1.4. Challenge 3: Environmental sustainability
Food production has led to environmental changes such as deforestation, erosion and resource depletion since the rise of agriculture (Kirch, 2005[82]), but environmental pressures from agriculture have accelerated in the past two centuries as the world population grew from 1billion in the early 1800s to more than 7.5billion today. As a result, agricultural production is currently a major source of environmental pressures, not only in local ecosystems but also at a global level (Campbell et al. (2017[83]), IPBES (2019[84]), IPCC (2019[85])).
Due to its close link with the natural environment, much of the environmental damage related to food systems occurs at the agricultural production stage. This is true not only for impacts on land use, biodiversity, or water use, but also for greenhouse gas (GHG) emissions. Agricultural production and the associated land use changes account for an estimated 16-27% of total anthropogenic GHG emissions while all other stages of food systems (energy, transport, processing, etc.) contribute an estimated 5%-10% (IPCC, 2019[85]).
Broadly speaking, greater food production can come from three sources, with starkly different environmental implications: greater land use, greater use of other inputs, and greater efficiency in how these inputs are used.
Historically, most of the increase in food production came from increased agricultural land use, as growing populations expanded the global area under crops and the area used for grazing animals. However, after 1960, food production more than tripled while land use grew by only 10%-15% (Figure1.7).
This “decoupling” of food production and land use was initially fuelled by more intensive use of inputs, such as synthetic fertilisers and irrigation water. In recent decades, production growth has increasingly come from greater efficiency, which makes it possible to produce more with fewer inputs. Figure1.8 shows the contribution to global agricultural output growth of greater land use, the expansion of irrigation, more intensive use of inputs (including labour and machinery, but also fertilisers, pesticides, etc.), and growth in total factor productivity, which here captures the effects of better management practices, the adoption of improved varieties and breeds, and other efficiency improvements. From the 1960s to the 1980s, the intensification of input use contributed the most to global output growth. Over time, however, total factor productivity growth grew in importance, and since the 1990s it has been the major factor driving the growth of global agricultural production.
Box 1.1. Fish and the triple challenge
Like agriculture, the fish and seafood sector forms part of food systems and is intimately connected to the triple challenge (FAO, 2020[86]). First, fish and seafood are important for global food security and constitute a major source of protein and essential nutrients, especially in developing countries in Southeast Asia and Sub-Saharan Africa, as well as in small island developing states (Béné etal., 2016[87]). Global per capita consumption of fish and seafood grew from 9kg to 20.5kg between 1961 and 2018, in large part due to demand growth in China and other Asian economies (FAO, 2020[86]). This strong increase in fish and seafood consumption was possible thanks to the rapid rise of aquaculture, which saw its contribution to global food fish consumption rise from 4% in 1950 to more than half today (FAO, 2020[86]), with expectations for further growth in the future (OECD/FAO, 2020[5]).
The fish and seafood sector is also an important source of livelihoods, with an estimated 39million people engaged in fisheries and 20.5 million in aquaculture globally, with the vast majority based in the developing world (FAO, 2020[86]). At the same time, there is a clear challenge for sustainability. Unsustainable production practices in both capture fisheries and aquaculture as well as climate change are damaging fish stocks, aquatic and ocean ecosystems, and biodiversity. These pressures reduce production capacity in the long run. FAO estimates that the share of the world’s fish stocks fished at unsustainable levels has grown from 10% in 1974 to 34% in 2017, a global average which hides significant geographical variation (FAO, 2020[86]). Data from the 2020 OECD Review of Fisheries on the status of stocks assessed by 31 OECD countries and major fishing economies shows that 66% had a sustainable status and 23% an unsustainable status, with 12% undetermined. The countries covered in this review tend to have more capacity for stock management, and assessed stocks tend to be intensely managed; both factors contribute to having a better status than the global average. But even so, the data shows that stock status remains an issue of concern. Moreover, about half of the stocks with a sustainable status either do not have, or are not meeting, additional management objectives (such as maximising catch volume within sustainable limits) (OECD, 2020[88]).
