Dhaka Tribune published an article stating that government subsidies transfer $620 billion per year to the farm sector worldwide. And only three farm economies – China, the European Union, and the United States – spend more than half of that global subsidy amount. At the 2022 Global Food Policy Report launch seminar, IFPRI called for an immediate repurposing of farm subsidies so that research and development (R&D) and innovations in agriculture are properly financed. “Support policies based on subsidies and trade barriers are highly distortive to markets and are also regressive, as most support is provided to larger farmers. On balance, the incentives this support creates appear to increase greenhouse gas emissions that contribute to climate change.” IFPRI made a strong case that trade-distorting subsidies were not the best of answers to the climate change challenges that the global farm sector was facing today; rather, more urgently the investments must go to initiatives that could meet climate-related goals for food systems. “Currently available finance is grossly insufficient,” said IFPRI Director General Johan Swinnen, who also said repurposing government support to agricultural sectors, totaling over $600 billion per year worldwide, provided a major opportunity to do away with harmful subsidies and border measures, reorient finance towards R&D in green innovations, provide farmers and other producers with incentives and investment resources to adopt these innovations, and provide consumers with incentives and means to make sustainable and healthy food choices.
Rob Vos, division director of Markets, Trade, and Institutions said, “Better outcomes could be achieved if even a small portion of agricultural subsidies were repurposed into investments in R&D dedicated to productivity-enhancing and emissions-reducing technologies. Repurposing would create multiple wins – mitigating global climate change, reducing poverty, increasing food security and improving nutrition.” IFPRI researchers said support policies based on subsidies and trade barriers were highly distortive to markets and were also regressive, as most support was provided to larger farmers. On balance, the incentives this support created appeared to increase greenhouse gas emissions that contributed to climate change.