Agriculture in the WTO:
Limits on Domestic Support
Randy Schnepf
Specialist in Agricultural Policy
December 4, 2012
Congressional Research Service
7-5700
www.crs.gov
RS20840
CRS Report for Congress
Pr
epared for Members and Committees of Congress
Agriculture in the WTO: Limits on Domestic Support
Summary
Omnibus U.S. farm legislation—referred to as the farm bill—is renewed about every five years.
Farm income and commodity price support programs have been a part of U.S. farm bills since the
1930s. Each successive farm bill usually involves some modification or replacement of existing
farm programs. A key question likely to be asked of virtually every new farm proposal or
program is how it will affect U.S. commitments under the World Trade Organization’s (WTO’s)
Agreement on Agriculture (AA) and its Agreement on Subsidies and Countervailing Measures
(ASCM).
The United States currently is committed, under the AA, to spend no more than $19.1 billion
annually on those domestic farm support programs most likely to distort trade—referred to as
amber box programs and measured by the aggregate measure of support (AMS). The AA spells
out the rules for countries to determine whether their policies—for any given year—are
potentially trade-distorting, and how to calculate the costs.
An additional consideration for WTO compliance—the ASCM rules governing adverse market
effects resulting from a farm program—comes into play when a domestic farm policy effect spills
over into international markets. The ASCM details rules for determining when a subsidy is
“prohibited” (e.g., certain export- and import-substitution subsidies) and when it is “actionable”
(e.g., certain domestic support policies that incentivize overproduction and result in significant
market distortion—whether as lower market prices or altered trade patterns). Because the United
States is a major producer, consumer, exporter, and/or importer of most major agricultural
commodities, the ASCM is relevant for most major U.S. agricultural products. As a result, if a
particular U.S. farm program is deemed to result in market distortion that adversely affects other
WTO members—even if it is within agreed-upon AA spending limits—then that program may be
subject to challenge under the WTO dispute settlement procedures.
Designing farm programs that comply with WTO rules can avoid potential trade disputes. Based
on AA and ASCM rules, U.S. domestic agricultural support can be evaluated against five specific
successive questions to determine how it is classified under the WTO rules, whether total support
is within WTO limits, and whether a specific program fully complies with WTO rules.
1. Can a program’s support outlays be excluded from the AMS total by being
placed in the green box of minimally distorting programs?
2. Can a program’s support outlays be excluded from the AMS total by being
placed in the blue box of production-limiting programs?
3. If amber, will support be less than 5% of production value (either product-
specific or non-product-specific) thus qualifying for the de minimis
exclusion?
4. Does the total, remaining annual AMS exceed the $19.1 billion amber box
limit?
5. Even if a program is found to be fully compliant with the AA rules and
limits, does its support result in price or trade distortion in international
markets? If so, then it may be subject to challenge under ASCM rules.
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Agriculture in the WTO: Limits on Domestic Support
Congressional Research Service
Agriculture in the WTO: Limits on Domestic Support
Contents
Introduction ...................................................................................................................................... 1
WTO Commitments May Influence U.S. Farm Policy Choices ...................................................... 1
Agreement on Agriculture (AA) ................................................................................................ 2
Agreement on Subsidies and Countervailing Measures (ASCM) ............................................. 2
WTO Dispute Settlement Understanding (DSU) ...................................................................... 3
Questions for Evaluating WTO Compliance of Domestic Farm Spending ..................................... 4
Question 1: Can This Measure Be Placed in the Green Box? ................................................... 4
Question 2: Can This Measure Be Placed in the Blue Box? ..................................................... 6
Question 3: If Amber, Will Support Exceed 5% of Production Value? ..................................... 7
Question 4: Does Total Annual AMS Now Exceed $19.1 Billion? ........................................... 8
Question 5: Does Domestic Support Result in Significant Market Distortion in
International Markets? ............................................................................................................ 8
Summary .......................................................................................................................................... 8
Appendixes
Appendix. Classification of U.S. Policies in 2010......................................................................... 10
Contacts
Author Contact Information........................................................................................................... 12
Congressional Research Service
Agriculture in the WTO: Limits on Domestic Support
Introduction
Omnibus U.S. farm legislation—referred to as the farm bill—is renewed about every five years.
