The study, The Economics of Desertification, Land Degradation and Drought, warned that the international community is losing vast amounts of agricultural production due to the effects of continuing environmental degradation, such as desertification.
The report added that without sustainable land management, development initiatives across the globe will be hindered.
Presented at the opening session of the UN Convention to Combat Desertification's (UNCCD) 2nd Scientific Conference, the report noted that up to five per cent of global agricultural gross domestic production (GDP) is being lost due to deteriorating land quality.
"Business as usual is no longer an option," UNCCD executive secretary, Luc Gnacadja, told the opening session of the conference, which was held in Bonn, Germany.
The report is the first economic evaluation of its kind in over twenty years and shows that up to 12 per cent of Africa's agricultural GDP is being lost, compared to six per cent in Paraguay and a staggering 24 per cent in Guatemala.
The social costs of land degradation are even more devastating according to the UNCCD, with nearly 870mn people suffering from chronic hunger globally.
The UN agency reported that nearly 3.7mn people in East Africa still required food assistance following the drought of 2011.
"Desertification, land degradation and drought are key constraints to building social and environmental resilience, achieving global food security and delivering meaningful poverty reduction," said Gnacadja.
The study, which looked at the costs and benefits of addressing desertification, land degradation and drought, found that existing research mostly focuses on the direct economic consequences of these phenomena but overlooked unintended consequences.
Gnacadja acknowledged that the study provided an unprecedented window into tackling the global challenge of land degradation but underscored that much yet remained to be achieved.
He said, "The study also points to significant opportunities for action but unless scientific understanding of all land degradation and drought is strengthened, especially in the context of a changing climate, the global community is poorly positioned to deal with the impact of change."