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Thursday, April 9, 2020

Strategic CSR - Farming subsidies

The article in the url below summarizes a report by the Food and Land Use Coalition (https://www.foodandlandusecoalition.org/), which demonstrates the scale of the market distortions currently being distributed by governments in the agricultural sector:
 
"The public [worldwide] is providing more than $1m per minute in global farm subsidies."
 
What is worse is that almost none of these subsidies are promoting sustainable production processes. On the contrary, they are encouraging extremely damaging practices:

"Just 1% of the $700bn (£560bn) a year given to farmers is used to benefit the environment, the analysis found. Much of the total instead promotes high-emission cattle production, forest destruction and pollution from the overuse of fertiliser."
 
The best way to do this, the report argues, is to redirect these subsidies to more sustainable farming practices:
 
"The security of humanity is at risk without reform to these subsidies, a big reduction in meat eating in rich nations and other damaging uses of land, the report says. But redirecting the subsidies to storing carbon in soil, producing healthier food, cutting waste and growing trees is a huge opportunity, it says."
 
Specifically:
 
"A series of major recent reports have concluded the world's food system is broken. It is driving the planet towards climate catastrophe while leaving billions of people either underfed or overweight, 130 national academies of science and medicine concluded in November. Another report found that avoiding meat and dairy was the single biggest way to reduce your environmental impact on the planet, with livestock using 83% of farmland to produce just 18% of calories. The 'planetary health diet' published by scientists in January requires an 80% cut in the red meat eaten by Europeans and North Americans. Adopting this diet in coming decades would mean 60% of today's pasture could be used for wildlife or other purposes, an area similar to the size of Brazil."
 
In spite of these warning signs, the report:
 
"… couldn't find any examples of governments using their fiscal instruments to directly support the expansion of supply of healthier and more nutritious food. Overall, [the report] said the damaging way the world currently produces food and uses land causes $12tn a year in hidden costs to the environment, human health and development."
 
The report looked at agricultural subsidies worldwide, but also covered food production and the R&D that goes into improving the food supply chain:
 
"The subsidy analysis in the report was done by the International Food Policy Research Institute, using OECD data. It found three-quarters of the $700bn annual subsidy is paid directly to farmers and that 15% supports measures such as research on higher yielding crops and road building in rural areas. It analysed subsidies in 51 nations and includes most, but not all, of global subsidies."
 
While the report is highly critical of existing government support for big-ag, it finishes on a high note by mentioning some examples of the (rare) good practices that it found:
 
"Benefits from reforming subsidies has been seen in some places. Farmers in the European Union have reduced greenhouse gas emissions from fertiliser by 17% while yields rose, and China is phasing out support for fertilisers."
 
Take care
David
 
David Chandler
© Sage Publications, 2020
 
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$1mn a minute: The farming subsidies destroying the world
By Damian Carrington
September 16, 2019
The Guardian