Explain the different type of subsidies as per WTO agreements

Ans:  Green Box Subsidies: The subsidies which cause no, or at most minimal, trade distorting effects or effects on production. These subsidies are permitted under WTO regime, for instance; Government services such as research, disease control, and infrastructure and food security.

 

Amber Box Subsidies : All domestic support measures considered to distort production and trade (with some exceptions) fall into the amber box. For instance, MSP, Procurement Price, sum total of subsidies on inputs like fertilizer, water, credit, power, etc.

 

Blue Box Subsidies: It contains direct payment subsidies which can be increased without limit, so long as payments are linked to production-limiting programs. This is the “amber box with conditions”, conditions designed to reduce distortion. Any support that would normally be in the amber box, is placed in the blue box if the support also requires farmers to limit production.

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