Our food systems are failing us. Over 800 million people are suffering from hunger, while 13% of the world’s population are obese. So what is to blame? Agricultural production follows the money. And 87% of the $540 billion given to agricultural producers each year is either price distorting or harmful to nature and human health. So what we can do to fix it? In Episode 10, we find our answers at the high-level launch of UNDP, UNEP and FAO's new report: "A Multi-Billion-Dollar Opportunity: Repurposing Agricultural Support to Transform Food Systems." Featuring Marco Sanchez (Food Agriculture Organization), Francesca Branca (World Health Organization), Nicoletta Batini (International Monetary Fund), Johan Swinnen (International Food Policy Research Institute), Vijay Kumar (Rythu Sadhikara Samstha, Government of Andhra Pradesh), Ann Tutwiler (Just Rural Transition) and Gerardine Mukeshimana (Government of Rwanda). The UNDP, UNEP and FAO report discussed during the episode can be found at the following link: https://www.fao.org/3/cb6562en/cb6562en.pdf
Teaser
Francesca Branca: The fact of the matter is that, the food system is failing us. It's not doing what it's meant to do, which is feed people.
Colm Hastings: Welcome to The Green Renaissance. A podcast series from the Partnership for Action on Green Economy, that aims to unpack the green recovery debate. This month, the billion – or even trillion – dollar question,
Johan Swinnen: I mean it's a trillion dollar issue, rather than a multi-billion dollar issue. In a way it's a one and a half billion dollar per day, issue.
Colm Hastings: With our food systems having an increasingly harmful impact on both nature and ourselves, how do we transform these systems to serve the needs of both people and our planet?
Nicoletta Batini: You could actually think of current food systems as nothing but the result of a careful and systematic public policy design of the last 7 years. So we have a way to turn this around.
Colm Hastings: Subscribe wherever you get your podcasts. I'm Colm Hastings, and this is The Green Renaissance.
Intro
Colm Hastings: As we've just heard, our food systems are failing us. Over 800 million people are suffering from hunger, and yet 13% of the world's population are obese. And that doesn't take into account the impacts that this is all having on nature, biodiversity, and our climate. So what's to blame?
Colm Hastings: Well, the production of food, like many other things in the world, often follows the money. And at the moment that money is telling our farmers to produce food in a way that is harming both nature and our health. So how can we fix this? How can we shift the flow of money to ensure that our food systems are no longer harming us, and instead serving the needs of producers, consumers and our planet?
Colm Hastings: Many of the answers can be found in a new report that has been launched by three United Nations organizations – the UN Development Programme, UN Environment Programme, and the Food and Agriculture Organization. The report, which is aptly titled "A Multi-Billion Dollar Opportunity," identifies six key steps that governments can take to shift the flow of money, transform our current incentives, and promote a more sustainable agricultural system.
Colm Hastings: So today we'll be speaking to some of those that have made contributions to the report, as well as those in government, to ask how these steps can be implemented in practice. To lead us off, we speak to Marco Sanchez, who is the Deputy-Director of Agri-Food Economics at the Food and Agriculture Organization. Marco is one of the report's lead authors, and he explains, first of all, why this report was needed.
Discussion
Marco Sanchez: As we all know, food systems support several SDGs. Not only food security and nutrition, but also in many other sustainability realms. Food systems have made impressive strides in producing food to feed the growing population, with more food safety. However, what we have seen is that these contributions are showing limits because of wrong management.
Marco Sanchez: For example, agriculture contributes to land conversion and biodiversity loss, pollutes air and waterways, and is the leading source of greenhouse gas emissions. The world produces enough food, but around 3 billion people in the world do not have access to healthy diets. To fix this, we are all saying that food systems need transformation. Now there are several entry points to transform the food systems. The report identifies agricultural support as one of these key entry points.
Colm Hastings: So the way that we produce our food is having a huge, negative impact on nature and biodiversity. Our food systems therefore need transforming, and one important entry point for this is agricultural producer support. So why does the report focus on this entry point in particular, and what types of support do we mean?
Marco Sanchez: Agricultural support mostly targets farmers individually. Worldwide, support to farmers corresponds to $540 billion yearly, on average. More than half this amount, which is almost $294 billion, is provided to farmers through price incentive policy. The rest are fiscal subsidies that target farmers individually. About 70% of these fiscal subsidies are given to farmers because they produce a specific crop, or they use a specific input or factor of production. We call this capital subsidies in the report, as they are tied to the production of a commodity.
