The Economics of Sustainable Food: Smart Policies for Health and the Planet

By Nicoletta Batini

Producing food industrially like we do today causes tremendous global economic losses in terms of malnutrition, diseases, and environmental degradation. But because the food industry does not bear those costs and the price tag for these losses does not show up at the grocery store, it is too often ignored by economists and policymakers.

The Economics of Sustainable Food details the true cost of food for people and the planet. It illustrates how to transform our broken system, alleviating its severe financial and human burden. The key is smart macroeconomic policy that moves us toward methods that protect the environment like regenerative land and sea farming, low-impact urban farming, and alternative protein farming, and toward healthy diets. The book’s multidisciplinary team of authors lay out detailed fiscal and trade policies, as well as structural reforms, to achieve those goals.

Chapters discuss strategies to make food production sustainable, nutritious, and fair, ranging from taxes and spending to education, labor market, health care, and pension reforms, alongside regulation in cases where market incentives are unlikely to work or to work fast enough. The authors carefully consider the different needs of more and less advanced economies, balancing economic development and sustainability goals. Case studies showcase successful strategies from around the world, such as taxing foods with a high carbon footprint, financing ecosystems mapping and conservation to meet scientific targets for healthy biomes permanency, subsidizing sustainable land and sea farming, reforming health systems to move away from sick care to preventive, nutrition-based care, and providing schools with matching funds to purchase local organic produce.

In the years ahead, few issues will be more important for individual prosperity and the global economy than the way we produce our food and what food we eat. This roadmap for reform is an invaluable resource to help global policymakers improve countless lives.

• Language: English
• Publisher: Island Press
• Release date: Jun 8, 2021
• ISBN: 9781642831627

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Half Title of The Economics of Sustainable FoodBook Title of The Economics of Sustainable Food

© 2021 Nicoletta Batini

All rights reserved under International and Pan-American Copyright Conventions. No part of this book may be reproduced in any form or by any means without permission in writing from the publisher: Island Press, 2000 M Street, NW, Suite 650, Washington, DC 20036

Library of Congress Control Number: 2020944714

All Island Press books are printed on environmentally responsible materials.

Manufactured in the United States of America

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Nothing contained in this book should be reported as representing the views of the IMF, its Executive Board, member governments, or any other entity mentioned herein. The views in this book belong solely to the authors.

Keywords: Agricultural industrialization, developing economies, food demand, food insecurity, food prices, food production, food supply, food system, food waste, global food shortage, Green Revolution, Intergovernmental Panel on Climate Change (IPCC), macroeconomic policy, polyfunctional farming, subsistence economies, sustainable agriculture, sustainable development, true cost of food

For Lina and Jehanne, my small (but mighty) Mother Nature warriors.

CONTENTS

Preface

Nicoletta Batini

1. We Depend on Food, Food Depends on Nature

Nicoletta Batini

I. GREENING FOOD SUPPLY

2. Greening Food Supply in Advanced Economies

Nicoletta Batini and Philippe Pointereau

3. Greening Food Supply in Less-Advanced Economies

Ruth DeFries

4. Sustainable Farming Trends

a. Small and Polyfunctional Farming

John Ikerd, Patty Cantrell, and Hanna Wernerson

b. Urban, Vertical, Controlled-Environment Farming

Dickson Despommier and Charles Knirsch

c. Regenerative Ocean Farming

Nicoletta Batini and Bren Smith

d. Alternative Protein Farming

Bruce Friedrich and Stephen R. Kaufman

II. GREENING FOOD DEMAND

5. Greening Food Demand in Advanced Economies

Nicoletta Batini and Luigi Fontana

6. Greening Food Demand in Less-Advanced Economies

Divya Mehra, Saskia de Pee, Jessica C. Fanzo, and Martin W. Bloem

III. GREENING FOOD WASTE

7. Eliminating Food Waste

Geeta Sethi, Emilie Cassou, Lucia Patricia Avila Bedregal, Catherine Simmy Jain, Dipti Thapa, Xiaoyue Hou, and Luis Constantino

