The billions of dollars spent every year on agricultural subsidies by developed countries are widely seen as worsening poverty, distorting trade and damaging the environment. However, current WTO requirements set no ceiling on the amount of ‘green box’ subsidies that governments can provide, on the basis that these payments cause only minimal trade distortion.
As governments come under pressure to reduce subsidies that are directly linked to production, they are increasingly shifting their spending into the green box. Growing evidence nonetheless suggests that green box payments can affect production and trade, harm farmers in developing countries and cause environmental damage.
Agricultural Subsidies in the WTO Green Box: Ensuring Coherence with Sustainable Development Goals