UN: most agricultural funding distorts prices, harms environment

The UN is calling for a radical global rethink of agricultural subsidies in a new report, saying more than 80% of the government funds either distort prices, harm the environment, or feed inequality.

The biggest part of total global government support given to agricultural producers includes measures that are price distorting and that can be harmful to nature and health, according to the UN. AFP/File

Three UN agencies this week have called on governments around the world to reappraise and reorganize their support for their farming sectors.

The report, commissioned by the Food and Agriculture Organisation (FAO), the UN Development Programme (UNDP) and the UN Environment Programme (UNEP) argues that 470 billion dollars (roughly 400 billion euros) of the 540 billion dollars spent on agriculture subsidies globally would need to be changed to be environmentally sustainable and fair. 

Qu Dongyu, director-general of the Food and Agriculture Organization (FAO), called the report, titled "A Multi-Billion-Dollar Opportunity: Repurposing agricultural support to transform food systems" a "wake-up call" for governments.

He said prompt action would "contribute to the Four Betters: better nutrition, better production, better environment and a better life." 

Action to #RepurposeAgSupport to transform food systems can bring a range of benefits to citizens around the 🌏🌍🌎

Our new report with @FAO & @UNDP provides guidance on how governments can make it happen. #ForPeopleForPlanet https://t.co/Hu1mE2FFeg

— UN Environment Programme (@UNEP) September 14, 2021

The report stressed that it was calling for "reconfiguring agricultural producer support rather than eliminating it." 

According to the study, most current subsidies took the form of either price incentives like import tariffs and export subsidies, or funding tied to the production of a specific commodity or crop. 

• Number of people living in famine conditions increased sixfold in 2020

"These are inefficient, distort food prices, hurt people's health, degrade the environment, and are often inequitable, putting big agri-business ahead of smallholder farmers, a large share of whom are women," the report said. 

The UN also estimates a threefold increase in government spending on agriculture in the coming decade, saying the total could reach almost 1.8 trillion dollars by 2030, making rapid action more important. 

A child's arm is measured at a center set up by World Food Programme and Action Against Hunger, in the village of Beraketa, in the far south of Madagascar. Thursday, Nov. 12, 2020. As a consequence of three straight years of drought, along with historic neglect by the government of the remote region as well as the COVID-19 pandemic,1.5 million people are in need of emergency food assistance, according to the U.N. World Food Program. AP - Laetitia Bezain

It also noted how 811 million people faced chronic hunger in 2020, 2.37 billion lacked year-round access to adequate food, and 3 billion could not afford a healthy diet.

Common Agricultural Policy

Meanwhile, in the European Union, negotiators struck a deal on reforms to the bloc's huge farming subsidy programme in June, introducing new measures aimed at protecting small farms and curbing agriculture's environmental impact.

The deal ended a near three-year struggle over the future of the EU Common Agricultural Policy, which will suck up around a third of the EU's 2021-2027 budget, spending 387 billion euros on payments to farmers and support for rural development. France is the biggest recipient of PAC funds.

Representatives from EU member states and European Parliament clinched the agreement, which aims to shift money from intensive farming practices to protecting nature, and rein in the 10% of EU greenhouse gases emitted by agriculture.

(With agencies)