Unsustainable practices are caused by weak governance, inadequate management, lack of scientific evidence to support decision-making and sometimes poorly targeted support policies. For example, over the period 2016-18 the 39 countries that report data to the OECD Fisheries Support Estimate database provided USD4.6billion per year in direct support to individuals or companies in the fisheries sector, accounting for 4.6% of the value of marine landings. About 70% of these transfers were directed at lowering the cost of inputs, e.g.through subsidies for vessel construction or modernisation, or through policies that lower the cost of fuel which constitutes 25% of total support. OECD work has shown that such policies are among the most likely to provoke overfishing, overcapacity, and illegal, unreported and unregulated (IUU) fishing, while at the same time favouring larger fishers. Re-directing support away from such policies that create incentives to fish more intensively could have significant benefits for the environment as well as for fishers’ livelihoods. Further investing in science-based management and combatting IUU fishing could have similar positive impacts along all dimensions of the triple challenge. OECD analysis has demonstrated that when an effective management system is in place (e.g.with limits on total allowable catch), support policies are less likely to encourage unsustainable fishing and generally also lead to more benefits for fishers (Martini and Innes, 2018[89]).
While the rise of aquaculture made it possible to expand the supply of animal protein for a growing world population, the growth of the sector has also created new environmental challenges (WRI, 2014[90]). Several inputs (land, water, feed, and energy) have important environmental impacts; moreover, there are problems related to disease transmission, water pollution, and safety concerns. Improvements in efficiency may make it possible to reduce the environmental impact per unit of fish produced, especially when coupled with better public planning and regulation. The environmental impact of aquaculture also depends greatly on the species farmed; a shift in demand towards “low-trophic” species (e.g.tilapia, catfish, carp) would ease pressures on the environment.
The fish and seafood sector thus exhibits many of the same characteristics as other sectors of the food system, including a close link to each of the three dimensions of the triple challenge, a policy environment which is not always conducive to meeting that challenge, and a strong connection between efficiency gains and sustainable growth. New technologies may improve monitoring and traceability along the supply chain. Moreover, as with the livelihoods challenge in other sectors of the food system, a transition towards more sustainable fish and seafood production may require investments in alternative opportunities for vulnerable populations dependent on the sector for their livelihoods.
Environmental effects of agricultural land use
Agriculture presently uses up to half of the world’s ice-free land surface, far more than any other human activity and considerably greater than urban land use and other infrastructure, which accounts for around 1% of the total (IPCC, 2019[85]). Agriculture’s extensive land use has come at the expense of natural landscapes and has led to the clearing or conversion of an estimated 28% of tropical forests, 40% of temperate forests, 50% of shrub land and 58% of savannah and natural grassland (Ramankutty etal., 2008[91]).
Such land use changes are a major threat to biodiversity (Newbold etal., 2015[92]). As land use by humans expands, natural habitats may be lost or degraded, or populations may be fragmented. Worldwide, around 80% of all threatened terrestrial bird and mammal species are in danger because of agriculture-driven habitat loss (Tilman etal., 2017[93]). If cropland were to expand into all suitable natural areas, there could be a potential loss in biodiversity of 30% of species richness and 31% of species abundance in tropical areas in the Amazon and Africa (Kehoe etal., 2017[94]).
The expansion of agricultural land also depletes soil carbon. When forests are converted into agricultural land, the stocks of soil organic carbon decrease strongly, with declines of around 50% in temperate regions, 40% in tropical regions, and 30% in boreal regions (FAO and ITPS, 2015[95]). Since soils hold more carbon than the atmosphere and terrestrial vegetation combined, this is worrisome from a climate change mitigation perspective; it also threatens soil fertility. A particular difficulty is that while soil organic carbon can be lost rapidly, re-carbonisation is a slow process (FAO and ITPS, 2015[95]).
