Countries worldwide are accelerating reforms to redirect over $650 billion in annual farm subsidies toward climate resilience and sustainability
A major transformation in global agricultural policy is underway as nations move to repurpose farm support systems, shifting away from traditional subsidies toward climate-smart practices and sustainable farming methods, according to a new report published under the Food Systems 2030 Multi-Donor Trust Fund.
The report, released jointly by the World Bank and the UK government, documents how countries are translating political commitments into concrete action—redirecting spending, modernizing support systems, and incentivizing environmentally sound agricultural practices.
The Hidden Costs of Current Systems
While global food production has increased, current agricultural systems carry massive environmental and health burdens. The report estimates hidden costs between $10-15 trillion annually, stemming from climate damage, ecosystem degradation, and unhealthy diets.
With food insecurity rising in regions where productivity has stalled, policymakers are shifting their focus from simply maximizing output to transforming how food is produced. More than 160 Heads of State have endorsed the COP28 UAE Declaration, committing to reorient agricultural support toward sustainability.
Reforms Across Continents
East Asia & Pacific
Several countries in the region are pioneering climate-smart innovations. Viet Nam has expanded low-carbon rice farming across more than 184,000 hectares, reducing emissions by 1.5 million tons of CO₂ each year. New Zealand is deploying methane inhibitors and low-emission feed options, while the Philippines has enacted rice market reforms that lowered consumer prices while funding industry modernization.
Europe & Central Asia
Denmark has introduced the world’s first carbon tax on agriculture, complemented by €5.4 billion allocated for peatland restoration and afforestation. England has replaced traditional acreage subsidies with environmental service payments, rewarding farmers for improving biodiversity, soil health, and water quality.
Africa
African nations are leveraging digital technologies to transform subsidy systems. Ghana is digitizing input delivery, while Malawi has developed a soil-health-based subsidy model integrating testing and targeted support. Tanzania is redesigning fertilizer programs and deploying digital extension services, and Zambia has expanded e-voucher systems with increased private-sector participation.
Middle East, North Africa & South Asia
Morocco and Jordan are prioritizing water efficiency and irrigation modernization. Bangladesh is piloting e-vouchers to reduce fertilizer waste, while Pakistan is phasing out long-standing wheat procurement policies to free up resources for infrastructure development.
Five Principles for Success
The report identifies key lessons from over 20 case studies:
- Gradual, sequenced reform based on analysis and pilot programs
- Digital targeting through e-vouchers and registries
- Climate-smart conditions that reward sustainable practices
- Strengthened institutions with technical assistance
- Protection for vulnerable households during transitions
Investment and Next Steps
Between 2017 and 2024, the World Bank invested $4.3 billion in Programs-for-Results and $4.8 billion in Development Policy Financing for agriculture-related reforms, with an additional $100 million in repurposing grants deployed through the Food Systems 2030 trust fund.
Regional dialogues will intensify through 2025-2026, particularly in Africa and Asia, as countries prepare for COP30 where agriculture will feature prominently.
A Cost-Neutral Opportunity
The report emphasizes that with only 35 cents of every support dollar currently generating real production gains, redirecting this spending toward climate resilience, soil restoration, and farmer incomes represents both an urgent and transformative opportunity.
As nations advance these reforms, the compendium suggests the world has reached a decisive moment to realign food systems for the benefit of people, planet, and economies.
Source: Repurposing Agricultural Support: 2025 Policy Compendium, Food Systems 2030 Multi-Donor Trust Fund (World Bank and UK government)