International Organizations — UPSC Mains Model Answer

The AoA organises domestic support into the Green Box (minimally trade-distorting), the Amber Box (trade-distorting, subject to reduction commitments), and the Blue Box (production-limiting programmes with partial exemptions). This classification determines which subsidies face multilateral scrutiny and reduction obligations.

Green Box measures must be government-funded, not involve price support to producers, and cause no, or at most minimal, trade distortion. Direct payments decoupled from current production levels, income insurance programmes, and payments for environmental services qualify. Because they are exempt from reduction commitments, developed countries have historically shifted support toward this category.

India's Minimum Support Price operations and food procurement for the Public Distribution System are classified under the Amber Box, exposing them to de minimis limits. India has consistently argued at WTO ministerials — including Bali and Nairobi — for a permanent solution that shields food security stockholding from challenge, reflecting the asymmetry between developed-country Green Box flexibility and developing-country constraints.

The Green Box's broad scope allows affluent nations to sustain large farm support without formal reduction obligations, arguably distorting trade indirectly through income support that frees resources for production. Reform of Green Box criteria remains a contested agenda item in the Doha Development Round's unfinished business.