Report urges governments to redirect $842 billion in farm subsidies

A new report launched at COP31 says governments can use agricultural subsidy reform to cut emissions, protect nature and strengthen food security without necessarily spending more. The push now shifts to building political support for reforms ahead of COP32.

Why it matters: - Governments spend about US$842 billion a year on agricultural support, and some of that money is still backing farming practices that increase emissions and damage nature. - The report says redirecting that spending could improve food security, rural livelihoods and climate outcomes at the same time. - The issue matters for both wealthy and developing countries, especially climate-vulnerable ones facing extreme weather, higher input costs and tight public budgets.

What happened: - A new report, Unlocking a Just Transition in Public Support to Agriculture, was released at the UN COP31 climate talks in Antalya, Turkey. - The report was published by the High-level Panel for Just Rural Transition and convened by Dutch think-and-do-tank Clim-Eat. - The panel is chaired by former Costa Rican President Carlos Alvarado Quesada. - The report examines how governments can better use annual agricultural support spending to help tackle climate change and repair broken food systems.

The details: - The report says some subsidies directly clash with climate commitments by encouraging excessive fertiliser use and other practices that raise greenhouse gas emissions. - The authors include scientists, researchers, policymakers, and philanthropic and NGO leaders. - The report argues that shifting existing support could cut emissions, protect nature, strengthen food security and improve rural livelihoods without necessarily increasing public expenditure. - The report says the case for reform is already well established, but political interests and institutional barriers have stalled action. - It sets out 10 practical strategies to help governments overcome those barriers. - Carlos Alvarado Quesada said governments can rethink how they use existing resources and do not necessarily need to spend more. - Alvarado said the goal should be healthy, nutritious, affordable and sustainably produced food for all, while protecting smallholder farmers and people. - Dr Sonja Vermeulen, Clim-Eat senior adviser and lead author, said subsidy reform is an “immense financial lever” and that redirecting existing spending could unlock billions for climate action. - Vermeulen said the shift could help small-scale food producers build resilience, protect nature and cut emissions, while amplifying international climate finance.

Between the lines: - The report frames the main barrier as politics, not policy design. - Subsidies are hard to change because their benefits are immediate and visible to farmers, agribusinesses and input suppliers, while the costs are spread across society and take longer to show up. - Malawi shows how politically popular fertiliser subsidies can persist despite sustainability concerns. - Sri Lanka shows the risk of abrupt reform: a 2021 ban on synthetic fertiliser and pesticide imports without adequate alternatives led to lower yields, higher food prices and stronger public opposition. - The report is arguing for reform with safeguards, not simple spending cuts.

What's next: - The launch begins a year-long campaign to win commitments from governments, policymakers and agricultural sector leaders to reform environmentally harmful agricultural subsidies by COP32. - The campaign will push for coalitions of farmers, businesses and environmental groups, compensation for those who lose support and credible alternatives before subsidies are withdrawn. - The report also calls for better coordination across ministries and gradual, predictable multi-year transitions. - By COP32, the goal is to move from broad support for reform to concrete commitments.

The details: - The report outlines three ways to redirect agricultural support. - One approach is to reward better farming by replacing poorly targeted input subsidies with incentives for more efficient fertiliser use, healthier soils and lower-emission practices. - A second approach is to invest in agricultural services such as research, irrigation, rural roads, extension services and climate information. - A third approach is to support vulnerable households directly through cash transfers, school feeding programmes and other anti-poverty measures. - The report says these approaches can support productivity while reducing environmental harm. - Brazil is cited as using subsidised credit to help farmers restore degraded pastures, improve manure management and integrate crops, livestock and trees. - Costa Rica is cited for its Payments for Environmental Services programme, with more than 1.3 million hectares covered by agreements by 2023. - Vietnam is cited for lower-carbon rice initiatives that cut spending on seeds, fertilisers and chemicals by 25% while increasing farmers' net profits by 30%, according to the report. - The examples are presented as evidence that public spending can support production and environmental goals at the same time.

The bottom line: - The report says the real test is no longer whether farm subsidies should change, but whether governments are willing to overcome the politics and make the change before COP32.