Introduction

The global food system significantly contributes to climate change, biodiversity loss, and pollution. It accounts for one-third of greenhouse gas emissions, over 80% of human-driven methane emissions, and 70% of global freshwater withdrawals. Agricultural expansion is responsible for up to 80% of deforestation between 2000 and 2010. Diet-related health burdens affect over half the global population, with malnutrition rising over the last decade. Nearly 3.1 billion people cannot afford a healthy diet, and poor diets are responsible for more than 20% of premature deaths. Agribusinesses—capital- and input-intensive firms active from inputs to retail—are central to both sustaining and potentially transforming the food system.

Food system lock-ins and the rules of the game for agribusiness

Three system lock-ins hinder transformation: The cheaper food paradigm, market concentration, and investment path dependencies.

• Lock-in 1: The cheaper food paradigm supports overproduction of low-cost food through deregulated markets, subsidies, and low environmental standards. This externalises environmental and health costs, undermining the business case for sustainable models.
• Lock-in 2: Market concentration in agribusiness enables oligopolistic and oligopsonistic dynamics. For instance, four firms control 50% of seed and agrochemical markets. Such dominance reduces innovation, restricts farmer autonomy, and leads to regulatory capture that blocks reforms.
• Lock-in 3: Investment path dependencies arise from historic capital allocations into intensive systems. R&D focuses heavily on staple commodities—maize and soy receive half of private-sector crop R&D. Proprietary seeds and digital advisory platforms reinforce dependency, limiting adoption of sustainable practices.

The combined effect of these lock-ins sustains environmentally harmful practices. Agribusinesses are incentivised to maximise output and efficiency with minimal regard for environmental or social impacts. Externalities from the food system amount to over US$19 trillion annually, exceeding the market value of food consumption.

How to change the rules of the game for agribusinesses

Governments are central to rewriting the rules to enable a sustainable transition. Two key actions are required: Signalling political commitment and building a robust business case for transformation.

• Governments must articulate clear, nationally relevant visions for food system transformation, integrating health, climate, biodiversity, and food security outcomes. Cross-ministerial coordination and alignment with international frameworks (e.g. GBF, UNFCCC) are critical. Transparency must be improved through harmonised ESG data and mandatory disclosure of environmental risks.
• Public understanding of the true cost of food is essential. Policies such as front-of-pack labelling, sustainable food procurement, and inclusive citizen engagement can build societal support.
• Financial incentives need rebalancing. Governments should reform agricultural subsidies to reward environmental outcomes, support net-positive practices, and expand R&D funding into sustainable farming. Private investors must adjust risk assessments to account for long-term benefits of sustainable systems.
• True cost accounting tools—such as the SEEA framework and TEEBAgriFood—should be embedded in decision-making across public and private sectors. These tools help value environmental impacts and guide investments.
• Beyond finance, stronger regulation is needed. This includes linking trade policy with environmental standards, regulating food environments, and supporting innovation through sandboxes and patent reform. Governments should also enforce penalties for harmful practices and address corporate strategies that suppress innovation, such as green killer acquisitions.

Conclusion

Agribusinesses can drive system transformation but require enabling conditions. Current political and market structures promote unsustainable models. Governments must take the lead by adjusting incentives, enforcing regulation, and clearly signalling a shift away from the cheaper food paradigm. Without this, the potential of agribusinesses to contribute meaningfully to sustainable, health-supporting food systems will remain unrealised.