A key challenge for the agricultural sector over the coming years is to provide adequate healthy and nutritious food to feed an increasing population within the earth's planetary boundaries while responding to the rapidly changing diet of a growing middle class. Achieving this will only be possible if economic, trade, and investment policies provide the right incentives and if governments cooperate across borders and supply chains. In this context, government subsidies to agriculture are a critical topic for attention given their influence on international production and consumption patterns and their impacts on all three dimensions of sustainable development—environmental, economic, and social.

The need to tackle the environmental impact of agricultural subsidies has been re-affirmed at the highest political level globally. The Kunming-Montreal Global Biodiversity Framework, adopted during COP 15 of the Convention on Biological Diversity in December 2023, calls for addressing subsidies harmful to biodiversity in a "proportionate, just, fair, effective and equitable way" and reducing them by at least $500 billion per year by 2030, starting with the most harmful incentives. At the WTO, several members have emphasized the need to address the sustainability dimension of agriculture, both under ongoing negotiations in the Committee on Agriculture in Special Session (CoA-SS) as well as the Working Group on Subsidies of the Trade and Environmental Sustainability Structured Discussions (TESSD).

However, in the context of these discussions, defining what clearly constitutes environmentally harmful agricultural subsidies involves considerable conceptual and technical difficulties.

As a contribution to efforts currently underway in different fora, TESS convened an international group of world leading experts on sustainable agriculture from academia, think tanks, and intergovernmental and stakeholder organizations representing a diversity of geographical origin and perspectives. The group was asked to contribute to building shared understandings of what constitutes environmentally harmful agricultural subsidies to inform ongoing discussions at the international level in the WTO, OECD, FAO, UNEP, and World Bank and in the context of the Kunming-Montreal Global Biodiversity Framework.

This report reflects that collective effort among the expert group members. It starts by reviewing the current state of knowledge on agricultural subsidies and their impacts on the environment and discusses trade-offs across different policy objectives. It then suggests possible approaches and pathways to building shared understandings of what could be defined as environmentally harmful agricultural subsidies as well as options for collaborative approaches to address them.

The objective is that dialogue around the findings of the report can serve as a basis to promote possible cooperative action in this area, where possibilities for discussion include new international disciplines with appropriate flexibilities, soft law outcomes in the form of guidance for the design of subsidies, pledges or voluntary commitments, or enhanced transparency mechanisms.

The group’s first meetings were held in February and May 2024. This process was complemented by consultations between TESS and key stakeholders and experts on critical issues for consideration as well as with government delegations.

View the report.
 

The group includes experts from academia, think tanks, and intergovernmental and stakeholder organizations representing a diversity of perspectives and regional expertise, participating in their personal capacities.

Joaquín Arias, Inter-American Institute for Cooperation on Agriculture

Jason Clay, World Wildlife Fund

Anthony Cox, Ecologic Institute

Helen Ding, World Resources Institute Global Centre of Economics,

Felipe Garcia, Centre for Biodiversity Economics and Finance, Humboldt Institute

Madhur Gautam, International Food Policy Research Institute

Lena Gubler, Swiss Federal Institute for Forest, Snow and Landscape

David Laborde, Food and Agriculture Organization of the United Nations

Prof. Alan Matthews, Department of Economics, Trinity College Dublin

Prof. Silvia Secchi, Department of Geographical and Sustainability Sciences, University of Iowa

Juha Siikamaki, International Union for Conservation of Nature

Observers and External Experts

Guillaume Gruère, OECD Trade and Agriculture Directorate

Katia Karousakis, OECD Environment Directorate

Jonathan Hepburn, Agriculture and Commodities Division, World Trade Organization