Three pillars Agreement on Agriculture

1 3 pillars

1.1 domestic support
1.2 market access
1.3 export subsidies

three pillars

the agreement on agriculture constitutes of 3 pillars—domestic support, market access, , export subsidies.

domestic support

the first pillar of agreement on agriculture domestic support . aoa divides domestic support 2 categories -trade distorting , non- trade distorting(or minimal trade distorting).the wto agreement on agriculture negotiated in uruguay round (1986–1994) includes classification of subsidies boxes depending on consequences of production , trade: amber (most directly linked production levels), blue (production-limiting programmes still distort trade), , green (minimal distortion). while payments in amber box had reduced, in green box exempt reduction commitments. detailed rules green box payments set out in annex 2 of aoa. however, must comply fundamental requirement in paragraph 1, cause not more minimal distortion of trade or production, , must provided through government-funded programme not involve transfers consumers or price support producers.

the agreement on agriculture s domestic support system allows europe , united states spend $380 billion year on agricultural subsidies. world bank dismissed eu , united states argument small farmers needed protection, noting more half of eu s common agricultural policy subsidies go 1% of producers while in united states 70% of subsidies go 10% of producers, agribusinesses. these subsidies end flooding global markets below-cost commodities, depressing prices, , undercutting producers in poor countries, practice known dumping.

market access

market access refers reduction of tariff (or non-tariff) barriers trade wto members. 1995 agreement on agriculture consists of tariff reductions of:

36% average reduction - developed countries - minimum of 15% per-tariff line reduction in next 6 years.
24% average reduction - developing countries - minimum of 10% per-tariff line reduction in next ten years.

least developed countries (ldcs) exempt tariff reductions, either had convert non-tariff barriers tariffs—a process called tariffication—or bind tariffs, creating ceiling not increased in future.

export subsidies

export subsidies third pillar. 1995 agreement on agriculture required developed countries reduce export subsidies @ least 36% (by value) or 21% (by volume) on 6 years. developing countries, agreement required cuts 14% (by volume) , 24% (by value) on ten years.