About 87 percent of the $540 billion in government support allocated to farmers each year is “environmentally and socially harmful,” according to a United Nations report released Tuesday.
The $470 billion worth of “agricultural producer support” includes misleading price incentives, such as import tariffs and export subsidies, as well as fiscal subsidies that favor the production of a specific commodity, according to the study compiled by the Food and Agriculture Organization (FAO), the U.N. Development Program and the U.N. Environment Program.
These mechanisms are not only inefficient, but they also “distort food prices, hurt people’s health, degrade the environment, and are often inequitable, putting big agri-business ahead of smallholder farmers, a larger share of whom are women,” a news release accompanying the report explained.
The groups launched the study ahead of the 2021 U.N. Food Systems Summit, which will take place next week in New York.
"This report,” FAO Director-General Qu Dongyu said in a statement, “is a wake-up call for governments around the world to rethink agricultural support schemes.”
Qu urged governments to repurpose such support “to transform our agri-food systems and contribute to the Four Betters: Better nutrition, better production, better environment and a better life."
Global support to agricultural producers today makes up 15 percent of total agricultural production value. That number is expected to triple by 2030 to $1.759 trillion, the news release said.
The report defined agricultural support as “any form of financial support for agriculture resulting from government policies,” while “agricultural producer support” involves “transfers to individual farmers, in the form of both price incentives and fiscal subsidies.”
In the report, the authors broke down the total $540 billion in annual agricultural producer support, which is an average figure for the years 2013 to 2018. The authors found that about $294 billion goes to farmers in the form of price incentives, while the remaining $245 billion includes fiscal subsidies.
Of those subsidies, only about $69 billion, or about 13 percent of the total $540 billion, are “decoupled from the production of any given commodity.” This means they “do not influence decisions on the type or volume” of one specific commodity, the report said.
This leaves about 87 percent, or $470 billion, of support that has a negative effect on global agricultural production, according to the authors.
During the same 2013-2018 period, the authors found that governments only funded an annual average of $110 billion in general sector services — monetary transfers to support infrastructure, research and development — even though this form of support is “most conducive for sustainable growth,” according to the report.
As governments begin implementing their own repurposing strategies, the authors advised officials to move forward through six steps: quantify the support already provided; assess the impact of the existing support; design a mechanism to repurpose the support that includes any necessary reforms; forecast future impacts of the overhaul; refine the strategy prior to implementation; and monitor the outcomes of the new support system.
"Repurposing agricultural support to shift our agri-food systems in a greener, more sustainable direction — including by rewarding good practices such as sustainable farming and climate-smart approaches — can improve both productivity and environmental outcomes," U.N. Development Program Administrator Achim Steiner said in a statement. "It will also boost the livelihoods of the 500 million smallholder farmers worldwide — many of them women — by ensuring a more level playing field."
In addition to making the agricultural playing field more equitable from a social perspective, redirecting these billions of dollars could also help countries meet emissions reductions goals set in the 2015 U.N. Climate Change Conference, the authors contended.
For high-income countries, this would mean moving away from “an outsized meat and dairy industry,” which is responsible for 14.5 percent of global emissions. For lower-income countries, it would mean repurposing support of toxic pesticides and the cultivation of single crops, according to the report.
"Governments have an opportunity now to transform agriculture into a major driver of human well-being, and into a solution for the imminent threats of climate change, nature loss and pollution," Inger Andersen, executive director of the U.N. Environment Program, said in a statement.
"By shifting to more nature-positive, equitable and efficient agricultural support, we can improve livelihoods, and at the same time cut emissions, protect and restore ecosystems, and reduce the use of agrochemicals."