Once upon a time, there was an automake variable called INCLUDES. It was used to pass flags to the preprocessor, such as -I flags to specify include paths. All was good.
Then the gentle leaders of automake decided that INCLUDES was not a very generic name, so they deprecated it in favour of the *_CPPFLAGS variables, like the target-specific my_program_name_CPPFLAGS. For those who wanted to specify preprocessor flags for all targets in their Makefile, the AM_CPPFLAGS variable was provided. Due to their kind and wise oversight, the transition between these variables (in the time of the coming of automake 1.12) was peaceful, and tranquillity continued to reign in the pastures of automakery.
And yet, some lands were troubled. Some of the citizens of automake had developed a confusion. They had taken the INCLUDES incantations of old, and mixed them with the AM_ prefix of new to create an AM_INCLUDES monster. ‘This is surely better’, they reasoned — ‘we have global preprocessor flags, but allow it to be overridden by the user due to our use of the AM_ prefix’. These citizens went ahead and used their AM_INCLUDES variable, but were confused when it failed to affect their automagic. They thought the runes were not in their favour, so copied its value into AM_CFLAGS as well, just in case.
These citizens are wrong. AM_INCLUDES does not exist. Do not use it. automake does not recognise it. You are wasting your time. It has no effect.
Use per-target CPPFLAGS (e.g. my_program_name_CPPFLAGS) to specify preprocessor flags. Use per-target CFLAGS to specify C-compiler-only flags. Do not use AM_CPPFLAGS unless you’re sure all flags in it are needed for all targets in the Makefile. Do not use INCLUDES unless you want a big deprecation warning from automake((warning: 'INCLUDES' is the old name for 'AM_CPPFLAGS' (or '*_CPPFLAGS'))) (it is entirely equivalent to AM_CPPFLAGS). Do not use AM_INCLUDES at all.
For the curious, passing -Wall to automake will enable a bunch of warnings which can improve your Makefiles. You can do that using the AUTOMAKE_OPTIONS environment variable, or the AM_INIT_AUTOMAKE macro in configure.ac.
And the citizens of automake lived happily ever after.