Introduction: Climate change poses significant challenges to global agricultural systems, exacerbating existing crises in agricultural markets. Reforms are urgently needed to address these challenges and ensure the sustainability of agricultural production while meeting the demands of a growing global population.
Key Points
- Reforming Policy Priorities: Agricultural policies must prioritize climate adaptation, emission reductions, resilience, and sustainable productivity growth to address the triple challenge of food security, livelihoods, and environmental sustainability.
- Rising Support Levels: Total support to agriculture has reached record highs, with harmful support hindering climate adaptation and environmental sustainability. Governments must redirect support towards climate-resilient practices and away from market-distorting measures.
- Concentration of Support: Support to agriculture remains concentrated in a few large producing economies, with China emerging as the leading provider of agricultural support. Efforts to reform support policies have stalled, with significant challenges remaining in reducing harmful subsidies.
- Impact of External Shocks: Recent crises, including the war in Ukraine and the COVID-19 pandemic, have disrupted international markets and highlighted the vulnerabilities of global food systems. Governments must implement measures to mitigate the impacts of these crises and support farmers and consumers.
- Climate Adaptation Measures: Governments must scale up efforts to help agriculture adapt to climate change, including investments in capacity-building, climate services, and financial mechanisms. Transformative actions are needed to ensure agriculture remains resilient in the face of evolving climate risks.
Policy Recommendations
- Phase out Harmful Measures: Governments should prioritize the phase-out of policies that hinder production adjustments, such as price support, to encourage adaptation to changing conditions. Short-term non-trade-distorting measures may be necessary to facilitate reform.
- Enhance Risk Management: Governments should invest in risk management tools, including information dissemination, insurance markets, and support for recovery from systemic risks. No-regret measures that support resilience across various circumstances should be prioritized.
- Invest in Climate Adaptation: Increased investments are needed in research, development, and innovation to enhance on-farm resilience and facilitate structural adjustments. Governments should evaluate the effectiveness of adaptation programs and foster international collaboration.
- Promote Sustainable Productivity Growth: Policies should incentivize sustainable productivity growth while reducing environmental impacts. Investments in agricultural knowledge and innovation systems should focus on sustainable practices and resource efficiency.
- Incentivize Public Goods Provision: Governments should incentivize the provision of public goods, such as biodiversity conservation and GHG emissions reduction, through targeted payments and market-based approaches. Collaboration among countries is essential to address cross-border environmental challenges.
