Agriculture in the WTO: Rules and Limits on
March 3, 2021
U.S. Domestic Support
Randy Schnepf
Omnibus U.S. farm legislation—referred to as the farm bill—has typically been renewed every
Specialist in Agricultural
five or six years. Farm revenue support programs have been a part of U.S. farm bills since the
Policy
1930s. Each successive farm bill usually involves some modification or replacement of existing

farm programs. A key question likely to be asked of 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 (AoA) and its Agreement on Subsidies and Countervailing Measures (SCM).
The United States is currently committed, under the AoA, 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 AoA 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.
The most recent U.S. notification to the WTO of domestic support outlays (made on July 24, 2019) is for the 2017 marketing
year. To date, the United States has never exceeded its $19.1 billion amber box spending limit. However, this has been
achieved in some years (1999, 2000, and 2001) through judicious use of the de minimis exclusion described below.
An additional consideration for WTO compliance—the SCM 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 SCM 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 SCM 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 AoA 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 AoA and SCM 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:
 Can a program’s support outlays be excluded from the AMS total by being placed in the green box of
minimally distorting programs?
 Can a program’s support outlays be excluded from the AMS total by being placed in the blue box of
production-limiting programs?
 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?
 Does the total, remaining annual AMS exceed the $19.1 billion amber box limit?
 Even if a program is found to be fully compliant with the AoA 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 SCM
rules.

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Agriculture in the WTO: Rules and Limits on U.S. Domestic Support

Introduction
Trade plays a critical role in the U.S. agricultural sector. The U.S. Department of Agriculture
(USDA) estimates that exports account for about 20% of total U.S. agricultural production.1
Furthermore, given the substantial volume of its agricultural exports, the United States plays a
significant role in many international agricultural markets. As a result, U.S. farm policy is often
subject to intense scrutiny both for compliance with current World Trade Organization (WTO)
rules and for its potential to diminish the breadth or impede the success of future multilateral
negotiations. In part, this is because a farm bil locks in U.S. policy behavior for an extended
period of time during which the United States would be unable to accept any new restrictions on
its domestic support programs.
Farm revenue support programs have been a part of U.S. farm legislation since the 1930s. Today,
these support programs are authorized as part of omnibus U.S. farm legislation—referred to as the
farm bil —which has typical y been renewed every five or six years. Each successive farm bil
usual y involves some modification or replacement of existing farm programs. The current
omnibus farm bil , the Agricultural Improvement Act of 2018 (P.L. 115-334; the 2018 farm bil ),
was signed into law on December 20, 2018.2 The 2018 farm bil largely maintains the farm safety
net of the previous 2014 farm bil (P.L. 113-79).3 The commodity programs of the 2018 farm bil
became operational with the 2018 crop year. They are scheduled to expire on September 30,
2023, or with the 2023 crop year. Ultimately, the current farm bil wil either be (1) replaced with
new legislation, (2) temporarily extended, or (3) al owed to lapse and replaced with “permanent
law”—a set of essential y mothbal ed provisions for the farm commodity programs that date from
the 1930s and 1940s.4
WTO Commitments May Influence Policy Choices
A potential major constraint affecting U.S. agricultural policy choices is the set of commitments
made as part of membership in the WTO.5 The WTO has three basic functions: (1) administering
existing agreements, including those governing agriculture and trade;6 (2) serving as a negotiating
forum for new trade liberalization; and (3) providing a mechanism to settle trade disputes among
members.7 With respect to disciplines governing domestic agricultural support, two WTO
agreements are paramount—the Agreement on Agriculture (AoA)8 and the Agreement on
Subsidies and Countervailing Measures (SCM).9

