2nd December 2009

New book shows how ‘green box’ farm subsidies affect trade, developing countries and the environment

Discuss this itemShare your views with other visitors, and read what they have to say

The EU, US and Japan provide billions of dollars in farm subsidies classed as ‘green box’ at the World Trade Organisation, on the basis that these payments have little or no effect on trade or production. However, a new book from the International Centre for Trade and Sustainable Development now shows how green box subsidies do in fact distort trade, affect developing country farmers and can also harm the environment.

“Agricultural Subsidies in the WTO Green Box: Ensuring Coherence with Sustainable Development Goals”, published by Cambridge University Press, shines a spotlight on an area of trade and agricultural policy that has so far remained unexplored – but one with massive implications for farmers, consumers and taxpayers around the world.

As efficient agricultural exporters press WTO members to reduce their trade-distorting ‘amber box’ and ‘blue box’ support, developed countries’ green box spending has increased – a trend widely expected to continue. While some types of green box payments probably have only a minor effect on production and trade, others have a significant impact.

According to countries’ latest official reports to the WTO, the US provided $76 billion in green box payments in 2007 – over nine-tenths of its total spending – while the EU notified €48 billion ($91 billion) in 2005 , or around half of all support provided by the bloc. In the case of the EU, a large and growing share of green box spending was on decoupled income support, which the book shows can have a particularly significant impact on production and trade.

The book is the first ever attempt to look at green box support from a ’sustainable development’ viewpoint, examining how payments affect economic, social and environmental progress in both the developed and developing world.

Ambassador Rubens Ricupero, former Secretary-General of the United Nations Conference on Trade and Development, has said: “this book constitutes a long-awaited and valuable contribution to clarifying what has become the core of agricultural negotiations: the fear that abusive migration toward so-called green-box subsidies might render meaningless any apparent progress in reduction of the more obvious distorting modalities.”

“Agricultural Subsidies in the WTO Green Box: Ensuring Coherence with Sustainable Development Goals”, eds. Ricardo Meléndez-Ortiz, Christophe Bellmann and Jonathan Hepburn, is published by Cambridge University Press (2009):

For a more detailed press release please click here.
To attend the book launch on 2 December, please visit: http://ictsd.org/i/events/dialogues/61948/
To download an ‘information note’ summarising some of the themes addressed in the book, please visit: http://ictsd.net/i/publications/56284/

Notes to editors:

The International Centre for Trade and Sustainable Development (ICTSD) is a non-governmental organization, based in Geneva, which – by empowering stakeholders in trade policy through information, networking, dialogue, well-targeted research, and capacity building – seeks to influence the international trade system such that it advances the goal of sustainable development. www.ictsd.org
The World Trade Organisation (WTO) is an organisation based in Geneva, Switzerland, which is responsible for liberalising and regulating international trade in goods, services and other areas. It has 153 Members.

The WTO Doha Round of trade negotiations was launched in Doha, Qatar, in 2001. It seeks to reduce trade barriers to a variety of goods and services, but has been plagued by repeated missed deadlines and breakdowns. In agriculture, it aims at “substantial improvements in market access; reductions of, with a view to phasing out, all forms of export subsidies; and substantial reductions in trade-distorting domestic support”.
WTO rules on ‘green box’ subsidies are set out in Annex 2 of the Agreement on Agriculture. They include payments for: general services (such as research and development, infrastructure, or pest and disease control); public stockholding for food security; and domestic food aid. Green box subsidies also cover various kinds of direct payments, including: decoupled income support payments; income insurance and income safety-nets; natural disaster relief payments; structural adjustment payments for producer retirement; structural adjustment payments for resource retirement; structural adjustment payments for investment aid; environmental programmes; and regional assistance programmes.

****Ends****

Critical acclaim for
“Agricultural Subsidies in the WTO Green Box:
Ensuring Coherence with Sustainable Development Goals”

“This book constitutes a long-awaited and valuable contribution to clarifying what has become the core of agricultural negotiations: the fear that abusive migration toward so-called green-box subsidies might render meaningless any apparent progress in reduction of the more obvious distorting modalities. It is a well-balanced and thoughtful analysis of all relevant arguments in the debate and provides trade negotiators with an enlightened guidance to help the Doha Round deliver on its promise of putting world trade to the service of development needs and environmental improvement.”
Ambassador Rubens Ricupero,

Former Secretary-General of the United Nations Conference on Trade and Development (UNCTAD)

“The meaning and practice of Green Box subsidies is central to the future of agriculture reform. This collection of essays provides an excellent, thorough and comprehensive analysis of this complex topic which has great ramifications for developing countries agriculture. A must-read for all stakeholders!”
Eveline Herkens,

Special Advisor to the UN Millennium Campaign and former Netherlands Minister for Development Cooperation

“I find it the most comprehensive book that I have read so far on Green Box Subsidies in the context of existing WTO Law and the WTO DDA negotiations. It should be a must-read for all those concerned with and interested in appreciating the implication of green box subsidies to the world trade in agricultural products, food security in the developed, developing countries and LDCs, as well as the protection of the environment.”
Ambassador Arsene M. Balihuta,

Former Permanent Representative to the WTO at the Mission of Uganda in Geneva

“ICTSD has done the cause of agricultural trade reform a genuine service with its initiative to commission and edit this collection of papers on the impacts of existing Green Box subsidy expenditures and the case for changes in the WTO rules governing them. The book brings together thoughtful contributions from some of the best known experts in the field … [It] is a valuable compilation of analysis, comment and suggestions on the issues and deserves wide exposure.”
Joanna Hewitt,

Former lead Australian WTO negotiator and previous Head of Division in the OECD’s Agriculture Directorate

“This volume is most timely and relevant to the current Doha Round negotiations. The various chapters in the volume address all the above issues from an expert, NGO and government negotiators perspective. It is essential reading for all those interested in a sustainable and development oriented outcome of the Doha Round multilateral trade negotiations.”
Faizel Ismail,

Head of the South African Delegation to the WTO