Public subsidies on agriculture needed for innovation, productivity: OECD

By Emir Yildirim

ISTANBUL (AA) – Public subsidies on agriculture has been “near historic highs” but still not aimed at innovation and productivity, the Organization for Economic Cooperation and Development (OECD) said on Wednesday.

The global public subsidies by some 54 countries reached $842 billion on average per year between 2021-2023, according to this year’s OECD Agricultural Policy Monitoring and Evaluation report.

Government support for agriculture was seen the highest in China, whose share among the 52 countries was at 37%, followed by the US with 15%, India with 14%, and the EU as a whole with 13%.

“The share of estimated support dedicated to general services such as innovation, biosecurity or infrastructure averaged only 12.6% of total support in 2021-23, (and) while it has been fairly stable since 2020, this share is well below the 16% seen at the beginning of the 21st century,” the OECD said in a statement.

Secretary-General Mathias Cormann stated that while government efforts in agriculture can help “future-proof” the industry, farm subsidies are still high and they are “counter-productive” to sustainable productivity growth.

The report said that individual farmers were granted $628 billion per year over 2021 and 2023, above pre-pandemic levels—while most of the support came in from policies, approximately $334 billion annually, the rest was sourced from taxpayer money.

“Higher world market prices rather than policy reforms,” which have seen a drop of 8% in 2021-2023, led to 10% decline in budgetary support, the report showed.

The OECD advised that governments need to set clear objectives for sustainable productivity growth strategies, invest in the capacity to measure results, adjust policies, and reduce the negative environmental impact by addressing harmful measures and reorienting agricultural support accordingly.

The organization also said that governments should “increase the share of producer support linked to environmental practices, use results-based policies and continuously monitor their effectiveness, and target innovation systems towards the combined objective of improved productivity.”