Context: Members including the US and the UK, raised concerns over India’s 50 percent increase in farm subsidies in 2022-23 in the  meeting of the Committee on Agriculture.

• India responded that its input subsidies were for “low-income or resource-poor” farmers  exempted under Agreement on Agriculture.

About Agreement on Agriculture

• It was negotiated at the Uruguay round  and ratified in Marrakesh (Morocco) in 1994.

• It contains provisions in three broad areas of agriculture and trade policy

• Market Access: includes tariffication, tariff reduction and access opportunities.

• Tariffication means that all non-tariff barriers such as quotas, variable levies etc. need to be abolished and converted into an equivalent tariff.

• Domestic Access: deals with subsidies and other support programmes that directly stimulate production and distort trade. It has various  kinds of boxes based on the type of subsidies provided (Refer to box).

• Export Subsidies: deals with methods which makes exports artificially competitive.

• Developed Members and developing countries eliminated export  subsidies as per the Nairobi Ministerial Decision 2015.

• Public stockholding programmes of developing countries are covered under the peace clause as an interim solution.

• Members would not challenge these programmes legally under the Agriculture Agreement.

Different Type of Boxes

• Amber Box: These supports are subject to limits. It allows for “De minimis”/minimal level of support as a share of the value of agricultural production.

• Blue Box: Support that would normally be in the amber box, is placed in the blue box if it also requires farmers to limit production. 

• Green Box: includes government funded subsidies which do not distort trade or cause minimal distortion.