Crisis-driven farming aid overlooks investment, OECD says

OECD Warns Crisis-Driven Farm Aid Misses Investment in Productivity

OECD Report Highlights Concerns Over Agricultural Support Allocation

Global Increase in Government Support for Agriculture

PARIS, Nov 2 (Reuters) - Government support for agriculture around the world has jumped in response to a spate of weather and geopolitical shocks, but not enough of it is going towards investment in farm productivity and resilience, the OECD said on Monday.

Key Factors Driving Agricultural Support

• Wars in Ukraine and the Middle East, along with extreme weather such as record heat in Europe and the onset of an El Nino cycle, have put agricultural supply and food prices under strain
• Total state support for farming reached a record of more than $950 billion last year, nearly 15% above the 2023 level, the Organisation for Economic Co-operation and Development estimated in a report covering 56 countries
• That meant that support as a share of agricultural production value rose to 19.1% from 17.6%, bucking a long-term declining trend

Price Support and Its Criticism

• The main driver of the increase was price support, particularly in emerging economies, an approach criticised by the OECD
• "More support does not always mean better outcomes," OECD Secretary-General Mathias Cormann said. "Distortive measures are raising costs for families and reducing efficiency," he added in a statement

Investment in Productivity and Resilience

• Support directed towards what the OECD calls "general services", such as infrastructure and innovation, remained stable as a share of production value at about 2.4%
• Longer-term investment was crucial to address a slowdown in agricultural productivity growth, which dropped to 0.8% per year during 2014-2023 from 1.8% over 1991-2000, it estimated

Reporting and Editorial Credits

(Reporting by Gus Trompiz; Editing by Alexander Smith)