The application of True Cost Accounting can be used to re-establish farming systems that operate within planetary boundaries and produce food in harmony with nature across the globe.
A method being applied more widely in the food system today is an economic model called true cost accounting, which identifies and quantifies the total cost of food and agricultural production depending on the type of farming system.
These days I’m focused on the true cost of food. We have the cheapest food in the world. Food purchases make up something like 8% of our GDP. But when you start to factor in all the chronic diseases and environmental impacts—the health footprint of food—then all of a sudden we have the most expensive food in the world. Not 8% but 25% or higher. How is it we have something that is so cheap but so expensive?
Farming is the most significant human management system of the planet; the future of humans on the planet largely rests upon how we manage our farmscapes. If we accept this then it has profound implications for agricultural policy for it means that ‘managing the planet’ is almost as an important task of the farming system as supplying food.
Traditionally, extended families were the unit of reproduction, and thus the unit that requires inputs and maintenance. In rural communities, a large proportion of those inputs were from free renewables.
For true cost accounting to work, we must share knowledge and data, and adopt a more systemic way of thinking.
Nothing illustrates the weirdness, injustice, and unpleasantness of the present economy more clearly than the misdirected attempts of government to reduce the price of food.
A new report by Foundation Earth and Watershed Media entitled Biosphere smart agriculture in a true cost economy calls on the World Bank (and other development banks) to assess the full ecological impact of agricultural development projects before providing loans, in order to account for the true cost of production.
We all make decisions on what to spend our money – or other resources like time and effort – and I think we’d all do well to explore the many non-monetary costs and benefits that accompany this spending.
Building resilience into our food systems is fundamental, if society is to adapt to the consequences of climate change.
What would our food system look like if the impacts of production on the environment and on public health were taken into account? At present the polluter doesn’t pay, and those producing food sustainably are not rewarded for positive outcomes.