IV. CONSERVING LAND AND SEA TO SUPPORT FOOD SECURITY

8. Conserving Land and Forests

Nicoletta Batini

9. Conserving the Oceans

Nicoletta Batini and Rodolfo Werner

10. Conserving Mammals

Ivon Cuadros-Casanova and Carlo Rondinini

11. Conserving Insects

Michael J. Samways, Pedro Cardoso, and Charl Deacon

12. Conclusions

Nicoletta Batini

Acknowledgments

Contributors

Index

PREFACE

Food systems have come a long way since the era of hunting and gathering began some 1.8 million years ago, yet the undeniable advances have come at a price. While more than two thirds of the population in poor countries still work in subsistence agriculture and fishing, less than 5 percent of the population does in richer countries, where most of our food is produced, using industrial methods focused on high crop and animal productivity. Globally, the industrial food chain is extremely concentrated, with a few players dominating entire food markets vertically or horizontally.

So far, twenty-first-century macroeconomists have largely ignored food systems. This is odd, considering that the agri-food sector is both the largest, fastest-growing industry in the world and the major employer in the developing world.

Perhaps more worryingly, many macroeconomists have overlooked the fact that our current food systems pose several existential threats to people and economies. First, almost half of humanity is chronically malnourished, and most of the rest is either overweight or obese, because the food we produce is less and less nutritious and the way we distribute it globally is grossly inefficient and vulnerable to disruptions. This has huge implications for labor productivity and health expenditures and, accordingly, for private and public finances. Second, industrial food production, from intensive monocrops and confined animal operations in the Northern Hemisphere to thousands of small-scale ranchers in the Amazon serving the cattle industry, is bringing entire ecosystems to biological collapse, causing a human-made mass extinction. Crucially, the food system is the top contributor to greenhouse gas emissions and the number one degrader of natural resources, including water and air. Third, human diets have shifted progressively toward consumption of more foods derived from animals. Many of these animals are fed from birth with growth-promoting subtherapeutic dosages of antibiotics, generating conditions for the proliferation of new, untreatable superbugs resistant to known antimicrobials. Industrial animal farming operations that raise large numbers of animals in confined spaces also breed bacteria and viruses such as Salmonella, Escherichia coli, and the 2009 swine flu H1N1. Even more concerning is the spread of zoonotic diseases such as SARS-CoV, Zika, HIV, Ebola, and today’s SARS-CoV-2, as more and more pathogens confined for millennia to the animal kingdom jump species to infect ours. This spread is traceable to the increasing disturbance of wildlife, both through the consumption of wild animals for food and through the loss of wildlife habitat as more land is cleared for farming and urbanization.

The impact of each one of these threats on people and the planet is immense and is economically unbearable, making their combined adverse effects too large to conceive. The good news is that this implies that reforming food systems promises incredible opportunities to advance both human and environmental well-being. Apart from feeding us properly and conserving the natural world, well-managed food systems can secure multiple social, economic, and environmental goals, such as keeping humanity healthy and well-nourished, sustaining inclusive trade and income, and creating millions of local high-quality jobs. In this sense, reforming food systems is central to achieving the UN Sustainable Development Goals and the pledges of the Paris Climate Agreement.

As populations grow and dietary patterns shift to become progressively more caloric and protein-rich, natural resources are put under growing stress while climate change wreaks havoc on global food security. To avoid the very real risk of a human and planetary catastrophe, we need to quickly reinstate food systems in the pantheon of economic activities that macroeconomists routinely analyze and work on. And we must design and implement economic strategies to make food production more inclusive, profitable, sustainable, and nutritious.

To this end, this book identifies a portfolio of policy measures to reform food systems based on a multidisciplinary approach connecting macroeconomics, public health, and environmental sciences. Recommendations are based on the most recent scientific literature and on a large array of successful country cases.

I strongly recommend this book to all those who want to understand the importance of food systems for economies and their relationship with climate and developmental goals, as well as to those who want to design sound public policy strategies to attain those goals.

