Compilation of Responses To Questions Raised During The Wto Committee On Agriculture Meeting On 21 March 2014

G/AG/W/126
16 May 2014
(14-3007) Page: 1/49
Committee on Agriculture

RESPONSES TO POINTS RAISED BY MEMBERS UNDER THE REVIEW PROCESS
COMPILATION OF RESPONSES TO QUESTIONS RAISED DURING THE COMMITTEE
ON AGRICULTURE MEETING ON 21 MARCH 2014
1

The present document compiles responses received in writing by the Secretariat to the questions
raised in document G/AG/W/119 as well as follow-up comments made during the Review Process.

Outstanding responses will be circulated in addenda to this document as soon as they are provided
by Members. A comprehensive version of the present compilation will be issued thereafter.

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1
This document has been prepared under the Secretariat's own responsibility and is without prejudice
to the positions of Members or to their rights or obligations under the WTO.
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TABLE OF CONTENTS
1 MATTERS RELEVANT TO THE IMPLEMENTATION OF COMMITMENTS: ARTICLE
18.6 ................................................................................................................................. 4
1.1 Article 18.4 of the Agreement on Agriculture ................................................................. 4
1.1.1 Statement by Canada (AG-IMS ID 73069) .................................................................. 4
1.2 Brazil's domestic support programmes .......................................................................... 5
1.2.1 Question by United States of America (AG-IMS ID 73026) ............................................ 5
1.3 Canada's proposed changes to tariff schedule ................................................................ 6
1.4 Canada's dairy policies ............................................................................................... 8
1.4.1 Question by New Zealand (AG-IMS ID 73001) ............................................................. 8
1.5 China's Cotton Domestic Support ................................................................................. 9
1.6 Costa Rica's compliance with AMS commitments ........................................................... 10
1.6.1 Question by Canada (AG-IMS ID 73002) ................................................................... 10
1.6.2 Question by United States of America (AG-IMS ID 73037) ........................................... 11
1.7 Ecuador's domestic purchase requirements .................................................................. 12
1.8 India's market support price for rice ............................................................................ 12
1.8.1 Question by Pakistan (AG-IMS ID 73053) .................................................................. 12
1.9 India's national food security bill ................................................................................. 13
1.10 India's sugar export subsidies ................................................................................... 14
1.10.1 Question by Australia and Colombia (AG-IMS ID 73036 and AG-IMS ID 73067) ............. 14
1.10.2 Question by Brazil (AG-IMS ID 73068) .................................................................... 16
1.10.3 Question by European Union (AG-IMS ID 73055) ...................................................... 16
1.11 India's wheat stocks and exports .............................................................................. 17
1.11.1 Question by Canada (AG-IMS ID 73003).................................................................. 17
1.11.2 Question by United States of America (AG-IMS ID 73039) .......................................... 17
1.12 Saint Lucia's domestic purchase requirements for poultry and pork ................................ 18
1.13 Thailand's paddy pledging scheme ............................................................................. 19
1.13.1 Question by Canada (AG-IMS ID 73004).................................................................. 19
1.14 Turkey's domestic support and export subsidies .......................................................... 21
1.14.1 Question by European Union (AG-IMS ID 73056) ...................................................... 21
1.15 Turkey's destination of wheat flour sale ...................................................................... 21
1.16 U.S. Farm Bill ......................................................................................................... 22
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1.16.1 Question by Indonesia (AG-IMS ID 73043) .............................................................. 22
2 POINTS RAISED IN CONNECTION WITH INDIVIDUAL NOTIFICATIONS .................... 26
2.1 ADMINISTRATION OF TARIFF AND OTHER QUOTA COMMITMENTS (TABLE MA:1) ............... 26
2.1.1 Russian Federation (G/AG/N/RUS/2) ......................................................................... 26
2.2 IMPORTS UNDER TARIFF AND OTHER QUOTA COMMITMENTS (TABLE MA:2) ..................... 27
2.2.1 Ecuador (G/AG/N/ECU/38) ...................................................................................... 27
2.2.2 Norway (G/AG/N/NOR/74) ...................................................................................... 27
2.2.3 Tunisia (G/AG/N/TUN/44) ....................................................................................... 28
2.3 DOMESTIC SUPPORT COMMITMENTS (TABLE DS:1) ....................................................... 28
2.3.1 Botswana (G/AG/N/BWA/19) ................................................................................... 28
2.3.2 Brazil (G/AG/N/BRA/32) ......................................................................................... 28
2.3.3 European Union (G/AG/N/EU/10/REV.1, G/AG/N/EU/17) ............................................. 32
2.3.4 Guatemala (G/AG/N/GTM/45) .................................................................................. 36
2.3.5 India (G/AG/N/IND/7) ............................................................................................ 37
2.3.6 Indonesia (G/AG/N/IDN/30, G/AG/N/IDN/34) ............................................................ 38
2.3.7 Jordan (G/AG/N/JOR/16) ........................................................................................ 39
2.3.8 Norway (G/AG/N/NOR/73) ...................................................................................... 40
2.3.9 Ukraine (G/AG/N/UKR/18) ...................................................................................... 40
2.3.10 United States of America (G/AG/N/USA/80/REV.1, G/AG/N/USA/89/REV.1,
G/AG/N/USA/93) ............................................................................................................. 42
2.4 EXPORT SUBSIDY COMMITMENTS (TABLES ES:1, ES:2 AND ES:3) .................................. 44
2.4.1 Brazil (G/AG/N/BRA/33) ......................................................................................... 44
2.4.2 European Union (G/AG/N/EU/18) ............................................................................. 44
ANNEX 1 ........................................................................................................................ 46
ANNEX 2 ........................................................................................................................ 47
ANNEX 3 ........................................................................................................................ 48