Marco Sanchez: Farmers, of course have reason to view these as good policies most of the time. For example, a price incentive for a fertiliser subsidy reduces the production cost for them. Or for example, a trade agreement that guarantees access to market for a crop, will force farmers to invest in that crop. What is the problem then? Well, as we argued in the report, price incentives are the result of border measures and market interventions, through for example, import tariffs, duties, quotas, and fixed or floor prices that keep producers’ prices above the market level. In this way, they distort prices, trade, production, and also consumption decisions.
Marco Sanchez: Similarly, fiscal subsidies tied to production can lead to negative environmental outcomes, for example, to overuse of natural resources, or the promotional of monoculture. Or they can also lead to adverse nutritional outcomes, by disproportionately fostering the production of staples versus fruits and vegetables. We need to shift from distorting and harmful forms of agricultural producer support, such as price incentive measures and capital subsidies, to support that is well targeted. Decoupled from production, and that incorporates conditions to improve productivity and reduce negative environmental impacts, and achieve better health and equity outcomes.
Colm Hastings: As Marco says, the report focuses on agricultural subsidies, meaning the price and financial incentives typically given to farmers to produce certain crops. So why is it important that we address this? As well as the impacts our current system has on the environment, we asked Francesca Branca, Director of the Department of Nutrition for Health and Development at the World Health Organization, about the risks our current food systems also pose to human health.
Francesca Branca: The fact of the matter is that, the food system is failing us, in multiple ways. It's not doing what it's meant to do, which is feed people. We have over 800 million people who are suffering from hunger. And then as Marco was saying, there's three billion people who cannot afford a healthy diet. So the kind of food which is available, doesn't allow people to have a healthy diet. And this is of course producing enormous effects on people's health.
Francesca Branca: We have what we call the double burden of undernutrition or overweight. We have 750 million children with stunting and at the same time, we have about 400 million children and adolescents with overweight and obesity, 13% of the world population, which is obese. So that doesn't work. And this is producing enormous health effects. I mean, if you put together the impact of unhealthy diets, that of obesity, of undernutrition, we get to about 15 million deaths every year, which is basically the top risk factor of the global burden of disease.
Francesca Branca: But that's not the only connection between food systems and health. The way we produce food, for example with intensive livestock production, and the use of antibiotics in livestock production, which produces antimicrobial resistance. We heard about having an impact on nature and getting closer to those habitats that then put us at a greater risk with zoonosis. So all this is producing enormous public health impacts. Only the unhealthy diet, also is producing incredible economic impacts. I mean, if we consider the cost of the unhealthy diets, on health costs, it's about $1.3 trillion per year. It's an enormous impact.
Colm Hastings: The health risks associated with our current food systems also carry huge economic costs as well. But with governments currently facing unprecedented economic pressures due to the impacts of COVID-19, we asked Nicoletta Batini, an economist working on food systems fiscal policy for the International Monetary Fund, why now was a good time to invest in food systems transformation.
Nicoletta Batini: Overall, the combination of the severe recession that we're going through, we've been going through, and the unprecedented spending that came with it, are posing great burdens on country's fiscal houses. And one immediate consequence of this is that in the near, but also distant future, there will be even less money to spend for anything. Especially large structural economic transitions, like the one on the food system. Secondly, given the sheer size of money that's being spent now, spending decisions that are taken today are likely to have durable effects on the global economy and shape societies for decades to come. So what does it mean for agricultural subsidies?
Nicoletta Batini: And we can start from the latest global shock COVID itself. COVID crisis has caused a large number of deaths, and economic hardship that has not been seen in many generations. But we do know that this pandemic is neither the first, unfortunately, nor the last that we'll see. And science indicates that unsustainable intensive agriculture, including deforestation and habitat encroachment, are the main culprits in the release of new and possibly lethal pathogens. So they create enormous pandemic risks.
Nicoletta Batini: Since current agricultural subsidies incentivize intensive agriculture and deforestation, they are part of the problem. Because in economics, it's very obvious we all know, that economic incentives are what motivates people and companies to behave in a certain way. And globally the agricultural sector has shown to be extremely responsive to subsidies in choosing what to farm and how to farm it. You could actually think of current food systems as nothing but the result of a careful and systematic public policy design of the last seven years. So we have a way to turn this around, and we have a way to redress it.
Colm Hastings: So economic incentives are the force that drive both producer and consumer behavior. So if our current incentive systems are driving behaviors that are harmful to both consumers and the environment, why don't we just remove these altogether? As Marco explains, the answer is not quite that simple.