The first step is to recognize that economic health is human health is planetary health.

Nicoletta Batini

Washington, D.C., June 2020

CHAPTER 1

We Depend on Food, Food Depends on Nature

Nicoletta Batini

The truth is: the natural world is changing. And we are totally dependent on that world. It provides our food, water and air. It is the most precious thing we have and we need to defend it. —David Attenborough

At the World Economic Forum in Davos, Switzerland in 2019, delegates spoke of a Great Energy Transformation needed to ensure a clean and secure energy future. No less urgent for the future of the planet is what we might call a Great Food Transformation.

While the climate implications of burning fossil fuels have received a great deal of attention, recent research by the UN’s Intergovernmental Panel on Climate Change (IPCC) shows that what we eat, how we produce it, and how it gets to us exerts an even greater impact on the global environment and public health, a finding made even more evident by the emergence of the COVID-19 pandemic. Greening food production and managing food demand to ensure that it is safe and nutritious for all are crucial for meeting the UN’s 2030 Agenda for Sustainable Development and the environmental pledge behind the UN’s Paris Agreement (Batini 2019b).

The True Cost of Our Food

Modern industrial agriculture has been described to the public as a technological miracle. Its advanced level of specialization and mechanization, we were told, would increase food production to meet the demand of a rapidly growing global population, and its economies of scale would ensure that farming remained profitable. But something crucial was left out of this story: the price tag.

Although productivity advances in agriculture have dramatically increased the supply of food, reducing the risk of global shortages, today hundreds of millions of people still go to bed hungry each night, and 2 billion more lack essential nutrients. Moreover, the way we produce food is making diets for the rest of humanity increasingly hypercaloric, undernutritious, and unhealthy, and unsafe food containing harmful bacteria, viruses, parasites, or chemical substances is a growing global threat leading to more than half a billion cases of illness a year (WHO 2020). Crucially, science shows that the practices currently used in conventional agriculture and fishing are harming the planet beyond repair (IPCC 2019; IPBES 2019; Willett et al. 2019).

Looking forward, fears are rising that industrial agriculture and fishing may not be able to feed a growing world because we are approaching the ceiling of what can be done to expand production industrially in terms of land, water, and chemical soil fertilization (FAO 2019). These challenges are aggravated by climate change, which is eroding the fertility of the land and the vitality of the sea, as well as making rain and other seasonal patterns more volatile and extreme (IPCC 2019). That should not surprise us: Since the inception of the not-so-green Green Revolution¹ in the 1950s, agriculture has churned through natural resources, and we may soon reach the bottom of the bucket. As Schumacher (1973, p. 30) pointed out, infinite growth in a finite environment is an obvious impossibility.

Importantly, agriculture, fishing, and forestry are fundamentally different from other industrial sectors in that the former deal with living substances subject to their own laws, whereas the latter do not. Altering these laws, as through synthetic fertilization or genetic manipulation of factory-raised animals, is creating biological imbalances of vast proportions, the effects of which are known to be either extremely dangerous or totally unpredictable.

The crises of the modern food system—malnutrition, diseases, and ecosystem collapse—generate incommensurate economic costs. However, the importance of developing economic policies that can help transform the system have long disappeared from the economic profession’s radar screen because of the widespread belief that producing food industrially would solve global food problems. Reflecting this belief, economic analysis regularly disregards the primary sector and its interactions with the rest of the economy, and macroeconomic policy design largely abstracts from it on the grounds of the low value added and job intensity of the sector in the advanced world. Accordingly, when major developments wreak havoc on the food system, such as foodborne pandemics, mass extinctions, spikes in food prices, record crop losses, or record deforestation from abnormal wildfire seasons, they are treated as exogenous, unanticipated shocks even if they are the direct result of specific public or private agents’ actions.

