Most agricultural funding distorts prices, harms environment: UN report

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Full Report here: http://www.fao.org/documents/card/en/c/cb6562en

https://news.un.org/en/story/2021/09/1099792

That is the main finding of a new UN report calling for repurposing these incentives to achieve more of the 2030 Sustainable Development Goals and realize the UN Decade of Ecosystem Restoration

The report, A multi-billion-dollar opportunity: Repurposing agricultural support to transform food systems, was launched on Tuesday by the Food and Agriculture Organisation (FAO), the UN Development Programme (UNDP) and the UN Environment Programme (UNEP). 

Switch investments 

Global support to producers in the form of subsidies and other incentives, makes up 15 per cent of total agricultural production value. By 2030, this is projected to more than triple, to $1.759 trillion. The OECD defines agricultural support, as the annual monetary value of gross transfers to agriculture, from consumers and taxpayers, arising from government policies. 

farmers are particularly vulnerable to impacts of the climate crisis, such as extreme heat, rising sea levels, drought, floods, and locust attacks
farmers are particularly vulnerable to impacts of the climate crisis, such as extreme heat, rising sea levels, drought, floods, and locust attacks, by © FAO//Fredrik Lerneryd


Current support 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 says these are inefficient, distort food prices, hurt people’s health, degrade the environment, and are often inequitable, putting big agri-business ahead of smallholder farmers, many whom are women. 

Last year, up to 811 million people worldwide faced chronic hunger and nearly one in three people in the world (2.37 billion) did not have year-round access to adequate food. In 2019, around three billion people, in every region of the world, could not afford a healthy diet. 

Change, don’t eliminate 

The reports note that, even though most agricultural support today has negative effects, around $110 billion supports infrastructure, research and development, and benefits the general food and agriculture sector.  

It argues that changing agricultural producer support, rather than eliminating it, will help end poverty, eradicate hunger, achieve food security, improve nutrition, promote sustainable agriculture, foster sustainable consumption and production, mitigate the climate crisis, restore nature, limit pollution, and reduce inequalities. 

Wake-up call 

The Director-General of FAO, Qu Dongyu, said the report “is a wake-up call for governments around the world to rethink agricultural support schemes to make them fit for purpose to transform our agri-food systems and contribute to the Four Betters: Better nutrition, better production, better environment and a better life.” 

Agriculture is one of the main contributors to climate change. At the same time, farmers are particularly vulnerable to impacts of the climate crisis, such as extreme heat, rising sea levels, drought, floods, and locust attacks. 

According to the report, “continuing with support-as-usual will worsen the triple planetary crisis and ultimately harm human well-being.” 

Cultivating crops like rice, as pictured here in the Philippines, requires a large amount of fresh water and has an environmental impact
Cultivating crops like rice, as pictured here in the Philippines, requires a large amount of fresh water and has an environmental impact, by © FAO/Lena Gubler


Meeting the goals of the Paris Agreement requires shifting support especially in high-income countries for an outsized meat and dairy industry, which accounts for 14.5 per cent of global greenhouse gas emissions. In lower-income countries, governments should consider repurposing their support for toxic pesticides and fertilizers or the growth of monocultures. 

For the Executive Director of UNEP, Inger Andersen, “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.” 

From India to the UK 

The report shares several case studies, such as the Indian state of Andhra Pradesh, that adopted a policy of Zero Budget Natural Farming; or the Single Payment Scheme, in the United Kingdom, that removed subsidies in agreement with the National Farmers Union (NFU).  

In the European Union, crop diversification has been incentivized through reform of the Common Agricultural Policy (CAP), and in Senegal a programme called PRACAS incentivizes farmers to cultivate more diverse crops. 

UNDP Administrator, Achim Steiner, believes repurposing agricultural support “can improve both productivity and environmental outcomes.” For him, this change “will also boost the livelihoods of the 500 million smallholder farmers worldwide, many of them women, by ensuring a more level playing field.” 

The report is being launched ahead of the 2021 Food Systems Summit convened by the UN Secretary-General António Guterres, due to take place on 23rd September in New York.  


The Summit will launch bold new actions to deliver progress on all 17 SDGs, each of which relies to some degree on healthier, more sustainable and equitable food systems. 

