10 - The distributional structure of US green box subsidies

Summary

Introduction

The objective of this chapter is to provide information on the distributional structure of US green box subsidies. The extent to which payments are made to farms of different sizes is provided as well as the importance of subsidy payments as a share of both farm and off-farm income. We will analyze the distributional structure of payments under different types of green box programs. The implications of this structure for the achievement of economic, social and environmental public policy goals are derived. Because payments tend to go to the largest farms, sustainable development objectives such as preserving the family farm and providing environmental services may be undermined. The chapter examines the extent to which the structure of green box subsidies distorts production and international trade. Finally, the chapter offers some suggestions for options to reform green box criteria that might support sustainable development goals in developed as well as developing countries.

Distributional structure of US green box payments

The evolution of overall US green box subsidies and its relation to the other “boxes” is given in Antón (this volume, chapter 7) and Matthews (2006). Our analysis focuses only on payments that can potentially be captured directly by producers. Hence, we exclude domestic food aid to consumers, the largest share of US green box expenditures. Table 10.1 summarizes the remaining categories of expenditures for the base period and for each year of the implementation period through 2005 (the last year for which the US notified the WTO of its domestic support).