Society

The Shocking Truth of How Subsidies Impact the Cost of Plant-Based vs. Animal Meat

There’s a prevailing narrative that plant-based meat alternatives are more expensive than meat, making them less accessible to many consumers. However, a critical, often overlooked element in this discussion is the profound impact of government subsidies on market prices.

Multiple global studies and data as described below highlight a substantial gap in government support, with meat and dairy producers receiving a lion’s share compared to their plant-based counterparts. This financial imbalance, fueled by policy decisions and the formidable lobbying power of the meat and dairy industries, plays a crucial role in maintaining lower prices for animal products at the expense of plant-based alternatives. 

The subsidy gap

Government subsidies designed to support the agricultural sector are distributed in a manner that heavily favors meat and dairy production over plant-based alternatives. In the US and EU, these subsidies amount to billions annually, bolstering meat and dairy industries to a degree that plant-based options cannot compete with. For example, an analysis by the Environmental Working Group (EWG) shows a significant gap in USDA spending. 

plant-based vs meat burger subsidies
Infographic with kind permission of Lynette Kucsma

Since 1995, livestock and seafood producers have received over $59 billion in subsidies. In contrast, for the past two decades, the USDA has allocated a tiny fraction of that amount, only $124 million, to support plant-based proteins and alternatives, according to EWG. This indirect support keeps production costs low for meat and dairy producers, a benefit not extended to the producers of plant-based alternatives.

“Meat is subsidized, which has a significant effect on lowering its price”

Further recent studies echo similar findings. The 2024 update of the “Still Butchering the Planet” report from Feedback Global exposes major financiers’ role in fueling the livestock industry, with over half a trillion dollars funneled to top meat-producing companies since the Paris Agreement, accelerating meat and dairy production while simultaneously hindering climate efforts. Notably, as per this report, finance to these companies surged by 15% between 2019-2022, with major meat producers like JBS, Marfrig, Cargill, Tyson Foods, and Minerva alone emitting more greenhouse gases annually than the UK and Ireland combined,

Additionally, the “Bull in the Climate Shop” study, conducted by Profundo and Friends of the Earth, exposes the contradiction between major US banks’ climate commitments and their significant financial backing of the meat, dairy, and feed industries. Although these industries constitute only 0.25% of their portfolios, they contribute to about 11% of their greenhouse gas emissions.

Lobbying influence

The disproportionate allocation of subsidies is further entrenched by the powerful lobbying efforts of the meat and dairy sectors. These industries have significant influence over policy decisions, ensuring the continuation of financial advantages through subsidies. Recent policy implementations aimed at restricting the growth of alternative proteins, including global labeling restrictions and bans on the production and sale of cultivated meat, demonstrate the impact of lobbying efforts.

Cows on a truck
© ocphoto-stock.adobe.com

The case for rebalancing subsidies

Advocates for agricultural subsidy reform argue for a more equitable distribution of government support. Proposals include offering subsidies for sustainable practices and tax breaks for plant-based producers aimed at leveling the playing field. The European Union, for instance, allocates one-third of its budget to Common Agriculture Policy (CAP) subsidies, with a significant portion historically favoring livestock farms.

The European Union, aiming to become the first climate-neutral continent, has been criticized by publications such as  The Guardian for making polluting diets “artificially cheap.” According to a study in Nature Food, 82% of EU subsidies are funneled into the production of emission-intensive animal-based foods, distributed both directly to these sectors and indirectly through feed subsidies.

Joanna Trewern, head of research at ProVeg International, shared her opinions on this study on social media, stating, “We need a more balanced approach in terms of how we use public funding. Taxpayer money should be used to deliver benefits for the taxpayer i.e., sufficient and affordable nutritious, sustainably produced food, and thriving rural communities.”

 Food For Profit
© Food For Profit

Food for Profit

A new documentary, “Food for Profit,” offers a poignant critique of this issue. Directed by Giulia Innocenzi and Pablo D’Ambrosi, the film takes an investigative approach to uncover the connections between the meat industry, lobbying efforts, and European Union policy-making. 

Through a series of undercover operations across European farms and the infiltration of a fake agrifood lobbyist within the European Parliament, the documentary exposes the harsh realities of intensive farming practices, environmental pollution, and the potential risks these pose for future pandemics.

This documentary not only sheds light on the direct influence of substantial taxpayer money funneled into environmentally and ethically questionable agricultural practices but also amplifies the call for a more equitable distribution of subsidies that could foster a more sustainable and health-conscious food system.

New study uncovers UK Farmers' mixed views on cultivated meat
© Anastasiia – stock.adobe.com

The call for subsidy reform 

The call for subsidy reform is gaining traction, with advocates pushing for support mechanisms that encourage sustainable and nutritious food production. Lynette Kucsma, the co-founder of Natural Machines, spoke to vegconomist, advocating for equal subsidies for plant-based products and the role of government support in promoting sustainable choices for consumers. 

She commented, “There are many arguments trying to push back on plant-based meat alternatives, one of them being price. Meat is subsidized, which has a significant effect on lowering its price. This can influence consumer behavior, such as leading to increased consumption of meat products.

“Plant-based meat alternatives don’t have that same advantage. By supporting plant-based meat alternatives with the same levels of subsidies that the meat industry receives, we can promote a level playing field so that consumers who choose the more sustainable plant-based option don’t have to pay an unfair larger price.”

Bookmark
ClosePlease login
See all bookmarks

Share