Financing a sustainable global food system

The global food system is unsustainable. While it is worth approximately $8 trillion annually, its negative impact is valued at roughly $12 trillion. And this is not the system’s only contradiction. Around the world, food systems are affected by climate change (due to disruptive weather and rising temperatures) and make significant contributions to it (through greenhouse gas emissions and biodiversity destruction). The millions of jobs they provide are often low-quality and poorly paid. And, most significantly, they fail in their ultimate purpose of delivering affordable, healthy food to all, writes Simon Zadek at eijnsight.com.

Because the global food system is fundamentally unviable, change is inevitable. But the radical reforms needed to create an inclusive, sustainable sector that produces nourishing food for the world’s population may have devastating short-term consequences. If we take the wrong approach, incorporating the actual production costs into food systems could trigger widespread bankruptcy, devastate rural unemployment, drive up prices, and increase poverty.

However, the best way to achieve a rapid, fair, and safe transition to a sustainable global food system that can deliver affordable, healthy food for all is a matter of heated debate. This is reflected in the strident and largely unproductive discussions taking place in the run-up to the United Nations Food Systems Summit, to be held during the UN General Assembly this month.

From a production standpoint, advocates of regenerative farming vehemently oppose a new generation of soilless food production, such as lab-grown “alternate protein” and vertical farming. But it is tough to scale regenerative farming rapidly. Soilless systems must be a major part of the solution, given their dramatically reduced carbon footprint and water use, minimal impact on biodiversity, and potential for rapidly delivering cheap, healthy food at scale.

The role of finance in this transition is no less controversial.

There is some merit to complaints about the undue influence of a limited number of private players on decisions that impact the entire global food system. Financialization – the drive to maximize risk-adjusted financial returns – is increasing across the global food system, and market concentration is growing. For example, just ten companies control half of the world’s seed market, and four agribusiness firms account for 90% of the global grain trade. Just 1% of agricultural firms own 65% of the available farmland.

Read the complete article at www.eijnsight.com.


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