The joint health and economic crises unleashed by the coronavirus outbreak and the burning down of large sections of the Amazon rainforest in 2019–2020 demonstrate that ignoring the role played by food systems in the economy is an expensive mistake not just from a public health and environmental perspective but also from an economic point of view. This is because food systems are an integral part of economic systems and intersect with human activity in many ways. Food systems do not only feed us, influence our health, and shape the way we interact with the natural world—including climate and pathogens. They also affect employment and labor productivity, drive international trade and domestic intermediate exchanges, and via land and sea rights have traditionally spurred exploration, commerce, and financial activities, helping to build nations’ wealth.

The industrialization of agriculture and fishing have not diminished the importance of food systems for people and economies but have distorted it, leading to five types of negative externalities:

Environmental degradation. Scientific evidence from a variety of independent sources and fields unanimously identifies agriculture (crop and animal) as the single most important driver of climate change (IPCC 2019; Sanjo et al. 2016). Specifically, agriculture is estimated to be responsible for 21–37 percent of all greenhouse gas emissions because of the release of carbon dioxide from deforestation to claw back land for pasture and feedstock crops and from burning fossil fuels to power farm machinery and to transport, store, and cook foods; the release of methane from ruminant livestock; and the release of nitrous oxide from industrially tilled, heavily fertilized soils and liquid manure management systems (IPCC 2019). Beyond warming the atmosphere and catalyzing climate change, industrial agriculture is quickly exhausting other natural resources. It has led to the clearing of more than 40 percent of Earth’s arable land, a surface area equivalent to the size of South America, and global pastures currently occupy land equivalent to the surface area of Africa. In addition, irrigation for industrial agriculture is responsible for the biggest use of water on the planet, absorbing 70–80 percent of all available freshwater. Meanwhile, fertilizers have more than doubled the levels of nitrogen and phosphorus in Earth’s crust, leading to massive water degradation and pollution in the remaining water available for human consumption and other uses (Rockstrom et al. 2017). Likewise, commercial fishing is removing an increasingly large number of fish from the ocean, depleting key fish stocks, and many industrial fishing practices also destroy aquatic habitat, with far-reaching consequences for biodiversity, climate, and life on Earth more generally (WWF 2018).

These phenomena are bound to get worse. Hastened population growth and the shift to hypercaloric, animal-based diets, together with a ramp-up in the production of biofuels as fossil fuels run scarce, suggest that we will need to double global food production by 2050 and triple it over the following decades. Looking at livestock alone, for example, projections indicate that by 2050 animal production will increase by 80 percent compared with 2005 (Alexandratos and Bruinsma 2012), in line with estimates of the trend in the global demand for milk and meat (Fiala 2008; Thornton 2010). But these rhythms and methods of production are plainly incompatible with the sustainability of the world’s future food supply, heralding the advent of a simultaneous global agricultural, food, and water crisis.

Jobs and income inequality. Industrial agriculture also threatens jobs and income equality in a variety of ways. In advanced economies, as predicted by Colin Clark in 1951, the industrialization of agriculture has eliminated most agricultural jobs in the industrialized world (figure 1-1). Far more jobs have been lost in farming than in manufacturing over the past half century.

Although economy-wide unemployment did not materialize after the industrialization of agriculture, as new industries emerged and expanded, the transition between agricultural and manufacturing or service jobs had far-reaching impacts on income inequality both in rural and urban areas, with effects still vividly felt today (Judis 2016). Production is also massively concentrated vertically, with 1 percent of all companies dominating two thirds of world markets and even higher concentration in some domestic markets (figure 1-2). This has negative implications for price and wage setting and the types and quality of food and beverages produced.²

Figure 1-1. Agricultural labor by world region, 1961–2020 (in millions of persons active, 15+ years, male and female). Sources: ILO Model estimates, May 2018 update; USDA Economic Research Service.

