UPSC Prelims 2016 · Question 36 of 98
UPSC Prelims 2016 question on WTO Agricultural Subsidy Boxes
- ExamUPSC CSE
- Year2016
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicExternal Sector of India
- DifficultyEasy
- TypeDirect
In the context of which of the following do you sometimes find the terms ‘amber box, blue box and green box’ in the news?
Show answer
Answer: A. WTO affairs
Verdict
The answer is WTO affairs. Amber, blue and green boxes are the World Trade Organization's categories for agricultural subsidies.
Analysis
In WTO terminology subsidies are grouped into boxes named for traffic light colours: green for permitted, amber for those that must be reduced, and red for forbidden. In agriculture there is no red box, though domestic support above the reduction commitment level in the amber box is prohibited, and a blue box exists for subsidies tied to production limiting programmes. The amber box covers trade distorting domestic support, which is why India's public stockholding for food security has been contested under it.
Source
Economic Survey and press reporting on farm subsidy negotiations.
How to crack it
The colour coding is itself the mnemonic, since traffic lights mean permitted, caution and forbidden, and only a rules based trade regime would need such a classification. Neither a climate convention nor a regional grouping regulates subsidies this way. Keep the Agreement on Agriculture's three pillars ready alongside, market access, domestic support and export competition, because the boxes belong to the second pillar and questions often approach from that direction.