• Under the Agreement on Agriculture, some of the subsidies are distorting trade, which means a high cost producing country becomes an exporter by giving high domestic subsidies. On the other hand, there are other types of subsidies that do not distort trade.

• Accordingly, subsidies are classified into different boxes – Green Box; Blue Box; and Amber Box.

• Green Box contains those types of subsidies that do not distort trade or that cause only minimum distortion.

• These include provisions of income support to the farmers during crop failure, incentives to the farmers to protect environment, subsidies for research and development, food aid to the poor people, etc.

• Thus, with PM-KISAN targeting the small and marginal farmers and the National Food Security Act may be classified under Green Box.

• On the other hand, AoA (the Agreement on Agriculture) prescribes reduction of tariffs on imports, elimination of export subsidies and reduction of domestic subsidies that are trade distorting, which are classified under ‘Amber Box’.