Farm income and commodity price support programs have been a part of U.S. farm legislation
since the 1930s.1 Each successive farm bill usually involves some modification or replacement of
existing farm programs.
Most agricultural provisions of the current omnibus farm bill, the Food, Conservation, and
Energy Act of 2008 (P.L. 110-246), expired on September 30, 2012, or are expiring with the 2012
crop year.2 Ultimately the current farm bill will either be replaced with new legislation,
temporarily extended, or allowed to lapse and be replaced with “permanent law”—a set of
essentially mothballed provisions for the farm commodity programs that date from the 1930s and
1940s. Whatever emerges as new farm policy in 2013 will include a farm safety net with some
form of farm commodity price and income supports.
WTO Commitments May Influence U.S. Farm
Policy Choices
A potential major constraint affecting U.S. agricultural policy choices is the set of commitments
made as part of membership in the World Trade Organization (WTO), with its various agreements
governing agriculture and trade, including dispute settlement.3 With respect to disciplines
governing domestic agricultural support, two WTO agreements are paramount—the Agreement
on Agriculture (AA)4 and the Agreement on Subsidies and Countervailing Measures (ASCM).5
In general, domestic policies or programs found to be in violation of WTO rules may be subject
to challenge by another WTO member under the WTO dispute settlement process. If a WTO
challenge occurs and is successful, the WTO remedy likely would imply the elimination,
alteration, or amendment by Congress of the program in question to bring it into compliance.
Since most governing provisions over U.S. farm programs are statutory, new legislation could be
required to implement even minor changes to achieve compliance.6 As a result, designing farm
programs that comply with WTO rules can avoid potential trade disputes.
This report provides a brief overview of the WTO commitments most relevant for U.S. domestic
farm policy. A key question that policymakers ask of virtually every new farm proposal is, how
will it affect U.S. commitments under the WTO? The answer depends not only on cost, but also
on the proposal’s design and objectives, as described below.
1 See CRS Report RL34594, Farm Commodity Programs in the 2008 Farm Bill.
2 See CRS Report R42442, Expiration and Possible Extension of the 2008 Farm Bill.
3 For a complete list of WTO agreements and their text, see The Legal Texts, WTO, Cambridge University Press,
©World Trade Organization 1999; hereinafter referred to as WTO Legal Texts
4 See CRS Report RL32916, Agriculture in the WTO: Policy Commitments Made Under the Agreement on Agriculture.
5 See CRS Report RS22522, Potential Challenges to U.S. Farm Subsidies in the WTO: A Brief Overview.
6 For example, see CRS Report RL32571, Brazil’s WTO Case Against the U.S. Cotton Program.
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Agreement on Agriculture (AA)
Under the AA, WTO member countries agreed to general rules regarding disciplines on domestic
subsidies (as well as on export subsidies and market access). The AA’s goal was to provide a
framework for the leading members of the WTO to make changes in their domestic farm policies
to facilitate more open trade. Under the AA, domestic spending is disaggregated according to
those outlays that have the greatest potential to distort agricultural markets—referred to as amber
box subsidies—and therefore are subject to spending limits.7 In contrast, more benign outlays
(i.e., which cause less market distortion) are exempted from spending limits under green box,
blue box, de minimis, or special and differential treatment exemptions.8
The AA contains detailed rules and procedures to guide countries in determining how to classify
its programs in terms of which are most likely to distort production and trade; in calculating their
annual cost, measured by the Aggregate Measure of Support (AMS) index; and in reporting the
total cost to the WTO. These AA classifications are described in more detail below in the section
entitled, “Questions for Evaluating WTO Compliance of Domestic Farm Spending.” The most
recent U.S. notification to the WTO of its domestic farm program spending is provided in the
Appendix.
Agreement on Subsidies and Countervailing Measures (ASCM)
To the extent that domestic farm policy effects spill over into international markets, U.S. farm
programs are also subject to certain rules under the Agreement on Subsidies and Countervailing
Measures (ASCM).9 The ASCM details rules for determining when a subsidy is “prohibited” (as
in the case of certain export and import-substitution subsidies) and when it is “actionable” (as in
the case of certain domestic support policies that incentivize overproduction and result in
significant market distortion—whether as lower market prices or altered trade patterns).10
The key aspect of ASCM commitments is the degree to which a domestic support program
engenders market distortion. Based on precedent from past WTO decisions, several criteria are
important in establishing whether a subsidy could result in significant market distortions:
• the subsidy constitutes a substantial share of farmer returns or covers a
substantial share of production costs;
• the subsidized commodity is important to world markets because it forms a large
share of either world production or world trade; and
• a causal relationship exists between the subsidy and adverse effects in the
relevant market.
