If Europeans eat less meat and dairy, this will have major consequences for farmers. New research shows that many barns and machines could lose their value. With the right policies, these losses can be limited. This is shown by research from Leiden, Oxford and Vienna.
Scientists agree that to protect the climate, nature and human health, we need to eat fewer animal products and more plant-based foods. This also means that agriculture must change.
But this creates a problem. Many investments that are currently needed for livestock may no longer be needed in the future. These investments can then lose their value, even though they are still technically usable. These are known as 'stranded assets': expensive assets that become worthless too early.
Money tied up in animal-based production
In Europe and the United Kingdom, most money in agriculture is tied up in animal-based production. This includes barns, machinery, milking systems and breeding animals. New research shows that 78 per cent of these fixed investments are linked to livestock and animal feed. The sums involved are enormous. Around €158 billion is directly linked to livestock farming, with another €100 billion tied up in feed production.
The research was carried out by scientists from Leiden University, the University of Oxford and Vienna University of Economics and Business, and was published in the scientific journal Nature Food.
'It can discourage farmers from switching to plant-based production.'
Billions of euros at risk
The researchers calculated how much money could be involved. With a moderate change in diets, around €61 billion could be at risk. With a stronger shift, this rises to €168 billion, and in the most extreme scenario to as much as €255 billion.
How serious the problem becomes depends mainly on how quickly the transition happens and whether investments can be reused or phased out gradually through depreciation.
'Stranded assets are not just a theory,' says lead author Anniek Kortleve of CML. 'Most agricultural investments are focused on animal-based production, especially dairy and animal feed. This can discourage farmers from switching to plant-based production.'
Impacts beyond the farm
The financial risks do not affect farmers alone. Feed companies, food processors, transport firms, banks and rural communities may also feel the effects.
Climate change also plays a role. Extreme weather, drought and lower yields increase the risk that investments will lose their value. 'Climate change is already contributing to this problem,' says researcher José Mogollón. 'Climate adaptation alone is not enough to remove these risks.'
'In the long term, food production could even become cheaper, but only if policies and investments change now.'
Time for smart choices
According to the researchers, there is also good news. Many agricultural investments lose value gradually. This means there is often time to phase them out step by step. 'This creates room to manage the transition properly,' says Paul Behrens of the University of Oxford. 'In the long term, food production could even become cheaper, but only if policies and investments change now.'
There are also opportunities to reuse existing buildings. Old barns, for example, could be converted for growing mushrooms, microgreens or plant-based proteins.
Policy makes the difference
The researchers stress that targeted policy support is crucial. Without help to write off investments, convert buildings or manage debt, the food system transition could stall. Their conclusion is clear: anyone who wants a sustainable food system must look not only at what we eat, but also at what is already standing on the farm.
