Food systems today are at the heart of many global challenges. From their contribution to climate change and biodiversity loss to issues of human health and social equity, it’s clear that transforming food systems is imperative. At the latest AgroTalk, Amanda Jekums from the Global Alliance for the Future of Food provided a fascinating deep dive into how True Cost Accounting (TCA) can help us better understand and address these challenges. Here’s what she shared.
What Is the Global Alliance for the Future of Food?
The Global Alliance is a coalition of approximately 30 philanthropic foundations united for collective action on food systems transformation. They focus on ensuring sustainable food systems are prioritized on political, economic, and social agendas by leveraging collective resources and expertise. Thirteen years ago, the Alliance began with a critical recognition: industrial food systems are not fit for purpose and are causing widespread harm to people, nature, and economies.
The Polycrisis in Food Systems
Amanda outlined the multifaceted crises we face today. Poor diets contribute to one in five deaths globally. Agriculture is responsible for one-third of greenhouse gas emissions and is a primary driver of biodiversity loss. These issues stem largely from industrial food systems, which often ignore the hidden costs, or externalities, of their practices.
Externalities are the positive or negative impacts of economic activities that aren’t reflected in the price of goods or services. For example, industrial farming’s pollution costs are often shifted to taxpayers, while the positive ecosystem benefits of agroforestry might go unquantified. This is where True Cost Accounting comes in.
What Is True Cost Accounting?
True Cost Accounting is a framework for evaluating the full costs and benefits of food systems. It expands beyond traditional economic measures to consider four forms of capital:
Natural Capital – The resources and ecosystem services that sustain life, such as clean water and pollination.
Human Capital – The health, knowledge, and skills of individuals.
Social Capital – Relationships, networks, and trust within communities.
Produced Capital – Infrastructure and financial investments.
By accounting for these factors, TCA helps reveal the dependencies and impacts of food systems, guiding better decision-making for sustainable outcomes.
"True Cost Accounting enables us to uncover the hidden costs and benefits of food systems, helping us address the most harmful practices and find positive pathways forward." —Amanda Jekums, Global Alliance for the Future of Food
The True Cost of Food Systems
Amanda shared groundbreaking data: the current global food system generates $12 trillion annually in externalized costs. These costs arise from greenhouse gas emissions, environmental degradation, and the health impacts of poor diets. Remarkably, transitioning to sustainable and equitable food systems would cost only $430 billion annually—a fraction of the externalized costs.
Success Stories: Zambia and India
Amanda highlighted real-world examples of TCA in action:
Zambia: The social enterprise COMACO supports communities in adopting agroforestry, reducing reliance on harmful practices like wildlife poaching and deforestation. Using TCA, COMACO quantified the annual value of their sustainable practices at $426 million due to avoided land degradation and ecosystem services.
India: In Andhra Pradesh, a TCA study compared natural farming practices with chemical-intensive methods. Natural farming increased crop diversity, improved household diets, boosted net incomes by 49%, and reduced input costs by 44%. The study also found significant social benefits, including greater employment and strengthened community ties.
Key Considerations in True Cost Accounting
While TCA is a powerful tool, Amanda emphasized the need for thoughtful implementation:
Monetization: Assigning monetary value to nature or social benefits must be done carefully to avoid unintended consequences.
Equity: Ensuring nutritious food remains affordable while addressing harmful practices requires policy shifts, not simply higher food prices.
Knowledge Inclusion: Incorporating traditional and community-based knowledge alongside scientific data strengthens TCA assessments and ensures their relevance.
Transforming Food Systems with TCA
The Global Alliance has made True Cost Accounting a cornerstone of its work, even launching a TCA Accelerator to mainstream its adoption. Amanda encouraged anyone interested in advancing sustainable food systems to engage with the Accelerator’s resources and initiatives.
"Industrial food systems are not fit for purpose—they are causing significant harm to humans, society, nature, and economies. Transforming these systems represents a massive opportunity to create sustainable and equitable outcomes for all." — Amanda Jekums, Global Alliance for the Future of Food
True Cost Accounting offers a way to navigate the complexities of food systems, addressing their most harmful aspects while uncovering pathways for positive change. As Amanda concluded, this approach enables us to organize and understand food systems more effectively, ultimately building a more sustainable and equitable future.
Learn More and Get Involved
The Global Alliance’s TCA Accelerator is an open network for anyone passionate about transforming food systems. Visit their website to learn more about upcoming workshops, webinars, and opportunities to join this critical movement.