7 These spending and subsidy commitments are detailed in each Member’s country schedule. For more information, see
CRS Report RL32916, Agriculture in the WTO: Policy Commitments Made Under the Agreement on Agriculture.
8 WTO special and differential treatment exemptions are reserved for “developing” countries and are thus not relevant
for evaluating U.S. domestic farm policy.
9 For a description, see CRS Report RS22522, Potential Challenges to U.S. Farm Subsidies in the WTO: A Brief
Overview.
10 Part II: Actionable Subsidies, Articles 3-4, and Part III: Actionable Subsidies, Articles 5-7, ASCM, WTO Legal
Texts; available at http://www.wto.org/english/docs_e/legal_e/legal_e.htm
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The ASCM evaluates the “market distortion” of a particular program or policy in terms of its
measurable market effects on the international trade and/or market price for the affected
commodity:
• did the subsidy displace or impede the import of a like product into the
subsidizing member’s domestic market;
• did the subsidy displace or impede the exports of a like product by another WTO
member country other than the subsidizing member;
• did the subsidy (via overproduction and resultant export of the surplus) result in
significant price suppression, price undercutting, or lost sales in the relevant
commodity’s international market; and
• did the subsidy result in an increase in the world market share of the subsidizing
member?
For any farm program that is challenged under the ASCM, a WTO dispute settlement panel will
review the relevant trade and market data and make a determination of whether the particular
program being challenged resulted in a significant market distortion.
Under WTO rules, challenged subsidies that are found to be prohibited by a WTO dispute
settlement panel must be stopped or withdrawn “without delay” in accordance with a timetable
laid out by the panel; otherwise the member nation bringing the challenge may take appropriate
countermeasures. Similarly, actionable subsidies, if successfully challenged, must be withdrawn
or altered so as to minimize or eliminate the distorting aspect of the subsidy, again as laid out by a
WTO panel or as negotiated between the two disputing parties.
WTO Dispute Settlement Understanding (DSU)
The WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU)
provides a means for WTO members to resolve disputes arising under WTO agreements. WTO
members must first attempt to settle their dispute through consultations, but if these fail, the
member initiating the dispute may request that a panel examine and report on its complaint. The
DSU provides for Appellate Body review of panel reports, panels to determine if a defending
member has complied with an adverse WTO decision by the established deadline in a case, and
possible retaliation if the defending member has failed to do so.
As of November 26, 2012, 450 complaints have been filed under the DSU, with nearly one-half
involving the United States as a complainant or defendant. The Office of the United States Trade
Representative (USTR) represents the United States in WTO disputes.11
11 See CRS Report RS20088, Dispute Settlement in the World Trade Organization (WTO): An Overview.
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Questions for Evaluating WTO Compliance of
Domestic Farm Spending
The United States currently is committed, under the AA, to spend no more than $19.1 billion per
year on amber box trade-distorting support. The WTO’s AA procedures for classifying and
counting trade-distorting support are somewhat complex; however, four questions might be asked
to determine whether a particular farm measure will cause total U.S. domestic support to be
above or below the $19.1 billion annual AMS limit. A subsequent fifth question may be asked to
ascertain whether AA-compliant outlays are also ASCM-compliant.
1. Can the measure be classified as a “green box” policy—one presumed to
have the least potential for distorting production and trade and therefore not
counted as part of the AMS?
2. Can it be classified as a “blue box” policy—that is, a production-limiting
program that receives a special exemption and therefore is also not counted
as part of the AMS?
3. If it is a potentially trade-distorting “amber box” policy, can support still be
excluded from the AMS calculation under the so-called 5% de minimis
exemption (explained later in more detail) because total support is no more
than 5% of either:
a. the value of total annual production if the support is non-product
specific, or
b. the value of annual production of a particular commodity if the support is
specific to that commodity?