GHG emissions from land use changes are a major channel through which agriculture contributes to climate change (IPCC, (2019[85]); Blandford and Hassapoyannes (2018[96]), Smith etal. (2014[97])). An estimated 44% of agriculture-related emissions in 2007-16 were due to land use change (IPCC, 2019[85]).23
Given the detrimental effects of agricultural land use, the fact that global food production tripled since 1960 yet required only a 10%-15% increase in agricultural land use can be considered a major achievement.24 However, this still reflects an increase of around 450million hectares globally, an area twice as large as Greenland. The environmental consequences have been significant, especially since this agricultural expansion largely came at the expense of tropical forests (Gibbs etal., 2010[98]). Agriculture caused an estimated 73% of tropical and sub-tropical deforestation between 2000 and 2010 (Hosonuma etal., 2012[99]). While conversion of land to agriculture is a longstanding phenomenon across all continents, recent emissions from deforestation and peat land conversion have been caused to an important degree by the expansion of pasture for cattle in Latin America, and by the expansion of oilseeds production (notably palm oil) in Indonesia, as well as other countries in Asia and Latin America (Pendrill etal., 2019[100]). Still, the growth of agricultural output per unit of land has prevented an even worse outcome.
Direct greenhouse gas emissions
In addition to the important emissions from agricultural land use change mentioned earlier, agricultural production also causes important direct GHG emissions. These emissions account for 12% of global anthropogenic greenhouse gas emissions (IPCC, 2019[85]); agricultural production’s share of global anthropogenic emissions is 44% for methane (CH4) and 82% for nitrous oxide (N2O).25
Two-thirds of the direct emissions from agricultural production are due to livestock. In a process known as “enteric fermentation”, cattle and other ruminants such as sheep and goats produce methane as part of their digestive process. This process by itself has accounted for some 40% of direct emissions from agriculture in recent years. Emissions from manure contribute another 26% to direct emissions. Two other important contributors are synthetic fertilisers (responsible for 13% of direct emissions from agriculture) and rice cultivation (accounting for 10% of the total).26
Direct emissions from agriculture are not limited to one region or one agricultural production system (Figure1.9). The sources of emissions tend to vary by region, although livestock-related emissions typically dominate, except in Eastern and South-Eastern Asia.
Between 1990 and 2016, direct emissions from agriculture grew by 0.5% per year. By comparison, global crop production grew by an estimated 2.5% per year over the same period, while livestock production grew an estimated 1.9% per year.27 Emissions per unit of agricultural output have therefore fallen over time as agricultural productivity has grown, a trend which is true for most regions (Blandford and Hassapoyannes, 2018[96]). The emissions intensity of livestock in particular has fallen considerably since the 1970s (Smith etal., 2014[97]). However, beef continues to have by far the largest emissions footprint per unit of product among the major agricultural commodities (Gerber etal., 2013[101]). Emissions intensities for livestock vary considerably around the world and are highest in regions with low yields of animal agriculture (e.g.low milk yields, low slaughter weights, or a long time until animals are ready for slaughter). The quality of feed in particular is an important driver of productivity (and hence lower emissions intensities) (Herrero etal., 2013[102]).
Environmental effects of intensification
The strong growth in agricultural output per unit of agricultural land is due in large part to a more intensive use of inputs. Since 1961, global consumption of nitrogen fertilisers grew almost nine-fold, while consumption of phosphorus and potassium fertilisers nearly quadrupled.28 Over the same period, the share of global cropland under irrigation grew from 12% to 21%, and agricultural water use grew from 1500 km3 to 2800 km3 per year.29 Between 1990 and 2015, global pesticide use grew from 2.7million tonnes of active ingredients to 4million tonnes.30 Together with modern varieties and better management practices, the use of these inputs has contributed to unprecedentedly high crop yields, both in developed and developing countries. Intensive input use similarly contributed to growth in livestock production, e.g.through the use of concentrated animal feed.