In emerging and developing economies, agricultural industrialization is significantly less advanced, and agriculture in these economies still employs about 1 billion people (ILO 2019). However, if agriculture were to follow the same destiny observed in advanced economies and to be industrialized as implied by UN projections on urbanization trends (UN 2018), most of these jobs could be permanently lost, leading to a quadrupling of 2019 global unemployment. Industrial agriculture in the advanced world, on the other hand, is already a leading cause of income inequality and poverty in developing countries: Subsidies to industrial agriculture in advanced economies distort international commodity prices, making it cheaper for developing countries to import rather than continue to produce food. This not only destroys the main source of income in subsistence economies; it also makes countries dependent on imports for food (among many others, see Alam et al. 2015; Boltvinik and Mann 2016).³ The COVID-19 pandemic is likely to affect food prices internationally and plunge developing economies into deeper debt (FAO 2020; UNSCN 2020).

Figure 1-2. Global food industry market concentration. Sources: Dow Jones Factiva; Oxfam International (2013).

Malnutrition and food insecurity. At the end of the eighteenth century, Malthus postulated that agricultural innovations would raise prosperity only fleetingly: By stimulating population growth, more food would lead to a fight for scarce resources, causing hunger, war, and diseases. In turn this would restrain economic growth and put a lid on population growth. Malthus’s prediction has long been dismissed as spectacularly wrong, because continuous advances in food production—alongside medical advances and improvements in sanitary infrastructure—have ensured a permanent global food glut and continual growth in global longevity. But although Malthus was wrong yesterday, he probably would have been right today and tomorrow in two important respects. First, although industrial agriculture has ensured that increasing amounts of food are produced globally, this has not solved world hunger. Major distributional problems remain between and within nations, with about 2 billion people around the world overeating and 3 billion undereating. Furthermore, a third of all food produced is wasted. The misallocation of food, in turn, is a cause of persistent differentials in the levels of prosperity around the world, and thus of migration and conflicts. Second, the ecological footprint from current agricultural methods demonstrably exceeds the carrying capacity of the planet. Absent bold and globalized policy action, this is bound to hamper production soon, causing either a massive rationing of food or drastic adjustments in food prices, making food unaffordable for billions of people. To make things worse, as the current COVID-19 crisis has shown, the global food supply chain—heavily concentrated, globalized, and operating on a just-intime supply basis—is likely to falter and fail in the case of major events such as natural disasters or pandemics, a high-probability scenario in a world of swift climate change (Batini et al. 2020; see also Blay-Palmer et al. 2020). In some cases, we do not have the ability to produce food. In other cases, we can produce it but do not have the ability to process it and package it, a limitation conducive to industrial-scale food crises. This is aggravated by the fact that large swathes of the food system rely on foreign seasonal labor, which depends on migration flows, which in turn are volatile and hinge on the resilience of international travel—gravely disrupted during the pandemic, for example—and migration policies.

Rural exodus and urbanization. The industrialization of food production has contributed to a global phenomenon of rural-to-urban migration. It is estimated that the rural population represented almost two thirds of the total population of the world in the middle of the twentieth century. Since then, the percentage of people living in rural areas has been decreasing at a very fast rate. The rate of decrease remained roughly the same between 1950 and 2000, at around 2 percent every 5 years, or 0.35 percent per annum. The projections suggest that this phenomenon will accelerate in the future: In 2030, only 40 percent of the world population will live in rural settlements, reflecting a rapid rate of decrease of 0.44 percent per year projected from 2000 to 2030 (UN 2018). Different continents have different patterns of urbanization, but the consequences in the rural population are similar. They include the disappearance of rural cultures, the increased risk of economic instability and deviant behavior among rural–urban migrants, higher unemployment in urban areas, changes in fertility behavior, and cultural tensions in urban areas. Crucially, the decline in agricultural employment has led to a degradation of human skills in traditional agriculture, which may aggravate the shift to industrial agriculture. Urbanization also adds to environmental degradation on two levels. First, poor air and water quality, insufficient water availability, waste disposal problems, and high energy consumption are exacerbated by the increasing population density and demands of urban environments. Second, urban development is one of the key causes of human encroachment on natural habitats, loss of tree cover, and for wild animal populations the loss of habitat and food sources. Together with farming and hunting, urbanization simultaneously threatens species survival and increases the risk of dangerous viruses such as COVID-19 spilling over from animals to humans (Johnson et al. 2020).