4. If such support exceeds the de minimis 5% threshold (and thus cannot be
exempted), when it is added to all other forms of non-exempt amber box
support is total U.S. AMS still beneath the $19.1 billion limit?
5. If a program is fully compliant with the AA rules and limits, does its support
result in price or trade distortion in international markets that, in turn, cause
adverse effects upon another WTO member? If so, then it may be subject to
challenge under ASCM rules.
Question 1: Can This Measure Be Placed in the Green Box?
No limits are placed on green box spending, since it is considered minimally or non-trade
distorting. To qualify for exemption in the green box, a program must meet two general criteria,
as well as a set of policy-specific criteria relative to the different types of agriculture-related
programs.12 The two general criteria are:
1. It must be a publicly funded government program (defined to include either
outlays or forgone revenue) that does not involve transfers from consumers.
2. It must not have the effect of providing price support to producers.
12 The so-called green box is actually Annex 2 of the AA, WTO Legal Texts.
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In addition, every green-box-qualifying program must comply with at least one of the following
criteria and conditions specific to the program itself.
• A “general service” benefitting the agricultural or rural community in general
cannot involve direct payments to producers or processors. Such programs can
include research; pest and disease control; training, extension, or advisory
services; inspection services, including for health, safety, grading, or
standardization; marketing and promotion services, including information advice
and promotion (but not spending for unspecified purposes that sellers could use
to provide price discounts or other economic benefits to purchasers); and
generally available infrastructure like utility, transportation, or port facilities,
water supply facilities, or other capital works construction.
• Public acquisition (at current market prices) and stockholding of products for
food security must be integral to a nationally legislated food security program
and be financially transparent.
• Domestic food aid is to be based upon clearly defined eligibility and nutritional
criteria, be financially transparent, and involve government food purchases at
current market prices.
• “Decoupled” income support is to use clearly defined eligibility criteria in a
specified, fixed base period; not be related in any way after the base period to (a)
domestic or world prices, (b) type or volume of crop or livestock production, or
(c) factors of production; and, further, not be contingent on any production in
exchange for payments.
• Government financial participation in an income insurance or income safety
net program should define eligibility as agricultural income loss exceeding 30%
of average gross income (or equivalent in net income terms) in the preceding
three-year period (or preceding five-year period, excluding the highest and
lowest years—the so-called Olympic average), with such payment compensating
for less than 70% of the income loss in year of eligibility, and payments based
solely on income, not production, price, or inputs. Total annual payments under
this and natural disaster relief (see next paragraph) cannot exceed 100% of a
producer’s total loss.
• Payments (whether direct or through government crop insurance) for natural
disaster relief are to use eligibility based on formal government recognition of
the disaster. Payments are to be determined by a production loss exceeding 30%
of production in the preceding three-year (or five-year Olympic average) period,
apply only to losses of income, livestock, land, or other production factors, and
cannot exceed the total replacement cost or require types/quantities of future
production. Total annual payments under this and the income insurance or safety
net measure cannot exceed 100% of a producer’s total loss.
• Structural adjustment through producer retirement shall tie eligibility to
clearly defined criteria in programs to facilitate producers’ “total and permanent”
retirement from agricultural production or their movement into nonagricultural
activities.
• Structural adjustment through resource retirement shall be determined
through clearly defined programs designed to remove land, livestock, or other
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resources from marketable production, with payments (a) conditioned on land
being retired for at least three years and on livestock being permanently disposed;
(b) not contingent upon any alternative specified use of such resources involving
marketing agricultural production; and (c) not related to production type/quantity,
or to prices of products using remaining productive resources.
• Structural adjustment provided through investment aids must be determined
by clearly defined criteria for programs assisting financial or physical
restructuring of a producer’s operations in response to objectively demonstrated
structural disadvantages (and may also be based on a clearly defined program for
“re-privatization” of agricultural land). The amount of payments (a) cannot be
tied to type/volume of production, or to prices, in any year after the base period;
(b) shall be provided only for a time period needed for realization of the
investment in respect of which they are provided; (c) cannot be contingent on the
required production of designated products (except to require participants not to
produce a designated product); and (d) must be limited to the amount required to
compensate for the structural disadvantage.
