The US crop insurance program and WTO disciplines

The purpose of this paper is to examine the US crop insurance programs in the context of domestic support disciplines under the World Trade Organization (WTO). Crop insurance has become an integral part of many domestic support programs, not just in developed countries, but in important emerging markets as well. An often-cited impetus for the growth in insurance program is the potential treatment of such programs as exempt from WTO reduction commitments.

A detailed examination of the so-called “green box provisions” of the Uruguay Round Agreement on Agriculture is presented with particular emphasis on eligibility criteria for crop yield and revenue insurance programs.

While WTO rules potentially shield green box policies from reduction, few developed countries have notified agricultural insurance policies under Annex 2. Moreover, crop insurance programs have been challenged in recent WTO dispute settlement cases and domestic countervailing duty investigations.

The paper presents a unique perspective on a program which has become the largest single farm program in the USA.