Yet, this intensification of agricultural production has brought with it new challenges. For instance, the widespread use of synthetic nitrogen fertiliser and the large quantities of manure produced by intensive livestock systems not only contribute to global warming but can also cause severe damage to aquatic ecosystems (OECD, 2018[103]). Nitrogen pollution leads to the acidification of freshwater ecosystems, which harms invertebrates (such as crustaceans) and fish. Nitrogen also causes eutrophication, i.e.the proliferation of phytoplankton and algae. The subsequent decomposition of organic matter of these organisms consumes oxygen, leading to hypoxia (low oxygen levels in the water); one result is extensive deaths of both invertebrates and fish.31 Eutrophication also directly stimulates the growth of toxic algae (Camargo and Alonso, 2006[104]).
As another example, pesticide use has been associated with declines in populations of wild bees (Brittain etal., 2010[105]) and insectivorous birds (Hallmann etal., 2014[106]) among others, and with harmful effects on broader ecosystem services (Chagnon etal., 2015[107]). A study of several European countries found that insecticides and fungicides had consistent negative effects on biodiversity (Geiger etal., 2010[108]). Exposure to certain pesticides can also have negative effects on human health, including acute toxicity, carcinogenicity, mutagenicity, or reproductive toxicity (WHO, 2010[109]) (Mostafalou and Abdollahi, 2017[110]), although there are currently no reliable estimates of the global health impact of pesticides (WHO, 2019[111]).32
Intensive use of inputs thus has had undesirable consequences. However, there are important differences among countries and regions. For example, agriculture accounts for some 70% of global water withdrawals, but agriculture’s share is particularly high in South and Southeast Asia, the Middle East, and Africa. In North America and Europe, agriculture’s share is smaller (although still sizeable). The impact of this water use also differs strongly. Water stress is particularly high in the Middle East and North Africa, given the low availability of water resources. But even in otherwise water-abundant countries, there could be local hotspots with water scarcity risks (World Resources Institute (2019[112]), OECD (2017[113])). As another example, application rates of synthetic nitrogen are especially high in East Asia (above 170kg per hectare) and Western and Central Europe (around 150kg per hectare), but lower in North America (around 73kg per hectare).33 Some developing regions (notably Sub-Saharan Africa) have low application rates and struggle with negative nutrient balances, meaning that fertiliser inputs are not sufficient to compensate for removals through harvest. At the same time, nitrogen leaching and runoff in Asia has been estimated at 15million tonnes per year, or 64% of the global total (Liu etal., 2010[114]).
Over the past two decades, OECD countries have on average experienced declining nitrogen and phosphorus surpluses, despite growing agricultural production, which demonstrates that progress is possible (OECD, 2019[115]). Better policies, coupled with efficiency gains, offer considerable scope to limit or reduce environmental damage from intensive input use.
Poor policy choices often contribute to inefficient input use. In many countries, the use of irrigation water by farmers is insufficiently regulated and farmers do not pay the full price, leading to excessive water use. In the Middle East and North Africa, agricultural policy often stimulates the consumption and production of water-intensive but relatively low value crops such as wheat at the expense of horticultural crops which would generate greater value relative to their use of water (OECD/FAO, 2018[116]). Many countries continue to provide agricultural support through instruments which stimulate production and excessive input use; these instruments have been shown to be not only economically wasteful but also environmentally harmful, as discussed in more detail below.
In addition, evidence suggests that input use in many cases is inefficiently high. At the global level, nitrogen uptake by crops has been estimated at less than 60% of total inputs. Two-fifths of global nitrogen inputs are therefore lost into ecosystems, indicating considerable room for improving the efficiency of nitrogen use (Liu etal., 2010[114]). Data for France shows no clear link between pesticide intensity and productivity or profitability for the majority of farms, which suggests that pesticide use in some cases could be cut with little or no opportunity cost (Lechenet etal., 2017[117]) (Lechenet etal., 2014[118]). Similarly, the use of antimicrobials for growth promoting purposes in some livestock production can, with more sanitary farming practices, be eliminated with little or no adverse impact on the economic or technical performance of farms (Ryan, 2019[119]). These examples suggest both that smart environmental regulations in agriculture do not necessarily come at an economic cost, and that efficiency gains make it possible to increasingly “decouple” agricultural production from its environmental impacts.
