You can find the FAO model with constants on page 35 of the FAO report "Food wastage footprint: Full-cost accounting". In order to use them, you have to know the water footprint, CO2 footprint, and soil erosion for the grower and product you want to apply the FAO model to. These footprints were calculated according to internationally recognized standards by Soil & More International.
FAO report
You can find the FAO model with constants on page 35 of the FAO report "Food wastage footprint: Full-cost accounting".
Aspects of the FAO model and additional modelling
In the explanation below we clarify how the numbers in the True Cost Flower were calculated, based on the FAO-reports "Food wastage footprint: full cost accounting (2014)" and "Natural Capital Impacts in Agriculture (2015)". For health impact, additional modelling was done.
1: THE NUMBERS WE SHOW
Climate
In the calculation model of the FAO, the hidden costs of climate change as a result of food production consist of two components: the societal costs of greenhouse gas emissions and the costs of ammonia emissions. The FAO gives us a fixed cost amount per ton of CO2e. This constant is a global average. For the costs of ammonia emissions, the FAO gives us a fixed amount per hectare, independent of product or location, being a global average. The greenhouse gas emissions or CO2-footprint have been calculated by the Soil & More Foundation per product and per farm for the organic situation, while for the conventional situation numbers have been used from similar conventional farms in the same area.
Water
In the calculation model of the FAO, the hidden costs of water use as a result of food production consist of a large number of components: eutrophication of water by N and P; the costs of removing nitrate and pesticides from drinking water; hidden costs related to water use; and costs related to water scarcity. Hidden costs for water use are costs of infrastructure and delivery that are covered by government subsidies. The FAO gives us a fixed amount per cubic meter of water use. The constant is therefore a global average. The water footprint for "grey" and "blue/green" water was calculated by the Soil & More Foundation per product and per farm in the organic case, while the numbers for the conventional case were taken from comparable farms in the same environment. For N, P, nitrate and pesticides the FAO gives us a fixed amount per hectare, independent of product or location, being a global average. The costs of water scarcity are a variable amount per cubic meter, which is different from country to country. These have not been calculated for Nature & More growers yet by lack of country-specific data. Adding the costs of water scarcity will make the difference between organic and conventional bigger.
Soil
In the calculation model of the FAO, the hidden costs for soil loss as a result of food production consist of two components: costs caused by water and wind erosion. The FAO gives us fixed amounts per ton of soil erosion by water respectively wind. The constant is therefore a global average of the costs of erosion per ton of soil. The Soil & More Foundation has calculated the net amount of erosion per product per grower in the organic case, while the numbers for the conventional case were taken from comparable farms in the same environment.
The FAO model does not include all costs: costs as a result of soil degradation and compaction, costs as a result of biodiversity loss in the soil, costs as a result of increased sensitivity to diseases and plagues caused by soil degradation are not taken into account. The real difference between organic and conventional will therefore be bigger.
Health
In the calculation model of the FAO, the hidden costs of social disruption as a result of food production consist of two components: medical costs as a direct result of pesticide poisoning, and costs of chronical loss of well-being as a result of pollution of the environment - on the production side in both cases. The FAO gives us a fixed amount per hectare for both cost types, independent of product or location, a global average therefore. The actual use of pesticides by the grower does not come into the equation.
There are several costs and benefits the FAO model does not take into account: health damages to consumers (or health benefits) and the effects of nutritional content, glyphosate, GMO's, added colouring, sweeteners, etc.
For health costs, additial modelling was done by EY. These costs are calculated based upon the impact that pesticides have on consumers as well as the working conditions of farmers and farm labourers. To determine the pesticide exposure level, data of scientists Peter Fantke and Oliver Jolliet were used as well as data from EFSA (European Food Safety Authority) and Ecolnvent. To look at “impact on health” and for this, the WHO (World Health Organisation) measuring unit DALY was used. DALY stands for Disability Adjusted Life Years. Fantke and Jolliet published a list of pesticides for which the DALY impact was estimated. By combining all data, accountancy firm Ernst & Young (EY) calculated the impacts for organic and non-organic products. For the impact of working conditions an analysis was made of the number of work related accidents and the relation to absenteeism.
2: THE NUMBERS THAT ARE NOT AVAILABLE YET
So far we have not given number for Livelihoods and Biodiversity, because the FAO model does not offer enough tools yet. There are also a lot of cost factors relevant to the organic case that are not taken into account in the FAO model. We offer an overview of the possibilities the FAO model would offer so far:
Social costs ("livelihoods")
In the calculation model of the FAO, the hidden costs of social disruption as a result of food production consist of two components: costs of conflicts and costs of livelihood loss. For the costs of conflict the FAO gives us a fixed amount per ton of water-caused soil erosion per person per year. For the costs of loss of livelihood the FAO also provides us with two numbers, one for OECD countries and one for non-OECD countries; both are a fixed amount per ton of water-caused soil erosion per person per year.
There are several costs and benefits the FAO model does not take into account: the influence of cultural, social and economical sustainability in the company, for example the treatment of employees, educational programs, the distribution of wealth, the attitude towards women and minorities, etc. Costs of conflict and livelihood loss caused by landscape degradation other than erosion are also ignored in the FAO model.
Biodiversity
In the calculation model of the FAO the hidden costs of biodiversity loss are linked to three causes: wash-out of P and N, and pesticide use. For each of the three causes FAO gives us a fixed amount per hectare, independent of product or location, a global average therefore.
There are many costs and benefits the FAO model does not take into account: farm management and agricultural such as landscape elements, flower borders, natural area's on the farm grounds, crop rotation, agro-biodiversity, green cover, weed control, no-tillage techniques, etc.