Marco Sanchez: Keeping support as usual, global support to farmers is projected in the report to reach almost $1.8 trillion by 2030. While this trajectory is very dangerous, removing agricultural producer support altogether will also have important trade-offs. For example, the report projects what would happen if global agricultural support measures were to have been removed by 2030. Results show an overall reduction in greenhouse gas emissions compared to keeping support as usual. This result as you can see is mostly driven by the global elimination of border measures, which would result in an increase in crop and livestock production. There will also be a shift towards more confined feeding operations, with less deforestation and land conversion for pasture globally, and an associated fall in greenhouse gas emissions.
Marco Sanchez: But the overall reduction in emissions globally, will not come without trade-offs. With all support dismantled by 2030, global crop production would fall by 1.3%, and livestock production by 0.2%, with rising prices in most of the scenarios reported in the report. With agricultural production falling, of course it isn't surprising that less land and other natural resources are being used, and that emissions are then projected to decline. But removing all support will also hurt farmers income, particularly in developing countries. This of course would affect global income inequality, and there could also be adverse effects on food consumption.
Colm Hastings: So it's reforming and repurposing, and not removing agricultural support altogether, that the report is advocating for – in other words, being smart with our money. So what might this look like in practice? Johan Swinnen, who is the Director General of the International Food Policy Research Institute, identifies some of the key target areas for smart government investment.
Johan Swinnen: Let me say first something on the size actually of the problem. I mean it's a trillion dollar issue rather than a multi-billion dollar issue. In a way it's a one and a half billion dollar per day, issue if you look at it okay. And that's important to keep in mind and why is it, because as part of the Food Systems Summit, we and colleagues have estimated that it takes roughly $350 billion of investment annually to reduce hunger, to get a much more sustainable food system and diet system. And that is less than what we are currently spending. So I think it's important to put that in the framework of what we're talking about here.
Johan Swinnen: Now, how it's a complex issue. It would be easy if we could just say, basically just do this and that will solve the problem, it is not. All the analysis that you see shows that research and investment shifting is a substantive part, research and investment has to be part of the answer. And so that is, so more research and investment for productivity-enhancing, emission-reducing technologies. And these, the returns on these are typically very high and so we don't need to shift all of that there, just a size of it will already have a significant effect.
Johan Swinnen: We already have a lot of management techniques, technologies which are there. Ways of how we do farming, how our food system works. And so there, the issue is much more getting the right set of incentives, the regulatory framework. Clearly, we have to shift the incentives there, with adjusting the nature of the payments to farmers and to the food industry that we're giving. And then the third element is investments, investments in infrastructure, and trying to incorporate the hidden costs of the food system into the new investment targets, if you want. So the combination of these things, and it can really make a very significant difference, we're talking about 30, 40% of greenhouse gas reductions within a decade or 15 years probably.
Colm Hastings: Now that we know what transformational change might look like, let's speak to someone that's worked to deliver this on the ground. Vijay Kumar led the Government of Andhra Pradesh's Zero Budget Natural Farming Strategy, which aims to make Andhra Pradesh India's first 100% natural farming state. Vijay explains how the use of indigenous farming knowledge, as well as a bottom-up approach driven by local smallholder farmers, allowed the state to make such a transformation.
Vijay Kumar: The government of Andhra Pradesh saw the crisis in farmers' livelihoods as an opportunity to go into the root causes, not to do symptomatic treatment. So that is one very important change, I would say, in a government's thinking. That government decided, let us go into the root causes. So that I think was a very powerful factor which made this happen. The other thing is the natural farming technology, which is, you know, climate resilient, and it's also a mix of our indigenous technology with modern science. So it is the future of agriculture, but rooted in Indian tradition. So that made it more acceptable to our farmers.
Vijay Kumar: And the third is a very important factor. We have a very strong women's self-help group movement in the rural areas. So these women collectives, almost 90% of rural women in Andhra Pradesh have been organized into these collectives. And they're also financially very strong. They borrow money from the banks, to promote their livelihoods, repay. So these women really provided the leadership for taking it to their members, hand-holding the members. And then the extension, knowledge dissemination was not a top-down system. It was a farmer-to-farmer extension system.
Vijay Kumar: So a best practicing farmer took the knowledge to other farmers, and almost 60% of these farmer trainers are women. We have 6,000 such champion farmers. So they are the ones who are basically practicing it first. So walking the talk. So it's not just you know, telling somebody to do it and you not doing it. And then we provided for long-term hand-holding support. But I must say the most important part has been the response of the farmers, and particularly women farmers. You know, the men always talked about the income, the increase that happened to them. But women told me that the health, their health had increased, had improved, children's health had improved.
