Executive Summary
The environmental performance of the agriculture sector registered some improvement in OECD countries during the period 2003-15, notwithstanding some signs of stagnation in particular areas. The majority of OECD countries saw decreasing trends in ammonia emissions, phosphorus surplus and water abstraction rates. Results were more mixed for nitrogen balances, which, while declining on average, nevertheless, increased in several countries, including in some with already high nitrogen surplus levels. A lack of progress was also observed in reducing greenhouse gas emissions and on improving biodiversity on farmland. Greenhouse gas emissions increased slightly in the OECD region, while the farmland birds’ indicator, the main OECD indicator used to track biodiversity on farmland, continued to decline in the majority of countries for which monitoring was undertaken. Overall, improvements in the environmental performance of the agricultural sector slowed down during the period 2003-15, relative to the pace observed over the period 1993-2005.
These developments occurred in a context where agricultural land area and support to farmers declined and agricultural production increased in OECD countries. In the period 2002-15, both croplands and grasslands were converted to other uses; the area of cropland was transformed into tree-covered areas or artificial surfaces, such as buildings and roads, while the area of grasslands was transformed to sparse vegetation and tree-covered areas. There were also regional variations in land conversion: in European OECD countries, croplands and grasslands were mainly converted to tree-covered areas, while in the Asian and Oceanian OECD countries, cropland conversion was dominated by artificial surfaces and grassland conversion by sparse vegetation. In most OECD countries, the decline in agricultural land was accompanied by an expansion of agriculture production.
Over the 2003-15 period, agricultural policies in OECD countries changed substantially: support to farmers relative to gross farm receipts declined from nearly 30% in 2003 to 17% in 2015, and the majority of OECD countries reformed their support policies to increase the share of payments decoupled from production or input use. In addition, most OECD countries made direct payments conditional on compliance with environmental regulations and established agri-environmental payments schemes that paid farmers to improve the environmental performance of their farms.
These policy reforms improved the environmental performance of agriculture. The empirical analysis conducted for this report finds that replacing distortionary forms of support – such as market price support and subsidies linked to input or production – with support which is not linked to current production, inputs or area of production tends to decrease nitrogen and phosphorus surpluses. Likewise, designing policies and regulations to target specific forms of pollution, such as the Nitrates Directive in the European Union, decreased both nitrogen and phosphorous surpluses. Implementing agri-environmental schemes that provide payments for areas set aside or that specifically target the conservation of high ecological value areas was also shown to effectively improve the biodiversity on farmland.
Contextual and external factors are important drivers of the environmental performance of agriculture. In particular, the crop mix and livestock population and herd composition play a strong role. In countries where the cultivated area with oil crops increased or where cattle stocks declined, both nitrogen and phosphorus surpluses decreased. In countries where irrigated corn area was replaced with other crops, water abstraction rates declined. Oil crops are positively associated with the prevalence of farmland birds; in contrast, hotter temperatures and higher insecticide use per hectare are negatively associated with farmland birds.
The report also explores the relationship between labour productivity and greenhouse gas emission intensities (kg CO2/USD), as well as the potential of emerging technologies to improve the environmental performance of agriculture. In OECD countries, growth in agricultural labour productivity is concomitant with GHG emission intensity reductions only up to a certain point, after which emission intensities no longer decrease and may even increase. Indeed, OECD countries may be reaching a point at which further productivity improvements may not be enough to reduce GHG emissions per unit of output.
Technological innovations, such as geographic information systems, global positioning systems, remote sensors, in situ sensors, yield monitoring, and variable rate technologies used in precision agriculture have the potential to improve the environmental performance of agriculture by targeting chemical input applications and saving energy. Enhanced efficiency nitrogen fertilisers can improve crop uptake of nitrogen and reduce the risk of nitrogen leaching. The ultimate environmental impact of these technologies is, however, highly dependent upon the type of crop and the biophysical conditions of the farm, as well as on other management practices. Adoption of efficient irrigation techniques has the potential to reduce water abstraction rates, but increased efficiency may also have negative environmental consequences such as lower groundwater recharging rates.
Monitoring agricultural indicators – and in particular measuring the environmental impact of agriculture – across OECD countries continues to be challenging, given the difficulties in developing a set of agri-environmental indicators that are comparable across countries and consistent through time. The integration of digital technologies into monitoring programmes, in particular, could improve the accuracy of agri-environmental indicators and the geographical scale at which they are measured.