Revising Public Agricultural Support to Mitigate Climate Change

The countries that account for two thirds of the world’s agriculture provided US$600 billion per year in financial support for the sector on average from 2014 to 2016. Half of that support was through direct government spending or targeted tax benefits and the other half through market measures that increase prices to consumers. A recent World Bank report addresses the extent to which that support helps boost agricultural production and mitigate emissions from agriculture and how support programmes might be changed to do better.

Agriculture generates roughly 25 percent of global greenhouse gas (GHG) emissions. Without mitigation, current agricultural emissions - roughly 12 billion tonnes per year of carbon dioxide equivalents (CO2e) - are likely to rise to 15 billion tonnes per year by 2050. If so, agriculture alone will use up 70 percent of the annual allowable emissions budget for all human emissions, including energy, that will be necessary to hold warming to international climate goals. One important source of mitigation in agriculture is increases in the efficiency with which it uses natural resources and chemical inputs.

One way of going about this would be to produce more food per hectare, per animal and per kilogramme of fertilizer and other chemicals. Another is to introduce measures to link these productivity gains to protection of forests and other native habitats. Lastly, another option is to pursue innovations, because reaching climate goals for agriculture requires new technologies and approaches.

The authors of the report analysed OECD data and used country studies to determine whether agricultural support programmes are doing these things today. Despite a few good examples, most public support is making little contribution. Indeed, the report found that of the $600 billion of annual government agricultural support funding provided in the countries that account for two thirds of the world’s agriculture, only 5% supports any kind of conservation objective, and just 6% supports research and technical assistance. Some 70% of the total is pure income support.

Conservation spending, although modest, has been growing, but could be better used. Moreover, programmes have mostly restored planted forests, which store less carbon and sometimes have even less biodiversity than the farmlands they replace. In many countries, including the US and EU member countries, some effort has been made to condition financial support on compliance with environmental conditions, but the report's authors find that those conditions have mostly been very weak.

However, all is not doom and gloom: country or regional studies showed some areas of progress that prompt certain recommendations:

• That countries in general follow the approach taken in Brazil and condition farm financial aid on the protection of forests and other native areas.
• That as in the US and EU, countries direct most of their conservation support to fostering partnerships between stakeholders and scientists to develop innovations.
• That countries allocate funding to farmers based on environmental conditions and distribute aid in such a way as to improve the environment, including mitigating climate change.
• That governments use systems of “graduated” payments that reward farmers for better and better performance.
• That only high fertilizer-use countries support more efficient fertilizer use, while others take a more balanced approach to boosting fertilization.
• In general, that governments should target restoration of agricultural land on carbon-rich peatlands and land with limited agricultural productivity, using native vegetation.

In short, the report gives clear pointers to governments worldwide that the first step towards a sustainable food future is to make better use of the financial support they are already providing. It fits in with the “Green Growth” concept favoured by the World Bank, which involves balancing investments emphasizing nearer-term income growth to reduce poverty, and investments in sustaining longer-term environmental wealth.

Searchinger, Timothy D., Chris Malins, Patrice Dumas, David Baldock, Joe Glauber, Thomas Jayne, Jikun Huang, and Paswel Marenya. 2020. “ Revising Public Agricultural Support to Mitigate Climate Change". Development Knowledge and Learning. World Bank, Washington, DC