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OECD: Agriculture Sector Confronting Multiple Challenges

November 6, 20243 Mins Read

The Organization for Economic Co-operation and Development (OECD) reported that the global agriculture sector is facing numerous challenges, including geopolitical tensions, the increasing frequency and severity of extreme weather events due to climate change, and additional pressure on the international trade system from export restrictions in some countries. The OECD published the Agricultural Policy Monitoring and Evaluation 2024 Report, revealing that the agriculture sector is confronted with a multitude of challenges worldwide. National and international markets for agricultural products continue to be affected by various short and long-term events, such as the Russia-Ukraine conflict, escalating tensions in the Middle East, and the increasing frequency and severity of extreme weather events associated with climate change. Intensifying farmer protests in many countries are indicating the economic, social, and political challenges that agriculture is facing. As a result, countries’ agricultural policies are undergoing changes, giving more importance to practices that will enhance sustainability and productivity. AGRICULTURAL SUPPORTS EMERGING IN LARGE DEVELOPING ECONOMIES In the 54 countries examined in the report, total support to the agricultural sector averaged $842 billion annually during the 2021-2023 period. Support for agriculture remained high but showed a decline from the peak in 2021. A considerable part of the annual support during the 2021-2023 period, $629 billion, was directed to individual producers. Most of this support was seen in large economies, with China accounting for 37% of the total annual support to agriculture, the United States 15%, India 14%, and the European Union 13%. This distribution indicates a significant shift from the early 2000s when the EU, US, and Japan accounted for 26%, 20%, and 16% of the total support, respectively, while China and India’s shares were below 15%. The regional distribution also showed variation in support received by consumers, with the US accounting for 67% and India 29% of agricultural support provided to consumers during 2021-2023. PRODUCTIVITY, THE DRIVING FORCE BEHIND PRODUCTION INCREASES Growth in productivity practices has been a significant driver of the substantial increase in agricultural production in recent years, but productivity practices alone are insufficient to boost production. Therefore, the OECD proposes policy approaches to make agriculture more sustainable, productive, and resilient against the persistent challenges faced by food systems globally. Setting clear objectives for sustainable productivity growth strategies, investing to increase productivity capacity, reducing environmental impacts, boosting support for environmentally sustainable production practices, ensuring sustainable management of natural resources, identifying innovation systems, and better guiding advanced productivity and environmental performance goals are among these recommendations. SUPPORTS FOR AGRICULTURE IN TURKEY According to the report, support provided to producers in Turkey during the 2021-2023 period was close to the OECD average at 11%. Budget support for producers was provided in the form of premium payments for specific products, while area payments specific to products like hazelnuts continued. Other support types included area-based crop insurance, support for covering diesel and fertilizer costs. Total support given to the sector in Turkey during this period equated to 1% of the gross domestic product in 2021-2023. This rate, higher than the OECD average of 0.6%, indicates faster growth in the sector compared to overall economic growth. The focus in Turkey for sustainable productivity growth includes innovation, improving irrigation, and developing and utilizing crops suitable for local conditions. However, the OECD recommends ensuring the implementation of this model does not deter farmers from trying new products or methods and focuses on creating a favorable environment for farmers.

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