UN calls for redirection of $540bn agriculture subsidies

A UN report on global subsidies for agriculture is calling for a refocusing of expenditure towards measures that reduce impact on the climate and deliver better nutrition.

Overall, 15% of the total value of global agricultural production comes from subsidies given by governments.

This is currently valued at $540bn (€458bn) but is expected to increase threefold if expenditure on subsidies continues to increase at present levels.

Assistance is divided into price incentives which are market supports, output subsidies, input subsidies or subsidies based on factors of production

On products that receive most support, sugar is top with what the report describes as the nominal rate of protection (NRP) of 20.9%.

NRP is the percentage of the total value of the product that is made up of state-funded assistance.

Assistance is divided into price incentives which are market supports, output subsidies, input subsidies or subsidies based on factors of production.

Most of EU CAP support falls into this category as it is an income support for farmers based on their historical supports that were paid on production but are now decoupled from production.

Figure 1 shows the rate of supports across a range of agricultural products.

It may come as a surprise that beef is only the seventh most supported in the top 10 categories. This is because many wealthy countries that are net food importers provide generous support to domestic production to ensure a level of food security.

The report, which covers the supports provided by 91 countries, identifies Norway as the biggest supporter of its farming with a subsidy worth 130% of the output value.

South Korea comes next with its subsidy approximately 110% of the output value. Japan is at 90% and Switzerland is at 75% of the production value for supports. The EU is at 25%, while the US is around 10%.

Tariffs

Tariffs on imports are considered a support and, in the case of EU, they are much higher than the US though nowhere near the levels for Norway and for some products Switzerland as well.

This was the position in 2013, the most recent year for which the report’s authors were able to secure data from the widest range of countries. Two-thirds of the EU payments to agriculture were in the subsidies based on factors of production category, ie decoupled payments.

It would be interesting to see this exercise repeated for more recent years in the EU and, indeed, the US given the level of financial support provided to farmers since 2018 when the US administration was in trade conflict with China.

The report does not oppose the payments of supports to farmers but it wants a complete reorientation away from production that damages the climate and environment and produce that is considered bad for human health as well.

The report sets out four goals – healthy and affordable diets, social equity, environmental health and economic profitability.

The three-crop rule and permanent grassland elements of the EU CAP 2014-2020 get a positive mention and there is enthusiasm for the EU Farm to Fork strategy.

There is no disguising that the UN report released just ahead of the Food Systems Summit is critical of how agricultural supports are used in wealthy countries to support sectors that aren’t considered good for either the environment, climate or public health. There is understanding of how less wealthy countries are striving to maintain production that provides a basic level of food security.

As Tom Arnold, who chaired Ireland’s strategy for 2030 points out in his piece on page 32, Ireland has adopted a food systems approach in the latest strategy.

To succeed, the UN needs to secure global buy-in, otherwise Europe and Ireland will be isolated with a costly loss of production that can be undertaken elsewhere

There is no doubt that the EU Farm to Fork strategy also fits into that category.

The UN will have noted a willingness on the part of Ireland and the EU to adopt a food systems approach as its summit this week is titled and which this report was produced to inform.

To succeed, the UN needs to secure global buy-in, otherwise Europe and Ireland will be isolated with a costly loss of production that can be undertaken elsewhere.

There is no point cutting beef production in Ireland if Brazil continues with the planned 24m expansion in its herd.

Tackling climate issues is a global, not a local challenge

It also needs to recognise that livestock is the only means of converting grassland to a protein that humans can utilise and that is done through ruminant livestock.

Tackling climate issues is a global, not a local challenge, and the UN is a global organisation so it is appropriate that it is involved in putting together a global response.

Ireland has put down a marker with Strategy 2030 as has the EU with Farm to Fork. If this is to be the global standard, the UN has to ensure similar delivery by the rest of the world. Otherwise, Ireland and the EU are left looking very foolish.