According to a new OECD report, public support for agriculture has decreased since 2021 but remains near historic highs and is still insufficiently focused on key innovation, productivity, and sustainability objectives.
OECD Agricultural Policy Monitoring and Evaluation 2024, the global reference on government support to agriculture across 54 countries, shows that total support to agriculture averaged USD 842 billion per year during the 2021-23 period. Support remains concentrated in a few large economies, with China, the United States, India and the European Union representing 37%, 15%, 14% and 13% of the total respectively, according to a press release.
From 2021 to 2023, just 12.6% of agricultural support went to essential services like innovation, biosecurity, and infrastructure, a steady but lower share compared to 16% in the early 2000s. These services are vital for sustainable productivity growth, enabling more output with fewer resources and reduced environmental impact.
Governments are promoting innovation through R&D investment, strengthening institutions, and offering incentives to producers for adopting new methods. Redirecting support could further boost these efforts.
Between 2021 and 2023, farmers received USD 628 billion annually in support, above pre-COVID-19 levels. Over half (USD 334 billion) came from policies raising domestic prices, with consumers bearing the cost, while USD 295 billion came from taxpayer-funded budgetary transfers. Most of the decline in support was due to higher world prices rather than policy changes. Meanwhile, consumers and first-level buyers received USD 107 billion annually in budgetary support, but it didn’t offset the higher prices caused by trade barriers and price-distorting policies, increasing consumer expenditures by 3.2%, down from 10.3% in 2000-02.
The OECD has laid out a strong policy agenda to reform and reorient support. To make agriculture more sustainable, productive and resilient, governments should:
- Set clear objectives for sustainable productivity growth strategies and invest in the capacity to measure results and adjust policies. The OECD’s work on measuring productivity and its agri-environmental indicators are possible avenues for measuring sustainable productivity growth in the future.
- Reduce the negative environmental impact from agricultural support by identifying and addressing environmentally harmful measures and reorienting agricultural support towards environmentally beneficial measures, agricultural knowledge and innovation systems, biosecurity services and key physical and digital infrastructure.
- Increase the share of producer support that is linked to environmental practices and make sustainable management and use of natural resources a core part of agricultural policy. Use results-based policies and continuously monitor, measure and evaluate them to improve their effectiveness.
- Better target innovation systems towards the combined objective of improved productivity and environmental performance.
