Agreement on Agriculture

Agreement on Agriculture

News: The Agreement on Agriculture at the WTO is riddled with deep imbalances, which favour the developed countries and have tilted the rules against many developing countries, a Union Minister has said.

Details:
• He claimed that it was in favour of developed countries and historical asymmetries and imbalances must be corrected to ensure a rule-based, fair and equitable order.
• He urged that G33 must strive for positive outcomes on a permanent solution to Public Stockholding (PSH) for food security purposes, finalization of a Special Safeguard Mechanism (SSM) quickly and a balanced outcome on Domestic Support.
• It is aimed to remove trade barriers and to promote transparent market access and integration of global markets.The WTO's Agriculture Committee oversees implementation of the Agreement and provides a forum for members to address related concerns. 

Three pillars of AoA

Domestic support
• AoA divides domestic support into two categories: trade-distorting and non-tradedistorting (or minimally trade-distorting).It the classification of subsidies by “boxes” depending on consequences of production and trade:
• Amber (most directly linked to production levels)
• Blue (production-limiting programs that still distort trade)
• Green (minimal distortion)

Market access
• Market access refers to the reduction of tariff (or non-tariff) barriers to trade by WTO members.The 1995 AoA consists of tariff reductions of:
• 36% average reduction – developed countries – with a minimum of 15% per-tariff line reduction in next six years.
• 24% average reduction – developing countries – with a minimum of 10% per-tariff line reduction in next ten years.
• Least developed countries (LDCs) were exempt from tariff reductions, but they either had to convert non-tariff barriers to tariffs—a process called tariffication—or “bind” their tariffs, creating a ceiling that could not be increased in future.

Export subsidies
• The AoA required developed countries to reduce export subsidies by at least 36% (by value) or by 21% (by volume) over six years.For developing countries, the agreement required cuts were 24% (by value) and 14% (by volume) over ten years.

Criticism:
• AoA has been criticized for reducing tariff protections for small farmers, a key source of income in developing countries, while simultaneously allowing rich countries to continue subsidizing agriculture at home.
• In 2017 India and China jointly submitted a proposal to the WTO calling for the elimination – by developed countries – of the most trade-distorting form of farm subsidies,
• They are known in WTO parlance as Aggregate Measurement of Support (AMS) or ‘Amber Box’ support as a prerequisite for consideration of other reforms in domestic support negotiations.