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Most agricultural funding distorts prices, harms environment -UN



A report by the United Nations (UN) has disclosed that most agricultural funding distorts prices in the market and harms the environment.
The report, A multi-billion-dollar opportunity: Repurposing agricultural support to transform food systems, launched Tuesday by the Food and Agriculture Organisation (FAO) UN Development Programme (UNDP) and UN Environment Programme (UNEP) called for the remodelling of the incentives to achieve more of the 2030 Sustainable Development Goals (SDGs) and realise the UN Decade of Ecosystem Restoration.

According to the report, global support to producers in the form of subsidies and other incentives makes up 15 per cent of total agricultural production value, projecting the figure to triple to over $1.759 trillion by 2030.

The Organisation for Economic Co-operation and Development (OECD) defines agricultural support, as the annual monetary value of gross transfers to agriculture, from consumers and taxpayers, arising from government policies.

Findings in the report revealed that current support to the agriculture sector 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 stated that these are inefficient, as they distort food prices, hurt people’s health, degrade the environment, and are often inequitable, putting big agri-business ahead of smallholder farmers, many of 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,” the report stated.

However, although the report stated that most agricultural support today has negative effects, it noted that around $110 billion supports infrastructure, research and development, and benefits the general food and agriculture sector.


The report called for the changing of agricultural producer support, rather than its elimination, saying it would 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.
Speaking at the launch, 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.”

The report noted that continuing with support-as-usual would worsen the triple planetary crisis and ultimately harm the well-being of humans.

“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,” the report stated.

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.”

READ ALSO: UN launches portal to provide data on Africa’s SDG journey

For UNDP Administrator, Achim Steiner, repurposing agricultural support can improve both productivity and environmental outcomes.

He maintained that this change will boost the livelihoods of the 500 million smallholder farmers worldwide, many of them women, by ensuring a more level playing field.

Moves by countries

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, and the United Kingdom, that removed subsidies in agreement with the National Farmers Union (NFU).
In the European Union, crop diversification has been incentivised through reform of the Common Agricultural Policy (CAP), while in Senegal a programme called PRACAS incentivises farmers to cultivate more diverse crops.

Meanwhile, the report was launched ahead of the 2021 Food Systems Summit to be convened on 23rd September in New York, by the UN Secretary-General António Guterres.

The Summit is expected to 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.

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