Agriculture and the Green Transition

The paper explores the bidirectional relationship between agriculture and industrial policy. It highlights how agriculture's long experience with subsidies and market distortions can inform current green industrial strategies, while detailing how the transition to a bioeconomy and green energy affects agricultural inputs and land use. The author emphasizes the need for 'sustainable productivity' metrics and warns of fiscal asymmetries between high-income and low-income countries during this transition.

• Agriculture is characterized by high levels of government intervention, with support levels for certain commodities often reaching 25%–30% of production value, significantly exceeding typical manufacturing subsidies.
• The global agrifood system generates substantial hidden costs, estimated at 10% of global GDP, resulting from soil loss, degraded ecosystems, and health issues such as obesity and undernutrition.
• Repurposing agricultural subsidies is complicated by the fact that land prices capitalize these subsidies; removing them could lead to the bankruptcy of farmers who took loans based on those inflated land values.
• Green industrial policies create upstream and downstream pressures on agriculture: upstream, competition for green ammonia for maritime fuels may crowd out farmers; downstream, the demand for biomass for biofuels and bioplastics may trigger 'food vs. fuel' conflicts and land competition.
• There is a significant fiscal asymmetry in agricultural support, with half of all transfers occurring in high-income countries and half in middle-income countries, leaving low-income countries with almost no support due to a lack of fiscal space.

APA

Laborde, D. (2025). Agriculture and the Green Transition. International Institute for Sustainable Development. https://www.iisd.org/articles/policy-analysis/agriculture-green-transition

Chicago

Laborde, David. Agriculture and the Green Transition. International Institute for Sustainable Development, 2025. https://www.iisd.org/articles/policy-analysis/agriculture-green-transition.

Wikipedia

{{cite report |last1=Laborde |first1=David |title=Agriculture and the Green Transition |publisher=International Institute for Sustainable Development |date=8 December 2025 |url=https://www.iisd.org/articles/policy-analysis/agriculture-green-transition |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{laborde2025agriculture, author = {Laborde, David}, title = {{Agriculture and the Green Transition}}, institution = {International Institute for Sustainable Development}, year = {2025}, month = dec, url = {https://www.iisd.org/articles/policy-analysis/agriculture-green-transition}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }