Agricultural Policy at a Crossroads
Between Sustainability and Food Security
eyesonsuriname
Amsterdam, Oct. 30th 2025– The way governments support their agricultural sector is under pressure. A new report from the OECD (Organisation for Economic Co-operation and Development) shows that while countries are paying more attention to sustainability in their agricultural policy, major steps are still needed. The central dilemma: how can agriculture become less harmful to the environment while simultaneously producing enough food for a growing global population?
Enormous Subsidy Amounts, Outdated Approach
Governments worldwide spend enormous amounts on agricultural support. Between 2022 and 2024, this amounted to an average of USD 842 billion per year across 54 countries that together represent three-quarters of global agricultural production. This is 20% more than in the period before the coronavirus pandemic (2015-2019).
The problem lies primarily in the type of support being provided. About half of all subsidies take forms that distort the market. Think of price support for farmers, payments linked to production volume, or subsidies for fertilizers and fossil fuels. Although this percentage has declined from 15% of total production value (at the beginning of this century) to 9% now, it remains a substantial portion of support.
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Trade Agreements as a Tool for Sustainability
Governments are increasingly discovering trade agreements as a means to promote sustainable agriculture. Between 1997 and 2024, OECD countries introduced or approved 130 measures, primarily through regional trade agreements. Notably, 60% of these measures were approved in the last seven years, indicating an acceleration.
The report advocates for greater uniformity in these sustainability provisions between countries. If every trade agreement sets different requirements, it becomes difficult and costly for businesses to comply with all regulations. Moreover, harmonisation ensures that all farmers worldwide work under comparable conditions, which is fairer.
Global Trade in Agricultural Products
International trade in agricultural products has grown spectacularly: export value now stands at USD 1.4 trillion, nearly five times as much as thirty years ago. This growth is faster than production growth itself, meaning an increasingly larger share of what is produced is traded across borders.
At the same time, agricultural products continue to face higher trade tariffs and more restrictions than products from other sectors. The Americas export 40% of all agricultural products worldwide, while Asia imports 47%, driven by population growth, rising incomes, and increasing urbanisation.
Insufficient Investment in Innovation
A worrying trend is the decline in government investment in agricultural innovation. Public investments in knowledge and innovation have fallen from 0.92% of production value at the beginning of this century to just 0.54% in 2022-2024. This is particularly concerning because these investments are crucial for developing new, sustainable farming methods and strengthening the sector’s resilience.
OECD Secretary-General Mathias Cormann emphasises that governments should replace market-distorting subsidies with more targeted support for research, innovation, and sustainable farming practices. This would not only increase productivity and make food more affordable, but also improve agriculture’s environmental sustainability and safeguard the income of millions of people who depend on the sector.
Recommendations for the Future
The OECD report makes concrete recommendations for future-proof agricultural policy:
First, the most distorting forms of support must be reformed or phased out where possible. Instead of general subsidies that are often inefficient and costly before they actually reach the farmer, the focus should be on targeted measures that precisely match the needs of individual farmers.
Second, more must be invested in innovation and sustainable productivity growth. Without continuous research and development, agriculture will not be able to meet the dual challenge of food security and environmental protection.
Third, resilience must be enhanced through proper preparedness and risk management. Climate change, pandemics, and geopolitical tensions demonstrate how vulnerable our food system can be.
Finally, environmental protection must be combined with open and transparent trade. Agriculture faces a triple challenge: producing enough food, providing farmers with a fair income, and doing all this within the limits of what the environment can sustain.
The OECD report makes clear that a fundamental revision of agricultural policy is necessary. Trade agreements with sustainability clauses are a step in the right direction, but they form only part of the solution. Real change must come from a shift in how governments structure their support to agriculture: away from subsidies that distort markets and burden the environment, toward targeted investments in knowledge, innovation, and sustainable practices. Only in this way can agriculture feed a growing global population without depleting our planet.