« TAPP Contribution to new FAO report Hidden Costs Food»

Published on 26-01-2024

Today, TAPP Coalition together with the Dutch Food Transition Coalition (TCV) submitted a contribution of 5 reports for the new FAO SOFA report on Hidden Costs of Food, to be published in November 2024. The contribution with annex attachments can be found here and here

"The Dutch Food Transition Coalition and True Animal Protein Price (TAPP) coalition, are committed to ‘getting the prices right’, i.e. internalizing external cost one way or another. In order to do so, we have commissioned and carried out a variety of studies in the past 4 years, to obtain a better insight in the external costs of food in the Netherlands and in the EU, and to lay a basis for developing the necessary policy interventions. Due to the high consumption and production of meat and dairy in The Netherlands and the EU, the protein transition is one of the main focal areas.

Studies: (Are discussed in the annex).

1. Value Case 2023. The societal impact of protein transition. Study by WUR (Wageningen University and Research), commissioned by TCV: https://research.wur.nl/en/publications/maatschappelijke-impact-van-eiwittransitie

2. ‘Eat as you pay dairy, eggs and meat’, 2023. Study by CE Delft commissioned by TAPP Coalition. https://cedelft.eu/publications/pay-as-you-eat-dairy-eggs-and-meat-internalising-external-costs-of-animal-food-products-in-france-germany-and-the-eu27/

3. ‘Sustainability Charge on meat’, 2020. Study by CE Delft, commissioned by TAPP Coalition. https://cedelft.eu/publications/a-sustainability-charge-on-meat/

4. ‘Consumer health -True pricing method for agri-food products’, 2022, Study by WUR (Wageningen University and Research) and True Price, commissioned by TAPP. Health costs of 7.5 euros per kg of red meat overconsumption - True Animal Protein Price Coalition (tappcoalition.eu)

5. “Rewarding and Pricing”. Rewarding and Pricing - Shifting Financial and Fiscal System Incentives from Farm to Fork TCV Study by Jan Paul van Soest and Tom Kools (Rapport-Belonen-en-Beprijzen-van-Boer-tot-Bord.pdf (transitiecoalitievoedsel.nl)

The Sofa 2024 contribution is written by Joost de Jong and Jan Paul van Soest (TCV) and Jeroom Remmers (TAPP), with support of Willy Baltussen of Wageningen University Research.

The first four scientific studies have a quantitative approach. The fifth study (TCV) is a qualitative study based on different studies and interviews, and offers a conceptual framework for implementing policies, depending on goals and on estimations of the impacts of different instruments.

It is a well-known economic fact that if prices do not reflect the full environmental, social, health and (animal) welfare effects, production and consumption patterns are suboptimal, leading to lower prosperity level than what would be feasible. For achieving a long-term sustainable food and agriculture system, it is therefore vital to correct pricing mechanisms.

Background FAO Call for Submissions for next SOFA 2024 report

The 5th of December, the FAO published a call for submissions. How can the hidden costs and benefits of agrifood systems be effectively incorporated into decision-making for
transformation? The complexity and interdependencies of agrifood systems make it challenging for decision-makers to incorporate the costs and benefits they generate into decision making. The 2023 edition of FAO’s flagship publication “The State of Food
and Agriculture 2023” (SOFA 2023) has the theme “Revealing the true cost of food to transform agrifood systems”. By introducing the concept of the hidden costs and benefits of agrifood systems and providing a framework through which these can be assessed, this report aims to initiate a process that will better prepare decisions-makers for actions to steer agrifood systems towards environmental, social and economic sustainability. The report presents the results of national level true cost accounting (TCA) assessments for 154 countries, and estimates that the global quantified hidden costs of agrifood systems amount to 10 trillion 2020 PPP dollars in 2020 or more (approximately 10 percent of global GDP). This underlines the urgent need to factor these costs into decision-making to promote agrifood systems transformation towards sustainability. 

The SOFA 2024 will showcase the flexibility of TCA in its application to different scopes, from an entire agrifood system down to a single product. Through a wide range of case studies, it will demonstrate the importance and challenges of incorporating the hidden costs into decisionmaking to evaluate different policy and management options to transform agrifood systems for the better. Its ultimate goal is to better prepare decisions-makers for actions to steer agrifood systems towards environmental, social and economic sustainability.

The SOFA team invites stakeholders to share illustrative examples (case studies) of existing or ongoing assessments of hidden costs and benefits of agrifood systems to ensure a wide range of coverage around the globe and across sectors. We also encourage contributions thatelaborate on how such assessments have been used to inform decision-makers and other stakeholders in implementing transformative actions towards sustainable agrifood systems.

FAO Road Map, IPCC, EU Climate Advisory Board on GHG-emission taxation of food

The FAO Roadmap published during the COP28 Climate conference in Dubai is called Global Roadmap for Achieving Sustainable Development Goal 2 (SDG2) without Breaching the 1.5°C Threshold. It envisions transforming agri-food systems from a net emitter to a carbon sink. It calls for alternative production methods and adjusted consumption patterns (less meat, more vegetables, fruit, plant-based meat and dairy). In the FAO website section ‘Enabling Healthy Diets for all’ the Roadmap says: ‘Change food taxes and subsidies to provide consumers with incentives to consume healthy diets”. FAO also wrote: “Change food taxes and subsidies for food producers (primary production and processors) to reduce the incentives to produce or utilize products that are over-consumed, and to promote under-consumed products’. It is known that consumer taxes and VAT rates can be changed in ways that overconsumption of meat products for instance is reduced and consumption of vegetables, fruit and plant-based meat and dairy is increased, also with direct subsidies, without increasing overall prices for food and without harming low income groups. The Roadmap writes: “High consumption of food products with high GHG footprints in some locations contribute unnecessarily to emissions of agrifood systems”. It is clear FAO is referring to meat and dairy products that cause 80% of food related GHG emissions in European diets and consumption patterns in other rich countries.  The FAO Road map also asks for changes in meat production and consumption, with a switch to more chicken meat. According to the third IPCC report (AR6III), ‘greenhouse gas emission taxes on food are recognized as policy options with great transformational potential regarding mitigation efforts, positive environmental effectiveness, and low implementation costs’. This recommendation is also mentioned in the recent report of the EU Climate Advisory Board EASBCC 18th January 2023:  “The Advisory Board recommends the introduction of some form of emissions pricing in the agricultural and land use sectors by 2031 at the latest.”