Global economy | Green recovery

Agricultural support at record highs as climate change impacts highlight need for reform

06/11/2023 PNG

According to the report OECD Agricultural Policy Monitoring and Evaluation 2023, total support to agriculture reached USD 851 billion per year in 2020-22 for the 54 countries covered in the report, as governments sought to shield consumers and producers from global crises and high inflation. This is a historical high and an almost 2.5-fold increase compared to 2000-02, even if below the 3.6-fold growth in the value of agricultural production. Support remains highly concentrated in a few large producing economies: China, now representing 36% of this total, has emerged as the country providing the most support. India, the United States and the European Union now represent 15%, 14% and 13%, respectively.

Just under half of this government support was in the form of measures with the greatest potential for market distortions, such as border tariffs and payments based on output. Most support reinforces existing production structures. The continued prominence of market price support in many countries, together with other forms of support that are potentially production and market distorting or commodity specific, discourage changes in production systems. Indeed, well-functioning international markets remain a key mechanism to smoothen the impacts of shortfalls or bumper harvests.

Moreover, investments in innovation, biosecurity, infrastructure and other general services accounted for only 12.5% of total transfers to the sector, down from 16% two decades earlier. As climate change is increasingly impacting global agriculture and food systems, these services play a key role in facilitating farmers’ ability to adapt to climate change.

Even though countries are scaling up their efforts to help agriculture adapt to climate change, effective adaptation requires further action. Governments should move beyond planning and urgently advance the implementation, monitoring and assessment of adaptation measures.

 Explore the publication Agricultural Policy Monitoring and Evaluation 2023