Agricultural funding distorts prices, harms environment, says UN

. Focus more on mega farms over smallholders

Victor Uzoho

The United Nations (UN) has declared that most of the agricultural funding distorts prices in the market and harms the environment.

Latest report on, “A multi-billion-dollar opportunity: Repurposing agricultural support to transform food systems, therefore called for the remodelling of incentives to achieve more of the 2030 Sustainable Development Goals (SDGs), to realise the UN Decade of Ecosystem Restoration.

Launched Tuesday, by the Food and Agriculture Organisation (FAO), UN Development Programme (UNDP), and UN Environment Programme (UNEP), the report said global support to producers through subsidies and other incentives constitute up 15% of total agricultural production value, and projected 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.

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 specific commodities or input.

It however said 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.

Nevertheless, the report said up to $110 billion supports infrastructure, research and development, and benefits the general food and agriculture sector.

Changing support model

The report therefore called for the changing of the support model to 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.”

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.

The report warned 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.”

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

He added 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.

Case studies

The report shared 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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