PARIS: The OECD says governments provided an average US$720 billion in annual agriculture subsidies between 2018-20, including US$338 billion that was market distorting, inequitable and harmful to both the environment and global food security.

Of 54 countries monitored, consumers paid US$272 billion through higher prices in the form of market price support, while taxpayers paid the remaining US$447 billion through budgetary transfers.

Investments in agricultural innovation, biosecurity and infrastructure accounted for only US$76 billion, despite the strong potential to boost sustainable productivity growth and improve resilience – key channels for ensuring food security, viable livelihoods and sustainable resource use.

“Only one in six dollars of budgetary support to agriculture globally is spent in ways that are effective in promoting sustainable productivity growth and agricultural resilience,” said Marion Jansen, OECD director for Trade and Agriculture. “Most support is either ineffective in improving the performance of food systems, or even harmful.”

The OECD says government subsidies remain inefficient at transferring income to farmers; inequitable, as benefits are weighted toward large producers; and environmentally harmful, as they often damages water quality and biodiversity and increases resource use and greenhouse gas emissions.

At the same time a small number of countries suppress prices for some or all commodities - resulting in US$104 billion per year transferred away from producers.

The report proposes three reforms to ensure safe, nutritious food for a growing world population while providing livelihoods along the food chain and protecting land, water and biodiversity.

• Phase out price interventions and market distorting producer support.
• Target income support to farm households most in need, and where possible incorporate such support into economy-wide social policies and safety nets.
• Re-orient public expenditures towards investments in public goods – particularly innovation systems.

In addition to the OECD’s 38 members and 27 EU Member States, the report also reviewed the economies of Argentina, Brazil, China, India, Indonesia, Kazakhstan, the Philippines, Russia, South Africa, Ukraine, and Viet Nam.