UPSC Civil Services Model Paper 7

Agreement on Agriculture ( AoA ) is a mechanism under the World Trade Organization ( WTO ) aimed to remove trade barriers and to promote transparent market access and integration of global markets.
Hence, Statement1 is incorrect.
It calls for a reduction in domestic subsidies that distorts free trade and fair prices.
Hence, Statement 2 is correct.
The Aggregate Measurement of Support (AMS) is to be reduced by 20% over a period of 6 years by developed countries and 13% over a period of 10 years by developing countries.
Under this, Subsidies are categorized into 3 types:
Green Box subsidies that do not distort trade , or at most cause minimal distortion .
They are government-funded and must not involve price support .
They also include environmental protection and regional development programs.
They are allowed without limits , provided they comply with the policy-specific criteria.
Amber Box Hence, Statement 3 is incorrect.
All domestic support measures considered to distort production and trade fall into this category.
These include measures to support prices, or subsidies directly related to production quantities.
Blue Box:
This is the “ amber box with conditions ”.
Such conditions are designed to reduce distortion.
Any support that would normally be in the amber box is placed in the blue box if the support also requires farmers to limit production.
At present, there areno limits on spending on blue box subsidies.