1 USDA, Economic Research Service (ERS), U.S. Agricultural T rade, “U.S. Export Share of Production,”
https://www.ers.usda.gov/topics/international-markets-us-trade/us-agricultural-trade/.
2 See CRS Report R45730, Farm Commodity Provisions in the 2018 Farm Bill (P.L. 115 -334).
3 See CRS Report R43448, Farm Commodity Provisions in the 2014 Farm Bill (P.L. 113 -79).
4 For example, see CRS Report R42442, Expiration and Extension of the 2008 Farm Bill.
5 T he WT O is a global rules-based, member-driven organization dealing with the rules of trade between nations. As of
March 7, 2019, the WT O included 164 members. See CRS In Focus IF10002, The World Trade Organization.
6 For a complete list of WT O agreements and their text, see WT O, The Legal Texts (Cambridge University Press and
World T rade Organization, 1999), https://www.wto.org/english/docs_e/legal_e/legal_e.htm.
7 See CRS In Focus IF10645, Dispute Settlement in the WTO and U.S. Trade Agreements.
8 See CRS Report RL32916, Agriculture in the WTO: Policy Commitments Made Under the Agreement on Agriculture.
9 See CRS Report RS22522, Potential Challenges to U.S. Farm Subsidies in the WTO: A Brief Overview.
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The AoA sets country-specific aggregate spending limits on the most market-distorting policies. It
also defines very general rules covering trade among member countries. In general, domestic
policies or programs found to be in violation of WTO rules may be subject to chal enge by
another WTO member under the WTO dispute settlement process. If a WTO chal enge is
successful, the WTO remedy would likely 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.10 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 that are most relevant for U.S.
domestic farm policy. A key question that many policymakers ask of virtual y every new farm
proposal is how it wil 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.
Agreement on Agriculture (AoA)
Under the AoA, WTO member countries agreed to general rules regarding disciplines on
domestic subsidies (as wel as on export subsidies and market access). The AoA’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.
Domestic Support Categorization
The WTO’s AoA categorizes and restricts agricultural domestic support programs according to
their potential to distort commercial markets. Whenever a program payment influences a
producer’s behavior, it has the potential to distort markets (i.e., to alter the supply of a
commodity) from the equilibrium that would otherwise exist in the absence of the program’s
influence. Those outlays that have the greatest potential to distort agricultural markets—referred
to as amber box subsidies—are subject to spending limits.11 In contrast, more benign outlays (i.e.,
those that cause less or minimal market distortion) are exempted from spending limits under
green box, blue box, de minimis, or special and differential treatment exemptions.12
The AoA contains detailed rules and procedures to guide countries in determining how to classify
their 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;13 and in
reporting the total cost to the WTO. Specifical y, the WTO uses a traffic light analogy to group
programs:
 Green box programs are minimal y or non-trade distorting and not subject to any
spending limits.

10 For example, see CRS Report R43336, The WTO Brazil-U.S. Cotton Case.
11 T hese spending and subsidy commitments are detailed in each member’s country schedule. For more information,
see CRS Report RL32916, Agriculture in the WTO: Policy Com m itm ents Made Under the Agreem ent on Agriculture .
12 WT O special and differential treatment exemptions are reserved for “develop ing” countries and are thus not relevant
for evaluating U.S. domestic farm policy.
13 T he AoA, Part I, Article 1(a), defines AMS as the annual level of support, expressed in monetary terms, provided for
an agricultural product in favor of the producers of t he basic agricultural product or non-product -specific support
provided in favor of agricultural producers in general other than support provided under programs that qualify for
exempt ion as described in the remainder of this report.
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 Blue box programs are described as production-limiting. They have payments
that are based on either a fixed area or yield or a fixed number of livestock and
are made on less than 85% of base production. As such, blue box programs are
also not subject to any payment limits.
 Amber box programs are the most market-distorting programs and are subject to
a strict aggregate, annual spending limit. The United States is subject to a
spending limit of $19.1 bil ion in amber box outlays subject to certain de minimis
exemptions.14
 De minimis exemptions are domestic support spending that is sufficiently
smal —relative to either the value of a specific product or total production—to be
deemed benign. De minimis exemptions are limited by 5% of the value of
production—either total or product-specific.15
 Prohibited (i.e., red box) programs include certain types of export and import
subsidies and nontariff trade barriers that are not explicitly included in a
country’s WTO schedule or identified in the WTO legal texts.16
This report describes the AoA classifications in more detail below in the section titled “Questions
for Evaluating WTO Compliance of Domestic Farm Spending.”
Domestic Support Notification
To provide for monitoring and compliance of WTO policy commitments, each WTO member
country is expected to routinely submit notification reports on the implementation of its various
commitments. The WTO’s Committee on Agriculture has the duty of reviewing progress in the
implementation of individual member commitments based on member notifications. Furthermore,
the WTO posts the notifications on its official website for al members to review.17 The most
recent U.S. notification to the WTO of domestic support outlays (made on July 24, 2020) is for
the 2017 marketing year.18
Agreement on Subsidies and Countervailing Measures (SCM)
To the extent that domestic farm policy effects spil over into international markets, U.S. farm
programs are also subject to certain rules under the Agreement on Subsidies and Countervailing

