In plain view: solutions to turbocharge the agrifood system transition

Momentum is growing for real food systems change at a scale never seen before. Last year at the UN Climate Summit in Dubai (COP28), 160 countries signed a landmark declaration to integrate food and agriculture into their national climate plans - prioritizing nutrition, nature, lower emissions, and climate-resilient productivity growth.

But how will developing countries secure the billions needed to cover the cost of that shift, especially as many face rising public debt and economic difficulty? The key to unlocking change is hiding in plain sight - in the form of money and public support already being spent on agriculture by governments around the world.  

Each year, countries channel about $650 billion into propping up a bad food system. They do this through trade measures or public expenditures largely designed to boost production of specific crop and livestock products, support farm income or keep food prices low for consumers.

Effectively, they often end up rewarding farmers for polluting the planet by overusing chemical fertilizers, practicing monoculture, and cutting down trees, when that money could be spent on rewarding them for sustainable practices such as crop diversification, healthy soils, and agroforestry.

Every year, these policies result in huge costs associated with global warming, destruction of our ecosystems, and a range of health impacts. Our modelling is clear: the business-as-usual path is unacceptable. 

Instead, repurposing farm support could be a game-changer. For instance, shifting just 10 percent of the most distortive subsidies to green innovations could generate an additional $2.4 trillion by 2040.

It could also reduce food prices by 18 percent, reduce sector emissions by 40 percent, and restore more than two percent of all farmland to natural habitats.

Importantly, repurposing public support can be tailored to benefit smallholder farmers, who produce 80 percent of the world’s food, but bear the brunt of climate change, volatile markets, and costly inputs.  

Repurposing agricultural support can also signal strong government commitment, attract investors, unlock new market opportunities all along the supply chain, and help the private sector drive the transition at speed and scale.

We need to think globally but act locally. While collective and coordinated global action will achieve multiple gains, policy change needs to happen at the country level, rooted within country-specific opportunities, constraints, and trade-offs.

To assist developing countries in navigating these challenges, the World Bank has introduced a comprehensive support package. This includes agricultural public expenditure reviews, policy dialogues, enhanced data insights, and support for reforms, alongside funding for targeted repurposing programs.

While results often take time to materialize, the initial progress has been encouraging. In the Philippines, for example, World Bank-supported trade reforms helped liberalize the rice industry, generating funds to boost the competitiveness of domestic producers. As a result, rice prices have dropped without reducing the level of domestic rice production, directly benefiting the country's poorest citizens.

In Uzbekistan, following the elimination of a costly price taxation of cotton and wheat farming estimated at 1.6 percent of GDP in 2018, the country revised its public expenditure regime to pave the way for a vast agriculture modernization program that prioritizes crop diversification, soil health, and market development.

We are now expanding our work, collaborating with seven countries in sub-Saharan Africa, East Asia, South Asia, and Latin America to support the design of agricultural reforms and strengthen the organizational capabilities needed to implement them through the Food Systems 2030 Multi-Donor Trust Fund.

Countries in sub-Saharan Africa have been keen to adopt new approaches to incentivize more sustainable fertilizer use by farmers, with a focus on improving soil health. With support from the World Bank, these countries are leading the way by introducing repurposed fertilizer programs. These include e-vouchers that offer farmers a range of technology choices, digital farm registries for better targeting, and complementary services like soil testing and extension services for precision agriculture. They are also piloting payment-for-ecosystem services schemes.

We envision a world where farmers are thriving and are rewarded for their contribution to healthier soils, cleaner air with less methane emissions and regenerative landscapes built through replanting forests, regenerative farming, agroforestry and more. This future is within our grasp if we have the collective will to act now.