Policies play an important part in influencing the efficiency and environmental performance of agriculture. Giving greater emphasis to policies that encourage research, development, and knowledge dissemination can boost productive efficiency. Effective resource management programmes and environmental regulations can limit the negative environmental effect of policies. But not all government support is harmful to growth and the environment, while not all environmentally motivated subsidies are beneficial for the environment. The absence of government support is no guarantee that the desired level of environmental performance will be achieved.

The available scientific evidence suggests that “business as usual”— both of policies and practices—will lead to a future in which economic growth will be constrained by natural resource limits, and climate change, putting the security of food supplies at risk. But “business as usual” may well be an attractive short-term option in so far as higher growth and better environmental performance may only become apparent in the long term (Box 1).

Box 1 Business as Usual and Green Growth Green growth may involve an opportunity cost in terms of reduced economic growth: some resources are consumed by actions and activities to protect environmental quality, or some outputs will be foregone. But this trade-off arises precisely because the cost of environmental protection is not accounted for under “business as usual”, and therefore in the short run output would be higher than under a green growth trajectory. However, in so far as production practices that deplete and/or degrade the natural resource base needed for future growth are unsustainable, in the long run the situation will be reversed. Under green growth the resource base would be preserved—or even enhanced if damages are reversible—thus leading to higher output than “business as usual”. Figure 3.3 represents possible stylised future trajectories of growth.

Identifying good policies, overcoming impediments, and embracing opportunities to move food and agriculture onto a green growth pathway,

"G reen growth" compared to "business as usual". Source

Fig. 3.3 "G reen growth" compared to "business as usual". Source: OECD Secretariat and developing the means to measure progress are all important. A green growth policy strategy needs to focus on three key elements to:

  • Improve resource use efficiency throughout the supply chain to not only ensure higher productivity, but also conserve scarce natural resources and deal with waste (the potential for reducing waste along the food supply chain is likely to be considerable). This means according higher priority to research, development, innovation, education, and information applied to the agriculture and food sectors.
  • Facilitate well-functioning markets so that prices reflect the scarcity value of natural resources as well as the positive and negative environmental impacts of the food and agriculture system that will contribute to resource use efficiency. This means reducing economically and environmentally harmful subsidies while providing incentives for the supply of environmental services; further integrating domestic and global markets through trade; applying the polluter pays principle through charges and regulations; and reducing waste and post-harvest losses, through better consumer information.
  • Clearly define and implement property rights to help ensure optimal resource use, in particular for marine resources, land and forests, GHG emissions, and air and water quality, because when resources are essentially free or private participants it can encourage over-exploitation, resulting in environmentally and socially suboptimal outcomes. This is a complex area and is increasingly of a global rather than purely domestic nature, and requires attention in particular to governance and institutions.
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