With appreciation to SOFA for its preliminary assessment of Hidden Cost in Agri food system, following points are offered:
- Though the TCA framework in SOFA 2023 is confined to Agri Food system, the aspect of Hidden Cost is ingrained in entire economic system. Hidden cost, connoting “demerit good” produced in other sectors of economy, possibly may not over score the most essential merit good of healthy and active life produced by Agri food system. The Hidden Cost is likely to be cascading and spilling over with expanding urbanization, changing food habits, transportation, trade, food preservation, processing and packaging. Therefore, the exercise of TCA, assessment of Hidden Cost and its spillover may be seen in the context of entire economic system.
- In the above context, the SOFA 2023 exercise coincides with the sustainable development agenda and It will be useful to reflect convergence in endeavors to control hidden cost and quests for SDGs. The aspect of Hidden Cost is related to SDG target 12.2 “ Achieve the sustainable management and efficient use of natural resources” and its indicator 12.2.1 “Material footprint per capita, and per GDP”, with 3600 coverage of eco system in dimensions of bio mass, fossil fuel, metal and non metal ores material footprints. Similarly, SDG target 2.4 for ensuring sustainable food system will be resulting in decline in hidden cost and its 11 elements composite indicator 2.4.1 “Proportion of agricultural area under productive and sustainable agriculture” is similar to the factors of Hidden Cost.
- There are some consistency observations. The Agri food Hidden Cost estimated for 2020 in PPP USD is about 10% of world GDP (in PPP 2020). Agri GVA on the other hand (about 4 Trillion USD nominal) was correspondingly about 4% of world GDP. This may be implying that hidden cost in Agri food system far exceeds the GVA of Agri food system. Secondly, the SOFA analysis reveals that Hidden Cost increased by 13% during 2016 to 2022. In the corresponding period, the real and nominal agri GVA (in USD $) increased by about 17% and 37% respectively. In the similar vein, the trend of global Total Factor Productivity (TFP) index of Agriculture (data source ERS USDA) has gradually increased from 101 in 2016 to 106 in 2021 (base 2015). Thus, the exercise of estimation, trend and control of hidden cost opens opportunity for coherence in policy analysis and decision support.
Д-р. Rajiv Mehta