Reforming agricultural policies to sustainably transform food systems

This article appeared first on the International Food Policy Research Institute (IFPRI) Blog.

A February 29 CGIAR policy seminar, co-organized by IFPRI, CGIAR, and Germany’s Federal Ministry for Economic Cooperation and Development (BMZ), explored evidence on the potential for policy reforms, including repurposing existing agriculture policies and public support, to accelerate the transformation of food systems – a just transition to become more inclusive, resilient, sustainable, and healthy.

Current global agriculture support amounts to $800 billion per year. Increased investments and changes in incentives are needed to sustainably transform food systems. “Repurposing is at the heart of food systems transformation,” said Johan Swinnen, CGIAR Managing Director, Systems Transformation and IFPRI Director General. Research is essential to drive this transformative change, along with “coherent and smart agriculture policies,” said Jan Brix, BMZ Senior Policy Advisor, to pave the way for healthier and more resilient food systems.

Over half of world’s population relies on the agriculture and food sector for their livelihoods, yet the sector is unable to adequately support these people. Improved technologies and science and policy breakthroughs are crucial ingredients to lead to a just transition in food systems transformation, said Loraine Ronchi, CGIAR Policy Advisor for Policy Impact. To accelerate this just transition, she recommends investments in scaling up efforts to reduce food sector carbon emissions, committing to faster uptake of proven technologies, and investing in R&D for robust impact on agricultural research among other actions.

The seminar turned to what Will Martin, IFPRI Senior Research Fellow, referred to as “the $800 billion dollar question”: What can we do better with agricultural support to promote sustainable food system transformation? Agriculture has a large carbon footprint—thus “it is important to focus on repurposing agriculture policies to reduce emissions while contributing to the SDGs [Sustainable Development Goals],” Martin said. The majority of the $800 billion in support is market-distorting, incentivizing unsustainable practices. Smart repurposing of subsidies can help achieve important societal gains such as higher incomes, less poverty, lower emissions. and better diets. But both Martin and Ronchi agreed that repurposing agricultural support is only a part of the puzzle and not a panacea.

According to UN Food and Agriculture Organization (FAO) estimates, more than 700 million people suffer from hunger globally. This makes it all the more urgent that food systems to be sustainable and provide food security and nutrition for all. However, there is no silver bullet for all countries.

“It is crucial to bear in mind that there is no single solution to promote access to safe and sustainable food for all,”

... said Bruno Brasil, Director of Sustainable Production and Irrigation, Brazil Ministry of Agriculture and Livestock. Brazil’s G20 priorities to help reduce asymmetries between developed and developing countries and accelerate a sustainable food systems transition include:

1. increasing adoption of technology and innovations,
2. promoting a fair and balanced trade environment,
3. recognizing the strategic role of family farmers and smallholders,
4. and promoting aquaculture and fisheries global value chains.

Sergiy Zorya, World Bank Global Lead for Agricultural Policy and Public Expenditures, noted that a lag often exists between the generation of knowledge and reform. It is important to make such knowledge available so that when the time is right, advocates of reform can use to shape agendas for change for countries and local contexts. Achieving sustainable agriculture and food systems that can deliver healthy diets for diverse economies also depends on addressing escalating climate and nature risks. Government action is central to such efforts, said Debbie Palmer, Director of Energy, Climate and Environment at the UK Foreign, Commonwealth and Development Office (FCDO):

“Government policy action combined with shifting of incentives for resilient and sustainable agricultural support will be part of the solution.”

The discussion then focused on regional and national policy reform experiences from the European Union, China, and Ghana. In the EU, recent reforms have two dimensions: The common agricultural policy (CAP) and the new delivery model (NDM), said Alan Mathews, Professor Emeritus at Trinity College, Dublin.

The CAP has undergone a series of reforms over the years and recently shifted its focus from compliance to performance, affecting both the member state administrations and farmers. The NDM is central to these efforts, giving EU member states greater flexibility to identify their own needs and design agricultural policies in line with those needs. Importantly, targeted direct payments to farmers have been reduced by 16% (to 50%) in the total agriculture budget. This shift has allowed an increase in targeted environmental and climate measures to 32% (a 16% increase from the previous CAP), in line with the European Green Deal for a climate neutral Europe by 2050 (a set of European Commission proposals). The upcoming European Parliament elections in June will further dictate the reform and green agenda.

Shenggen Fan, Chair Professor at China Agricultural University and CGIAR Systems Board Member, examined China’s agriculture support policy and its significant changes over time. In 2018-2020, total Chinese agriculture support amounted to 22% of agricultural GDP—23% higher than that of 12 emerging global economies. This support has continued to grow over time, yielding benefits such as increased food security, significant reductions in hunger, improved farmer incomes and increased carbon sinks—as well as challenges including market-distorting subsidies, higher greenhouse gas (GHG) emissions, and insufficient attention to nutrition and health. Therefore, Fan said, current subsidies should be reformed by shifting them away from staple grains to more nutritious, healthy, and low-carbon impact foods for a sustainable food systems transformation in China.

The case of Ghana is quite different from that of the EU or China. Ghana faces the challenges of high government spending on subsidies, limited access to agricultural credit, and limited adoption of a value chain-based policy approach. The country’s first phase of reform from 2017 to 2022 focused solely on the use of seeds and fertilizer to increase production and exclusively targeted smallholders—limiting its impacts. It also faced other challenges such as ineffective monitoring of input suppliers and distributors, smuggling and adulteration.

However, Ghana’s second phase of agricultural policy reform made a strategic shift to smart agricultural input credit. The expected impact from the second phase includes job creation, import substitution, and greater income. A coordinated and structured value chain approach will ensure a sustainable resilient food system that will deliver value for money, said Patrick Ofori, Deputy Director and Head of the Monitoring and Evaluation Division at the Ghana Ministry of Food and Agriculture. In addition, implementing the program and achieving its goals will depend on financial resources and effective partnerships, he said.

Event participants agreed that evidence-based policies are critical to steer a sustainable food systems transformation. This just transition requires urgent action from governments around the world—both in the global North and the global South—to better align, reform, or repurpose current policies and public support to deliver better value for people, planet, and prosperity.

To learn more, please watch the event recording here.