Understanding the WTO’s Agreement on Agriculture: Key Takeaways



What is Agreement on Agriculture under WTO? (HPAS Mains Question Paper 2022 – GS 3, Q.4)

The Agriculture Agreement was negotiated during the Uruguay Round (1986-1994). It is an agreement to reform agriculture and address the subsidies and high trade barriers that distort agricultural trade. The Agriculture Agreement of the World Trade Organization entered into force in 1995.

The purpose of the Agriculture Agreement (AoA) is as follows:

  • The overall goal is to create a more equitable trading system that will increase market access and improve farmers’ livelihoods around the world.
  • The agreement will level the playing field for farmers all over the world, particularly those in poor countries who are unable to compete with rich countries that artificially boost their exports through subsidies.
  • The AoA’s long-term goal is to establish a fair and market-oriented agricultural trading system, as well as to initiate a reform process through negotiations, ensuring strengthened and more operationally effective rules and discipline.

Important provisions of the Agriculture Agreement: 

  • The Agriculture Agreement states that it will apply to agricultural products. Agricultural products include not only essential products such as wheat, milk, and live animals but also derived products such as bread, butter, and oil, and processed products such as chocolate, yoghurt, wines, spirits, and tobacco products, as well as fibres such as cotton, wool, and silk.

The Agriculture Agreement is built on three central pillars:

  • Market entry
  • Domestic assistance (subsidies)
  • Subsidies for exports/competition

The Agriculture Committee is in charge of overseeing the agreement’s implementation. The committee is made up of WTO members and meets three or four times a year on average.

The agreement’s commitments are based on unique and differential treatment (Giving flexible and different timelines for developing and Least developed countries in implementing the terms)

Special Safeguard Mechanism is also included in the Agreement (SSM). SSM indicates that countries have the option of imposing additional temporary duties on imports when there is a surge in importance at a lower price.

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