ri lt re and ood ana ement 8.47
disease control, research and extension, and some s&D box
direct payments to farmers that do not stimulate
Other than the above-discussed highly
production like restructuring of agriculture, controversial boxes of agricultural subsidies, the
environmental protection, regional development, WTO provisions have defined yet another box,
crop and income insurance, etc. i.e., the Social and Development Box (S & D
The green box subsidies are allowed without Box)75 allows the developing countries for some
limits provided they comply with the policy- subsidies to the agriculture sector under certain
specific criteria.71 It means, this box is exempt from conditions. These conditions revolve around
the calculation under subsidies under the WTO human development issues such as poverty,
provisions because the subsidies under it are not minimum social welfare, health support, etc.,
meant to promote production thus do not distort specially for the segment of population living
trade. That is why this box is called ‘production- below the poverty line. Developing countries can
neutral box’. But the facts tell a different story.72 forward such subsidies to the extent of less than 5
In the current negotiations, some countries per cent of their total agricultural output.76
argue that some of the subsidies forwarded under
this box (by the developed economies) do seriously
distort trade (opposed to the view of minimal For export subsidy the WTO has provisions in
distortion as used by Annexure 2)— it is the view two categories:
of the developing countries. These countries have (i) Reduction in the total budgetary support
raised their fingers on the direct payments73 given on export subsidies, and
by the developed countries to their farmers via (ii) Reduction in the total quantity of exports
programmes like income insurance and income- covered by the subsidy.
safety schemes,74 environmental protection, etc. Higher reduction commitment for the
Some other countries take the opposite view and developed countries and lower for the developing
argue that the current criteria are adequate, and countries are the provisions. But the developed
advocate to make it more flexible (so that it could nations forward such an inflated support to their
be increased) to take better care of non-trade agricultural exports that even after the committed
concerns such as environmental protection and reductions it will be highly price distorting against
animal welfare. the agri-exports of the developing countries. It is
therefore opposed by the developing countries.
71. WTO, Annexure 2, AoA, AoA, 1994.
72. Basically, a large part of this box is used by the
farmers in the USA and the European Union as basic sAnitAry AnD PhytosAnitAry meAsures
investments in agriculture. India as well as other like- The provisions of the WTO allow member
minded countries have this view and want this box to
be brought under the AMS i.e. under the reduction countries to set their own health and safety
commitments. The USA at the Hongkong Ministerial standards provided they are justified on scientific
meet (December 2005) announced to abolish such
grounds and do not result in arbitrary or unjustified
subsidies in the next 12 year commencing 2008. The EU
also proposed to reduce its trade distorting su sidies barrier to trade. The provisions encourage use of
by 70 per cent. None of them used the name green box international standards and also include certain
which shows some internal vagueness.
73. WTO, Para 5, Green Box, AoA, 1994. 75. WTO, Para 8, Green Box, AoA, 1994.
74. WTO, Para 7, Green Box, AoA, 1994. 76. WTO, Article 6.2, AoA, 1994.