The UN is calling for reform in the global agricultural system and repurposing $540bn of the world’s farm subsidy payments to improve people’s health and mitigate the climate crisis. 

What is Happening? 

Nearly 90% of the world’s $540bn in global farming subsidies are given and contribute to sources of significantly harmful greenhouse gas emissions, according to a study jointly published by the UN Food and Agriculture Organization (FAO), the UN Development Programme (UNDP) and the UN Environment Programme (UNEP). 

The UN report echoes a similar recent study on how 20 livestock and dairy companies emit a greater volume of greenhouse gasses than countries like Germany, Britain or France, while being financed by the world’s most powerful banks and investors.

Particularly in developed and higher-income countries that consume more dairy and meat, farming subsidies skewed production towards the largest emitting sectors. In less developed countries, where grain production receives the biggest state support, farmers have fewer incentives to diversify their produce to more nutritious foods.

Current global subsidies are on track to reach up to USD$1.8 trillion in 2030, which will drive greater inequality in farming businesses, working against the targets set out in the Paris Agreement, and worsening the climate crisis. About 73% of projected subsidies would be in the form of border measures, which affect trade and domestic market prices, while the remaining 27% would be in the form of fiscal subsidies that support agricultural producers and could continue to promote overuse of inputs and overproduction.

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This monumental financial support damages people’s health and the environment, exacerbating climate change, and are unequally distributed against smallholder farmers – many of whom are women. If we were to eliminate global agricultural subsidies entirely by 2030 without being repurposed, emissions are projected to fall by 78.4 million tonnes CO2 but crop production, livestock farming production and farm employment would drop by 1.3, 0.2 and 1.3 percent, respectively. 

Instead, the UN is calling for major repurposing of the subsidies to transform the global food system, which “can be a game changer”. The report says it can end poverty, eradicate hunger, achieve better food security, improve food nutrition, as well as be more supportive of the countries’ Sustainable Development Goals(SDGs). 

The report also details a six-step plan on how to implement reform, and stressed phasing out the most economically distorting producer support such as price incentives and “fiscal subsidies tied to the production of a specific commodity”. 

“This report is a wake-up call for governments around the world to rethink agricultural support schemes to make them fit for purpose to transform our agri-food systems and contribute to the four betters: better nutrition, better production, better environment and a better life,” said Qu Dongyu, the FAO director general.