The author is a professor of responsible and sustainable business at Oregon State University

Should agricultural giants challenge the farm subsidies destroying biodiversity or work within the system?

That's the question facing companies such as Singapore's Olam, which sources and processes ingredients and commodities -- from cocoa to coffee to rice -- across more than 60 countries.

The stakes are high. Biodiversity loss threatens supply security, corporate legitimacy, and long-term value creation. It is a particular problem for businesses such as Olam which has cultivated a reputation as a sustainability leader through its regenerative practices and transparent sourcing.

Its Living Landscapes Policy for example adopts a net positive approach -- putting back more into food and farming systems than it takes out. The aim is a "triple positive" impact: viable livelihoods for farmers, thriving rural communities with access to services and nutrition, and regenerated ecosystems that restore biodiversity, soil and water health, and carbon storage. That allows farming to coexist with conservation, and local communities to participate in land-use decisions.

The company's AtSource platform offers customers traceability and access to social and environmental metrics. It supports due diligence and allows buyers to track progress on soil, water, and community outcomes.

UN agencies estimate that global farm subsidies total $540bn annually, with 87 per cent harmful for biodiversity. But agriculture is just one sector. When including other sectors, such as fossil fuels, fisheries and forestry, the costs from government subsidies that degrade nature are much higher -- even as governments pledge to meet global biodiversity targets. That means voluntary corporate biodiversity initiatives struggle to gain traction when public finance steers agriculture in the opposite direction.

Ahead of the UN biodiversity summit last year, Olam Food Ingredients joined scores of businesses in urging governments to raise their ambition. The CFO warned: "If we don't focus on nature, if we don't focus on biodiversity, the business that we operate may not even exist in years to come."

The joint call pressed governments to repurpose harmful subsidies to align public finance with private biodiversity commitments. Danone, Unilever, Oatly and McCain have urged the EU to redirect its Common Agricultural Policy towards payments for so-called ecosystem services, or benefits to humans from ecosystems, in a sign that corporate advocacy on subsidy reform is beginning to emerge.

But taking a public stance is fraught with complexity. In many of Olam's key markets, state programmes -- notably administered prices, such as fixed procurement prices for staple crops -- are politically sensitive. These shield farmers from volatility, but distort incentives, entrench monoculture and lock governments into costly subsidy regimes. In India, minimum support prices on wheat and rice have contributed to groundwater depletion and biodiversity loss. In Nigeria, regulated food prices have been used to secure political support but at the expense of long-term agricultural resilience.

Companies that openly criticise such arrangements risk being seen as challenging national sovereignty. For instance, multinational beverage firms across Africa faced pushback when they opposed sugar-sweetened beverage taxes, with governments and health advocates framing their resistance as an attack on public health policy.

Similarly, in Europe, agrifood companies such as Danone have called for CAP reform to better align subsidies with sustainability goals. This has encountered stiff resistance, as French political leaders and farm lobbies defend CAP supports as a key pillar of agricultural policy. These episodes show how corporate activism, even when well-intentioned, can quickly provoke political resistance.

Any company choosing to step into the subsidy debate must ensure that its activism is rooted in a clear business case. For Olam, which did not respond to a request for comment for this article, it could rest on three arguments.

First, redirecting input subsidies and price guarantees towards outcomes-based payments would directly support the regenerative practices it already promotes, improving soil health, boosting water retention, restoring pollinator habitat, and enhancing climate resilience.

In such systems, farmers are rewarded not simply for yields but for measurable environmental benefits. The UK's new Environmental Land Management scheme, for instance, ties payments to outcomes such as reduced river pollution or restored hedgerows. With its detailed farm-level metrics, Olam's AtSource platform is well positioned to support similar models.

Second, active advocacy would align Olam with efforts to disclose nature-related risks. Governments and investors are moving towards mandatory transition planning; early engagement could give the company a strategic edge.

Third, subsidy reform would help level the playing field. Producers investing in regenerative agriculture face competitors propped up by subsidies that externalise ecological costs. Redirecting public finance could reduce this distortion.

The risks are significant. Entering the public debate could strain relations with governments in producer countries, slowing permits or jeopardising market access. It could alienate suppliers who fear compliance costs, and expose Olam to charges of hypocrisy if parts of its supply chain still benefit from harmful supports.

A more cautious path would be neutrality, by focusing on scaling regenerative pilots, enhancing traceability and deepening due diligence without entering politically sensitive subsidy debates. But neutrality comes at a cost. It means leaving the most powerful lever -- public finance -- in the hands of others. As long as subsidies continue to reward ecologically damaging practices, corporate progress risks being drowned out by state-driven regression.

The financial exposure is already visible: cocoa yields in West Africa have been hit by extreme weather, swollen-shoot virus, declining soil fertility and loss of pollinator habitats. These shocks have driven supply shortages and record price spikes. In its 2025 first-half results, Olam expanded its balance sheet by nearly S$488mn ($377mn), largely because higher input prices in cocoa and coffee increased working capital needs -- evidence of how ecosystem risks can cascade directly into financial outcomes.

Olam is not alone. Nestlé and Mondelez have cautioned investors that biodiversity loss -- from pests and plant disease to ecosystem decline -- poses material threats to their cocoa and coffee supply chains. Over time, consumers, non-government organisations and regulators may question companies whose sustainability rhetoric outpaces their actions.

A more balanced course is possible. Rather than targeting individual governments, Olam could take a principles-based stance, calling for subsidy repurposing towards measurable outcomes in soil health, water quality and biodiversity recovery. Drawing on the data in AtSource, it could pilot outcome-based programmes and share the lessons through coalitions of businesses and NGOs, framing itself as a constructive partner in shaping global innovation.