Agriculture sector needs broader reforms

Days before the kick off of its Food Systems Summit in New York, the United Nations released a report that called on countries to evaluate the support they extend to their agricultural producers. The report, A multi-billion opportunity: Repurposing agricultural support to transform food systems, was prepared by the Food and Agricultural Organization, the UN Development Program and the UN Environment Program. Current support to producers, according to the report, mostly consists of 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.

The report noted that global support to producers in the agricultural sector amounts to $540 billion per year, making up 15 percent of total agricultural production value. By 2030, this is projected to surge more than three times to $1.759 trillion. Yet, 87 percent of this support, approximately $470 billion, is price distorting and environmentally and socially harmful. The subsidies also put big agri-business ahead of smallholder farmers, particularly women.

Under the “support-as-usual” scenario, the report warned that climate change, nature loss and pollution will worsen and ultimately harm human well-being. The UN called on high-income countries to shift their support for an outsized meat and dairy industry, which accounts for 14.5 percent of global greenhouse emissions. In lower-income countries, the UN urged governments to repurpose their support for toxic pesticides and fertilizers for the growth of monocultures.

Majority of the agricultural support may exacerbate the woes confronting the planet, but there are investments worth replicating. Of the global support extended to agricultural producers, the UN said $110 billion supports infrastructure, research and development, and benefits the general food and agriculture sector. While the positive impacts of R&D and farm infrastructure take longer to materialize compared to price incentives or input subsidies, the returns of these investments on agricultural growth and poverty reduction are higher.

In reconfiguring agricultural support, the report recommends a broad six-step approach for governments: Measuring the support provided; understanding its positive and negative impacts; identifying repurposing options; forecasting their impacts; refining the proposed strategy and detailing its implementation plan; and monitoring the implemented strategy. Apart from this approach, the UN has also given additional recommendations for middle-income countries, such as the Philippines. It called on middle-income countries to address food security and nutrition dimensions carefully when designing agricultural subsidies and to craft social protection schemes that will accompany reforms.

Countries like the Philippines are practically racing against time to deliver their commitments under the 2030 Agenda for Sustainable Development. The UN noted that the decisions and commitments made about transitioning to sustainable and more equitable food systems will either support or hinder progress towards at least 12 of the 17 Social Development Goals. Transforming food systems to mitigate the climate crisis, limit pollution, and reducing inequalities require broader and deeper reforms that must be undertaken immediately by nations that have pledged to meet the SDGs by 2030.

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