• Environmental program payments must have eligibility determined as part of a
clearly defined government environmental or conservation program, and must be
dependent upon meeting specific program conditions, including conditions
related to production methods or inputs. Payments must be limited to the extra
costs (or loss of income) involved with program compliance.
• Regional assistance program payments shall be limited only to producers in a
clearly designated, contiguous geographic region with definable economic and
administrative identity, considered to be disadvantaged based on objective,
clearly defined criteria in the law or regulation, which indicate that the region’s
difficulties are more than temporary. Such payments in any year (a) shall not be
related to or based on type/volume of production in any year after the base period
(other than to reduce production) or to prices after the base period; (b) where
related to production factors, must be made at a degressive rate above a threshold
level of the factor concerned; and (c) must be limited to the extra costs or income
loss involved in agriculture in the prescribed area.
In summary, the above measures are eligible for placement in the green box (i.e., exempted from
AMS) as long as they (1) meet general criteria one and two, above; and (2) additionally comply
with any criteria specific to the type of measure itself. If these conditions are satisfied, no further
steps are necessary; the measure is exempt.13 However, if not, then the next step is to determine
whether it qualifies for the blue box exemption.
Question 2: Can This Measure Be Placed in the Blue Box?
No limits are placed on blue box spending, in part because it contains safeguards to prevent
program incentives from expanding production. To qualify for exemption in the blue box,14 a
program must be a direct payment under a production-limiting program,15 and must also either:
13 For examples of U.S. outlays on various green box programs, see the Appendix of this report which contains the
most recent U.S. notification to the WTO of its domestic farm program spending.
14 Article 6.5, AA, WTO Legal Texts.
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• be based on fixed areas and yields, or
• be made on 85% or less of the base level of production, or,
• if livestock payments, be made on a fixed number of head.
If these conditions are satisfied, the measure is exempt. However, if not, then it is considered to be
an amber box policy, and the next step is to determine whether spending is above or below the
5% de minimis rate (see below).
Question 3: If Amber, Will Support Exceed 5% of Production Value?
The AA states that developed country members (including the United States) do not have to
count, when calculating their total AMS, the value of amber box programs whose total cost is
small (or benign) relative to the value of either a specific commodity, if the program is
commodity-specific, or the value of total production, if the program is not commodity-specific.16
In other words, “amber box” (i.e., potentially trade-distorting) policies may be excluded under the
following two de minimis exclusions.
• Product-specific domestic support, whereby it does not exceed 5% of the
member’s “total value of production of a basic agricultural product during the
relevant year.” Support provided through all of the measures specific to a
product—not just a single measure in question—is tallied to determine whether
the 5% level is exceeded.
For example, 5% of the value of the 2010 U.S. corn crop was $3.2 billion
compared with corn-specific AMS outlays of $15.1 million. As a result, the entire
$15.1 million was exempted from inclusion under the AMS limit for the
marketing year 2010. In contrast, U.S. sugar support of $1.267 billion for 2010
easily exceeded its 5% product-specific de minimis of $163.8 million and,
therefore, was counted against the AMS limit.
• Non-product-specific domestic support, whereby it does not exceed 5% of the
“value of the Member’s total agricultural production.” All non-product-specific
support—not just a single measure—is tallied to determine whether the 5% level
is exceeded.
For example, the value of 2010 U.S. agricultural production was notified to the
WTO as $334.9 billion. As a result, the 5% threshold for non-product-specific
support was calculated as $16.7 billion. The United States notified outlays of
$5.4 billion for non-product-specific support in 2010. As a result, the entire $5.4
billion was exempted from inclusion under the AMS limit.
(...continued)
15 An example of a production-limiting program is the now-abandoned U.S. target-price, deficiency-payment program
that linked payments to land set-aside requirements. The target-price, deficiency-payment program was first established
under the 1973 farm bill (the Agricultural and Consumer Protection Act of 1973; P.L. 93-86), and was terminated by
the 1996 farm bill (The Federal Agriculture Improvement and Reform Act of 1996; P.L. 104-127). As a result, the
United States only notified blue box payments under this program for the year 1995.
