insect demand ecomomics

insect demand ecomomics

The Economic Impact of Insect Demand

1. Introduction

In the next section, the food science challenges implied by the demand for insect-derived food are analyzed. These challenges are crucial for the food quality and safety of the final products. Moreover, this is an aspect that market demand must efficiently satisfy because, in the long-term, exploiting market niches will produce enticing commercial opportunities, manufacturing products involving different insects and partly different food technologies. Section 3 introduces the main topics regarding the food market demand for edible insects, which are further analyzed in Section 4. Although the edible insect market is already growing, its importance is primarily ascribed to the marketing targets to which the commercialization of insect-derived specialties refers. The market features described can be grouped into various categories (consumer segments for insect-derived food products, product attributes, and market strategies, insect-derived product innovation). Their consideration is essential to support not only food firms looking to develop innovative insect-derived food products but also companies that use waste insects and byproducts as a raw material to produce insect-based functional foods or ingredients that are functional because they consist of or contain insect components.

In this contribution, we provide an economic and managerial perspective on the demand for these edible insects, i.e., the demand of companies that commercialize insect-based food responding to requests from consumers. There is a consensus that fostering human consumption of insects is beneficial from the point of view of the environment, since it is a more sustainable protein source, but our debate stimulates a reflection about which food science challenges researchers should specifically address for developing and marketing commercial edible insect food products. The aim is to provide further momentum to what is already a growing trend on the global market, intended to offer companies in the sector stimulus for fostering their development.

In different countries, it is common to consume a diverse array of insects, such as ants, grasshoppers, water boatmen, caterpillars, scorpions, crickets, worms, grubs, or beetles. The vast majority of the two million species of insects are neither eaten nor utilized in some other way. More attention is, however, given to a more limited set of around 2,000 species, among which caterpillars, bee brood, termites, ants, crickets, grasshoppers, and mealworms.

2. Factors Driving Insect Demand

Furthermore, and given the declining of traditional subsidies on product price, rural farming population, with increased employment opportunities in food, can potentially generate additional services in both developing and industrial countries. In fact, sustainable insect production, together with secondary processing and manufacturing of insect-based products in rural areas, may have a potential socio-economic impact, allowing micro-economies to develop in conjunction with producer-country’s certified premium market guarantees. Given the context and potential for exponential growth in insect-derived product demand, it is important that the development and growth of Western insect-based product industries start with maximum support from public institutions, international organizations, and financial institutions.

Second, the growth of the world’s population has not been accompanied by growth in wealth or food supplies. In addition, because of the misallocation of resources, 842 million people in developing countries do not have enough food for an active, healthy life. In short, multiple factors are set to drive inflation in food prices over the coming decades. Third, being distributed in the ecosystem, it is evident that edible insects could offer significant economic, ecological, and health advantages. Here, although such an approach reveals the potential for insects in food and feed, the economics behind it, through the transformation of such biomass into valuable products, affords small new interesting questions and considerations.

While the global population of farmed insects is still relatively small in comparison to other livestock, demand for insect-derived products and those from secondary processing is increasing. This is being driven by a number of factors. First, the pragmatics of land and resource use at the macroeconomy level. As the global population is set to increase from seven billion today to around nine billion in 2050, it is likely that the price of relatively scarce commodities will also increase, not forgetting the finite nature of resources.

3. Economic Opportunities in Insect Farming

However, due in large part to the low cost of developing the technology used in insect farming, the initial market barriers to farm establishment are significant. It takes roughly $750,000 to $850,000 to get a standard-scale black soldier fly farm up and running. That includes the cost of setting up an automated room 885.8 ft3 in size (a stay to 80 x 80 ft shed) with production equipment, animal husbandry programs, production processes in areas such as feeding and harvesting, a quality control program, and other essential practices for assuring safe, consistent feed products. Once the farm is operational, a single worker can produce up to 16,000 lb of material annually. At a starting wage of circa $20,000 per year, the average US insect farm worker could produce about 14,500 lb of feed each year per automated farm space, as an example. Furthermore, with an average insect feed sale price of $1.95 per pound, insect farm employees’ labor can generate roughly $28,000 annually in sales, fully covering their annual wage. In the future, this level of production and income could become even more efficient. With minor operational modifications to enhance production, reduce costs, and enhance labor roles, it appears labor efficiency could be increased from 3% to 12% in black soldier fly farming by 2022.

