An incurious customer browsing the aisles at a typical supermarket in Europe or North America might be under the impression that all is well with the systems that supply them with food. Food appears to have never been cheaper. However, by using true cost accounting we are able to look below the surface and discover that we are paying far more than we could possibly imagine.
True cost accounting means calculating not only the direct costs of food products, like raw materials and labour, but also their effects on the natural and social environment, including water pollution from fertiliser run-off, climate change - to which agriculture is a major contributor - and soil degradation. These negative costs are typically deferred to the future or to countries far away from the eventual food consumer, but true cost accounting makes these 'hidden' production costs visible. To this end, the True Cost Initiative
has launched its new website 'True Cost - From Costs to Benefits in Food and Farming.'
Since 2019 the True Cost Initiative has been developing a consistent, transparent and robust set of innovative, internationally applicable reporting guidelines with which true cost accounting can be put into practice, allowing for more accurate assessments of businesses in the food and farming sector, as well as for coherent reporting of sustainability information in businesses' annual reports.
How to uncover the True Cost
The guidelines have been developed over the last two years through an exhaustive pilot and testing process, involving a wide range of food and plant-based products, in living labs in five continents in countries including the USA, Mexico, Columbia, Argentina, Honduras, Spain, Netherlands, Germany, Serbia, Austria, Hungary, Turkey, Egypt, Uganda, and India. The ‘True Cost – From Costs to Benefits in Food and Farming’
website outlines the concept and methodology behind the guidelines. The guidelines are now undergoing final evaluations and refinements, and will be launched at the BioFach in Nuremberg, 15-18 February 2022. They will be available for free online.