Agriculture Question:
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Are subsidies to farmers completely prohibited under the AoA?

Answer:

No. The AoA distinguishes between support programmes that stimulate production directly, and those that are considered to have no direct effect. Subsidies that are in the nature of programmes having direct effects on production and trade, referred to as the “Amber Box”, have to be reduced. In the terminology used by the AoA, these subsidies are called “aggregate measurement of support” or “AMS”. Developed countries were required to reduce their AMS as existing during 1986-88 (the “base period”) by 20% over six years starting in 1995. Developing countries had to reduce their AMS by 13.3% spread over a 10-year period. Least-developed countries were not required to make any cuts.

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How are subsidies provided to farmers of any concern to the WTO?Did India have to reduce subsidies provided to its farmers as a consequence of the Uruguay Round negotiations?