USA – As policymakers strategize to rebuild the economy amid the Covid-19 pandemic, The Breakthrough Institute, a global research center seeking technological solutions to environmental and human development challenges has called on the US Congress to leverage the alternative protein industry to support an economic recovery in response to Covid-19.
The research center recently released a new report: “Federal Support for Alternative Protein for Economic Recovery and Climate Mitigation,” which calls on lawmakers to direct funds to the alternative protein industry as one of the key industries that will provide jobs and reduce carbon emissions.
To back the proposition, the Good Food Institute remarks that Covid-19 has demonstrated that the current meat production system is vulnerable. In the United States, rapid spread of this illness has significantly disrupted meat production and nationwide supply chain.
GFI says that alternative proteins can help in creating a protein supply that is more secure, efficient, and resilient in economic and public health crises. But to maximize the progress of the alternative protein industry, the Breakthrough Institute adds that public investment is needed to spur new knowledge and technological innovation.
According to a report by the research center, federal investment in the alternative protein industry would help ensure that the industry, which could generate over 200,000 jobs in the long-term, does not collapse and continues to innovate and grow.
To support continued R&D, which is essential to the industry’s growth, the report proposes that the congress could create an interagency R&D program and increase Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) funding.
“To address the drop in financing for large company expansions and investments, USDA could guarantee on the order of US$200 million in loans for alternative protein companies,” the research centre said in the report.
More jobs and economic benefits
The call comes at a time when the COVID-19 pandemic and its induced economic downturn is threatening to wipe out the advances of the industry during an inflection point, when many companies are raising funds, launching production capacity, developing new products, or deploying them to market.
Although the animal livestock industry has been at the center of the crisis’ negative impacts and sales of some plant-based meat products are thriving in grocery stores, The Breakthrough Institute says that the alternative protein industry is far from secure.
Companies are losing a key revenue source as food service outlets close or severely decrease sales, closed production facilities to mitigate potential risks from COVID-19 as well as restricted access to research and development facilities.
According to the report, the economic crisis will likely lead to losses in venture capital (VC) funding and private equity, which the industry has depended on to finance R&D and commercialization.
The research centre projects that VC investment in alternative protein startups could fall about US$300 million globally in 2020, if funding falls as much as it has for all startups in the first quarter of 2020.
The Breakthrough Institute has therefore recommended creation of an interagency research initiative to support alternative protein research and development, funding small business innovation programs, and providing federal loan guarantees to expand alternative protein production capacities.
The Breakthrough Institute estimates that public funding support could generate more that 200,000 jobs in the plant-based food industry alone, which currently supports more than 60,000 higher-than-average paying jobs, providing US$3.6 billion in income each year, in at least 35 different states.