Risks to public health. Finally, there is compelling evidence that industrial agriculture has vast implications for public health, and the cost and risks are escalating fast. First, as animal products have become less expensive per unit of agricultural land than fruit and vegetables in most advanced and large emerging markets, and food is becoming increasingly processed, the average diet in richer countries is skewing toward protein- and cholesterol-rich, high-sugar, and nonfibrous foods, often laden with hormones, antibiotics, and chemicals used in industrial production. This has led to higher rates of noncommunicable diseases and obesity, illnesses exacerbated by the shift toward sedentary lifestyles that has accompanied the shift from agricultural economies to service-based economies and urbanization in the developing world. To this we add the human and social costs of pesticide use in industrial agriculture and its effect on the neurologic, respiratory, and reproductive systems (Nicolopoulou-Stamati et al. 2016).

Second, most livestock today are raised in concentrated animal feeding operations, more commonly known as factory farms. These industrial-scale facilities, where thousands of genetically similar animals are packed together in unsanitary, overcrowded quarters and are vulnerable to disease because of the stress placed on their immune systems by these living conditions, continuously breed lethal bacteria such as Salmonella, Escherichia coli, and, in farms at sea, Vibrio cholerae, as well as an array of flu viruses, such as the bird (poultry) 2006 highly pathogenic avian influenza or the swine 2009 H1N1 flu, which triggered deadly pandemics. Research shows that these farms create the perfect conditions for rapid amplification and spread of pathogens (Saenz et al. 2006). These conditions have been shown to be comparable to those in wet markets in Asia, Africa, and South America, where zoonotic viruses such as severe acute respiratory syndrome, HIV, Ebola, and now, possibly, COVID-19, spilled over to our species from stressed wild animals mixed with humans in unsanitary and crowded spaces.

Third, the overuse of subtherapeutic doses of antibiotics in factory farms for nonmedical purposes has led to antibiotic-resistant strains of bacteria that make treating human illnesses more difficult. Although the links between animal agriculture and human disease are complex and in need of additional study, evidence is strong enough for scientists and public health organizations to have repeatedly called for reduced use of antibiotics in agriculture (WHO 2017; CDC 2020). Based on current projections, if unaddressed, antimicrobial resistance will lead to more deaths than cancer by 2050 and an economic cost equivalent to 260 percent of the 2016 Global World Product (O’Neill 2016).

The current and future costs of fixing these public health challenges are enormous. Yet they are only part of the true cost of our food. By harming human health, through overnourishment or undernourishment, dysfunctional food systems erode labor productivity because they increase the number and types of workers’ disabilities and, correspondingly, the number of years of work lost. By raising health spending and lowering potential output, industrial food systems pose one of the greatest menaces to fiscal sustainability in most world countries today.

Fixing Food Systems

Few issues will be more important for individual prosperity and the global economy than the way we produce our food and what food we eat. Adopting policy measures to move away from current methods of industrial agriculture and fishing and to make them sustainable, healthy, and safe is a tremendous opportunity for global policymakers to make a difference across a range of issues and in many people’s lives.

Seizing this opportunity involves following three steps (figure 1-3).

Figure 1-3. The three steps toward a Great Food Transformation.

Step One

To begin with, policymakers need to understand the public health, economic, and environmental trade-offs between using land and sea for food production and their use for competing activities: urban, extractive, industrial, recreational, and conservational. In addition, policymakers need to appreciate the different impacts of alternative food systems on natural resources, biological diversity, and greenhouse gas emissions. Farming and fishing methods that are more resource intensive eat into resources that could be used for other ends, raising the opportunity cost of producing food relative to methods that are less resource intensive. Also, policymakers need to have a clear sense of how different diets affect health. Diets that are healthier are less burdensome for people and the economy because they minimize the risk of premature death, the need for and cost of sick care and nonmedical care, and losses of work and income due to illnesses.

