Solution

There are three categories of support measures that are not subject to reduction under agreement and support within de-minimis. (under de-minimis provision, there is no requirement to reduce support if it falls under a certain limit; 10%for developing countries). (i) Green Box Subsidies: Measure which has minimum impact on trade, which meet the basic and policy specific criteria. Example, Government assistance on research, training, extension, pest and disease control, domestic food aids etc. (ii) Blue Box Subsidies: Direct payments under production limiting programmes comes under these. These are relevant for developed countries point of view only. (iii) Special and Differential treatment (S&D Box): Developing countries measures otherwise subject to reduction which meet the criteria set out in paragraph 2 of article 6 of the agreements comes under it. Example investment subsidies (generally for agriculture) and agricultural input services available to low income and poor producers in developing countries. The subsidies that are trade distorting comes under ‘Amber box’ and are covered under reduction commitment of WTO