Policy seminar: Repurposing agricultural subsidies can deliver better value for people, the planet, and the global economy

For decades, governments have provided massive support to agriculture—an average of $639 billion per year during 2016-18—yet global food production is environmentally unsustainable and a major contributor to climate change, and food security remains tenuous for many.

A Feb. 2 IFPRI policy seminar explored potential solutions to these problems laid out in the new IFPRI-World Bank report Repurposing Agricultural Policies and Support: Options to Transform Agriculture and Food Systems to Better Serve the Health of People, Economies, and the Planet.

Both the UN Food Systems Summit 2021 and the UN Climate Change Conference in Glasgow (COP26) stressed the hidden costs of current food and land use systems–$12 trillion per year–that significantly outweigh the estimated $10 trillion annual market value of food systems. “To meet this demand for change, new coalitions and analytical work including the IFPRI-World Bank report will aid the adoption of technological solutions that foster sustainable productivity growth across all countries and accelerate the transition to better food systems,” said Mari Elka Pangestu, World Bank Managing Director of Development Policy and Partnerships.

Food production has outpaced population growth over the last 60 years. But to feed a global population expected to reach 10 billion by 2050 sustainably, despite rising hunger, climate change, and volatile markets, it is crucial to support farmers, emphasized Madhur Gautam, co-author of the report and Lead Agriculture Economist at the World Bank. “This study proposes options to better support farmers and to collectively solve the societal problems of poverty, food insecurity, climate change and unsustainable patterns of food production,” he said.

The report employs a global economic model that uses a global database of subsidies and emissions by commodity and country to track impacts of reform on emissions from production and land use change, and on farm income, food security, diets, and poverty. Simulations were run to assess impacts of potential policy changes from 2020-40 relative to a baseline “business as usual” scenario, which projects doubled emissions from agricultural production and land use change.

 Removing all current and government support or reallocating support away from emissions-intensive commodities will not produce game-changing results, said IFPRI Senior Research Fellow Will Martin, a report co-author. But, he said, changing production technology to reduce emissions—investing in green innovation and providing incentives for farmers to adopt the new practices—reduces agricultural emissions by 40% and returns 50 million hectares of agricultural land to natural habitats, delivering “triple wins” for people, economy, and the planet.

Options to repurpose agricultural subsidies need careful and context-specific impact evaluation to address global food insecurity, poverty and climate change, and to deliver better value for money, said Rob Vos, Director of IFPRI’s Markets, Trade and Institutions Division and co-author of the report. Both Vos and Ann Tutwiler, Senior Adviser at Just Rural Transition, agreed that multistakeholder dialogues will be required to overcome political obstacles and devise feasible strategies.

“While policies are implemented nationally, internationally concerted action is crucial to overcome the global challenges of climate change and environmental sustainability, since present agricultural support is distributed unevenly across countries,” Vos added.

Both World Farmers’ Organization President Theo De Jager, and FoodDrinkEurope Director General Dirk Jacobs agreed that harmonizing agricultural policies and farming standards to level the playing field and making the transition towards sustainability less risky for farmers are important in this major transition. In addition, “involving farmer organizations is critical in the design and implementation for policies and future research,” said Ruben Echeverría, Senior Advisor of Agriculture Development at the Bill & Melinda Gates Foundation.

Repurposing agricultural support also involves changes in trade policies. World Trade Organization (WTO) Deputy Director General Anabel González presented three approaches to this challenge: Reducing tariff and non-tariff barriers, negotiating new global rules to improve support and other trade policies underpinning food and agricultural systems, and fostering coordination between agricultural support, digitalization, investments, and green technologies to ensure that no one is left behind.

Only 10 years remain to halve global emissions to combat climate change and to do so “the biggest emitters, and the most unsustainable and large-scale producers need to act first and get their house in order,” said Nick Bridge, Special Representative for Climate Change at the UK Foreign, Commonwealth & Development Office (FCDO).

Repurposing a significant part of current domestic support towards investment in green innovations is essential, participants said. To do so, it is crucial “to think globally and act locally,” said Martien van Nieuwkoop, World Bank Global Director of Agriculture and Food Global Practice. Although agricultural support policies are national, the benefits of reform are long-term and global. Despite the challenges, there are many opportunities for addressing them—and reasons to be optimistic, concluded IFPRI Director General Johan Swinnen.

Swati Malhotra is a Communications Specialist with IFPRI’s Markets, Trade, and Institutions Division.