs total USD $2100 billion. The social costs are estimated to be even higher, at USD $2700 billion. Together this adds up to a total of externalised costs of food production amounting to USD $ 4.8 trillion every year. These costs are not paid for at the grocery checkout counter, yet consumers today and future generations tomorrow will bear the brunt of this huge financial burden through taxes and healthcare costs.
The consequence of our present profit definition is that it is economically more profitable to farm unsustainably than to farm sustainably. This needs to change and that is why it is time to look at the True Cost of Food.
The solution: transparency about the True Cost of Food
It is time to get our bookkeeping straight, redefine profit and start working with a model that also covers societal (People) and environmental (Planet) costs. Placing a clear monetary value on the benefits and impacts of different food production systems as well as redefining our definition of ‘profit’ will enable the introduction of policy mechanisms to penalise damaging practices and reward the development of systems that deliver positive environmental and public-health outcomes.
Together with the FAO (The Food and Agricultural Organisation of the United Nations), Nature & More is proud to introduce The True Cost of Food at a consumer level. In a pilot, Nature & More has launched transparent consumer information at point of sale that compares the true costs and benefits of organic fruit with its conventional, industrial alternative. The product lines for the pilot include: lemons, oranges, grapes, pineapples, apples, pears and tomatoes.
How Nature & More ‘did the maths’
In 2014, the FAO published the report ‘Food wastage footprint: full cost accounting’. The report was the result of the Full Cost Accounting Project (FCA) led by Nadia El-Hage Scialabba (Senior Officer for Environment and Sustainable Development at the Climate, Energy and Tenure Division). In close cooperation with the Swiss Agricultural Research Institute FIBL, a methodology was developed as to how one can calculate the external costs of food production.
The methodology was consequently applied in the aforementioned report ‘Food wastage footprint: full cost accounting’ and not only included the value of wasted food but also all the environmental and social costs involved in producing the food. On top of economic costs totalling more than USD $1 billion dollars each year, the report calculated that annual ecological and social costs for wasted food amounted to USD $700 billion and USD $900 billion respectively.
Since the FIBL methodology is just as relevant for food production that is not wasted, the FAO has a concrete foundation for natural resources accounting (covering ecosystem destruction, health and livelihood) that can be applied to the food and agricultural industry. Considering that approximately 1/3 of the global food production is wasted, this leads to an estimate of hidden costs of USD $ 2100 billion in environmental damage and USD $2700 billion in social costs; together USD $ 4.8 trillion.
It must be noted that the total cost of wasted food will differ for different product groups. Since the ratio of different product groups will differ for consumed food and wasted food, extrapolation of the global cost of waste to the global cost of food production will increase the margin of error. However a recent FAO report, "Natural Capital Impacts in Agriculture" from 2015, confirms the number for environmental damage, evaluating the environmental costs of global agriculture to be over USD $ 2330 billion (USD $ 2.33 trillion) per year.
In cooperation with the FAO, Nature & More has applied the Full Cost Accounting (FCA) methodology as developed by FIBL to be able to compare organic fruits with their non organic counterparts for different crops. These costs are communicated through the True Cost of Food Power Flower. The calculations were conducted by the Soil & More Foundation.
Since Full Cost Accounting is still in its development stage, many positive elements of sustainable agriculture have not been included in the model. In reality therefore, we would expect to find that the differences between organic and industrial farming will be much larger.
Check the video!
A great video about the True Cost of Food, by the Sustainable Food Trust
Check the True Cost Flower for 8 organic products!
You can check the True Costs for eight Nature & More products, by dragging them into the heart of the True Cost Flower. Check it here.
Below you find an explanation about the 6 dimensions of the True Cost Flower, discussing what costs are involved and whether they have been taken into account:
1: Climate costs
Climate costs include both societal and ecological consequences of climate change. The main costs are a result of greenhouse gas emissions from the soil as a result of deforestation, intensive use of fertilizer (artificial fertilizer) and tillage. Looking at climate benefits, the focus here is on forms of sustainable agriculture that keep carbon in the soil, conserve forests or maintain a green cover.
2: Soil costs
Soil costs are costs incurred when soil is lost through wind and water erosion. Poorly managed soils are significantly more prone to this form of erosion.
Soil benefits arise where farmers invest in their soils using compost or deep rooting green crops. These methods enhance the soil and make soils less susceptible to erosion. Additionally, healthy soils boost the natural pest and disease resistance of the crops. These benefits have not been taken into account by the FAO yet.
3: Water costs
Water costs result from both water pollution and water scarcity. The most significant cost here is filtering nitrate and pesticide contaminants out of drinking water. Water scarcity leads to damage costs and defensive expenditure.
Looking at the benefits, sustainable agriculture uses less water and causes less pollution. Due to the fact that agrochemicals are prohibited and that healthy soils have a higher water holding capacity, sustainable farming has a much more positive impact on this vital resource.
4: Biodiversity costs
The loss of biodiversity leads to several costs for society. Agrochemicals and fertilizer leach causes loss of flora and fauna biodiversity. A major cost is the loss of pollinators who play an indispensable role in the lifecycle of our crops. Loss of biodiversity also leads to increased sensitivity to pests and loss of landscape value.
Looking at the benefits, sustainable farming practices can protect biodiversity; on top of the fact that agrochemicals are banned, organic farmers often implement measures such as flower borders, hedges, crop rotation, low-tillage and other techniques that benefit diversity. Unfortunately, the current FAO framework looks only at damage reduction in relation to pesticide and fertilizer use, so positive impacts may be much larger than calculated.
5: Livelihood costs
Societal costs as a result of non-sustainable farming practices occur when these practices lead to social disruption and the loss of living environment. In the worst case scenario this can lead to regional armed conflicts over land or water. The FAO model calculates the loss of livelihood purely based on land loss. For the cost of conflicts, no modelling is available.
Benefits for society occur when sustainable farming practices maintain farmland and the living environment, leading to lower risks of conflict. Unfortunately the influence on the social fabric of capacity building & development (freedom), equal rights and opportunities (justice) and a fair distribution of economic wealth (solidarity) is not taken into account yet. The same goes for landscape quality and beauty.
6: Health costs
Health costs are costs incurred by coming into contact (directly and indirectly) with agrochemicals on the production side. The FAO does not take into account health damage on the consumer side (for example, as a result of pesticide residues).
Health benefits of sustainable agriculture are the savings incurred when farmers and locals do not come into contact with poisonous agrochemicals. The benefits of healthy food (pro-active health care and disease prevention) are not included in the FAO model.
Explaining the calculation model
In the explanation below we clarify how the numbers in the True Cost Flower were calculated, based on the FAO-reports "Food wastage footprint: full cost accounting (2014)" and "Natural Capital Impacts in Agriculture (2015)".
1: THE NUMBERS WE SHOW
So far we have not given number for Livelihoods, Health and Biodiversity, because the FAO model does not offer enough tools yet. There are also a lot of cost factors relevant to the organic case that are not taken into account in the FAO model. We offer an overview of the possibilities the FAO model would offer so far:
Social costs ("livelihoods")
The work on the model is a continuing process, and we hope to be able to fill in the first results for Livelihoods, Health and Biodiversity in 2016.