A Misguided Approach To Agricultural Support

A new report by the Organisation for Economic Co-operation and Development has found that even though agricultural support measures have continued to grow worldwide in recent years, the type of support given often fails to meet its stated aims of improving food security, livelihoods and environmental sustainability.

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The Organisation for Economic Co-operation and Development (OECD) has been monitoring developments in agricultural support in OECD countries annually since 1988, with an increasing number of economies outside the OECD area included over this period.

The current assessment covers 54 countries across six continents, and includes all OECD member countries, five non-OECD EU member states, and 12 emerging and developing economies, including South Africa. Together, these countries represent three-quarters of global value-added agriculture.

A new report by the OECD, ‘Agricultural Policy Monitoring and Evaluation 2021’, shows that these countries provided on average US$720 billion (about R10 trillion) of support to agriculture annually between 2018 and 2020. In nominal terms, this was twice the level observed between 2000 and 2002, but it was nevertheless lower when expressed relative to the size of the sector.

However, just 6% of all budgetary transfers to the sector, or US$26 billion (R371 billion) per year, were spent on agricultural innovation systems, despite their high social returns. Investments in agricultural innovation, biosecurity and infrastructure accounted for US$76 billion (R1,1 trillion), or 17% of support to agriculture, despite their strong potential to boost sustainable productivity growth and improve resilience.

In contrast, half of the support to agriculture is market-distorting, inequitable and harmful to both the environment and global food security.

AN OVERVIEW OF SUPPORT AND SPENDING