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Subsidy transition bonds as a funding mechanism for agroecological transformation

Nature Food volume 5, pages 445–446 (2024)Cite this article

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The Food and Agriculture Organization of the United Nations suggests that US$110 billion were spent on fertilizer imports in 2021 globally. Such fertilizers are generally manufactured using fossil fuels, and ammonia is responsible for 2% of global fossil fuel use1. Imports of carbon-intensive fertilizer are part of the total bill for many agricultural fertilizer subsidy programmes2,3.

To transition away from fertilizer dependence, farmers need investment in education and training in sustainable alternatives. The lag between learning how to reduce the use of purchased inputs and the profitable implementation of that learning requires bridge financing. One approach, building on the idea of ‘pay for success’ social impact bonds, is that of environmental impact bonds.

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Fig. 1: Projections for APCNF from FY 2024–2025 to 2034–2035.

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Authors and Affiliations

  1. University of Texas at Austin, Austin, TX, USA

    Raj Patel

  2. Rythu Sadhikara Samstha, Guntur, Andhra Pradesh, India

    Vijay Kumar Thallam

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  1. Raj Patel
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  2. Vijay Kumar Thallam
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Correspondence to Raj Patel or Vijay Kumar Thallam.

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Competing interests

R.P. declares no competing interests. V.K.T. is the executive vice chairman of Rythu Sadhikara Samstha, which is a parastatal organization of the government of Andhra Pradesh, and has provided the RySS data.

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Nature Food thanks Matthew Brand for their contribution to the peer review of this work.

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Patel, R., Thallam, V.K. Subsidy transition bonds as a funding mechanism for agroecological transformation. Nat Food 5, 445–446 (2024). https://doi.org/10.1038/s43016-024-01000-2

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