Agriculture:

Agriculture had been under soft discipline from the  inception of the GATT. Efforts  were  made right from the 1970s  to bring agriculture under  stricter discipline. Ultimately,  all this has resulted  in the Agreement on Agriculture (AOA) in the Uruguay Round.
Obligations in this sector are in the fields of

(i) market access, i.e.  tariff and import restrictions, 

(ii) domestic support to producers,  i.e., domestic subsidy, and

(iii) export competition,  i.e. export subsidy,  etc.  

market access

The restrictions on market access were  earlier in the  form  of  tariff  and non-tariff measures,  e.g.,  quantitative restrictions, etc. AOA made  it incumbent on the countries to '"tariw' their non-tariff measures, i.e. they had to remove these measures and replace them with equivalent tariffs. Several countries calculated very high levels of equivalent  tariffs  in replacement for non-tariff measures. Thus now the only restraints on import in this sector are through tariffs which are, of course, very high  in most of the cases. One important  feature  is  that all countries,  including the developing countries (even the  least  developed countries), have  to bind (explained  in the section on "tariff'  earlier) all tariffs on agricultural items. This condition is much more stringent than in case of industrial goods where the developing countries have not  covered all products  by commitment of binding of tarig There is a provision for a mechanism called "tariff quota". When a country  has very high tariff on some product, it may allow imports up to some quantity in a year on very low  tariff. This  level  is the  tariff quota. Tariff  is at the normal rates beyond this level. Generally  when  domestic production  is suffering because of imports, a country may take safeguard action as explained in the section on safeguards  earlier.  In  the agriculture  sector too this  remedy  is available.  And, in addition, there  is a provision for Special Safeguard (SSG)  in agriculture. A country can  take SSG  action without having to establish  injury  to the domestic production, as is compulsory in the case of the general safeguard provision.

Only the countries  which have  converted their non-tariff measures to equivalent tariffs  can  take SSG The developing countries, with very few exceptions, did not have any such non-tariff restraints  and thus did not have to undertake,the  process of conversion.  In this way, they lost the right  to use SSG. SSG is  in  the form of additional duty  imposed on the import of a product. SSG can be taken either when the quantity of import in a particular year exceeds a trigger level or when the price of the imported product is  below a trigger price. While an elaborate  formula has been prescribed for defining the quantity trigger level, a country may itself define the trigger price for a product.

Domestic Support

Domestic support,  i.e., domestic  subsidy, in agriculture  is broadly of  two types in the  AOA. One type is reducible over a period and  the other type is not reducible.  Both  these types of subsidies are mainly used by the developed countries. Currently  negotiations are going on to  reduce the reducible subsidies  further and also reduce some of the present non-reducible subsidies and put  them under more rigorous discipline. This has become a very hotly debated subject in the WTO and the international trade circles.

Export Subsidy

Export subsidy in agriculture is in the  form of direct payment  to  the exporter or in the form of export credit and food aid. Mostly export subsidy  is paid by the major developed countries. A decision has been taken recently that the export subsidy will be eliminated latest by 2013.