Environmental effects of efficiency gains
In addition to land expansion and greater use of fertilisers, pesticides, and animal feed, other factors such as better management practices and better technology have played an important role in raising agricultural output and productivity both in the developing and the developed world. For example, modern crop varieties introduced during the Green Revolution accounted for 40% of crop production growth in developing countries between 1981 and 2000 (Evenson and Gollin, 2003[120]) while the development of better varieties through plant breeding is estimated to account for 59-79% of the seven-fold increase in US maize yields between 1930 and 2011 (Smith etal., 2014[121]).
Better genetics, better management practices and better technology can enable agricultural output growth without a corresponding increase in inputs. Data for the United States show how, relative to dairy practices in 1944, modern dairy practices make it possible to produce milk using only 21% of the number of animals, 23% of the feed, 35% of the water, 10% of the land, 24% of the manure output, 43% of the methane emissions, and 56% of the nitrous oxide emissions; the overall carbon footprint per kg of milk in 2007 was only 37% of that produced in 1944 (Capper, Cady and Bauman, 2009[122]), with further improvements between 2007 and 2017 (Capper and Cady, 2020[123]). Denmark and the Netherlands have reduced their use of synthetic nitrogen fertiliser since the 1980s, while agricultural output has been steadily expanding (OECD, 2019[115]). In the United States, nitrogen use per hectare of maize has been flat or declining over the same period, while maize yields have grown from around 6tonnes per hectare in the early 1980s to more than 10tonnes per hectare today.34
As these examples suggest, there is scope for efficiency gains which would allow production of the same agricultural output with less inputs, or a greater output with a less than proportional increase in inputs. Technological progress, better management practices and other increases in efficiency are also increasingly important drivers of global agricultural output growth. Continued investments in agricultural innovation are therefore key to achieve more productive, sustainable, and resilient food systems (OECD, 2019[7]).
Policies to limit or reorient demand growth hold the potential to improve the environmental footprint of food systems while meeting objectives of food security and nutrition, as discussed earlier. Such policies could thus also be seen as contributing to efficiency more broadly defined.
Alternative approaches to improving the environmental sustainability of the food system
In response to the environmental toll of intensive agriculture, alternative approaches have gained popularity, emphasising organic, local, and/or small-scale production. By reducing or eliminating the reliance on synthetic inputs (fertilisers and crop protection chemicals) or shortening supply chains, such approaches try to reduce the environmental impact of agricultural production. While some of the proposed practices can indeed help make agriculture more sustainable, alternative approaches have their own shortcomings and are not a panacea (OECD, 2016[124]).
The evidence suggests that organic agriculture achieves better environmental impacts per unit of land used (Seufert and Ramankutty, 2017[125]). These alternative approaches face a significant challenge, however, given the robust finding in the literature that organic farming produces considerably less food per unit of agricultural land. Meta-analyses summarising a wide range of comparisons concluded that organic yields are overall 19%-25% lower than yields in “conventional” agriculture, although yield gaps may vary depending on the specific crop and on management practices (de Ponti etal., (2012[126]); Seufert et al., (2012[127]); Ponisio etal. (2015[128])). All else being equal, a yield gap of 20% would imply that 25% more land is needed to produce the same output, which is problematic given the important negative consequences of expanding agricultural land use.35 Because of this yield gap, organic agriculture requires more land, causes more eutrophication, uses less energy, and causes similar greenhouse gas emissions as conventional systems per unit of food (Clark and Tilman, 2017[129]).
Similarly, local agriculture does not in general minimise environmental impacts (Edwards-Jones etal., 2008[130]). The overwhelming majority of GHG emissions related to food occur through agricultural production and land-use change; all other stages of the food chain (including inputs, energy, processing, transport, etc.) account for only one-fourth of the total (IPCC, 2019[85]). Focusing on transport-related emissions or “food miles” without regard to how the food was produced will thus give a misleading picture. The environmental sustainability of food production differs strongly by region and by food product; depending on circumstances, locally-produced food may be more or less sustainable than imported alternatives, even after taking into account transport.