Colm Hastings: Local, smallholder farmers, who are also often women, can be key agents of change in driving this process forwards. But how do we ensure that their voices are heard? We asked Ann Tutwiler, who is a Senior Advisor for the Just Rural Transition. She explains that any transformation of our food and agricultural systems must be underpinned by inclusive consultation, which brings community voices into the policy process.
Ann Tutwiler: That needs to happen all the way through the process, but very early on. The World Farmers Organization is very supportive of this idea of repurposing. We need to engage the farmers – small, large, women, et cetera, indigenous farmers – in these processes if they are to be successful and if they are to take into account all the equity considerations that we've been touching on very lightly. You know, as many people have said, this is complex, we are asking our food system not only to produce more food, but to do all of these other things for us. And that is, the core are the farmers who need to be on board and be part of developing the solutions.
Colm Hastings: This is important, because as Ann says, it is those very community voices that will be the ones experiencing first-hand the impacts of this transformation. And as Marco said earlier in the podcast, any transformation will also encounter trade-offs. We therefore asked Johan again about some of the steps that governments can take to mitigate these potentially negative impacts.
Johan Swinnen: All the policies in the world that we have, also the cycles to support. They affect the global goods, if you want, the public goods, but of course they affect people's incomes as well, obviously. And so we have to be smart and careful in reforming these things, to think about the compensation schemes, to think about the transition systems there. And there are basically global trade offs, because if we are going to change the systems, it may be that production systems are going to shift to other parts of the world. But reform is possible, I mean the history has shown it. If you look at the last 15, 20 years, major changes have occurred in agriculture support policies, in different parts of the world. And I think 2021, this year is an excellent time with the COVID-19 pandemic showing us the vulnerability of what we have today. And also the entrepreneurship, both I think in the private sectors, and in the public policy area.
Colm Hastings: As Johan says, it's vital that governments protect the incomes and livelihoods of those at risk to the impacts of food systems transformation. So next we spoke to Ms. Gerardine Mukeshimana, who is the Minister of Agriculture and Animal Resources in Rwanda. Ms. Mukeshimana talks about the actions her government has made to remove these risks for the country's smallholder farmers and SMEs.
Gerardine Mukeshimana: The Government of Rwanda continues to invest in transport infrastructures, including the rural roads, energy and IP tools to support market linkages, as well as providing social protection mechanisms that are needed to cater for the most vulnerable. As we continue to figure out how to enhance access to agricultural finance, we strongly believe that continuous efforts to empower youth and women in all aspects of food systems are very critical for inclusiveness and sustainable food systems.
Gerardine Mukeshimana: Therefore, in Rwanda, we continue to encourage farmers to work in co-operatives, in order to easily access benefits that are associated with economies of scale. We are also supporting agriculture insurance schemes to de-risk the sector for the farmers. We also promote contract farming in order to protect the vulnerable farmers who are engaged in the markets. We've continued to fund research and development for productivity-enhancing technologies, while striving to provide conducive conditions for the private sector investments.
Colm Hastings: So it's clear that governments still have a significant role to play in driving the transformation of our food and agricultural systems. But they cannot do it alone, and neither can the food and agricultural sectors themselves. So where do we go from here? We finish by returning to Ann, who calls for continued dialogue and collective action at the national and global levels.
Ann Tutwiler: This is about national governments. They are the ones who have to move this forward. I think it's really important that the national dialogues that have been initiated under the process of the Food System Summit, continue as we go forward beyond because that really needs to be the locus of the conversations. Secondly, I think there are a number of organizations that can help support those countries as they're going forward, and keeping this conversation alive. Not just in the Food System and the Climate COP, but as someone mentioned earlier, the Nutrition Summit, the Convention on Biological Diversity. Policy reform, policy repurposing cuts across all of those topics, all of those issues.
Outro
Colm Hastings: You've been listening to The Green Renaissance. Subscribe wherever you get your podcasts to receive new episodes each month, and whilst there you can also catch up on all of the episodes we've released so far. If you've enjoyed today's podcast and would like to read the UNDP, UNEP and FAO report that we've been discussing, you can head over to the FAO website at www.fao.org. We'll also be providing a link to the report in the bio for this episode. Thanks as always for listening, and we'll see you next time.