16 Article 6.4, AA, WTO Legal Texts.
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These provisions are known as the so-called de minimis clause. To reiterate, it is not enough to
determine whether a single amber box measure (i.e., one not classified as either green or blue) by
itself may be beneath the 5%-of-production-value trigger. Its level of support must be added to
the support provided by other non-exempt (amber box) measures. If the cost of any particular
measure effectively boosts the total support above 5%, then all such support must be counted
toward the U.S. total annual AMS.
Question 4: Does Total Annual AMS Now Exceed $19.1 Billion?
Finally, all support that fails to qualify for an exemption is added for the year.
• If the total does not exceed $19.1 billion, then the United States has met its WTO
commitment.
• If it does exceed $19.1 billion, the United States has not met its WTO
commitment.
Through 2010, the most recent year for which the United States has made notifications to the
WTO, the United States has never exceeded its AMS limit. The closest approach was in 2000,
when the United States notified a total AMS of $16.8 billion.
Question 5: Does Domestic Support Result in Significant Market
Distortion in International Markets?
An additional consideration for WTO compliance—the ASCM rules governing adverse market
effects resulting from a domestic farm support program—comes into play when a domestic farm
policy effect spills over into international markets. This is particularly relevant for the United
States because it is a major producer, consumer, exporter, and/or importer of most major
agricultural commodities, but especially of temperate field crops (which are the main
beneficiaries of U.S. farm program support). If a particular U.S. farm program is deemed to result
in market distortion that adversely affects other WTO members—even if it is compliant with all
AA commitments and agreed-upon spending limits—then that program may be subject to
challenge under the WTO dispute settlement procedures (Brazil’s WTO case against U.S. cotton
programs is a prime example of this).17
Summary
The AA’s structure of varying spending limits across the amber, blue, and green boxes is
intentional. By leaving no constraint on spending in the green box while imposing limits on AMS
spending, the WTO implicitly encourages countries to design their domestic farm support
programs to be green-box-compliant.18 Negotiations to further reform agricultural trade within the
context of the WTO—referred to as the Doha Round of multilateral trade negotiations—began in
17 CRS Report RL32571, Brazil’s WTO Case Against the U.S. Cotton Program.
18 Zulauf, Carl and David Orden, U.S. Farm Policy and Risk Assistance: The Competing Senate and House Agriculture
Committee Bills of July 2012, ICTSD Program on Agricultural Trade and sustainable development, Issue Paper No. 44,
International Centre for Trade and Sustainable Development, Geneva, Switzerland, http://www.ictsd.org.
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2001.19 They are not expected to be completed in the near future. As lawmakers consider policy
options, other countries will be evaluating not only whether, in their view, these options will
comply with the U.S. commitments under the AA, but also how they reflect on the U.S.
negotiating position in the Doha Round of talks.
The U.S. objective is for negotiations to result in substantial reductions in trade-distorting support
and stronger rules that ensure that all production-related support is subject to discipline, while
preserving criteria-based “green box” policies that can support agriculture in ways that minimize
trade distortions. At the same time, Congress might seek domestic farm policy measures that it
can justify as AA- and ASCM-compliant.
19 For more information, see CRS Report RS22927, WTO Doha Round: Implications for U.S. Agriculture.
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Appendix. Classification of U.S. Policies in 2010
The last U.S. notification to the WTO was made on October 1, 2012, for the 2010 marketing year.
Following are examples of how various U.S. domestic policies were classified in that notification,
along with the associated values.20
Green Box Policies ($120.5 Billion)
The United States notified $120.5 billion in green box outlays, including outlays under the
following programs.
General Services ($15.2 Billion)
• State programs for agriculture ($4.3B)
• Risk Management Agency (RMA) total costs ($3.9B) including:
1. Risk Management Agency (RMA) administrative costs ($0.08B)
2. RMA A&O reimbursements ($1.4B)
3. RMA underwriting gains ($2.4B)
• Farm Service Agency (FSA) & Natural Resources Conservation Service (NRCS)
($1.7B)
• Agricultural Research Service ($1.3B)
• Animal and Plant Health Inspection Service (APHIS) programs ($1.2B)
• National Institute for Food and Agriculture (NIFA) programs ($1.1B)
• Food Safety and Inspection Service (FSIS) meat and poultry inspection ($1.0B)
• Agricultural Marketing Service (AMS) ($0.3B)
• National Agricultural Statistics Service (NASS) ($0.16B)
• Economic Research Service (ERS) ($0.07B)
• Grain Inspection, Packers and Stockyards Administration (GIPSA) ($0.04B)
• World Agricultural Outlook Board ($0.005B)
Domestic Food Aid ($94.9 Billion)
• Supplemental Nutrition Assistance Program (SNAP) ($70.5B)
• Child nutrition programs ($16.4B)
• Special supplemental food program for women, infants, and children (WIC)
($6.5B)
20 “U.S. Domestic Support Notification for Marketing Year 2010,” G/AG/N/USA/89, WTO, October 1, 2012.
