agriculture policy brief
Agricultural Policy Monitoring and Evaluation 2022: Reforming Agricultural Policies for Climate Change Mitigation November 2022
Government policies generate substantial transfers to the agricultural sector across OECD countries and major emerging economies – amounting to USD 817 billion per year in 2019-21. USD 500 billion per year comes in the form of budgetary support paid by taxpayers, with the remaining USD 317 billion per year being transferred by consumers through higher prices. Almost half of support to the sector - USD 319 billion per year - is market distorting and potentially harmful to long-term efforts to ensure food security and combat climate change. Investments in general services, notably innovation, biosecurity and infrastructure, which are key for sustainable productivity growth, account for only 13% of total transfers to the sector, compared to 16% two decades earlier. While investing in adaptation, agriculture must also reduce its contribution to climate change. A policy agenda to achieve both food systems and climate objectives should focus on reforming current agricultural support policies, providing direct incentives for adaptation and mitigation, and ensuring appropriate social safety net policies to facilitate an inclusive transition.
What’s the issue? Total support to the agricultural sector reached a record USD 817 billion per year in 2019-21 for the 54 countries* covered in the OECD Agricultural Policy Monitoring and Evaluation 2022 report. Only a small share of this support was directed at longer-term efforts to combat climate
change and other food systems challenges. The 13% increase in support over the USD 720 billion reported for 2018-20 largely reflects temporary support to both consumers and producers in the context of the COVID-19 pandemic, and increased market price support related
Figure 1. Breakdown of agricultural support, total of 54 countries, 2019-21
Note: “Implicit taxation” of producers refers to negative market price suport, “General services“ refers to the General services support estimate, “Consumer support“ is transfers to consumers from taxpayers, “Other most dist.“ refers to support based on output and on the unconstrained use of variable inputs.
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