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How Meat and Dairy Subsidies Are Driving Climate Change


The Impact of Animal Agriculture on Climate Change

According to the United Nations Food and Agricultural Organization (FAO), meat and dairy account for around 14.5% of global greenhouse gas (GHG) emissions. The production of beef and cattle milk accounts for most of these emissions, contributing 41% and 20%, respectively, while pig and poultry meat and eggs contribute 9% and 8% to the sector’s emissions, respectively. Additionally, animal agriculture puts a significant strain on Earth’s limited resources, including land, water, and energy. 

To support the billions of animals raised annually for human consumption, one-third of the planet’s ice-free land and nearly 16% of global freshwater are used for raising livestock. Furthermore, one-third of global grain production is used to feed livestock. With consumption of meat and dairy products expected to increase by 76% and 64%, respectively, by 2050, the burden the industry poses on these resources will only grow further.

In comparison, plant-based foods such as fruits and vegetables, whole grains, beans, peas, nuts, and lentils have a much smaller carbon footprint. On average, emissions from plant-based foods are 10 to 50 times smaller than those from animal products. According to a 2022 study by scientists from Stanford University and the University of California Berkeley, phasing out animal agriculture over the next 15 years would have the same effect as a 68% reduction of carbon dioxide (CO2) emissions through the year 2100. This would provide 52% of the net emission reductions necessary to limit global warming to 2C above pre-industrial levels. 

More on the topic: How Animal Agriculture Is Accelerating Global Deforestation

Meat and Dairy Subsidies: An Overview

What are subsidies?

Meat and dairy subsidies are financial incentives provided by governments to support the production, distribution, and consumption of animal-based products such as meat, milk, and cheese. These subsidies come in various forms, including direct payments to farmers, tax breaks, and financial support for infrastructure and technology improvements. The primary goal of these subsidies is to stabilise food prices, ensure a steady supply of agricultural products, and protect the livelihoods of farmers by mitigating the risks associated with market volatility and unpredictable weather conditions.

By lowering the costs of production, subsidies make meat and dairy products more affordable for consumers. This, in turn, promotes higher consumption of these products, with significant implications for the environment. Indeed, whilethese financial supports help maintain a stable agricultural sector, they also encourage the continuation of practices that contribute substantially to greenhouse gas emissions and other environmental issues.

What is the current scale of these subsidies?

The global scale of meat and dairy subsidies is immense, with governments around the world allocating billions of dollars each year to support these industries. 

According to a OECD report in 2021, more than US$700 billion in transfers is provided annually to the agricultural sector worldwide. A significant portion of this funding supports the meat and dairy industries. For instance, in the European Union (EU), livestock farmers receive 1,200 times more public funding than those producing plant-based or cultivated meat alternatives. In the US, animal farmers benefit from 800 times more public funding than their plant-based counterparts. 

The difference in funding is stark when compared to the relatively minimal financial support allocated to sustainable agriculture. For example, from 2014 to 2020, the combined spending on plant-based alternatives in the EU and the US was a mere $42 million, representing just 0.1% of the $44 billion spent on meat and dairy during the same period. 

The Impact of Meat & Dairy Subsidies

One consequence of these subsidies is the distortion of market prices. These subsidies lower production costs for farmers, which in turn reduces the retail prices of meat and dairy products in supermarkets. As a result, consumers pay prices which do not reflect the true cost of production. 

This artificially low pricing fails to account for the extensive environmental damage caused by animal agriculture, including GHG emissions, deforestation, water usage, and pollution. The hidden costs are instead borne by society in the form of environmental degradation – amongst other externalities. 

This contributes directly to overconsumption. When consumers encounter cheaper prices, they are more likely to purchase and consume greater quantities of these products than they would if the prices reflected the true environmental and production costs. This increased consumption exacerbates the negative effects associated with meat and dairy production, such as climate change.

What Can We Do?

The Case for Reforming Subsidies

Advocates for agricultural subsidy reform argue for a more equitable distribution of government support, emphasising the need to shift financial incentives towards sustainable practices and plant-based production. Currently, subsidies disproportionately favour the meat and dairy industries, contributing to artificially low prices and their overconsumption. To address this imbalance, governments could offer subsidies and tax breaks for sustainable agricultural practices and plant-based food producers, levelling the playing field and encouraging more environmentally friendly food choices.

Studies have shown that making subsidy payments conditional on producing fruits, vegetables, and other plant-based foods can significantly increase their production while reducing meat and dairy output. For example, an economic model that tracked the effects of altering subsidies found that fruit and vegetable production could increase by about 20% in developed countries, leading to healthier diets and lower greenhouse gas emissions. Policymakers in the EU are already exploring ways to reduce the environmental impacts of subsidy payments, with proposals to tie subsidies to public goods like clean water, wildlife habitat, and nutritious food supply. 

Implementing a Meat Tax

Another proposed solution is the implementation of a meat tax, which would adjust the price of meat to reflect its true environmental costs. Research published in the Review of Environmental Economics and Policy suggests that the retail price for meat in high-income countries would need to increase significantly to account for the environmental damage caused by its production. For instance, beef prices would need to rise by 35-56%, poultry by 25%, and lamb and pork by 19%.

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