In WTO terminology, subsidies, in general, are identified by "boxes" which are given the colors of
- Green (permitted)
- Amber (slow down — i.e. need to be reduced)
- Red (forbidden)
The Agriculture Agreement has no red box, although domestic support exceeding the reduction commitment levels in the amber box is prohibited; and there is a blue box for subsidies that are tied to programs that limit production.
- Nearly all domestic support measures considered to distort production and trade (with some exceptions) fall into the amber box,
- It is defined in Article 6 of the Agreement on Agriculture
- It includes all domestic supports except those in the blue and green boxes.
- These include measures to support prices, or subsidies directly related to production quantities.
- These supports are subject to limits: "de minimis" minimal supports are allowed (generally 5% of agricultural production for developed countries, 10% for developing countries)
- 32 WTO members that had larger subsidies than the de minimis levels at the beginning of the post-Uruguay Round reform period are committed to reducing these subsidies.
- This is the "amber box with conditions" — conditions 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.
- It includes those subsidies that must not distort trade, or at most cause minimal distortion.
- These subsidies have to be government-funded (not by charging consumers higher prices) and must not involve price support.