Agreement on Agriculture: Exemption from reduction commitments (Article 15.2):

Pursuant to Article 15.2 of the AoA, least-developed country Members shall not be required to undertake reduction commitments.   In the market access pillar, this article provides LDCs with an exemption from reducing their bound agricultural tariffs during subsequent negotiations. This provision does not represent an additional flexibility for LDCs in the other two pillars, since none of the LDCs scheduled commitments in domestic support and export subsidies when they became WTO Member. In fact, only 25 WTO members can subsidize exports for products on which they have commitments to reduce the subsidies and 34 WTO members have commitments to reduce their trade-distorting domestic supports.

This does not mean that LDCs cannot provide domestic support. LDCs are allowed to maintain certain domestic support measures. These are:

  • “Green Box” measures, as defined in Annex II of AoA. In principle, all WTO members can provide subsidies without any limitations if they are classified as a Green Box measure.
  • Development measures under Article 6.2 AoA which defines four additional categories of subsidies which can be provided by most developing countries (not by developed countries)
  • Minimise levels of support (Article 6.4 AoA). For developing countries this is equal to 10% of the value of agricultural production during the relevant year and for developed countries this percentage is 5%.

Available Smooth Transition Procedures:

Utilization by LDCs:

Most LDCs cite budgetary or financial constraints as the barrier to provide domestic support.

A number of LDCs informed that the government had provided domestic support to the agricultural sector, by subsidizing inputs (fertilizers, seeds, agricultural equipment), providing loans at preferential interest rates or supplying specialists services for crop production and farming techniques (Bangladesh, Chad, The Gambia, Malawi, Mali, Lesotho and Tanzania)

Resources:

  1. UNDERSTANDING THE WTO: The Agreements on Agriculture: Fairer Markets for Farmers
  2. URUGUAY ROUND AGREEMENT: Agreement on Agriculture
  3. AGRICULTURE NEGOTIATIONS: Domestic support — amber, blue and green boxes
  4. AGRICULTURE NEGOTIATIONS: Export Subsidies and Competition