The environmental footprint of food systems is complex and multifaceted, and often depends on local circumstances. In turn, this means that no single approach will solve the environmental problems of the food system. This is true for alternative approaches such as organic or local agriculture, but it is equally true for a strategy of maximising yields through conventional agriculture in order to save land. In addition to the obvious risk that further intensification of agricultural production to achieve higher yields will exacerbate problems, such as nitrogen runoff or excessive use of pesticides, higher yields – even when due to efficiency gains instead of intensification – do not by themselves protect forests and other valuable areas from expanding agricultural land use.
While higher yields were “land saving” during the Green Revolution in Asia, Latin America, and the Middle East, simulations show that growth in agricultural productivity in Sub-Saharan Africa could increase the profitability of farming in the region and could thus lead to an expansion of production on the continent and reduced production in other regions (Hertel, Ramankutty and Baldos, 2014[131]). As yields in Sub-Saharan Africa would still be lower than in those other regions, the net result may well be an increase in global agricultural land use and GHG emissions, at least in the short run.36 There is a need to spare land from agricultural expansion, but higher yields do not automatically lead to reduced agricultural land use. Other policies such as explicit conservation measures are needed.
The relative benefits of “land sharing” practices (e.g.adopting wildlife-friendly practices to increase on-farm biodiversity) as opposed to “land sparing” ones (e.g.aiming for high yields to reduce overall agricultural land use) are thus complex (Green etal., 2005[132]). A pragmatic approach is to assess which agricultural practices (e.g.crop rotations, biological pest control, cover crops) are beneficial under which circumstances, and with what trade-offs. This could imply specific roles for conservation agriculture, agro-ecological approaches, agricultural biotechnology and precision agriculture, among other farm management practices (OECD, 2016[124]). None of these constitute a “silver bullet” in terms of environmental sustainability of agriculture, but careful, context-dependent and evidence-based evaluation of specific practices and technologies could hold great potential. Examples of such pragmatic approaches include Integrated Pest Management (Ehler, 2006[133]) and Integrated Soil Fertility Management (Place etal., 2003[134]).37
Another shortcoming of the binary classification of “conventional” and “alternative” agricultural approaches is that it ignores the important potential of policies to improve environmental outcomes. Smart policies can make a difference for the environmental sustainability of agriculture.
The role of policies
Policy makers have looked at ways of containing the adverse environmental effects of agricultural production. For instance, with increased scientific understanding, regulatory procedures for pesticides have become more stringent and many harmful pesticides have been banned. Out of the ten best-selling pesticides in the United States in 1968, six are now banned, including DDT (Phillips McDougall, 2018[135]).
Similarly, several countries have taken steps to reduce problems related to fertiliser use. For instance, since the early 1990s, Denmark has reduced its nitrogen balance by 56% and its phosphorus balance by 58%, although its agricultural production has continued to increase over this period. Policy makers used a mix of instruments, including targets for reductions of nitrogen and phosphorus discharges, fertiliser accounting systems, nitrogen quota systems to regulate the use of fertilisers, bans on manure application on bare fields, fertiliser taxes for non-agricultural uses, taxes on phosphorus content in feed, as well as agri-environmental schemes and advisory services (OECD, 2019[115]).
Despite some success stories, however, policies have mostly failed to achieve significant improvements in environmental outcomes. An important factor is that many existing agricultural support policies exacerbate the environmental impact of agriculture. Coupled support measures such as import tariffs or output and input subsidies encourage farmers to expand production, to use more fertiliser and other inputs, and/or to expand agricultural land use, and hence have negative environmental impacts. By contrast, relatively less coupled payments, such as those based on historical entitlements, do not encourage intensification or an expansion of agricultural land use and are therefore less harmful to the environment (OECD, 2019[17]) (Henderson and Lankoski, 2019[136]). Less coupled payments can still have indirect effects, however; for instance by keeping farmers in business who would otherwise have left the sector or maintaining production on marginal land. Nevertheless, less coupled payments are in general among the least environmentally harmful support policies. In addition to these environmental effects, less coupled forms of support are economically less distorting than coupled support.
