Transforming Agri-Food Systems Through Climate-Smart Practices: Ending Hidden Costs, Maximizing Benefits

The agri-food system encompasses the interconnected activities of production, processing, distribution, and consumption of food and other agricultural products. Currently, this system contributes more than 10% of global GDP, with a market value of over $10 trillion annually. However, inefficiencies in the system generate hidden costs of more than $12.7 trillion. While most of these costs are difficult to quantify, a large portion are attributed to labour and environmental productivity losses. The agri-food system is driving many environmental externalities such greenhouse gas emissions, land-use conversion, pollution, biodiversity loss, and excessive freshwater consumption. Therefore, the system is highly contributing to climate change, environmental degradation, and the depletion of natural resources. The agri-food system is also linked to many social externalities such as high levels of diet-induced diseases, undernourishment, and poverty. Richer nations are primarily responsible for these hidden costs, with poorer nations often bearing the brunt of the consequences. This mismatch reinforces global inequalities, heightens social and economic disparities, and complicates food, environmental, and climate crises. This chapter emphasizes the critical need to address hidden costs and trade-offs in the current agri-food system, unlocking the multidimensional benefits of sustainable and climate-smart practices.