Conservatives and progressives do not agree on much these days. But most people can agree that wasting money is a bad idea—especially when it comes to taxpayer dollars from hard-working Americans. So why is the government funding the insect farming industry when it has a growing rap sheet of failed businesses and bankruptcies?
Insect farming crawled into the sustainable food conversation a decade ago, with organizations like the United Nations and the World Wildlife Fund pushing its benefits and insect companies making lofty promises about reducing the food system’s carbon footprint. These green-minded founders and their investors envisioned riding the wave of an exciting new protein that would unlock a new circular economy. The idea was that the insects would eat organic waste, then be turned into sustainable food, animal feed, and pet food, while their excrement could be used as fertilizer. It was sold to the public and investors as a magic panacea to address rising global protein needs in a warming world. United States policymakers fell for these promises, investing millions of state and federal taxpayer dollars into the insect industry.
However, recent research from the Insect Institute shows that the reality does not match the promise. As industry leaders have recently confessed, insect protein is not all it is chalked up to be. It does not compete with conventional feed and pet food ingredients on sustainability or price, and Western consumers are disgusted by the thought of eating it. Moreover, many leading industry players are now facing insolvency or worse.
Take the giant French mealworm producer, Ÿnsect, as an example. Ÿnsect had raised over 600 million euros, including massive support from the French government. Yet, the company was officially liquidated by a French court on December 1, meaning its massive insect factory farm will now shut its doors. Another company that owned the largest insect farm in Northern Europe, ENORM in Denmark, declared bankruptcy in November.
Given those challenges, investing in this flailing industry would strike most of us as a risky business endeavor. However, those red flags didn’t stop American politicians from giving $11.8 million in taxpayer dollars to another French insect-farming company, Innovafeed, in 2024. But deja vu seems inevitable, given the similarities between Innovafeed and Ÿnsect’s trajectories. In 2024, Innovafeed generated only 5 million euros in revenue and lost 35 million euros.
According to Ÿnsect’s co-founder Antoine Hubert, “There are no more investors in the market.” But Innovafeed has found investors among American politicians, including Illinois’ Democratic Governor J.B. Pritzker, who gambled with taxpayer dollars to support the company. Gov. Pritzker’s administration gave at least $1.5 million in tax credits to fund the company’s building of an Illinois facility.
“Innovative, exciting new approaches to agricultural and environmental challenges are what Illinois is all about, from the invention of the farm silo to global leaders like Innovafeed,” said Gov. Pritzker in honor of Innovafeed opening its North American Insect Innovation Center (NAIIC) in Decatur, Illinois, in April of 2024. “This expansion, perfectly situated in Illinois’ rich corn country, is yet another commitment from a global business to Illinois as a place to grow and continue to innovate. Innovafeed is part of a growing Illinois business economy that is far from done expanding.”
Contrary to Gov. Pritzker’s vision of Innovafeed treating Illinois as a place for growth and innovation, the French company recently suspended operations at the NAIIC. A company representative explained that the decision to halt operations in Decatur for 18 months is part of their “phased, de-risking approach and reflects a responsible allocation of resources to ensure we stay resilient while preparing the next steps, including the scale-up site in Decatur.” That explanation raises the question—is insect farming an inherently risky investment, particularly when funded by taxpayers?
A recent peer-reviewed study concluded that insect farming is riskier and less beneficial than originally advertised. The study found that, in most cases, insect farming scores worse than conventional feed and pet food ingredients, defeating any eco-minded rationale for government support. Additionally, the new research reveals serious risks insect farming may pose to biodiversity, including threatened pollinators, through the escape of farmed insects and the spread of genes, parasites, and pathogens.
With so many market-based players vying for consumer support for their innovative solutions to make the food supply more sustainable and resilient, there is no reason taxpayers should continue to fund the insect farming industry. Policymakers, whether at the federal level or in states like Illinois, should let the market determine whether insect farms succeed or fail. Continuing to subsidize the insect industry would not just be a distortion of the market or an investment in failing businesses—it would effectively mean that the government is pushing bugs onto American plates.