The limits to agricultural subsidies established in the Uruguay Round Agreement on Agriculture could cause trade-distorting domestic support. This study suggests limits in the subsidy value to level the maximum price distortion for each product. A partial equilibrium model was estimated for the products. The maximum value of subsidy to main agricultural products in the country-regionplaceUSA., causing a two percentage limit in their world price, were: US$ 1.0 billion to soybean; US$ 0.6 billion to cotton; US$ 0.2 billion to rice; US$ 1.4 to corn and US$ 1.3 billion to wheat. Therefore, those patterns of product value could be used as a parameter to product subsidy cap.
agricultural subsidies; price distortion; international trade
