Key findings
- The hidden costs of Indonesia’s food system are estimated at $210.7–$622.3 billion—28.5–45.4 percent of Indonesia’s GDP in 2023 (we provide a range to incorporate uncertainty). Even the lower value of 28.5 percent of GDP suggests an alarming health, environmental, and social impact of the food system. The largest cost categories are air pollution, obesity, undernutrition, water scarcity, greenhouse gas emissions, and food loss and waste.
- Understanding these hidden costs is essential to transforming Indonesia’s food system. This paper emphasizes the importance of incorporating comprehensive costs, including societal losses from health, environmental, and social problems that are the result of food production and consumption and land use practices but are not reflected in the market prices of the sector and therefore require policy reforms.
- Understanding these hidden costs is critical to informing policy decisions aimed at mitigating the impacts of the food system and reducing unintended consequences as a result of intervention. Health costs contribute the most, but environmental and social costs are also significant. For example, food choices are shaped by land-use change, particularly in rural transition areas, where shifts in land use affect food availability, access to markets, and women’s time use—all of which influence household food choices (Purwestri et al 2019).
- Estimating the cost of the food system is difficult, because of data limitations and uncertainties in cost calculation methods. There is also the problem of setting boundaries on what a food system encompasses. Similar problems are cited by global studies, including the State of Food and Agriculture 2023 flagship report by the Food and Agriculture Organization of the United Nations (FAO 2023b) and The Global Consultation Report by the Food and Land Use Coalition (FOLU 2019).
