The Agreement on Agriculture (AoA) is an international treaty under the World Trade Organization (WTO), which was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) and came into effect in 1995. Its creation was driven by the need to reform the global agricultural trading system, which was previously characterized by high protectionism, large surpluses, and depressed world prices due to heavy subsidies in developed countries. The AoA's core objective is to establish a fairer, more market-oriented system by reducing trade-distorting subsidies and barriers.
The mechanism of the AoA is structured around three pillars: Market Access, Domestic Support, and Export Subsidies. Market Access required the conversion of non-tariff barriers, like quotas, into transparent tariffs (tariffication), followed by their reduction. Developing countries, including India, were obligated to reduce tariffs by an average of 24% over ten years. Domestic Support classifies subsidies into "boxes" based on their trade-distorting potential. Green Box subsidies (e.g., research, food aid) are allowed without limits, while Amber Box subsidies, which include India's Minimum Support Price (MSP), are considered trade-distorting and are subject to reduction commitments. The third pillar, Export Subsidies, required developed countries to reduce their expenditure by 36% and volume by 21% over six years.
The AoA is intrinsically connected to the WTO's ongoing negotiations, particularly concerning food security and public stockholding for developing countries, a major point of contention for India. While the agreement has not been replaced, its reform process continues through ministerial decisions like the Bali Package and Nairobi Package, though consensus on new provisions remains challenging, as seen at the 11th WTO Ministerial Conference (MC11) in 2017.