As mentioned earlier, across the 54 OECD and non-OECD economies covered in the OECD’s Agricultural Policy Monitoring and Evaluation, the agricultural sector receives USD708 billion per year in support, of which USD536 billion per year is support to individual producers through various support measures, including through higher prices paid by consumers Figure1.10) (OECD, 2019[137]) (OECD, 2020[81]). Market price support and other coupled support account for much of the total; agricultural policy thus still relies to an important extent on the most distortionary and potentially most environmentally harmful instruments.38 Market price support is measured as the policy-induced gap between domestic and border prices, and constitutes a transfer of resources from consumers to producers. Direct payments, on the other hand, are taxpayer financed, which means they can potentially be reallocated to other uses.
Based on the current profile of agricultural support policies around the world, a move to less coupled forms of support would likely reduce the environmental pressures from agriculture. Even with less coupled support, however, market price signals will typically not take into account environmental externalities associated with agricultural production. Decoupling on its own is therefore unlikely to fully resolve the environmental problems related to agriculture. Other policy instruments, such as environmental regulations or agri-environmental payments, are needed to tackle the negative environmental externalities of the food system.
Environmental regulations can play an important role in the policy mix. Existing studies show that the negative economic impact of such regulations is not necessarily as high as is often believed; some studies even appear to show a positive effect on economic efficiency.39 As discussed earlier, evidence shows that agricultural inputs such as fertilisers are often used at inefficiently high levels. Regulations to reduce these levels can in such circumstances improve efficiency and environmental performance.
On the other hand, the evidence regarding the effectiveness of agri-environmental schemes suggests considerable room for improvement. The objectives of such policies are sometimes ill-defined or may not be sufficiently ambitious. A lack of detailed scientific data may also make it difficult to develop effective policies. This problem is compounded by the heterogeneity of agricultural landscapes and production practices. As many policies focus on encouraging or discouraging specific practices, rather than focusing on environmental outcomes, there is a risk that policies will stimulate ineffective practices. An outcome-based approach with careful measurement and evaluation, and taking into account differing environmental conditions, is probably more effective. Finally, an overarching challenge in designing effective policies is that evidence about the environmental impacts is often lacking, making it difficult to judge the cost-effectiveness of policies.
Despite these shortcomings, agri-environmental policies have an important role to play in improving the environmental footprint of agriculture. However, an improved evidence base and a careful choice of policy instruments and their design features will be necessary to increase their impact.
Another possible lever for public policies to improve environmental sustainability is to stimulate improved transparency and traceability along the food chain. By making it easier for consumers to identify sustainably-produced items, governments may create incentives for producers to adopt sustainable practices and may point consumers towards a diet with a more favourable environmental footprint. Many environmental labelling and information schemes (ELIS) exist: one analysis found that more than 500 such schemes were introduced around the world between 1970 and 2012, across all sectors (Gruère, 2013[138]). Most of these schemes are voluntary, and are either initiated by a non-profit or by the private sector. One challenge in the use of such voluntary schemes is to avoid misleading or fraudulent claims. The private sector can increase the credibility of a voluntary scheme by third-party certification, but public policies can also help. Countries differ in how environmental claims are regulated, but in many countries misleading claims can be challenged under consumer protection laws (Klintman, 2016[139]). A range of other possibilities exist for public policies: e.g.mandating the disclosure of certain information; harmonising existing voluntary standards; stimulating the creation of new standards; overseeing certification; or creating a public standard (Rousset etal., 2015[140]). Developments in digital technology could open up new possibilities for increased traceability and transparency along supply chains, in addition to the opportunities they offer to improve agricultural policies through better data collection, processing and sharing (Baragwanath, 2021[50]) (OECD, 2019[13]).
These policy levers are focused on providing better market signals. Yet the importance of efficiency gains for sustainability also points to a more direct role for public policies to facilitate the uptake of more efficient and more sustainable practices and technologies, as well as to stimulate innovation. Both public and private efforts need to be strengthened, which requires public funding for food and agricultural research, and public-private partnerships (OECD, 2019[7]).
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