Governments across the world are heavily subsidising their agricultural industries off the back of more frequent global shocks.
The OECD Agricultural Policy Monitoring and Evaluation 2026, released this week, said that government support for farming had increased by $US121 billion between 2023 and 2025.
This was a 15 percent increase over the period.
The report said much of this increase was focused on short-term responses to successive crises rather than strengthening the sector’s resilience to future risks.
OECD Secretary-General Mathias Cormann said more support did not always mean better outcomes.
“Distortive measures are raising costs for families and reducing efficiency,” he said in a statement.
“We need to invest in innovation and infrastructure to help farmers produce more with less, and we need to help farmers prepare for the next shock rather than simply compensating them for the last one.”
The report said that total support to the agricultural sector averaged $US885 billion per year in 2023-2025.
Nearly half of support “still takes the forms most likely to distort production and trade” – altering market prices, subsidising inputs, or tying payments to output quantities.
“This rise in support occurred against a backdrop of more frequent and interconnected global shocks with increasing economic impact,” the report said.
“The increase reverses a decades-long decline in agricultural support relative to production.”
Across 56 countries covered, support to the sector rose from 17.6 percent to 19.1 percent of the value of agricultural production between 2023 and 2025.
In many emerging economies, support came mainly through policies that kept domestic agricultural prices above world prices.
This was to insulate domestic markets against external shocks.
“Consumers are bearing a significant share of the cost through higher food prices across the countries covered,” the report said.
“Policies that kept domestic food prices above international levels resulted in an estimated net cost to consumers of $US204 billion annually during 2023-25 as additional costs from higher food prices exceeded budgetary assistance to consumers.”
The full report is here
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