A group of 32 investors managing $7.3 trillion in assets is lobbying the G20 group of wealthier countries to align agricultural subsidies with their climate and nature goals by the end of the decade.
For Canada, the largest subsidy is supply management for dairy and poultry farmers.
The group, which includes Britain's biggest asset manager Legal & General Investment Managers and the fund arm of BNP Paribas, issued their first ever call to the countries' finance chiefs ahead of a G20 summit in September in India.
The intervention marks the first time investors have grouped together to tackle global subsidies in this way, they said, and follows a narrower 2021 request to the European Union, amid concern about the risks to investment portfolios of inaction.
A 2021 United Nations report said about 87 per cent of the $540 billion in total annual subsidies to agricultural producers included measures that were price distorting and potentially harmful to nature and human health.
In addition, subsidies caused $4-$6 trillion in damage to nature each year, a landmark 2021 UK report on the economics of biodiversity said.
While a global deal to preserve biodiversity, including reform of subsidies, was struck in December in Montreal, it was crucial that richer countries acted quickly, said Helena Wright, policy director at the FAIRR Initiative, a grouping of investors managing $70 trillion focused on farming issues.
"Investors are calling on the G20 to lead by example and ensure these commitments are met – to the benefit of the climate and nature."
The World Trade Organization has been trying for decades to reduce farm subsidies because they distort production and trade. Those efforts have largely failed since the Uruguay Round was signed in April, 1994.
Its main achievement was converting subsidies and trade barriers into tariffs, hoping that it would be simpler to make further cuts in the future. That has not happened.
