True cost accounting applications for agrifood systems policymakers – Background paper for The State of Food and Agriculture 2023

Reinier de Adelhart Toorop, Bart van Veen, Loes Verdonk and Bettina Schmiedler

No 365833, ESA Working Papers from Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA)

Abstract: This background paper to The State of Food and Agriculture 2023 introduces true cost accounting (TCA) as an approach to measure and value the costs and benefits generated by agrifood systems in order to facilitate improved decision-making. The paper is based on a systematic review of existing TCA approaches and of relevant case studies in agrifood systems. Guidance on conducting TCA is provided, especially in relation to data collection. The paper ends with a discussion on scaling and harmonizing TCA for agrifood systems transformation. Based on a systematic literature review, the paper describes seven TCA approaches and identifies nine case studies deemed most relevant to policymakers in agrifood systems. It then proceeds to describe the different stages and steps needed to undergo a TCA study, such as: setting the boundaries of their assessment; determining the materiality of indicators; and estimating data points that are not readily available. The latter is particularly important given that a lack of (robust) data at low cost is potentially the main barrier to applying and scaling up TCA, especially in middle- and low-income countries. Because a TCA study requires a substantial amount of data to be collected, it is important to start with the data that are available and use this to determine which data points are crucial to answering a given policy question, to then focus on refining the available data points and filling in missing data points that are essential to the analysis. Another important bottleneck to scaling up TCA is the issue of harmonization, which the paper argues is impeded by the number of approaches available. As future steps for scaling up TCA, harmonization by integrating methodologies and adopting shared principles, ideas and requirements, is thus recommended.

Keywords: Agricultural and Food Policy; Demand and Price Analysis (search for similar items in EconPapers)
Pages: 104
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Persistent link: https://EconPapers.repec.org/RePEc:ags:faoaes:365833

DOI: 10.22004/ag.econ.365833

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