Reforming agrifood system subsidies: Synthesis of political economy findings from fish, fertilizer, and animal inputs
Chugh, Aditi · Ouma, Emily A. · Resnick, Danielle · Schutter, Marleen
Dec 2025 · International Food Policy Research Institute
Ebook
21
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About this ebook
Subsidies are price distortions aimed at shifting incentives to generate a desired behavioral response. Agrifood system input subsidies aim to reduce the cost of components—such as fertilizer, fuel, animal feeds, vessels, and machinery—needed by farmers, fisherfolk, ranchers, and pastoralists to improve productivity. Such subsidies may occur in multiple forms, including vouchers that enable beneficiaries to receive a discount, a direct reduction in input retail prices borne by the state or distributors, or through tax reductions and exemptions. The cost of agricultural subsidies, inclusive of fertilizer subsidies, are estimated at USD 635 billion a year (Damania et al. 2023) while fisheries subsidies, including for fuel, fisheries management, and non-fuel tax exemptions, are estimated to total approximately USD 35 billion (Sumaila et al. 2019). While they can support poorer constituencies in the agrifood system who could not otherwise afford such inputs, subsidies can be prone to corruption and leakage to elites, generate negative environmental externalities, and place undue pressure on public sector finances (Amaglobeli, Benson, and Mogues 2024; Damania et al. 2023; Jayne et al. 2018). In addition, they can generate distributional conflicts among different constituencies—both within countries and across countries—and these conflicts can undermine program implementation as well as hinder needed reforms.
Subsidies are price distortions aimed at shifting incentives to generate a desired behavioral response. Agrifood system input subsidies aim to reduce the cost of components—such as fertilizer, fuel, animal feeds, vessels, and machinery—needed by farmers, fisherfolk, ranchers, and pastoralists to ...
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