In 2016, there were no insect farms in the United States. All of the food-grade farmed insects consumed by people were imported, mostly from Thailand. Ten years later, there is an estimated 20 insect farms across the US. These so-called insect farm “pioneers” consist of technology-savvy entrepreneurs and the new wave of agriculture producers, eager to be at the forefront of the world’s new food movement. As with any new agricultural business, especially ones taking place largely in controlled environments, there is a significant amount of both capital and labor required to successfully develop the farm infrastructure and achieve consistent production.

4. Challenges and Potential Solutions

By now, we can gather some conceptual elements to encourage “conjoinery” projects in the rural economic. We can consider how medium and long-term orientation programs can create new rural-specific value chain projects which will contribute in a certain way to ending poverty in elaborating as to the amplitude of the different enticed groups, and relatively to peasants’ lifestyles. A particular group will be the target because insect breeding and related activities have been specific window long since formalization and constitution of that livestock. Just two years before the election, we have already said a few words about sedentarization, exclusion of physical suffering, our also stands. But may our lack of explanation freentials viewing on the rural sociologists of some news on our own thought it is whole thoughts to be hidden but the reading and careful reflections are really part of enlarged two of the referred deep ravens of the interest of readers become uses.

The analysis in the preceding sections makes it clear that there are indeed a wide range of ways that insects, as a nutrient alternative for human nutrition, can contribute positively to household well-being and net welfare more generally. However, this potential impact depends on actual productive capacity having been created so that price levels can be driven down sufficiently as purchasing power increases among low-income consumers. Yet, while these findings are a heartening indicator for those advocating making insects more a part of the daily diet, we know from experience in a wide range of agriculture and food systems over the long term that achieving constant production levels in a market is not a given. There are many challenges that may arise. These go for the whole of the value chain and, in particular, according to the interests of proceeding with these development activities over time. What could be some of these possible challenges? Potential solutions may also give an idea of the best approach to make to fulfill, if that is to the best needs make of certain actors and consumers in terms of transforming raw or semi-processed available goods, as a consequence of various of the markets. These remain at this stage partial and incomplete given the fact that a medium of transformation is not yet fully operational, or the federation and alliance between various economic actors are not sufficient and able to drive the building of a future industrial processing.

5. Conclusion

The present low prices in many traditional insect products could be a result of a depleted supply, creating a vicious cycle with continuous food shortages, an increase in malnutrition, and unaugmented global environmental impacts from the expansion of arable land. An increase in the supply of insects could help to reverse these global trends. An increase in wild resources through managed insect collection or wildlife-friendly agroforests could contribute to socio-economic objectives such as wealth creation and improved nutrition of rural poor people in several countries. A decrease in demand for wild honey and larvae, which are both high-demand products and often the most expensive non-timber forest products in the habitat, could have opposite effects on the environment and the people in the mountains. Even if managed bees are being used for increased production, they do not decrease the pressure on the wild resources. At the same time, the affordability of such a source of protein for poor people would be reduced.

Edible insects are as diverse as the societies in which they are consumed, yet their economic implications are only beginning to be understood. Here we outline the impacts of insect demand and trade on sustaining the collection of non-timber forest products from forests, the profits from agricultural land, employment, and the diets and nutrition of the economically poor. The propagation of insects in different agro-ecological zones could support additional economic and social structure differentiation. We also highlight how an unfavorable market or trade regulations could weaken many traditional livelihood functions in poor societies. All these issues deserve more attention, but the outcome for the economic balance in those societies could be influenced by national policies.