Designing a Finance Infrastructure for Europe's Food System Transition
How we are co-designing a capital orchestration mechanism to redirect money flows toward a fair, resilient, and regenerative agri-food system in Europe.
Europe’s agri-food system is under profound structural stress. Decades of misaligned subsidies, fragmented funding, and short-term finance have locked farmers and food businesses into unsustainable practices, while the capital needed to support a genuine transition remains scattered, inaccessible, or simply absent. Together with the TransCap Initiative, Metabolic is working to change that by co-designing an Agrifood Just Transition Fund (AJTF) – a finance infrastructure that coordinates capital flows across scales to accelerate a just and systemic transformation of Europe’s food system.
- Date: 2025 – Ongoing
- Partners: TransCap Initiative, Systems Transformation Hub
This project builds on the Strategic Dialogue on the Future of EU Agriculture, which in 2024 called for the creation of an Agrifood Just Transition Fund. Metabolic and the TransCap Initiative took up that call, developing a concrete proposal for what such a fund could look like – and why it needs to be much more than just another fund.
Over the course of nine months, we mapped the financing landscape, catalogued innovative financial instruments, and engaged stakeholders across the spectrum: EU institutions, philanthropies, civil society organizations, farmer groups, and private finance. Through two high-level workshops, validation interviews, and an iterative design process, we developed a proposal grounded in three principles: systemic investing, strategic capital orchestration, and place-based transition finance.
The result is a design brief for a finance infrastructure that does not just channel more money into the food system, but channels the right capital, to the right places, in the right forms, at the right time.
Europe’s annual financing gap for regenerative agriculture is estimated to exceed €25-45 billion. But the problem is not only one of quantity of capital. Our research identified three structural failures that explain why money, despite often existing in large volumes, consistently falls short of driving transformation.
The system is locked in. Common Agricultural Policy subsidies, dominant supply-chain infrastructure, and entrenched market norms continue to reward conventional production and penalise those trying to transition. Farmers who want to shift face higher upfront costs, uncertain revenues, and a financing system built for the status quo.
Capital is poorly coordinated. Public, private, and philanthropic funding streams operate in silos. Funds compete for the same project pipelines rather than complementing each other. There is no cross-scale infrastructure to align these flows around shared goals or regional realities – and without it, well-intentioned investments produce fragmented results.
Finance is mismatched to the transition. Sustainable agriculture requires patient capital, long-term planning horizons, and risk tolerance. Most conventional finance – such as short-term loans, collateral-heavy credit, isolated grants – is structurally misaligned with these needs. In 2022, EU farmers had around €62 billion in economically viable, unmet financing needs, a figure that nearly doubled since 2017.
These findings point to a clear conclusion: transforming Europe’s food system requires not just more capital, but better-orchestrated capital, coordinated across different scales, tailored to place and context, and aligned with a the EU’s strategic objectives.
The stakes are not abstract. The average age of European farmers is 57 years. Only 12% of farmers are under 40, and young farmers face a €14 billion financing gap. Without a new generation of farmers, as well as the land, infrastructure, and financial support they need, the European food system has no viable future.
Beyond generational renewal, soil health is declining, agricultural emissions are barely falling despite decades of subsidy, and rural economies remain fragile. The food system we have today is neither resilient nor fair, and no single fund or policy instrument will fix that on its own.
What is needed is an architecture: one that coordinates public guarantees, private investment, and philanthropic capital around a shared set of regional transition pathways. That is what the AJTF is designed to be: not a traditional fund, but a capital orchestration mechanism that operates across the micro, meso, and macro levels of the system simultaneously.
Phase 1 of this work, which involved problem scoping, research, stakeholder engagement, and solution design, is now complete. We are moving into Phase 2: piloting the orchestration model at two or three existing place-based agri-food transition initiatives across Europe.
Over 15 months, we will test how the AJTF concept functions in practice: how it connects local transition needs to EU-level funding mechanisms, how it builds coalitions across farmers, investors, and public bodies, and what governance infrastructure is needed to sustain it.
We are building a steering committee of partners from across the agri-food system, and we are actively looking for collaborators – whether from finance, policy, civil society, or on-the-ground transition work. If you are working on agri-food transition financing and want to explore how to collaborate, we would love to hear from you. Please send us an email at [email protected]
