FACTBOX - Subsidy issues in WTO's Doha round farm talks

REUTERS - World Trade Organisation (WTO) members are trying to reach broad agreement on reforms to farm trade.

Talks are taking place on the basis of a draft text issued in July 2007 by the chairman of the agriculture talks, New Zealand's WTO ambassador Crawford Falconer.

The talks have three groups of topics -- domestic support (subsidies), market access (tariffs) and export competition.

Here are key issues on domestic support:

Subsidies and other support for farmers are classified in different boxes depending on how much they distort trade. Some supports, such as those promoting rural development or environmental protection, do not distort trade and are classified as green box. Others encourage farmers to grow more of a product and are grouped under amber, with strict limits.

Subsidies distort competition by squeezing producers from other countries out of the market.

The $280 billion farm bills passed by both houses of U.S. congress in late 2007 would not be in line with the proposals under discussion.

1. Overall trade-distorting support -- This comprises amber box support and some other measures.

The proposal in Falconer's July draft is for those with the biggest subsidies above $60 billion, in practice the EU, to cut them by 75-85 percent. This would take these EU subsidies to 27.6 billion euros from 110.3 billion.