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FAO; 10 TRILLION DOLLARS IN ‘HIDDEN COSTS’

New Reports Urge Action on Hidden Costs, Farm Support
 
A major new report from the UN Food and Agriculture Organization (FAO) has found that the agrifood system imposes “hidden costs” of at least USD 10 trillion – while the Organisation for Economic Co-operation and Development (OECD) has published new analysis showing support to the farm sector has hit record levels.

The studies, which were published just weeks before a major UN climate summit, have come as WTO members table new negotiating submissions on the reform of agricultural domestic support – seen by many as central to unlocking progress in the long-running talks.
 
Markets “don’t price and can’t value everything,” FAO Chief Economist Maximo Torero wrote in an opinion piece for Reuters that coincided with the report’s launch. Subsidy reform – along with taxes on unhealthy food, dietary guidelines, labelling or regulation – could help address this, Torero said.

Maximo Torero

The OECD’s analysis found total support to agriculture reached a record USD 851 billion during 2020-22 for the 54 countries covered – of which just under half took the form of measures that the organisation said had the greatest potential to distort markets, such as border tariffs and subsidy payments based on output.
 
“Reforms are needed to ensure government support for agriculture and other industries does not prevent us from meeting our global climate objectives,” said OECD Secretary-General Mathias Cormann, in a 30 October press statement.

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