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Domestic Support in Agriculture

The WTO ‘boxes’.  One function of the World Trade Organisation (WTO) is to level the playing field between countries and one way it achieves this is by restricting the way in which agricultural subsidies are used.  The WTO uses different coloured boxes to describe these with a traffic light system.  Support mechanisms which are Amber box are those where there are restrictions such as ‘de minimis’ which effectively cap the total amount of amber box support any business can receive.  Examples in Scotland would be the interest element of any Scottish Government Loan schemes, together with one-off schemes such as Weather Aid.  Blue box are support mechanisms with conditions attached, usually around limiting production, whilst Green Box support mechanisms are allowed without limits but providing conditions around decoupling and environmental protection are met – and include Basic Payment Scheme.  Some of the restriction in UK or Scottish subsidy rules ultimately derive not from the EU, but from the WTO – and brexit is therefore unlikely to bring significant relaxation on the rules around headage payments or decoupling of subsidies from production.

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