In the last 50 years we have radically changed the way we produce and process our meat, dairy products and eggs. Global meat production has quadrupled, and farming methods have shifted from traditional pasture-based systems to an industrial model of production. Over 70 percent of the world’s farm animals are now factory farmed – in the US it is closer to 99 percent. The industrialization of meat production is gathering pace as emerging economies harness these methods.

Although factory farming has become the dominant mode of production, surprisingly little analysis has been done into the societal and financial risks that it poses. This should ring alarm bells, because we are rapidly reducing our options for feeding the world. As the risks become clearer we need to take action, and this is where there are also exciting opportunities for social entrepreneurs.

Betting the farm

Uncovering the potential risks and opportunities around factory farming is one of the reasons that the Farm Animal Investment Risk & Returns (FAIRR) initiative was created; and why it is supported by the likes of Aviva Investors, the Health Foundation and Joseph Rowntree Charitable Trust.

In the words of FAIRR founder, and Chief Investment Officer at Coller Capital, Jeremy Coller, “Investors currently have a dangerous blind spot when it comes to the long-term risks that the rise of factory farming poses to their portfolios. From pollution to pandemics, we urgently need to close the knowledge gap that exists.”

Four inconvenient truths

New research from FAIRR, set to be formerly released in autumn 2015, highlights four “inconvenient truths” about the factory farming sector that question its long-term sustainability. These are:

  1. Threats to human health. Intensive farming methods have been shown to lead to the spread of deadly viruses such the H1N1 Swine Flu which in 2009 killed over 150,000 people and wiped billions off the value of many agriculture investments. The massive overuse of antibiotics by factory farms also makes them breeding grounds for antibiotic-resistant superbugs.
  1. Unsustainable levels of emissions. Animal agriculture is responsible for 5 percent of all greenhouse gas emissions, more than the transport sector. Similarly, about 75 percent of soybean production, which is a major contributor to deforestation and climate change, is used to feed livestock.
  2. Unsustainable use of natural resources. Natural resources such as water are increasingly scarce yet factory farming uses a disproportionate amount. For example, it takes 1,000 litres of water to produce 100 calories of beef, compared to just 38 or 51 litres to produce the same amount of calories from potatoes or pasta.
  1. Famishing, not feeding the world. Instead of providing a solution to the way we feed ourselves, factory farms are exacerbating world hunger by feeding more to livestock than to ourselves. A third of the world’s grain harvest is fed to animals and more lost along the supply chain. To produce 1 kg of farmed salmon, we use 4 kg of wild fish in feed.

What is the role for social entrepreneurs in finding a solution?

I believe there is a role for both small and large social enterprises to help find alternatives to the industrial model.

On a small scale this might look like city farms, which grow affordable food in the heart of urban centres. Just one great example is Stepney City Farm in London, which last year hosted eight pigs fed on food waste to show how the food that humans throw away could be reused as animal feed.

On a larger scale we are seeing exciting food technology enterprises that are developing plant-based alternatives for the meat, eggs and dairy that many of us eat.

For example, Hampton Creek is a food technology company in California that uses plant proteins as egg substitutes, to create products such as ‘Just Mayo’ and ‘Just Scrambled’. Their products are cheaper and use less natural resources than egg-based equivalents. Since the outbreak of avian flu in the US this year (which is argued by some to have been catalyzed by intensive farming), the company has reported enquires from most major food chains and is now on track to become the fastest growing food company in history.

Another example is Impossible Foods which uses proteins and other nutrients from greens, seeds, and grains to recreate the complex taste of meats and dairy products.

The relationship between what we eat and how it is produced is looking increasingly unsustainable. If we are going to satisfy global demand for the sort of proteins we get from meat without causing risks to human health and the environment then we need innovative social entrepreneurs to step up and help meet the challenge.