Green Box Subsidies in agriculture: worldwide experiences for policymakers

Supporting agricultural products is accepted due to its role in food security, high risk production, rural development requirements, employment stability and export development. The World Trade Organization (WTO) has also authorized the use of certain supportive measures by governments. According to the Agreement on Agriculture of WTO members, green box subsidies should not distort production or trade, or at most cause minimal distortions. The main purpose of this study is to examine the dimensions of green box subsidies, practical measures and related policies, and comparing the trend of change between developed and developing countries using critical realism method and scientific databases. The research findings indicate that developed countries have dramatically increased their green box support (25.85 percent), while in developing countries paid subsidies as a percentage of agricultural GDP are very low (2.75 percent). Evidence also shows that despite the allegations made, subsidies paid by developed countries have led to significant production- and trade- distortion. The conclusion is that criteria and operation of the green box, definitely needs a major overhaul and clarification to determine a specific set of rules. Determining the amount of green subsidy ceiling payable in developed countries, allowing direct payments only in case of natural disasters and strengthening the monitoring mechanism are among these proposed rules.