True Price and Impact Institute have worked with the Scientific Group of the UNFSS & Action Track 1, the Global Alliance for Improved Nutrition (GAIN), the Food and Agriculture Organization (FAO), the Global Alliance for the Future of Food (GAFF) Rabobank, the World Benchmark Initiative and World Business Council for Sustainable Development (WBCSD) to realize a joint initiative on the true value of food, including true pricing.
The Initiative on the True Value of Food represents a community of experienced experts who stand ready to support country efforts to consider, trial, implement and evaluate true cost, value, and price of food actions and policy change.
The global food system has many hidden costs, including high rates of diet-related chronic disease, the impacts of climate change, and unfair wages that are not included in prices and profits that are ignored by markets. The global food system also has many hidden benefits that are also not fully reflected in food prices: healthy food is a basic need with many economic and social benefits, and well-functioning food systems allow farmers and workers to earn a decent livelihood.
By creating transparency about the costs and benefits and applying appropriate incentives and disincentives across food systems, we can ensure more sustainable, healthful, and fairer food systems in the future and create real value for economic growth, society and businesses.
The UNFSS Scientific Group’s paper on the topic provides the estimation of these costs at the global level: the costs are estimated to be US$19.8 trillion per year, these costs include $7 trillion of environmental costs and $12 trillion of health costs (of which $11 trillion of loss of human life and $1 trillion of economic costs of illness). Preparations for the United Nations Food Systems Summit (UNFSS) that took place on September 23rd, 2021 has highlighted the urgency for action on these hidden costs and benefits.
Actions of the Initiative will include developing a new economic basis for decision making – one that accounts for the True Value of Food. This new basis will guide the decisions made by – consumers, businesses, financial institutions, investors, and policy-makers towards more positive outcomes for people, the planet and prosperity.
This new basis includes three elements:
- True Cost Accounting (TCA) to systematically quantify and value impacts and dependencies across the full agri-food value chain to enable decision-making and policies based on true value.
- True Value business strategies to develop and implement successful business models that create true value for society.
- True pricing policies to internalize the externalities to make healthy and sustainable food more affordable and align market incentives with true value through market-based pathways, regulatory and income policies.
Integrating these elements into national food systems plans and creating a supportive policy environment for the implementation of strategies and actions to protect our people, planet, and prosperity will require coordinated action by all food systems stakeholders. The True Value of Food Initiative stands ready to support governments, businesses, and civil society in considering these approaches, sharing experiences, and implementing changes for fairer, more sustainable, and healthy food systems.