In recent years, researchers have come up with precise measures of these relative impacts and have arrived at three broad conclusions. First, the true cost of food produced industrially is very high for people, nature, and the economy (IPCC 2019). In contrast, regenerative agriculture and fishing follow ecological principles that can heal the environment, are more adaptive to changes in climate, and produce nutritious and safe food that is comparatively cheap (FAO 2019; FOLU 2019; UNEP 2019). Second, diets that are primarily plant based are healthier and more sustainable than diets that are heavy in animal products (Willet et al. 2019). Finally, biological diversity of both animals and plants is key to human food security because a significant diversity of organisms is necessary to protect the web of life that sustains crops and livestock. Conservation of pristine ecosystems is also essential to stabilize climate, which in turn shelters food production from an exacerbation of extreme weather events and global warming (IPBES 2019).

Step Two

Having identified the direction in which food systems must go for health and planet, society needs clear operational frameworks to guide shifts at the country or regional level. Ideally, these frameworks should reflect scenarios obtained with integrated land and sea use models calibrated nationally. These models can typically compare the environmental, dietary, and socioeconomic implications of alternative production and consumption templates given specific geographic, resource, climate, and cultural initial conditions in various places around the world. In turn, these frameworks can be weaved into larger analytical and modeling setups involving energy planning and macroeconomic variables, such as the country’s international trade balance, to assess the overall environmental and socioeconomic impact of competing food supply models. Advanced geospatial models of land, food production, and trade can then be built to test policy options and develop pathways, as has been done successfully for Brazil, France, Indonesia, and the United Kingdom (Bretz, 2016; Solagro 2016; Vergara et al., 2016; Harwatt and Hayek 2019; Schmidt-Traub et al. 2019).⁴

Step Three

Finally, policymakers need to design economic policies and structural reforms that can transform food systems to meet their country’s development and environmental goals. These are the actual policy levers that change food production and consumption.

Regrettably, although today we understand how to produce and eat food for the well-being of people and the planet (Step One), and these precepts are starting to be investigated more pragmatically in some countries (Step Two), the design of economic policies to make a food transformation happen is much sketchier. Globally, only a handful of countries have announced plans to earmark modest amounts of public investment and changes in regulations or green food production and consumption. Elsewhere, reforms to promote food sustainability and health continue to be sidelined to a bilateral debate between agriculture ministries, nongovernment organizations, and the few large corporations that dominate the sector (Andersen and Kuhn 2014).

And yet macroeconomic policy is ideally suited to improve food systems. Green fiscal, trade, and financial policies, as well as structural reform measures used successfully to spur green transitions in other markets, such as energy, can be deployed in food markets to arrive at more sustainable production and healthier diets and reap the ensuing economic, social, and planetary gains.

The route to food system reform via well-targeted economic measures is uphill but far from impossible as food markets everywhere seem ready to embrace change. Promising trends toward greater agri-food sustainability are emerging independently, including a global acceleration in land and sea used for nonconventional, regenerative farming, a shift away among Millennials and Generation Z members from animal-based protein, and technological advancements in restorative methods of agricultural production and regenerative ocean farming. These trends are accompanied by parallel, self-directed shifts in financing, which is slowly but relentlessly becoming more engaged in funding green, sustainable agri-food production and consumption solutions (Batini 2019c). Novel investment trends, which largely respond to emergent demand trends, include plant-based investing, alternative protein investing, and agricultural technology venture capital investing. They also include a growing class of green and sustainable bond investing that is no longer limited to green projects in the energy realm but increasingly incorporates a focus on land use.

Although the potential benefits of making global food systems sustainable are enormous, not all of them can be achieved through a business-as-usual approach. In fact, current trends in global investment do not yet reflect the potential for disruption in demand-side agri-food innovations—innovations that target and affect consumers. The lower levels of investment in food systems are due in great part to the complexity of the sector. Fragmented rural markets, poor infrastructure, high regulatory burdens, and other