In Short

• OECD Agricultural Policy Monitoring and Evaluation 2025 tells governments to replace market-distorting subsidies with funding for research and sustainable farming.
• Governments introduced 130 sustainability measures in trade agreements between 1997 and 2024.
• Public investment in agricultural innovation has declined.

Governments are using trade policy measures to catalyse agricultural sustainability, notes the OECD Agricultural Policy Monitoring and Evaluation 2025 report.

The organisation sees progress through new environmental clauses in trade agreements, yet says deeper reforms in agricultural support systems are needed to improve food security and reduce the sector’s environmental footprint.

The OECD calls for a “direction change” in spending towards research, innovation, and sustainable farming methods to up the sector’s resilience.

Total agricultural support, says the report, averaged USD 842 billion per year during 2022–24, which is a 20% increase from pre-pandemic levels. Despite this rise, about half of the assistance still comes from market-distorting subsidies such as price support, input subsidies for fertilisers or fossil fuels, and payments linked to output.

Read More: Carbon, Crops, and Climate: The Regenerative Revolution in Agriculture

These measures, the OECD explains, should be gradually reoriented to encourage environmentally sustainable production and efficient resource use.

The report also spotlights the growing use of trade agreements to encourage sustainable agriculture.

Between 1997 and 2024, OECD members introduced or approved 130 measures, largely through regional trade deals, with 60% happening in the past seven years.

The organisation recommends harmonisation of sustainability clauses across agreements to ease implementation and reduce compliance costs for businesses, as well as promote a fair trading environment for sustainable practices.

OECD Secretary-General Mathias Cormann said: “To complement trade agreements that encourage sustainable agriculture, governments can replace market-distorting subsidies with better-targeted support for research, innovation, and sustainable farming practices.

“This would boost productivity, improve food affordability and security, strengthen the environmental sustainability and resilience of agriculture, and sustain the livelihoods of millions of people who depend on the agriculture sector worldwide.”

Also Read: What are the Benefits of Sustainable Development?

Global agro-food exports have expanded to USD 1.4 trillion, nearly five times higher than three decades ago, though agricultural products still face higher tariffs, quantitative restrictions, and non-tariff measures compared with other sectors.

From 2021 to 2023, the Americas accounted for 40% of global export value, whereas Asia represented 47% of imports, influenced by population growth, rising incomes, and urbanisation.

A concerning trend identified by the OECD is the decline in government investment in agricultural research and innovation, which has dropped from 0.92% of production value in 2000–02 to 0.54% in 2022–24. Such investment, the report says, is important for improving productivity, sustainability, and resilience of global agro-food systems.

In its recommendations, the OECD dockets a policy agenda aimed at feeding a growing global population efficiently and sustainably. It calls for phasing out market-distorting support, reducing income support measures with low efficiency, and directing public funds towards innovation and risk management systems.

See Also: Climate-Smart Farming Fuels AI in Agriculture Market Boom

It also encourages balanced approaches that promote environmental protection, open trade, and sustainable farming practices, thereby helping agriculture respond effectively to the triple challenge of productivity, food security, and environmental care.

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