Food prices in supermarkets do not tell the truth!
True Cost Accounting — a bookkeeping standard reflecting all costs and benefits
The prices we pay in supermarkets for our food do not inform us about the true costs of food production. The existing standard accounting and economic evaluation systems do not consider positive nor negative impacts or dependencies on natural, social and human capital. Ignoring these capitals or externalities lead to distorted markets and false accounting.
Today when we purchase food, we are in fact paying four times from four different wallets. These costs include:
- Economic — in the supermarket
- Environmental — repairing the damage to our climate and ecosystems
- Health — treating diet related issues
- Social — fixing avoidable social costs
Natural capital (biodiversity, climate, soil and water) is critical for the short- and mid- term resilience of food and agricultural systems. The dependencies of food and farming systems on the natural capital and their related economic risks are becoming increasingly obvious. Therefore, accounting firms, insurance companies and banks are currently developing approaches to monitor and evaluate these economic risks. Yet, there is no harmonised standard that would justify and legalise financial incentives linked to the implementation of risk preventing more sustainable agricultural practices.
“True Cost — From Costs to Benefits in Food and Farming” is an initiative of various market leaders in the food and farming sector who, in cooperation with other partners, want to develop, pilot and implement an integrated accounting standard, that considers natural, social and human capital at corporate and supply-chain level.
The initiative will realise joint communication campaigns at policy, expert, corporate and consumer level about the true costs and benefits of food. It will expose the necessity to act and develop an integrated accounting standard for food and farming for use at agricultural level in annual accounts, thereby incentivising better farming practices.The initiative will furthermore facilitate research on the health impact of food and use its results in various communication campaigns.
The content development and project implementation is coordinated by Soil & More Impacts BV and TMG — Töpfer Müller Gaßner GmbH.
To learn more about the project, please visit tca2f.org
