LETTERS: There is no denying that much of the initiative to expand world food production would be challenging without agricultural subsidies.
Developed economies, including the European Union, the United States and Japan, spend large amounts of money to support agriculture.
Though there are many positive sides to subsidies, we have also been warned of the darker sides of improperly managed subsidies.
Blanket subsidies have come under intense criticism lately. Non-targeted subsidies often end up helping those who do not really need them, thus leading to a waste of a country's resources.
Talk of more targeted subsidies is gathering interest. I recently came across an article in the New Straits Times on how agricultural subsidies can harm nature.
The article mentioned New Zealand's experience with its agriculture industry, which was once so heavily subsidised that slaughterhouse workers were earning more than airline pilots. There were more sheep than people in New Zealand.
What had been disturbing subsidy watchers was that huge subsidies then meant vast swathes of the country's marginal land were cleared for grazing, fertiliser was overused and the sheep population boomed to the point where surplus meat had to be destroyed.
It soon became clear that the subsidy programmes took a toll on nature, not only polluting rivers, but also eroding soils, according to a United Nations study.
This prompted New Zealand to go for a total revamp in 1984. In a radical shift, the subsidies were either removed or phased out. The outcome was enlightening.
Farming became more efficient and harmful practices like the excessive use of chemical fertilisers decreased.
Fertiliser use has, in fact, declined by 50 per cent, according to the report.
While agriculture remains a major source of the country's planet-warming greenhouse gas emissions, New Zealand is still held up by biodiversity campaigners as a "poster child" for reforming subsidies that harm nature and the environment.
Around the world, it is estimated that government subsidies that can potentially harm nature amount to at least US$1.8 trillion each year, equivalent to two per cent of global gross domestic product.
Admittedly, agriculture subsidies, at US$520 billion annually, are the largest drivers of ecosystem destruction, along with those for fossil fuels, at US$640 billion, which also impact climate change. Agricultural subsidies for things like meat production and fertilisers are also considered a threat to long-term food security.
Because methane is the more potent GHG, methane emissions from subsidised livestock are causing climate concerns.
What is happening in Brazil, where vast tracts of forest land are cleared for cattle rearing, has come under global scrutiny.
The world has been warned that a decrease in fertile soil means 95 per cent of land worldwide could become degraded by 2050.
Decision-makers are calling for aggressive subsidy reforms to close most of the financing gap for biodiversity protection, which is estimated at US$700 billion each year.
However, analysts also say a major reason reform can be difficult because many powerful interests are beneficiaries of subsidies. Research has flagged that agricultural subsidies tend to disproportionately favour large farms.
Subsidies are a double-edged sword. Prudently managed, it can be positive for the economy. Oversubsidisation, on the other hand, can have a negative impact on the economy.
The experience in New Zealand is a case for us to ponder and re-evaluate our subsidy schemes. It's clear that subsidies in energy and agriculture need more diligent study.
Their impact on nature and the climate deserves scrutiny. Otherwise, we may end up with the negatives outweighing the positives.
Datuk Dr Ahmad Ibrahim
Tan Sri Omar Centre for STI Policy, UCSI University
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times