Consider the following statements:
- 1. The Agreement on Agriculture (AoA) under the WTO classifies subsidies into the Green Box, Blue Box and Amber Box.
- 2. India's Minimum Support Price (MSP) operations are categorised under the Green Box subsidies.
- 3. The Special and Differential Treatment (S&DT) provisions under the WTO provide developing countries like India with greater flexibility in implementing agreements.
Which of the statements given above is/are correct?
- AOnly 1 and 2
- BOnly 2
- COnly 1 and 3
- D1, 2 and 3
Show answer and explanation
Correct answer: (c) Only 1 and 3
Explanation
The WTO's Agreement on Agriculture (AoA), in force since 1995, sorts domestic farm support into boxes by how much it distorts trade:
- Green Box: little or no distortion (research, extension, environmental programmes); not limited;
- Blue Box: payments tied to programmes that limit production;
- Amber Box: price support and other trade-distorting subsidies, kept within limits (the *de minimis* level is 10% of the value of production for developing countries and 5% for developed ones).
Statement 1 is correct. Statement 2 is wrong: procurement at the Minimum Support Price is market price support, which falls in the Amber Box; India relies on the peace clause (Bali, 2013) to protect its public stockholding for food security. Statement 3 is correct: Special and Differential Treatment gives developing countries longer timelines and more flexibility.