Increased investment in agriculture and adequate incentives to farmers are required to meet this global challenge.

Public support mechanisms for agriculture in many cases hinder the transformation towards healthier, more sustainable, equitable, and efficient food systems, thus actively steering us away from meeting the Sustainable Development Goals and targets of the Paris Agreement. This report sets out the compelling case for repurposing harmful agricultural producer support to reverse this situation, by optimizing the use of scarce public resources, strengthening economic recovery from the COVID-19 pandemic, and ultimately driving a food systems transformation that can support global sustainable development commitments. The report provides policymakers with an updated estimate of past and current agricultural producer support for 88 countries, projected up until 2030. The trends emerging from the analysis are a clear call for action at country, regional and global levels to phase out the most distortive, environmentally and socially harmful support, such as price incentives and coupled subsidies, and redirecting it towards investments in public goods and services for agriculture, such as research and development and infrastructure, as well as decoupled fiscal subsidies. Overall, the analysis highlights that, while removing and/or reducing harmful agricultural support is necessary, repurposing initiatives that include measures to minimize policy trade-offs will be needed to ensure a beneficial outcome overall. The report confirms that, while a few countries have started repurposing and reforming agricultural support, broader, deeper, and faster reforms are needed for food systems transformation. Thus, it provides guidance (in six steps) on how governments can repurpose agricultural producer support – and the reforms this will take.

Do the World Trade Organization's rules on 'green box' farm subsidies allow both rich and poor countries to achieve important goals such as food security, or do they worsen poverty, distort trade and harm the environment? Current WTO requirements set no ceiling on the amount of green box subsidies that governments can provide, on the basis that these payments cause only minimal trade distortion. Governments are thus increasingly shifting their subsidy spending into this category, as they come under pressure to reduce subsidies that are more directly linked to production. However, growing evidence nonetheless suggests that green box payments can affect production and trade, harm farmers in developing countries and cause environmental damage. By bringing together new research and critical thinking, this book examines the relationship between green box subsidies and the achievement of sustainable development goals, and explores options for future reform.

The upcoming WTO Ministerial in November 2021 will once again provide WTO Members with an opportunity to address and reform agricultural domestic support. As pointed out in the Draft Chair Text on Agriculture of 29 July 2021, the Domestic Support pillar has been at the heart of the agricultural negotiations since their commencement in 2000, and, to date, has proven to be a challenging area to achieve consensus on how best to further reforms in that area. This paper examines three broad questions: First, what would be the effect on agricultural trade if Members were to fully utilize domestic support entitlements under the current Agreement on Agriculture. To study the role of existing policy space inherited from the Uruguay Round, we examine the impact of full utilization of domestic support entitlements on agricultural markets. Under the scenario, trade-distorting support would increase to USD 1.3 trillion, 5.5 times the level under the baseline scenario (USD 246 billion). Assuming full use of policy space, global agricultural production is projected to increase by 6 percent and global prices will drop by 8 percent, with all agricultural product prices showing declines. While farm income rises, a greater share of farm income comes from taxpayer resources, and the efficiency of additional transfers (ratio between increase in farmer income and taxpayer cost) is about 60 percent. The second objective of the paper is to discuss and analyze new disciplines that would further the re-forms accomplished under the Agreement on Agriculture by harmonizing support levels across Members and providing additional constraints to prevent Members from undermining these disciplines by concentrating support in a few commodities. The paper examines how these disciplines would affect production, prices, trade and farm sector income compared to a business-as-usual baseline. We find that using an overall concept of Overall Trade Distorting Support including all forms of trade-distorting measures, associated with amber and blue boxes, will have very negligible impacts on applied policies by 2030 and small effects on the agricultural markets overall. Extending this discipline to measures currently notified under Art. 6.2., the development box, will not put significant constraints on developing countries. Moving to this simplified and more transparent framework will require to define properly an anti-concentration clause, limiting the amount of payments that can benefit the producers of a specific commodity. Such feature will be quite important for sensitive commodities like cotton. Lastly, the paper examines how the proposed disciplines would affect agricultural markets under the alternative baseline that assumes that Members will utilize full entitlements under the current AoA. De-pending on the discipline scenarios, the potential subsidies increase will be reduced by USD 240 billion to USD 800 billion.

This study reviews policy developments in recent years and, in the light of that, explores ways in which further consensus might be reached among WTO members to reduce farm trade distortions – and thereby also progress the multilateral trade reform agenda. Particular attention is given to ways that would boost well-being in developing countries, especially for those food-insecure households still suffering from poverty and hunger.

The Action Framework (2021-2025) for the Global Action on Green Development of Special Agro-Products: “One country – One Priority Product” (OCOP) presents the rationale, main pillars, key principles, thematic areas, results framework, budget, and activity planning, coordination and implementation, and guidelines for country project application for implementation of the Global Action. Special agricultural products (SAPs) are agricultural products with unique qualities and special characteristics associated with geographical locations, farming practices and cultural heritages. They are important examples of underutilized resources, which have not received the same attention as commonly known agricultural products, but which can significantly contribute to ensuring food security and healthy diets, supporting a sustainable bioeconomy, and improving farmers’ livelihoods and economic growth while protecting the environment and biodiversity. SAPs include all kinds of agricultural products, with the potential to become national or local agricultural products, and to be integrated into local, regional, and global markets and trade. In this context, Global Action has been developed based on the renewed mission of FAO. The Global Action will promote inclusive, profitable, and environmentally sustainable value chains through optimizing the structure, functionality, and service of SAPs production systems, minimizing the application of agrochemicals, waste, and losses, and maximizing integrated agro-profits to enable the transition to MORE efficient, inclusive, resilient, and sustainable agriculture production.

Between 2013 and 2015, the Food and Agriculture Organization of the United Nations (FAO) and the French National Institute for Agricultural Research (INRA) undertook a survey of innovative approaches that enable markets to act as incentives in the transition towards sustainable agriculture in developing countries. Through a competitive selection process, 15 cases from around the world provide insights into how small-scale initiatives that use sustainable production practices are supported by market demand, and create innovations in the institutions that govern sustainable practices and market exchanges. These cases respond to both local and distant consumers’ concerns about the quality of the food that they eat. The book evidences that the initiatives rely upon social values (e.g. trustworthiness, health [nutrition and food safety], food sovereignty, promotion of youth and rural development, farmer and community livelihoods) to adapt sustainable practices to local contexts, while creating new market outlets for food products. Specifically, private sector and civil society actors are leading partnerships with the public sector to build market infrastructure, integrate sustainable agriculture into private and public education and extension programmes, and ensure the exchange of transparent information about market opportunities. The results are: (i) system innovations that allow new rules for marketing and assuring the sustainable qualities of products; (ii) new forms of organization that permit actors to play multiple roles in the food system (e.g. farmer and auditor, farmer and researcher, consumer and auditor, consumer and intermediary); (iii) new forms of market exchange, such as box schemes, university kiosks, public procurement or systems of seed exchanges; and (iv) new technologies for sustainable agriculture (e.g. effective micro-organisms, biopesticides and soil analysis techniques). The public sector plays a key role in providing legitimate political and physical spaces for multiple actors to jointly create and share sustainable agricultural knowledge, practices and products.