14 For developed member countries, the AMS was to be reduced from a 1986-1988 base period average by 20% in six
equal annual installments during 1995-2000. For the United States, the initial 1986 -88 AMS base was $23.879 billion.
T his was lowered to $19.103 billion by 2000, where it has been fixed ever since.
15 General domestic support (not specific to any one commodity, such as rural infrastructure or extension) that is below
5% of the value of total agricultural production is deemed sufficiently benign that it does not have to be included in the
amber box. Similarly, support for a specific commodity (such as marketing assistance loan benefits, commodity storage
payments, crop insurance premium subsidies, etc.) that is below 5% of that commodity’s value of production is deemed
sufficiently benign that it does not have to be included in the amber box.
16 T he term red box is not actually used by the WT O but is included here to complete the traffic light analogy.
17 WT O, “WT O Documents Online,” https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S003.aspx.
18 A marketing year is the 12-month period that begins after a crop is harvested. It represents the 12 months prior to the
next harvest, during which a harvested crop is either sold into domestic or international markets or kept on the farm to
be used as feedstuffs or stored for future sale or use. Crops with different planting and harvesting schedules have
different marketing years. For example, the marketing year for the U.S. wheat, barley, and oat crops starts on June 1;
the marketing year for cotton and rice starts on August 1; and the marketing year for corn, soybeans, and sorghum starts
on September 1. USDA, in notifying total program outlays for a marketing year, aggregates payment data from slightly
different marketing-year periods across the different program crops.
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Measures (SCM).19 The SCM 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).20
The key aspect of SCM 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.
 A causal relationship exists between the subsidy and adverse effects in the
relevant market.
The SCM evaluates the “market distortion” of a 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?
 Did the subsidy result in an increase in the world market share of the subsidizing
member?
For any farm program chal enged under the SCM, a WTO dispute settlement panel review s the
relevant trade and market data and makes a determination of whether the particular program
chal enged resulted in a significant market distortion.21
Under WTO rules, chal enged 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 chal enge may take appropriate
countermeasures. Similarly, actionable subsidies, if successfully chal enged, must be withdrawn
or altered so as to minimize or eliminate the distorting aspect of the subsidy, again as according to
a timetable laid out by a WTO panel or as negotiated between the two disputing parties.

19 For details, see CRS Report RS22522, Potential Challenges to U.S. Farm Subsidies in the WTO: A Brief Overview.
20 Part II: Prohibited Subsidies, Articles 3-4, and Part III: Actionable Subsidies, Articles 5-7, ASCM, WTO Legal Texts,
http://www.wto.org/english/docs_e/legal_e/legal_e.htm.
21 T he final interpretation of significant is left to a WT O panel. However, two notable trade economists suggest that
economic and statistical modeling can be used to show causal linkages between specific agricultural support policies
and prejudicial market effects as measured by market share, quantity displacement, or price suppression. Richard H.
Steinberg and T imothy E. Josling, “ When the Peace Ends: T he Vulnerability of EC and US Agricultural Subsidies to
WT O Legal Challenge,” Journal of International Economic Law, vol. 6, no. 2 (July 2003), pp. 369-417.
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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 Appel ate 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.
Since the WTO was established in 1995, 598 complaints have been filed under the DSU, with
nearly one-half (280) involving the United States as a complainant or defendant.22 The Office of
the United States Trade Representative represents the United States in WTO disputes.23
Questions for Evaluating WTO Compliance of
Domestic Farm Spending
The United States is currently committed, under the AoA, to spend no more than $19.1 bil ion per
year on amber box trade-distorting support. The WTO’s AoA procedures for classifying and
counting trade-distorting support are somewhat complex. However, four questions might be asked
to determine whether a particular farm measure wil cause total U.S. domestic support to be
above or below the $19.1 bil ion annual AMS limit. A subsequent fifth question may be asked to
ascertain whether AoA-compliant outlays are also SCM-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 potential y trade-distorting “amber box” policy, can support stil be
excluded from the AMS calculation under the so-cal ed 5% de minimis
exemption (explained later in more detail) because total support is no more
than 5% of either
 the value of total annual production if the support is non-product-
specific, or
 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 al other forms of non-exempt amber box
support is total U.S. AMS stil beneath the $19.1 bil ion limit?
5. If a program is fully compliant with the AoA 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
chal enge under SCM rules.

