Crisis as Opportunity: The triple challenge to global food systems

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This article is part of a series in which OECD experts and thought leaders – from around the world and all parts of society – address the COVID-19 crisis, discussing and developing solutions now and for the future.

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The COVID-19 pandemic health crisis continues to have devastating impacts on the world economy – and important impacts on food systems. Many governments are responding with short-term emergency measures, including support to farmers and other businesses along the food chain; initiatives to expedite trade and keep food supplies moving; and special assistance for vulnerable consumers. But governments also need to create conditions for global food systems to “build back better” to meet the challenges of the future.

Global food systems must meet a formidable “triple challenge” of simultaneously:

  • providing food security and nutrition to a growing global population: according to the FAO, the world’s population is expected to reach almost 10 billion in 2050, requiring a significant increase in the production of affordable, healthy and nutritious food;
  • contributing to the livelihoods of people around the world working along the food supply chain: global food systems are essential to the livelihoods of people working on the more than 570 million farms worldwide, and are especially important in developing countries; and
  • ensuring the environmental sustainability of the sector, while adapting to, and helping to mitigate climate change: global food systems are not only dependent upon natural resources but are also responsible for the vast majority of global land and water use, as well as being one of the main producers of greenhouse gas emissions.

As governments pump support into hard-hit economies, they have the opportunity to look at whether the significant resources devoted to supporting agriculture are helping to meet this triple challenge. Evidence from the OECD suggests that governments can do more to ensure that public funds and policies build better global food systems.

Read the OECD Policy Response COVID-19 and global food systems

Global support to agriculture is substantial, but not well directed

Total domestic support to agriculture across the 54 countries covered by the OECD Agricultural Policy Monitoring and Evaluation report averaged USD 708 billion per year during 2017-2019. Some three-quarters of this support – USD 536 billion – was transferred to individual producers. More than half of all support was directly linked to farm production decisions, in many cases by keeping domestic prices higher than international prices, through a combination of subsidies and trade barriers. Not only do these policies distort international markets – often to the detriment of producers in developing countries – they also impose a high burden on consumers in the home country, reduce the competitiveness of the domestic food industry, increase the income gap between large and small farmers and can harm the environment. For example, payments linked to production  can undermine efforts towards climate adaptation and mitigation by locking farmers into producing particular crops, even in the face of changing climatic conditions.

By contrast, only around USD 106 billion was devoted to research and development, innovation and extension services that help farmers manage their farms. Governments can do more, for example, to improve the productivity and environmental performance of agriculture and foster resilience to shocks, in particular by exploiting the potential of digital technologies. These investments are key to increasing yields while minimising environmental impact, and improving the livelihoods of farmers, notably smallholders.   

Yet while significant reforms have been introduced over the past 30 years, progress has stalled. With global food systems facing multiple challenges – from COVID-19 and African Swine Fever to locust invasions and more frequent extreme climatic events – the case for reform is becoming urgent.

Investments are required now to build resilient food systems

The OECD-FAO Agricultural Outlook 2020-29 highlights the need to invest now in building productive, resilient and sustainable food systems in the face of uncertainties.

The Outlook finds that, over the next ten years, supply growth is expected to continue to outpace demand growth, leading to declining real prices of most commodities. But, a drop in household income, as a consequence of COVID-19, will depress demand in the short-term and could undermine food security in vulnerable countries. As the pandemic spreads to poorer countries, the international community will need to act to help avoid an increase in hunger and malnutrition.

For more information, and to access the OECD-FAO Agricultural Outlook 2020-2029, check out the dedicated Agricultural Outlook website 

Over the coming decade, most output growth is expected to come from productivity improvements rather than from additional land area or animal numbers. Aquaculture is expected to overtake capture fisheries as the most important source of fish worldwide within a few years. While population growth will remain the main driver of global demand, the nature of demand is changing. Environmental and health concerns in high-income countries will contribute to a shift away from animal-based protein, and income growth in middle-income countries to a shift towards diets with more animal protein and other higher value products.

Overall, given current policies and technologies, agriculture greenhouse gas emissions are projected to grow by 0.5% annually. While this represents a reduction in the carbon intensity of food and agriculture production, without additional efforts it still falls short of what the agricultural sector could do to contribute to Paris Agreement targets and national contributions for fighting climate change.

Against the background of a changing climate, international trade will become increasingly important to enable food to move from where it can best be produced to where demand is growing fastest, and to pool risks from increasingly severe shocks. An open, predictable and transparent international trade system will be important to ensure global food security and people’s well-being. Yet average tariffs are much higher in agriculture than for manufactured goods, and agricultural and food products are also characterised by tariff peaks and tariff escalation (instances where tariffs increase with higher levels of processing). Moreover, recent trade tensions have introduced considerable uncertainty into global agrifood markets.

Building back better for global food systems

Building back better in the wake of COVID-19 is an opportunity to roll back the most distorting and wasteful forms of policy support, releasing scarce financial resources for investments in open and predictable markets and productive, sustainable, and resilient food systems.

Building back better for global food systems means investing in people (skills and education); in innovation systems (R&D, technology transfer, and extension services); in physical infrastructure (digital technologies, as well as roads and ports); in climate and environmental measures (payments, as well as regulations and penalties, where necessary); in risk management schemes for improved resilience; and in some cases in temporary adjustment support to ensure that no one is left behind.

Also on the Forum Network: The Future of Farming 4.0: The digitalisation of agriculture by Cesar Cunha Campos, Director, FGV Europe - Fundação Getulio Vargas

This is an ambitious agenda. But action is needed for global food systems to meet the triple challenge of providing safe, affordable and nutritious food for a growing global population, contributing to livelihoods for actors all along the food chain and helping ensure a sustainable planet for current and future generations. 

Further reading

  • OECD (2020), Agricultural Policy Monitoring and Evaluation 2020, OECD Publishing, Paris,
  • OECD (2020), Producer and Consumer Support Estimates, OECD Agriculture Statistics (database)
  • OECD/FAO (2020), OECD-FAO Agricultural Outlook 2020-2029, OECD Publishing, Paris/FAO, Rome,
  • OECD (2020), Food systems and the challenges of coherent policies- Chapter 1: The performance of the global food systems, [TAD/CA/APM/WP(2019)29/FINAL], OECD, Paris

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Julia Nielson

Deputy Director, Trade and Agriculture Directorate, OECD

As Deputy Director of the OECD Trade and Agriculture Directorate (TAD), Julia Nielson helps oversee work to develop and communicate evidence-based advice to governments with the aim of helping them improve the domestic and international performance of their policies in the areas of trade, food, agriculture and fisheries. Ms. Nielson has over 20 years’ experience in multilateral trade and development, strategy and management. She was previously Head of the Emerging Policy Issues Division in TAD. Prior to that, she worked for the World Bank Group (WBG), including in the office of the then-President of the WBG, Bob Zoellick.

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