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Unit 15: WTO and Agriculture
Pavitar Parkash Singh, Lovely Professional University

Unit 15: WTO and Agriculture Notes

CONTENTS
Objective
Introduction
15.1 WTO and Agriculture
15.2 Summary
15.3 Key–Words
15.4 Review Questions
15.5 Further Readings

Objective

After reading this Unit students will be able to:
• Explain the WTO and Agriculture
Introduction

Agriculture is one of the few economic sectors which has its own agreement within the WTO. Other
than the broad WTO distinction between goods and services, all other WTO provisions are neutral as
to the economic sector involved. Agriculture is therefore unique. However understanding agriculture
is central to understanding the WTO.
Agriculture has given rise to a high number of disputes. Ironically the two most famous agricultural
disputes, EC - Bananas III and EC - Hormones, were not brought on the basis of the Agreement on
Agriculture but on the GATT 1994 and GATS for bananas and on the Agreement on the Application
of Sanitary and Phytosanitary Measures or SPS Agreement for hormones. The first big dispute to
examine the Agreement on Agriculture was, in fact, the FSC case which was about a general tax
scheme in the United States which favoured exporters.
Recently there have been two cases on the Agreement on Agriculture which are of utmost importance
and which are dealt with in this module: the Canada - Dairy case and the Chile - Price Band System
case. Like many dispute cases both these cases only look at specific parts of the Agreement on
Agriculture. This module, on the other hand, looks at the broad provisions of the Agreement on
Agriculture as well as the specific issues which were decided in all the cases which have examined
the interpretation of the provisions of the Agreement on Agriculture.
Overall this module examines both the agricultural sector specific provisions in the Agreement on
Agriculture and the general WTO rules in a number of other WTO Agreements which can impact
agricultural trade. The reader of this module should, on completion, be able to understand the main
legal provisions affecting trade in agricultural products. Where technical terms have been used simple
explanations of them have been provided.
15.1 WTO and Agriculture

WTO Agreement on Agriculture stipulated that developed countries would reduce their subsidies
by 20 per cent in six years and developing countries by 13 per cent in 10 years. But as facts stand
today, developed countries tried to circumvent this agreement by providing Green Box and Blue Box
subsidies to support agriculture.
Green Box Subsidies include amounts spent on Government services such as research, disease control,
infrastructure and food security. They also include payments made directly to farmers that do not

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