Agriculture and the WTO boxes
"In WTO terminology, subsidies in general are identified by "boxes" which are given the colours of traffic lights: green (permitted), amber (slow down i.e. be reduced), red (forbidden). In agriculture, things are, as usual, more complicated. The Agriculture Agreement has no red box, although domestic support exceeding the reduction commitment levels in the amber box is prohibited; and there is a blue box for subsidies that are tied to programmes that limit production. There are also exemptions for developing countries (sometimes called an "S&D box")".
amber box: domestic support arrangements in agriculture linked to production support which have to be reduced under the Uruguay Round Agreement on Agriculture .
blue box: domestic support arrangements based on acreage and headage which limit production, as defined in Article 6(5)(a) of the Uruguay Round Agreement on Agriculture , which states:
(a) Direct payments under production-limiting programmes shall not be subject to the commitment to reduce domestic support if:
(i) such payments are based on fixed area and yields; or
(ii) such payments are made on 85 per cent or less of the base level of production; or
(iii) livestock payments are made on a fixed number of head.
green box: domestic support arrangements in agriculture having no significant effect on levels of commodity consumption, production and trade, exempt from the provisions on reducing support. The Annex to the Uruguay Round Agreement on Agriculture states:
Accordingly, all measures for which exemption is claimed shall conform to the following basic criteria:
(a) the support in question shall be provided through a publicly-funded government programme (including government revenue foregone) not involving transfers from consumers; and,
(b) the support in question shall not have the effect of providing price support to producers.
Within the European Union, CAP market support - through intervention payments - falls into the amber box. Arable area payments and livestock headage payments, such as the suckler cow premium, fall into the blue box. Payments under the agri-environment scheme fall into the green box.