Egyptian agribusiness SEKEM is placing a bold wager on the idea that sustainable agriculture is not just good ethics — it’s good economics. The company has emerged as one of Egypt’s prominent advocates for true cost accounting (TCA), a framework that captures the full environmental, health, and social costs embedded in agricultural production and translates them into monetary terms. The goal, says SEKEM’s CEO Helmy Abouleish in comments to EnterpriseAM, is simple — reprice food in a way that reflects its real cost to society, not just what consumers pay at the till.

In a wide-ranging conversation with EnterpriseAM, Abouleish outlined SEKEM’S approach to embedding TCA into its entire value chain, its impact on long-term decision-making, and why he believes Egypt could become a leader in the regional transition to sustainable agriculture.

SOUND SMART- True cost accounting is a systems-based methodology grounded in frameworks developed by institutions like the UN Food and Agriculture Organization. It quantifies externalities that markets typically ignore, including soil degradation, CO2 emissions, and long-term health costs, as well as positive social outcomes like rural livelihoods and employment quality.

THE BUSINESS CASE FOR TCA ADOPTION-

SEKEM’s decision to adopt TCA was driven by its ability to reveal what Abouleish describes as a “proactive and potentially more cost-effective” path to agriculture. “Through the true cost accounting methodology, we discovered that organic and biodynamic products are actually cheaper when we factor in the hidden and externalized costs,” he tells us. “These costs include impacts on health, society, and the environment, such as water usage and CO2 emissions. If these costs are properly accounted for, organic products become the more economical choice.” The aim, he says, is “to enhance decision-making processes for policymakers, businesses, farmers, investors, and consumers alike.”

Why it matters: Abouleish emphasizes that TCA doesn’t directly improve environmental outcomes, but it helps measure them. The real benefits lie in organic and biodynamic farming, which reduce environmental harm, lower emissions, and conserve water. These methods also carry health advantages by limiting exposure to pesticide residues and contribute to rural development by creating better-paying jobs.

PUTTING THE MODEL TO WORK-

SEKEM adopts true cost accounting throughout its product portfolio — ranging from food and textiles to healthcare and spices. The group sees strong market potential in four key categories:

• Organic cotton: SEKEM’s NatureTex has pioneered organic cotton in Egypt, producing babywear, home textiles, and toys for a growing sustainable fashion segment.
• Biodynamic foods: Its subsidiary Isis Organic offers a range of organic products, including vegetables, honey, dates, oils, and beverages, targeting rising demand for healthy food.
• Phyto-pharma: Atos Pharma — another SEKEM company — develops plant-based medical products that align with global trends in natural healthcare and tap into Egypt’s expanding wellness market.
• Herbs and spices: The company’s Lotus Organic Herbs & Spices supplies organic herbs and spices to local and international markets.

While TCA adoption remains quite nascent throughout Egypt and the region at large, Abouleish sees more companies embracing it over time. “Notably, Rdna Store — one of our partners — has recently conducted a true cost accounting study for organic beef, marking a significant and promising first step in this direction.”

Big plans ahead: The company’s “Economy of Love” project aims to convert 40k farmers to sustainable agriculture practices by the end of this year, with plans to reach 250k farmers by 2028.

Regional plans are also starting to take root: SEKEM previously announced its subsidiary Isis Organic’s plans to expand into Saudi Arabia and Algeria with two new production facilities. The move comes in response to growing demand for organic products in both markets, according to Abouleish. While organic farming is less prevalent there than in Egypt, SEKEM aims to build local supply chains by encouraging farmers to adopt organic methods and meet rising domestic demand.

THE CHALLENGES-

SEKEM’s own transition to TCA wasn’t without friction: Abouleish acknowledges it remains a hard sell for many. “The primary challenge in promoting sustainable agriculture lies in advocating for upfront cost investments,” he says. Many farmers are hesitant to transition to organic farming due to certification costs, changes in input regimes, and the time it takes for soil to regenerate.

The solution: “To overcome financial barriers, strategic pre-funding mechanisms can cover initial investments, ensuring that organic farming becomes a financially sustainable choice for farmers,” he says.

Debunking the cost myth of going organic: Another common misconception, he adds, is that “true cost accounting leads to more expensive products.” That may be true in the short term, but “in the medium and long term, it will become clear that our methods result in cheaper products when all the side effects and impacts are factored into the calculation.”

Rolling out true cost accounting in Egypt won’t be easy. Abouleish points to a mix of structural and cultural hurdles, saying that the model needs informed consumers, bold policymakers willing to legislate for sustainability, and strong backing from funding agencies. Add to that a pressing need for capacity building, research, and education to mainstream the concept — without which, he says, TCA simply won’t take root.