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• Section 32 food purchases ($1.1B)
• Commodity Assistance Program (CAP) ($0.3B)
Decoupled Income Support ($5.9 Billion)
• Direct payments ($4.9B)
• Tobacco quota buyout payments ($1.0B)
Payments for Relief from Natural Disasters ($0.062 Billion)
• Non-insured crop disaster assistance program (NAP) payments ($0.06B)
Structural Adjustment Through Investment Aids ($0.13 Billion)
• Farm credit programs ($0.12B)
Environmental Payments ($4.4 Billion)
• Conservation Reserve Program (CRP) payments ($1.8B)
• Environmental Quality Incentives Program (EQIP) ($1.2B)
• Wetland Reserve Program ($0.63B)
• Conservation Stewardship Program ($.39B)
• Farmland Protection Program ($0.15B)
• Grassland Reserve Program ($0.1B)
Blue Box Policies ($0)
The United States has not notified any payments under the blue box since 1995 (the first year of
WTO notifications). In that year, U.S. blue box notifications consisted entirely of target-price
deficiency payments, which ended with 1996 farm law (P.L. 104-127).
De Minimis Exclusions ($5.7 Billion)
• Product-specific de minimis exclusions totaled $0.278 billion in 2010, including
corn, cotton, livestock, orchards, rice, soybeans, wheat, and minor grains and
pulses.
• Non-product-specific de minimis exclusions of $5.3 billion in 2010 were well
below 5% of the total value of U.S. agricultural production of $284 billion.
Amber Box Policies ($4.1 Billion)
Prior to the de minimis exclusions, U.S. amber box notifications totaled $9.8 billion, including
$4.4 billion of product-specific outlays and $5.4 billion of non-product-specific outlays.
However, $0.278 billion in product-specific support and all non-product-specific support of $5.3
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Agriculture in the WTO: Limits on Domestic Support
billion were exempted from the AMS limit under the de minimis exclusions, leaving $4.119
billion in amber box support subject to the $19.1 billion limit.
Product-Specific Support ($4.4 Billion)21
• Dairy price support ($2.8B)22
• Sugar price support ($1.3B)23
• Marketing loan benefits, including gains from repaying marketing loans at less
than the loan rate and loan deficiency payments ($0.109B)
• Commodity loan-related interest subsidies ($0.085B)
• Special cotton marketing payments ($0.077B)24
• Average Crop Revenue Election (ACRE) program ($0.011B)
Non-Product Specific Support ($5.4 Billion)25
• Crop and revenue insurance subsidies ($4.7B)
• Supplemental Crop Revenue Assurance (SURE) program ($0.4B)
• Irrigation subsidies in western states ($0.2B)
• Grazing programs ($0.045B)
• Counter-cyclical payments ($0.017B)
• Biomass Crop Assistance Program (BCAP) ($0.011B)
Author Contact Information
Randy Schnepf
Specialist in Agricultural Policy
rschnepf@crs.loc.gov, 7-4277
21 Of which $0.278 billion was exempted under the product-specific de minimis exclusion as described above.
22 AMS is a measure of both actual and implied support and not necessarily a measure of actual budget outlays. In the
case of both dairy and sugar programs, U.S. support—provided primarily in the form of import tariff quotas—is
measured by applying the difference between higher U.S. support prices and lower international prices to U.S. domestic
production.
23 Ibid.
24 These are upland cotton economic adjustment assistance (EAA) payments ($77.1 million). For more information see
“Cotton: Policy, Special Program Provisions,” Cotton Briefing Room, ERS, USDA, at http://www.ers.usda.gov/
briefing/cotton/specialprovisions.htm.
25 Of which the entire amount was exempted under the non-product-specific de minimis exclusion as described above.
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