Madhur Gautam, David Laborde, Abdullah Mamun, Will Martin, Valeria Piñeiro & Rob Vos POLICY SEMINAR UNFSS Science Days Side Event: Reforming Agricultural Policies to Support Food Systems Transformation Co-organized by IFPRI, Indian Council for International Economic Research (ICRIER) and Academy of Global Food Economics and Policy, China Agricultural University JUL 7, 2021 - 09:30 AM TO 11:00 AM EDT

1. Repurposing Agricultural Support for
GHG Emission Reduction and Food
Security
Madhur Gautam#, David Laborde*, Abdullah Mamun*, Will Martin*,
Valeria Piñeiro* & Rob Vos*
# The World Bank * IFPRI
UNFSS Science Days – Side Event, 7 July 2021

2. Global policy question
How can agricultural measures be repurposed to provide
incentives for sustainable food system transformation?
• That is, to meet global targets for food security, poverty
reduction, climate protection and other environmental
sustainability goals

3. Modeling repurposing scenarios
Who wants to know?
▪ Current work is global at request of
inter alia:
oFOLU
oUNFSS (Science Grp + all AT’s)
oWorld Bank
oUNEP/FAO
oT20/G20
▪ Country-level work to follow
What answers do we offer?
▪ Focus on global, internationally
concerted scenarios
oWhat happens if we get rid of
all support (or components)?
oHow to repurpose to reduce
emissions without jeopardizing
other development goals?

4. Food availability and
sustainability
challenges
1. Food production
outpaces population
growth
2. Productivity growth
mainly from land
intensification
3. Agricultural
productivity growth
has slowed by more
than 20%
4. Production has
become more
volatile again since
2000s
Food Production X 3.6
Population X 2.5
Agricultural land X 1.1
1961 1968 1975 1982 1989 1996 2003 2010 2017
Index:
1961=100
0.5
0.7
0.9
1.1
1.3
1.5
1.7
1.9
-0.1
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1981-90
1982-91
1983-92
1984-93
1985-94
1986-95
1987-96
1988-97
1989-98
1990-99
1991-00
1992-01
1993-02
1994-03
1995-04
1996-05
1997-06
1998-07
1999-08
2000-09
2001-10
2002-11
2003-12
2004-13
2005-14
2006-15
2007-16
2008-17
2009-18
2010-19
Standard
deviation
in
annual
growth,
percent
Trend
growth,
percent
10-year Trend growth in food output per capita (left axis)
Volatility in food output per capita (Std. Dev. of growth) (right axis)

5. Food availability and sustainability challenges
5. Climate change is already important factor behind slower productivity growth
6. Impact is intensifying and hurting tropical agriculture the most
7. Agriculture remains significant source of global GHG emissions
Impact of Climate Change on Agricultural Productivity Changes in Levels of GHG Emissions by Main Sector (mt CO2 eq).
-5000
0
5000
10000
15000
20000
Agriculture Land Use
Change
Sequestration Electricity Transport Ind & Manuf Other
1990 2018
AG LUC SEQ

6. What support?
Current agricultural support
▪ About $640 billion per year
▪ Increasing in developing
countries
▪ China about $200 bn p/y
▪ Most are ‘market distorting’
▪ Coupled subsidies (25%)
▪ Border protection (33%)
▪ Other
▪ 5% for green subsidies
▪ 17% R&D and infrastructure
▪ 11% consumer subsidies
0 100 200 300 400 500 600
ALL
Developed
Developing
MPS Coupled subsidies
Uncoupled subsidies GSSE
Agricultural producer support by types, 2017-2019
(Billions of US$ per year)

7. Scenario 1: Removal
of all ‘distorting’
support
▪ Do not expect miracles!
▪ Small real income gains
▪ Farm incomes and
employment suffer (esp.
in major economies)
▪ Little change in poverty
▪ Healthy diets less
affordable
▪ Global GHG emissions
barely down
▪ Slightly less loss of forest
and biodiversity
-3 -2 -1 0 1 2 3
World
Developed
Developing
ECONOMIC
(Real National Income, % change 2040)
-12 -7 -2 3
World
Developed
Developing
FARM SECTOR
(Real Farm Income per worker, % change
2040)
-2.0 -1.0 0.0 1.0 2.0
World
Developed
Developing
SOCIAL
(Poverty at $1.90, % change 2040)
-20.0 -15.0 -10.0 -5.0 0.0 5.0
World
Developed
Developing
DIETS
(Healthy Food Prices, % change 2040)
-0.5 -0.3 -0.1 0.1 0.3 0.5
World
Developed
Developing
NATURE
(Forest Habitat, % change 2040)
-60 -50 -40 -30 -20 -10 0 10
World
Developed
Developing
CLIMATE
(Emissions from agriculture and land use
change, %)

8. Scenario 2: Repurposing for
R&D and conditional payments
for productivity-enhancing
and emission-reducing
technologies
Smart repurposing can pay off:
▪ Focus on “efficiency” critical
▪ Yields are significantly up
▪ Farm incomes and employment
suffer (esp. developed)
▪ Poverty falls (but small)
▪ Healthy diets more affordable
▪ Global GHG emissions down
▪ Protect forest habitat and
biodiversity
-60 -50 -40 -30 -20 -10 0 10
World
Developed
Developing
CLIMATE
(Emissions from agriculture and land use
change, %)

9. Conclusions
▪ Smart repurposing of subsidies will help achieve important societal gains
(more welfare, less poverty, less emissions, better diets)
▪ Efficiency gains are key
▪ Repurposing of existing support is no panacea, but at best only part of puzzle
oBundle repurposing of producer support with demand interventions
oR&D should be well targeted and needs complementary efforts through
better infrastructure, education, food value chain integration, etc.
oEnsure farm sector does not lose out too much
▪ Important political economy obstacles:
oGains are global, but policies are national – how to achieve global
concertation of policy reform?
oGains are societal and long-term – can PPP (people, planet and profits)
be served simultaneously?