OECD countries use a range of subsidies and taxes, regulations, co-operative approaches, and dissemination of knowledge to address environmental issues in agriculture. But there is a lack of comparative information on the policies in place, how they work, their costs, and impacts on the environment, production and trade. Work is underway to prepare an inventory of agri-environmental policies.

A major issue concerns the effects of agricultural trade liberalisation on the environment, and the effect of agri-environmental measures on the environment, competitiveness and trade. Recent work has explored these linkages through broad-based studies, while current work is looking at these issues with reference to the pig, dairy and arable crop sectors in OECD countries.

Farmers and governments are paying more attention to the dissemination of knowledge, technologies and farm systems to achieve sustainable agriculture. In many OECD countries there is an interest in promoting organic agriculture. But there is a variety of systems and technologies that can achieve sustainable agriculture, provided technologies and systems match the agro-ecological conditions.

Which are the best policies, and what is the role of markets to improve environmental performance of agriculture? There is potential to create markets, to implement the polluter pays principle, and to use economic instruments and regulations, so as to reduce environmental harm and enhance environmental benefits. The essential characteristics of appropriate policies has been outlined by the OECD.