Agriculture subsidies have declined since 2021 but remain near historic highs and are still not sufficiently directed at critical innovation, productivity and sustainability goals, according to a new report from the OECD (Organization for Economic Cooperation and Development).
A measure of farm subsidies across 54 countries, shows that total support at $1.2 billion per year during the 2021-23 period.
Support remains concentrated in a few large economies, with China at 37 per cent, the United States at 15 per cent, India at 14 per cent and the European Union at 13 per cent.
The share of estimated support dedicated to general services such as innovation, biosecurity or infrastructure averaged only 12.6 per cent of total support in 2021-23, down from 16 per cent a few years ago.
“Government efforts towards sustainable productivity growth in agriculture are a positive step forward, and can help to future-proof the sector,”said OECD Secretary-General Mathias Cormann.
“However, overall levels of farm subsidies remain high, and much of it is counter-productive to these key objectives. Smart reforms are the key to further progress.”
To encourage innovation, governments are developing strategies and frameworks, investing in research and development, strengthening institutions, enhancing agricultural knowledge as well as innovation systems, and providing targeted incentives to producers to develop and adopt new production methods.
Reorienting support could benefit such efforts, the report said.