Transforming Agricultural Policies Through Agricultural Support and Subsidies in Developing Countries

In late 2021, the UN Food and Agriculture Organization (FAO), the United Nations Development Programme, and the UN Environment Programme called on countries to repurpose their agricultural support and subsidies, including by removing those that are considered the most economically inefficient and potentially the most environmentally harmful. According to the Organisation for Economic Co-operation and Development (OECD), these harmful agricultural policies and support represented almost two-thirds of the USD 629 billion that farmers received in public support and subsidies between 2021 and 2023 in a broad group of countries, including those from the OECD plus a few large developing economies.

However, these figures only paint an overall trend of agricultural support in OECD countries and some large developing economies such as China and India. The picture is completely different in poorer countries and least developed countries (LDCs), where agricultural subsidies are rather limited, and farmers are often penalized through policies designed to guarantee cheap food to their poor consumers.

Given their tight budgets, it is worth asking to what extent repurposing agricultural policies and support is relevant to poorer countries and LDCs that do not, in practice, have much to repurpose. We asked Marco V. Sánchez, who leads the FAO's Monitoring and Analysing Food and Agricultural Policies (MAFAP) program, to answer this question. His piece walks us through the efforts that MAFAP is making in poor countries and LDCs in Africa to optimize their rather limited budgets for food and agriculture—and to share his vision of the potential payoffs that these efforts could yield.

One of the LDCs in which MAFAP has been active is Uganda. We have invited Jane Nalunga and Jonathan Lubega, two agriculture trade experts based in Kampala, to provide us with a full picture of how agricultural policies and support look in Uganda. Finally, three agriculture trade experts from Brazil, Leila Harfuch, Rodrigo Lima, and Gustavo Dantas Lobo, and one from India, Ranja Sengupta, share their views on what has worked—and what could be done better—to ensure that their countries' agricultural support and subsidies promote sustainability.

Happy reading,

Facundo Calvo

Policy Analyst (Trade and Agriculture), IISD

Articles

Optimizing Public Spending on Food and Agriculture: A gamechanger in lower-income countries

FAO's Marco V. Sánchez highlights the need to repurpose agricultural support and policies to transform food systems in lower-income countries.

Read article here.

Agricultural Subsidies in India: A critical balancing act

Ranja Sengupta explores the socio-economic impact of agricultural subsidies in India and underscores the need for effective policy adjustments.

Read article here.

Challenges to Fostering Low-Carbon Agriculture Through Public Policies and Support in Brazil

Leila Harfuch, Rodrigo C. A. Lima, and Gustavo Dantas Lobo examine how low-carbon agriculture policies can balance production with conservation for more sustainable agriculture in Brazil.

Read article here.

Agricultural Subsidies: A case for Uganda

Jane Nalunga and Jonathan Lubega examine Uganda's agricultural subsidies, offering recommendations for redesigning them to foster sustainability.

Read article here.