Agricultural Policies

Paper

5 reasons why a comprehensive review of Green Box subsidies is required within the WTO

ActionAid International, June (2004)

This paper examines 5 arguments relating to subsidies and production issues: 1. Green box ‘decoupled’ payments in the US distort production and trade because of wealth effects, risk reduction, planting flexibility restrictions and keeping a production history should the system change. Production has remained high. 2. It is predicted that green box ‘decoupled’ payments in the EU will continue to distort production and trade – that high levels of production will remain with some farmers potentially treating the new payments as ‘coupled’. 3. The interaction with other policies (ie supplementary trade distorting amber and blue box subsidies) will have a ‘coupling’ effect on ‘decoupled’ green box payments. 4. If the EU’s decoupled payments were taken away, EU farming would be decimated - thus instantly challenging the assumption that they are production neutral. 5. Dumping from the EU will continue.

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