22 WT O dispute settlement data as of December 31, 2020, https://www.wto.org/english/tratop_e/dispu_e/dispu_e.htm.
23 See CRS In Focus IF10436, Dispute Settlement in the World Trade Organization: Key Legal Concepts.
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Question 1: Can This Measure Be Placed in the Green Box?
No limits are placed on green box spending, since it is considered to be minimal y or non-trade
distorting (Figure 1). To qualify for exemption in the green box, a program must meet two
general criteria, as wel as a set of policy-specific criteria relative to the different types of
agriculture-related programs.24 The two general criteria are the following:
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.
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 sel ers could use
to provide price discounts or other economic benefits to purchasers); and
general y available infrastructure such as 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 national y legislated food security program
and be financial y transparent.
 Domestic food aid is to be based upon clearly defined eligibility and nutritional
criteria, be financial y 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 shal 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-cal ed 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;
they are to apply only to losses of income, livestock, land, or other production

24 T he so-called green box is actually Annex 2 of the AoA, WTO Legal Texts.
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factors; and they cannot exceed the total replacement cost or require specific
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 shal 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 shal be determined
through clearly defined programs designed to remove land, livestock, or other
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) shal 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 shal be limited to producers in a
clearly designated, contiguous geographic region with definable economic and
administrative identity that are considered to be disadvantaged based on
objective, clearly defined criteria in the law or regulation that indicate that the
region’s difficulties are more than temporary. Such payments in any year (a) shal
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) so long as they (1) meet general criteria one and two above and (2) additional y 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. However, if not, then the next step is to determine
whether it qualifies for the blue box exemption.
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Figure 1. U.S. Annual Green Box Notifications by Category

Source: WTO, annual notifications of the United States through 2017.
Note: Until 2008, crop insurance subsidies were calculated as “net indemnities” (equal to indemnities paid minus
producer-paid premium) and notified as non-product-specific AMS. In 2008, USDA began notifying certain crop
insurance outlays—including administrative costs, delivery-cost reimbursements, and underwriting losses—as
green box “General Services,” while notifying federal premium subsidies as non-product-specific AMS. In 2012,
USDA again changed its notification strategy to notify federal premium subsidies as crop -specific AMS.
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,25 a
program must be a direct payment under a production-limiting program26 and must also either
 be based on fixed areas and yields,
 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.

25 AoA, WTO Legal Texts, Article 6.5.
26 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. T he 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 (T he 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 1995.
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Question 3: If Amber, Will Support Exceed 5% of Production
Value?
The AoA states that developed country members (including the United States), when calculating
their total AMS, do not have to count the value of amber box programs whose total cost is smal
(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.27 In other
words, “amber box” (i.e., potential y 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 al of the measures specific to a
product—not just a single measure in question—is tal ied to determine whether
the 5% level is exceeded. For example, the value of the 2017 U.S. corn crop was
$49.568 bil ion, and 5% of that was $2.478 bil ion.28 This compares with corn-
specific AMS outlays of $2.199 bil ion. Since outlays were below the 5%
product-specific de minimis threshold, the entire $2.199 bil ion was exempted
from inclusion under the AMS limit for the marketing year 2017. In contrast,
U.S. sugar support of $1.577 bil ion for 2017 easily exceeded its 5% product-
specific de minimis of $124.1 mil ion (based on total sugar value of $2.482
bil ion) 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.” Al non-product-specific
support is tal ied to determine whether the 5% level is exceeded. For example,
the value of 2017 U.S. agricultural production was notified to the WTO as $369.3
bil ion.29 The 5% threshold for non-product-specific support was $18.465 bil ion.
The United States notified outlays of $3.442 bil ion for non-product-specific
support in 2017. As a result, the entire $3.442 bil ion was exempted from
inclusion under the AMS limit.
These provisions are known as the so-cal ed de minimis clause. If the cost of any particular
measure effectively boosts the total support above 5%, then all such support (not just the portion
of support in excess of 5%) must be counted toward the U.S. total annual AMS.
Question 4: Does Total Annual AMS Now Exceed $19.1 Billion?
Final y, al support that does not qualify for an exemption is added for the year. If total U.S. AMS
does not exceed $19.1 bil ion, the WTO commitment is met (Figure 2). Through 2017, the most
recent year for which the United States has made notifications to the WTO, the United States has
never exceeded its $19.1 bil ion amber box spending limit. The closest approach was in 1999,
when the United States notified a total AMS of $16.862 bil ion. However, the de minimis
exemptions have been instrumental in helping the United States avoid exceeding its amber box
limit in 1999, 2000, and 2001, when total AMS outlays prior to exemptions were $24.3 bil ion,
$24.2 bil ion, and $21.5 bil ion, respectively (Figure 3).

