From Depletion to Regeneration: Redirecting agricultural subsidies is crucial for promoting healthy soils

Healthy soils are critical for productive, sustainable, and climate-resilient food systems. They act as carbon sinks and aid mitigation by sequestering greenhouse gases. They also help build resilience to increasingly erratic weather patterns by providing a source of moisture for crops during dry spells and draining excess water more efficiently during heavy rains. 

Healthy soils are also critical for biodiversity. They provide habitats and food sources for animals and other organisms, including the soil microbes that cycle the nitrogen needed to support plant growth. This, in turn, boosts the productivity of soil ecosystems, resulting in more productive, resilient crops with a higher nutritional value. Boosting crop productivity and resilience through improved soil health also reduces the need for the application of chemical inputs, which can help lower emissions from food systems and mitigate risks to human health.

And yet, despite the multiple benefits offered by investing in improvements to soil health, many countries continue to provide subsidies that incentivize agricultural practices that degrade our soils, such as the use of chemical fertilizers. Such subsidies are generally introduced to promote agricultural productivity, boost food and nutrition security, and reduce rural poverty. However, subsidies incentivizing the use of chemical inputs often result in negative trade-offs in terms of soil health, which can in turn result in lower yields and nutritional quality of crops, threatening the livelihoods and incomes of farmers.

With governments worldwide struggling with increasingly constrained public finances, optimizing subsidies to improve soil health, without compromising productivity, is imperative. Identifying which subsidies incentivize harmful practices, understanding the scale and scope of these, and redirecting them to more sustainable and regenerative practices can help governments deliver better results with increasingly scarce public resources. 

Depending on the country context, this could involve redirecting subsidies toward practices that support improved management of soil nutrients and organic matter, such as incentivizing the use of organic inputs, as seen in countries such as Germany. It could also involve subsidies to incentivize practices that improve soil cover and diversity, such as integrating trees with crop and livestock farming systems to reduce soil erosion, boost soil fertility, and increase carbon sequestration. Brazil’s Low Carbon Agriculture Programme, for example, redirects subsidies toward regenerative practices, such as crop-livestock-forest integration and the restoration of degraded pastures. 

Soil Health Moves up the Policy Agenda

At the recent Africa Food Systems Forum in Senegal, participants heard from sub-Saharan African governments that are turning their attention to the link between subsidies and soil health. The Government of Malawi, with support from the World Bank, is implementing a series of soil health pilots to address challenges posed by soil health degradation. With over 40% of soils in Malawi classed as nutrient poor, and 75% of soils classed as degraded, Malawi is one of the sub-Saharan African countries most impacted by soil degradation. In response, the government is implementing a series of pilots, offering incentives to farmers for adopting sustainable practices intended to help boost soil fertility, boost productivity, and improve food and nutrition security. A range of approaches are being piloted, including payment for environmental services schemes. 

Kenya faces similar challenges, with soil erosion, nutrient depletion, and high levels of both soil acidity and salinization negatively impacting yields and food security in recent years. The government is now revising its agricultural subsidy system to better support soil health, guided by the Agricultural Soil Management Policy (2023), which addresses the link between fertilizer use, sustainable land management, and improvements to soil health.  

The role of reorienting agricultural subsidies to incentivize more sustainable practices also featured in international climate conversations this summer, underscoring growing international recognition of the need to align public budgets with sustainable development objectives. At the United Nations Framework Convention on Climate Change Standing Committee on Finance Forum held in Rome in September 2025, participants heard how the Colombian national development bank, in partnership with UNDP-Biofin, identified which subsidies were incentivizing practices driving deforestation and—with a focus on key value chains such as coffee and cocoa—began providing incentives instead for practices such as agroforestry. 

Repurposing agricultural subsidies and incentives was also recognized as a critical lever for food systems transformation at New York Climate Week.  At various sessions during the week, conversations highlighted how subsidies can drive change and improvements to soil health by encouraging farmers to adopt agroecological and regenerative practices instead of relying on agrochemical inputs. However, discussions also noted that scaling the impact of these practices requires an improved understanding of not only the climate and environmental benefits associated with investing in soil health, but also the socio-economic benefits, including yields, farmers' incomes and food security.

These discussions highlight growing consensus among a range of stakeholders at the regional and global levels on the critical role that repurposing agricultural subsidies can play in driving the transition to sustainable food systems, including through enhancing soil health. From Colombia to Malawi, governments are beginning to link agricultural subsidies and incentives to practices that deliver a range of climate, environmental, and socio-economic benefits. 

Moving Beyond Talk to Advance Reform Efforts

The International Institute for Sustainable Development (IISD) has identified a series of actions needed to advance efforts to redirect subsidies toward agricultural practices that boost soil health and deliver on a range of sustainable development outcomes:

1. Define the problem: We need to better understand the scale and scope of harmful subsidies at a country level—how much is being spent, which practices are having harmful impacts on soil health and where, and what is the true cost of these negative impacts? For example, Target 18 of the Global Biodiversity Framework requires all countries party to the UN Convention on Biological Diversity to map and analyze existing subsidies to determine the extent to which they can be considered as potentially environmentally harmful. IISD is analyzing national reform targets for environmentally harmful subsidies under Target 18 and will provide methodological recommendations for how these can be strengthened in the future.
    
2. Identify solutions: We need to identify policy solutions and a suite of potential reform options for how public money can be spent in ways that better deliver on enhancing soil health, among other sustainable development objectives. Through ongoing research work, IISD is examining how countries in East and Southern Africa are aligning agricultural subsidies with policies and practices aimed at enhancing soil health, with a view to identifying useful lessons or best practices which can help governments design or reform agricultural subsidy regimes that support a better balance between economic growth and environmental stewardship.
    
3. Build political will and identify policy windows for action: Political support can grow gradually or shift suddenly—sometimes sudden events such as a budgetary crisis or an election can put subsidy reform on the government agenda. What we do know is that for sudden political shifts to result in successful reform, the groundwork of problem definition and solution identification needs to be done in advance. We need to be ready to act when the opportunity presents itself. This could include, for example, targeted engagement and outreach with farmers on the reform of subsidies in line with relevant policy windows to co-create practical approaches to subsidy reform together with farmers, including creating safe spaces for conversation about reform and targeted communications that amplify farmers’ voices in the call for subsidy reform. In December 2025, IISD is holding a round-table discussion in Nairobi, bringing together a range of stakeholders involved in, or impacted by, agricultural subsidy reforms linked to soil health in Kenya. This discussion, together with prior IISD work on the role of sustainability standards in improving soil health, lays the foundation for forthcoming work on soil health at the East Africa-regional level in the coming years.

Investing in soil health is not only an environmental imperative, but an economic and a social one too. Momentum is growing, both domestically and internationally, behind reforming agricultural subsidies to support soil health. Turning this momentum into action will require improved data and analysis, science-backed policy solutions, and political will to ensure public budgets are sustaining rather than depleting our soils.