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Reduced animal-sourced food (ASF) consumption risks stranding billions in EU agricultural assets. Phasing out these assets over time can mitigate financial risks and support sustainable food systems.

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Area of Science:

  • Agricultural Economics
  • Environmental Economics
  • Sustainable Food Systems

Background:

  • High-income countries face significant financial risks from declining animal-sourced food (ASF) consumption.
  • ASF-related assets constitute a substantial portion of fixed agricultural assets in the EU27 + UK.

Purpose of the Study:

  • To quantify the financial risk of stranded assets due to reduced ASF consumption in the EU27 + UK.
  • To explore pathways for mitigating asset stranding and supporting sustainable food system transformation.

Main Methods:

  • Integration of agricultural and economic data with global multi-regional input-output models.
  • Estimation of asset stranding percentages under various ASF consumption reduction scenarios.

Main Results:

  • ASF assets represent 78% of EU27 + UK fixed agricultural assets (€158 billion livestock, €100 billion feed).
  • ASF reductions of 9.5%, 60%, and 100% could strand 18%, 50%, and 77% of these assets, respectively.
  • Current depreciation rates offer time for gradual asset phase-out.

Conclusions:

  • Policy and climate-driven risks to ASF assets are interconnected and require integrated financial modeling.
  • Repurposing or phasing out ASF-related assets with policy support is crucial for sustainable food system transitions.
  • Food producers face cascading stranding risks, necessitating proactive strategies.