Difference between Green Box subsidies and Blue Box subsidies

In WTO terminology, subsidies in general are identified by “Boxes”with different colours:

  • green (permitted subsidies)

  • amber (slow down — i.e. subsidies to be reduced),

  • red (forbidden subsidies)

But the Agreement on Agriculture AoA is an international treaty of WTO and has the following boxes:

  • Amber (de-minimis)

  • Green

  • Blue (for subsidies that are tied to programs that limit production)

  • S&D (exemptions for developing countries)

There are three categories of support measures that are not subject to reduction under the Agreement, and support within specified de-minimis level is allowed.

  1. Measures which have a minimum impact on trade i.e. Green Box criteria

Ex: Government of India assistance on general services like

  1. research, pest and disease control, training, extension, and advisory services;

  2. public stock holding for food security purposes;

  3. domestic food aid; and

  4. direct payment to producers like governmental financial participation in income insurance and safety nets, relief from natural disasters, and payments under environmental assistance programmes.

  1. Developing country measures otherwise subject to reduction i.e. S&D Box criteria Examples

  1. investment subsidies which are generally available to agriculture in developing countries; and

  2. agricultural input services generally available to low income and resource poor producers in developing countries.

  1. Direct payments under production limiting programme i.e. Blue Box criteria

These are relevant from the developed countries point of view only.

  1. Green Box

  1. Green subsidy is allowed in terms of support example: MSP or Subsidies

  2. Measures with minimal impact on trade can be used freely

  3. They include government services such as research, disease control, infrastructure and food security.

  4. They also include payments made directly to farmers that do not stimulate production, such as certain forms of direct income support, assistance to help farmers restructure agriculture, and direct payments under environmental and regional assistance programmes.

  1. Blue Box

  • Subsidy is also permitted

  • Cover certain direct payments to farmers where the farmers are required to limit production called “blue box” measures.

  • Covers certain government assistance programmes to encourage agricultural and rural development in developing countries

  • Also covers other support on a small scale (“de minimis”) when compared with the total value of the product or products supported (5% or less=developed countries &10% or less=developing countries).

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