 

UN report calls for repurposing of $470 billion of agricultural support that distorts prices and steer us away from environment and social goals

http://www.fao.org/news/story/en/item/1438889/icode/

 

FAO, UNDP and UNEP estimate that 87 percent of growing producer supports are harmful to 2030 agenda

 

Photo: ©FAO/Miguel Schincariol

Papayas in Brazil.

Nairobi/Rome/New York, 14 September 2021 - 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 soar up 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. These are findings of a new United Nations report calling for repurposing damaging incentives to achieve more of the 2030 Sustainable Development Goals and realize the UN Decade of Ecosystem Restoration.

The report, A multi-billion-dollar opportunity: Repurposing agricultural support to transform food systems, launched by the Food and Agriculture Organisation (FAO), the UN Development Programme (UNDP) and the UN Environment Programme (UNEP) finds that current support to producers 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. These are inefficient, distort food prices, hurt people's health, degrade the environment, and are often inequitable, putting big agri-business ahead of smallholder farmers, a large share of whom are women.

In 2020, up to 811 million people in the world faced chronic hunger and nearly one in three people in the world (2.37 billion) did not have year-round access to adequate food. In 2019, around three billion people, in every region of the world, could not afford a healthy diet.

While the majority of agricultural support today has negative effects, about $110 billion supports infrastructure, research and development, and benefits the general food and agriculture sector. Reconfiguring agricultural producer support, rather than eliminating it, will help end poverty, eradicate hunger, achieve food security, improve nutrition, promote sustainable agriculture, foster sustainable consumption and production, mitigate the climate crisis, restore nature, limit pollution, and reduce inequalities.

The Director-General of FAO, QU Dongyu, said: "This report, released on the eve of the UN Food Systems Summit, is a wake-up call for governments around the world to rethink agricultural support schemes to make them fit for purpose to transform our agri-food systems and contribute to the Four Betters: Better nutrition, better production, better environment and a better life."

Agriculture is one of the main contributors to climate change through greenhouse gas emissions from different sources, including manure on pastureland, synthetic fertilizers, rice cultivation, burning crop residue, and land-use change. At the same time, agricultural producers are particularly vulnerable to impacts of the climate crisis, such as extreme heat, rising sea levels, drought, floods, and locust attacks.

Continuing with support-as-usual will worsen the triple planetary crisis and ultimately harm human well-being. Meeting the goals of the Paris Agreement requires shifting support especially in high-income countries for an outsized meat and dairy industry, which accounts for 14.5 per cent of global greenhouse gas emissions. In lower-income countries, governments should consider repurposing their support for toxic pesticides and fertilizers or the growth of monocultures.

"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," said Inger Andersen, Executive Director of UNEP. "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."

The report highlights cases where such a process began: the Indian state of Andhra Pradesh that adopted a policy of Zero Budget Natural Farming; the 2006 reform of agricultural policies in China that supports decreased use of mineral fertilizers and chemical pesticides; the Single Payment Scheme in the United Kingdom that removed subsidies in agreement with the National Farmers' Union; the European Union, where crop diversification has been incentivized through reform of the Common Agricultural Policy (CAP) and the Senegalese programme PRACAS to incentivize farmers to cultivate more diverse crops.

Although there is no one-size-fits-all strategy for repurposing agricultural producer 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; Finally, monitoring the implemented strategy.

"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," said UNDP Administrator, Achim Steiner. "It will also boost the livelihoods of the 500 million smallholder farmers worldwide -- many of them women -- by ensuring a more level playing field."

By optimizing support for the agricultural sector using a transparent, customised and evidence-based approach, our planet will benefit from a healthier, more sustainable, equitable and efficient global agri-food system.

The report is launched ahead of the 2021 Food Systems Summit (September), COP15 on biodiversity (October) and COP26 on climate change (November). These events will allow governments to make multilateral commitments to rethink outdated agricultural subsidies, build forward better for the post-COVID-19 era, to commit to such a strategy and to coordinate and monitor its implementation. 

 

Position: Co -Founder of ENGAGE,a new social venture for the promotion of volunteerism and service and Ideator of Sharing4Good

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