AGREEMENT ON AGRICULTURE

AGREEMENT ON AGRICULTURE(AOA)
The general idea of the AoA, as of all agreements
under WTO, is to open up trade as far as possible
The implementation of the Agreement on
Agriculture started with effect from January 1, 1995.
As per the provisions of the Agreement, the
developed countries would complete their reduction
commitments within 6 years, whereas the
commitments of the developing countries would be
completed within 10 years. The least developed
countries are not required to make any reductions.

OBJECTIVE
The objective of the Agriculture Agreement is to
reform trade in the sector and to make policies
more market-oriented
Developing countries do not have to cut their
subsidies or lower their tariffs as much as
developed countries, and they are given extra time
to complete their obligations

THREE PILLARS
The commitments under the AoA can be divided into three broad
areas
Market access:
Market Access commitment requires conversion of all nontariff barriers into equivalent tariff barriers
Reduction of tariffs:
- Developed countries would cut the tariffs by an
average of 36%
- Developing countries would make 24% cuts over 10
years
- Least Developed Countries were exempted from tariff
reductions
Developing countries that were maintaining Quantitative
Restrictions due to Balance of Payments problems were
allowed to offer ceiling bindings instead of tariffication

Export competition:
The 1995 AoA required developed countries to
reduce export subsidies by at least 36% (by value)
or by at least 21% (by volume) over the six years.
In the case of developing country Members, the
required cuts are 14% (by volume) or 24% (by value)
over 10 years.

Domestic support:
Domestic Support to agriculture was also to be
reduced considerably in countries where the
aggregate measure of support exceeded the level
specified in the member schedule
The main complaint about policies which support
domestic prices, or subsidize production in some
other way, is that they encourage over-production.
This squeezes out imports or leads to export
subsidies and low-priced dumping on world
markets.
Domestic policies that do have a direct effect on
production and trade have to be cut back,
Developed countries agreed to reduce these figures
by 20% and Developing countries agreed to make
13% cuts.

NUMERICAL TARGETS:

INDIAS COMMITMENTS

India is one of the six countries who has been

maintaining quantitative restrictions under the specific
enabling provisions of GATT1947
India does not provide any product specific support
other than market price support.
The non product specific subsidies being extended by
India to its farmers include subsidies for research,
extension, pests and disease control, as also for inputs
like electricity, water, fertilizers, seeds etc.
India does not provide any export subsidy except the
permissible internal and international transport subsidies
and processing charges to reduce marketing costs of
exports of agricultural produce.