The Agreement on Agriculture (AoA), signed under the World Trade Organization (WTO) in 1995, has had complex and multifaceted implications for India’s agricultural sector. Its primary objective was to reduce trade-distorting support and protection in agriculture. For India, this affected domestic policies, particularly Minimum Support Prices (MSP) and input subsidies such as fertilizer, power, and irrigation. The AoA classifies subsidies into “green box” (non-trade-distorting, allowed), “blue box” (production-limiting, allowed), and “amber box” (trade-distorting, to be reduced). India’s substantial amber box subsidies, crucial for farmer welfare and food security, came under scrutiny, requiring justification within the permissible de minimis limit for developing countries (10% of production value).

Market access provisions required reduction in tariffs and non-tariff barriers, exposing domestic farmers to cheaper imports. While this could benefit consumers, it posed significant risks to small and marginal farmers if not carefully managed. The export competition pillar aimed to reduce export subsidies, affecting India’s ability to heavily subsidize agricultural exports in the future, potentially impacting its global competitiveness.

A major concern has been public stockholding for food security, with India’s large-scale procurement and storage for the Public Distribution System sometimes challenged as trade-distorting. India, alongside other developing countries, advocates a permanent solution, emphasizing food security as a sovereign and humanitarian necessity.

Overall, the AoA has compelled India to re-evaluate agricultural policies, carefully balancing farmer support, rural livelihoods, and food security with international trade commitments, leading to continuous negotiations, strategic policy adjustments, and sometimes contentious discussions within the WTO framework.