27 AoA, WTO Legal Texts, Article 6.4.
28 Data are from the U.S. notification to the WT O Committee on Agriculture, domestic support commitments (T able
DS:1 and the relevant supporting tables) for the marketing year 2017, G/AG/N/USA/135, July 24, 2020.
29 Ibid.
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Agriculture in the WTO: Rules and Limits on U.S. Domestic Support

The 2018 farm bil includes a provision, Section 1701 (7 U.S.C. §9091(c)), that serves as a safety
trigger for USDA to adjust program outlays (subject to notification being given to both the House
and Senate agriculture committees) in such a way as to avoid breaching the AMS limit.
Question 5: Does Domestic Support Result in Significant Market
Distortion in International Markets?
An additional consideration for WTO compliance—the SCM rules governing adverse market
effects resulting from a domestic farm support program—comes into play when a domestic farm
policy effect spil s 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 especial y 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 al
AoA commitments and agreed-upon spending limits—then that program may be subject to
chal enge under the WTO dispute settlement procedures. (Brazil’s WTO case against U.S. cotton
programs is a prime example of this.)30
Conclusion
The AoA’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
amber box spending, the WTO implicitly encourages countries to design their domestic farm
support programs to be green box compliant.31
Negotiations to further reform agricultural trade within the context of the WTO—referred to as
the Doha Round of multilateral trade negotiations—began in 2001.32 In 2009, negotiations hit an
impasse but resumed in 2011 when ministers agreed to concentrate on topics where progress was
most likely to be made.33 They are not expected to be completed in the near future.
As U.S. lawmakers consider policy options for agriculture, other countries wil likely be
evaluating not only whether, in their view, these options wil comply with the U.S. commitments
under the AoA but also how they reflect on the U.S. negotiating position in WTO multilateral
talks. The U.S. objective, in the past, has been for the negotiations to result in substantial
reductions in trade-distorting support and for stronger rules that ensure that al production-related
support is subject to discipline (to avoid costly and time-consuming chal enges via the WTO
Dispute Settlement process)34 while stil 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 AoA- and SCM-compliant.

30 CRS Report R43336, The WTO Brazil-U.S. Cotton Case.
31 Carl Zulauf and David Orden, U.S. Farm Policy and Risk Assistance: The Competing Senate and House Agriculture
Com m ittee Bills of July 2012, International Centre for T rade and Sustainable Development, http://www.ictsd.org.
32 For more information, see CRS Report RS22927, WTO Doha Round: Implications for U.S. Agriculture.
33 WT O, Agriculture Negotiations, https://www.wto.org/english/tratop_e/agric_e/negoti_e.htm.
34 As exemplified by the recent U.S. challenge of China’s domestic support for agricultural producers. WT O, Dispute
Settlement cases, DS511: China—Domestic Support for Agricultural Producers, first initiated by the United States on
September 13, 2016, https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds511_e.htm.
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Figure 2. U.S. Amber Box Outlays Subject to AMS Spending Limit

Source: WTO, annual notifications of the United States through 2017.
Figure 3. U.S. Amber Box Outlays Including Exemptions

Source: WTO, annual notifications of the United States through 2017.
Note: In the initial WTO agreement, “developed” countries made AMS reduction commitments from a 1986-
1988 base period average by 20% in six equal instal ments during 1995-2000. Amber box spending limits have
been fixed since 2000 at $19.1 bil ion.
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Author Information

Randy Schnepf

Specialist in Agricultural Policy

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Congressional Research Service
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