Modern agriculture has done much to reduce poverty and improve food security but it is also contributing to the climate emergency, degrading the environment and failing to provide nutritious food for many millions of people.
This is why states, experts say, need to take a hard look at the billions of dollars provided as support to agricultural producers.
A new report – A Multi-billion Dollar Opportunity: Repurposing agricultural support to transform food systems – shows how state support can be repurposed to promote healthier and more sustainable fare. Jointly produced by the United Nations Environment Programme (UNEP) and the Food and Agriculture Organization (FAO), the vanguard study examines the environmental and economic impact of financial support to the agriculture sector.
We sat down to discuss the report’s findings with Joy Kim, the Lead for Green Fiscal Policy at UNEP, who co-authored the report.
UNEP: What is wrong with providing financial support to the agricultural sector?
Joy Kim (JK): Financial support for agricultural producers comes to almost $540 billion a year, or around 15 per cent of the total value of agricultural production. More than half is provided as price incentives, while the rest is in the form of fiscal subsidies.
That’s a lot of money and it is not paying dividends at a time of environmental and social crises. Today, over 720 million people face hunger and nearly one in three people do not have access to adequate food. Meanwhile, our climate emergency constitutes a ‘code red’ for humanity and our agricultural methods are making it worse. Change needs to happen.
That is why this new report recommends repurposing agricultural subsidies so that they can be used to build better, fairer global food systems rather than distorting prices, creating inefficiencies in public resources and leading to unacceptably high costs for nature, climate, nutrition, health and equity.
The bottom line is that if agricultural support policies are reformed, they can be part of a global redesign that places nature at the heart of our future survival.
UNEP: At this moment in time, the world has a lot of problems. How urgent is this?
JK: Agriculture has a critical role to play in ending poverty, eradicating hunger, achieving food security and reducing inequalities. Given that we only have eight years left to achieve the Sustainable Development Goals and to halve global emissions, anything that contributes to achieving these ambitious targets must be treated as a priority.
Food systems are responsible for 70 per cent of the water extracted from nature, cause 60 per cent of biodiversity loss and generate up to one-third of human greenhouse gas emissions.
If we shift the focus of agricultural support, we could cut 55.7 million tonnes of carbon dioxide by 2030, protect and restore degraded ecosystems, and slash the use of agrochemicals.
UNEP: How exactly do governments provide support to agricultural producers?
JK: Most support policies today consist of environmentally harmful price incentives, such as import tariffs and export subsidies, as well as fiscal subsidies which are tied to the production of a specific commodity or input.
For example, in high-income countries, support mostly sponsors an outsized meat and dairy industry while in lower-income countries, subsidies often sponsor toxic pesticides and fertilizers or encourage the growth of monocultures, often of staple foods like cereals. That means that farmers have less incentive to diversify towards more nutritious food.
UNEP: If this support is so bad, why not get rid of it altogether?
JK: Pulling the plug on support to agricultural producers altogether could have some adverse effects. For example, if all agricultural support was ended by 2030, greenhouse gas emissions could certainly fall but crop production, livestock farming and farm employment could decrease. If you end fiscal subsidies, this could help preserve nature and cut emissions but food prices for consumers would likely rise.
That’s why the report recommends repurposing the support that perpetuates unsustainable agricultural practices so that the money is used more efficiently to ensure access to nutritious food and a healthy planet for all.
UNEP: How should states repurpose subsidies?
JK: There is no one-size-fits-all strategy. Each country will have to determine its own best method but there are some basic guiding principles that can help. The report offers a six-step template: measure the financial support provided; understand its positive and negative impacts; identify repurposing options; forecast their impacts; refine the proposed strategy and detail its implementation plan; and, finally, monitor the implemented strategy.
UNEP: Does the COVID-19 pandemic make tackling this issue more difficult?
The pandemic has placed incredible strain on global food systems with more people facing food shortages and higher prices, not least because of the resulting global recession.
But this unprecedented situation also represents an opportunity to build back better. Amid even tighter budget constraints, every penny will count. Repurposing agricultural subsidies will allow cash-strapped governments to redirect scarce public resources towards nature-positive, low-emission, and environmentally sustainable farming practices and food consumption habits.
Agricultural support should take centre stage in recovery packages to help kick-start economies, particularly in low- but also middle-income countries, while enabling the transformation towards better food systems.
This report shows what can be done and how to do it. What we need now is political willpower to drive these critical changes.
Envisaging a global transformation, UN Secretary-General, António Guterres will convene the UN Food Systems Summit in September 2021. It is designed to support the transition toward food systems that provide net positive impacts on nutrition, the environment and livelihoods. UNEP is a contributor to the One Planet Network Sustainable Food Systems Programme, leading the development of guidelines for collaborative policymaking and improved governanc, and a member of the Transformative Partnership Platform, which informs donors and policy makers and fosters innovation.
UNEP is also the custodian of the food waste element of Sustainable Development Goal 12.3, committing member states to halve their per capita food waste at the consumer retail level, and is currently developing the Food Waste Index, a global food waste databank enabling countries to track their progress towards the goal.
