The Economics Of The Food System Transformation

Generated Summary

This document presents a comprehensive overview of the Food System Economics Commission’s (FSEC) investigation into transforming global food systems to be more inclusive, health-enhancing, and environmentally sustainable. The study employs a combination of methodologies, including rigorous economic modeling and in-depth literature reviews, to assess the current state of food systems and the potential impacts of a transformation. The research focuses on two primary pathways: the Current Trends (CT) pathway, which extrapolates from existing trends, and the Food System Transformation (FST) pathway, which envisions a global effort to create a sustainable food system. The core objective is to evaluate the feasibility of the FST pathway, its economic benefits, and the strategies required for its implementation. The scope of the analysis extends to the evaluation of hidden costs within the current food systems and how those costs are potentially reduced via the FST pathway. It further examines how policy interventions, including incentives and regulations, innovation, and investment, can facilitate these changes, emphasizing the need for inclusion and addressing potential trade-offs.

Key Findings & Statistics

• The economic value of the human suffering and planetary harm caused by the current food systems is estimated to be well above $10 trillion USD per year, more than the contribution of food systems to global GDP.
• The net benefits of achieving a food system transformation are worth 5 to 10 trillion USD a year, equivalent to between 4 and 8 percent of global GDP in 2020.
• The health costs of the global food system are at least $11 trillion USD per year, largely driven by the high incidence of obesity (735 million people) and the high burden of chronic health conditions.
• Environmental costs are estimated at $3 trillion USD per year, reflecting the negative impacts of current agricultural land use and food production practices. These include the costs of biodiversity loss and environmental damage arising from nitrogen surplus.
• The continuation of current trends to 2050, as modeled through the Current Trends pathway (CT), shows that food insecurity and undernutrition will continue to plague humanity, still leaving 640 million people underweight in 2050.
• The global adoption of diets high in fats, sugar, salt, and ultra-processed foods would increase the number of obese people worldwide by 70 percent to an estimated 1.5 billion in 2050.
• The estimated costs of the global food system transformation are low compared to its economic benefits, with estimated costs of 200-500 billion USD a year.
• Implementing the FST pathway worldwide will need investments and transfers averaging 500 billion USD each year between now and 2050.
• Under the FST, agricultural commodity prices increase by roughly 30 percent by 2050.
• The net benefits of achieving a food system transformation are worth 5 to 10 trillion USD a year, equivalent to between 4 and 8 percent of global GDP in 2020.
• The Food System Transformation (FST) pathway is designed to immediately reduce greenhouse gas emissions and ensure the land system becomes a net carbon sink by 2040, and to eradicate undernutrition by 2050.
• The FST reduces diet-related mortality from 12 million deaths per year attributable to poor diets in 2020 to 7.7 million in 2050.
• Under the FST, low-income regions will see a 33 percent aggregate decline in the intake of animal-sourced foods.
• Under the FST, global per capita food waste decreases by 24 percent between 2020 and 2050, contrasting with an expected increase under CT of 16 percent.
• Under CT, global GHG emissions from agriculture, forestry, and other land use (AFOLU) will drop by 16 percent from 2020 to 2050.

Other Important Findings

• The transformation of food systems is projected to lead to substantial environmental and health net economic benefits.
• The FST pathway enhances processes of structural transformation and reallocation of labor outside of agriculture.
• The FST pathway achieves health targets by eradicating food insecurity, improving diet-related health outcomes, and achieving a strong reduction in nutrition-related mortality.
• By 2050, China is characterized by a dramatic abatement in land-based GHG emissions compared to CT, with measures protecting unique biodiversity hotspots.
• A shift to environmentally sustainable production in agriculture reverses biodiversity loss, reduces demand for irrigation water and almost halves nitrogen surplus from agriculture and natural land.
• The need for new institutions and new ideas to shape preferences and shift interests, fostering sustained systemic support for new practices and behaviors is highlighted in the document.
• The report confronts the challenge of negotiating change across a multitude of diverse stakeholders with unequal power and varying prospects from the transformation.

Limitations Noted in the Document

• The report acknowledges the need for detailed and contextual analysis to cost national food system transformation strategies.
• The study’s analysis on food system resilience is limited by its reliance on long-term dynamics and trends.
• The data used for estimating the benefits of the FST are subject to variations in methodologies and the items they consider.
• The results are summarized in terms of 16 outcome indicators, each connected to one of the five operational goals.
• The study relies on the analysis of agri-food systems, and where needed, special emphasis on the non-food components is needed.

Conclusion

The FSEC’s findings underscore that a profound transformation of the global food system is both necessary and achievable. The current trajectory, characterized by unsustainable practices, poses grave threats to human health, environmental stability, and economic prosperity. In stark contrast, the Food System Transformation (FST) pathway offers a viable route to an inclusive, health-enhancing, and environmentally sustainable future, yielding enormous economic benefits. The report emphasizes the urgency of action, highlighting the dramatic contrast between the FST and Current Trends scenarios. The core message is clear: transforming food systems is not merely desirable, it is economically viable and essential for safeguarding future well-being. To achieve this transformation, the report emphasizes the importance of wide-ranging and coordinated national strategies, informed by science-based, quantitative pathways. The success of these strategies hinges on a multi-pronged approach that encompasses incentives and regulations, innovation, and strategic investments. The emphasis on inclusion, ensuring that the most vulnerable populations benefit from these changes, is also crucial. By understanding the interests, institutions, and ideas that shape food systems, policymakers and stakeholders can create and implement transformation strategies that are not only effective but also politically feasible. The FSEC findings point to a path forward, urging policymakers to prioritize the FST to create a more equitable and sustainable future for all.