Remarks by Mathias Cormann, Secretary-General, OECD
13 April 2023
Dear President Boric,
Dear Ministers, Distinguished guests,
Thank you for the opportunity to share some insights at this First Ministerial Summit on Low Emission Food Systems, which was set in motion by Minister [Esteban] Valenzuela of Chile during last year’s OECD Agriculture Ministerial.
A very warm thank you in particular to our hosts, Chile and Spain.
These are challenging times for food systems.
Russia’s war of aggression against Ukraine has disrupted supply chains, triggered broad-based inflation, and threatened global food security.
While the UN Black Sea Grain Initiative has allowed over 25 million tons of grain and other foodstuffs to be exported from Ukraine to date, in February this year, global food prices were still around 36% higher than the 2019 average.
Looking ahead, the effects of climate change and natural disasters threaten to reduce agricultural productivity and increase yield volatility.
We must ensure food security and nutrition for a growing population, and support the livelihoods of millions of farmers and others in the food value chain, while improving the environmental sustainability of our food systems.
OECD work has shown that agricultural productivity needs to increase by 28% over the next decade to achieve zero hunger, while also reducing agricultural emissions.
Due to both land use and impacts on forestation, agriculture accounts for 22% of global greenhouse gas emissions, of which 8% is due to direct methane emissions from crop and livestock production.
There is a real commitment to addressing these challenges and setting our food systems on a sustainable path.
In November last year, at the OECD Agriculture Ministerial meeting, 42 countries pledged to reduce emissions from agriculture and food systems.
We need to translate ambition and commitments into real actions and real outcomes.
OECD data shows that too much of the support that governments provide to the agricultural sector by way of subsidies is distortive and environmentally harmful. Too little of the government support provided is geared toward incentivising the innovation we need to meet our sustainability goals.
Of the more than USD 800 billion a year provided in subsidies and other support to the agricultural sector only 13% goes to investments into innovation, biosecurity and infrastructure, down from 16% two decades ago.
For our climate and to help boost sustainable food security we need to phase out distortive subsidies. We need to redirect that substantial public expenditure towards inclusive and future oriented policies that foster productive, sustainable, and resilient agriculture and food systems.
And we need to keep markets open and transparent by avoiding export restrictions and other measures.
Since the start of Russia’s war of aggression against Ukraine 31 jurisdictions around the world have imposed 96 different export restrictions on agricultural commodities.
Export restrictions are making and will continue to make a very challenging food situation worse than it needs to be.
That is because they limit the overall global supply of food, and as such limit the capacity of food markets to respond and to adapt to evolving market conditions.
Data from the Agricultural Market Information System shows that supplies of wheat and other key commodities remain globally sufficient. Trade openness is key to ensure those key food products can get efficiently and at the lowest possible cost to those markets where they are needed.
The OECD is pleased to contribute to this Information System, created by the G20 in 2011, which helps prevent unexpected price hikes by improving transparency in global food markets.
In fact, the OECD is leading work across a number of different areas when it comes to optimizing food production and the environment.
From providing transparency on environmentally harmful subsidies across sectors; analysing the impacts of agricultural policies on climate and vice-versa, to measuring sustainable productivity growth.
On 25 April, the OECD Global Forum on Agriculture will bring together a wide range of stakeholders to coordinate how we measure, monitor and communicate carbon footprints in food systems.
Those insights will feed into the OECD’s major new initiative, the Inclusive Forum on Carbon Mitigation Approaches.
Through data and information sharing, evidence-based mutual learning and inclusive multilateral dialogue, the Inclusive Forum, is designed to help optimise the global impact of individual countries’ efforts to reduce emissions, including on agriculture and food systems.
In closing, agricultural policy has a key role to play in achieving our climate goals – as a major source of emissions and environmental impacts – and as a fundamental driver of economic development for millions around the world.
I wish you a productive Summit as you enable the policy co-ordination needed to make this happen.
Thank you.