True Cost of Food

What is an “externality?”

Economists refer to “externalities” when they talk about the (often unintended) costs or benefits of a production method, and how that method affects people who did not participate in the decision making process. A synonym might be “by-product.”

The field of “true cost accounting” reflects an economic principle in which all the external costs (externalities) are considered when determining the full cost of production—and includes calculating the price tags of negative externalities. 

What are some examples of externalities?

A positive externality might look like this: a farmer who grows apples unintentionally provides a benefit to a neighboring beekeeper, because the beekeeper’s bees get access to a good source of nectar and make more honey. A negative externality might look like this: an industrial swine operation produces manure that infiltrates a municipal water supply, and the city, using taxpayer dollars, spends a great deal to clean the polluted water to render it safe for human use and consumption.

Why does CLF use the term “True Cost of Food?”

At the Center, we often use the term “true cost of food” because of our focus on food system issues. The true cost of food is essentially a method for assessing the costs and benefits of any type of food production system and how those costs and benefits may affect people, both directly and indirectly. (The field goes by other names, as well, such as “full cost accounting,” “true cost economy,” “natural capital accounting,” and “triple bottom line.”)

How can determining the True Cost of Food bring about positive change?

While we recognize that research into the true cost of food is critical to understanding a wide range of food system-related public health issues, we’re also keenly aware that globally, there’s an urgent need to move toward healthier and more sustainable food systems.  The reality is that we don’t have time to wait for all true cost of food research and analysis to be completed before taking action. In this vein, we hope that our explorations into the true cost of food will provide, if not immediate answers, at least insight that is useful to the global community in developing informed and educated plans of action for a healthy, equitable, and more sustainable food system.

Essential Reports

• True Costs for Food System Reform: An Overview of True Cost Accounting Literature and Initiatives
  CLF Report, 2020.
• Mechanisms for Resilient and Equitable Food Systems
  CLF Brief, 2020

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• Q&A with Alessandro Demaio on the True Cost of Food: Climate Change, Hunger and Framing the Problem
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