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1 MATTERS RELEVANT TO THE IMPLEMENTATION OF COMMITMENTS: ARTICLE 18.6
1.1 Article 18.4 of the Agreement on Agriculture
1.1.1 Statement by Canada (AG-IMS ID 73069)
The paper G/AG/W/122, which presents best practices in notification relating to Article 18.4, is
intended as a practical contribution to help strengthen the review process by promoting greater
transparency in notifications and more effective and consistent questions and answers from
Members.
Canada's interest in Article 18.4 stems from an observation that Members' notification practices
and the resulting questions and answers relating to this issue have been rather inconsistent. At
times, this has resulted in less transparency in the review process. A history of notifications and
related questions and answers pertaining to Article 18.4 can be found in RD/AG/18/Add.1/Rev.1.
Since last June, Canada has organized four plurilateral meetings on this issue. Members have also
discussed the issue during three informal meetings of the Committee on Agriculture.
Each time Canada invited all interested Members to contact Canada and share their views. This
resulted in several bilateral exchanges and in an expansion of participation in the plurilateral
meetings. Canada is very pleased with the level of engagement from Members.
In particular, Canada would like to thank the co-sponsors, as well as all Members who participated
very constructively in consultations on this issue.
Before summarizing some key points, it should be underlined at the outset that the paper is
without prejudice to Members' rights and obligations under Article 18.4 and the review process
more broadly, including notification obligations. This is not a legal exercise. This point is made very
explicitly in paragraph 1.2 of the paper.
Paragraphs 2.1 and 2.2 of the paper attempt to spell out very clearly what Article 18.4 says and
does not say.
Article 18.4 does not create a right for Members to violate domestic support commitments, to
modify such commitments or to unilaterally adjust notifications to account for the influence of
excessive rates inflation.
Rather, Article 18.4 creates space in the Committee to discuss the effects of excessive inflation on
the ability of any Member to abide by its commitments and creates an obligation for Members to
give "due consideration" to these effects in the review process.
However, the article is entirely silent on the procedural aspects of how this process should work.
This lack of specific guidance reinforces the value of improving Members' notifications through the
identification of best practices.
Regarding best practices, the co-sponsors offer the following suggestions to Members seeking
consideration as provided for in Article 18.4, which are reflected in paragraph 3.2 and 3.3 of the
paper:
submit a domestic support notification with data that has not been adjusted for inflation;
and,
submit supporting documentation, which can include domestic support data that has been
adjusted for inflation, as well as other information pertaining to the nature and magnitude of
inflation and demonstrating its impacts on the ability of the Member in question to abide by
its domestic support commitments.
Canada would encourage Members to keep these points in mind, and hope that the communication
can serve as a useful reference document for the future work of the Committee.
Follow-up: Several Members including Chile, Costa Rica, the European Union, New Zealand,
Paraguay and Uruguay welcomed the paper noting that it had been useful in enhancing
transparency in the Committee's work. Some Members such as Argentina, China, the European
Union, Pakistan, Norway, and the United States of America stressed that Members should not see
this exercise as an incentive to avoid fulfilling current obligations and implementing agriculture
reforms. Argentina, Colombia, the European Union, Pakistan, and the Republic of Korea supported
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Canada's view that Article 18.4 did not provide for Members to unilaterally adjust domestic support
notifications. Argentina and the United States of America underlined "excessive rates of inflation"
as the precondition for Members seeking recourse to Article 18.4. Considering Article 18.4 did not
specifically define the word "excessive", the United States of America suggested Members to agree
on some criteria. New Zealand, Norway, and the United States of America pointed out that the
Committee could only consider the effects of excessive inflation on a Member's ability to abide by
its AMS commitment if sufficient information was provided in its domestic support notification.
Indonesia, supported by India, stated that inflation is unavoidable especially in developing
countries where according to data from the World Bank or IMF the rates of inflation are higher
than in developed ones. In Indonesia's view, excessive rate of inflation had undermined the
implementation of government policies including those addressing food security issues. Like some
previous speakers, Indonesia recognized that Members had yet reached consensus on issues such
as the meaning of "excessive rate of inflation" and "due consideration" and how "due
consideration" should be reflected in Members' notifications to help Members comply with AMS
commitments. In its view, that Article 18.4 did not provide for Members to self-adjust the
notification, as stated by some Members, was only one interpretation of the Article, and there
might be other interpretations on which further discussions were needed. As a developing Member
who faced negative impact of inflation when complying with AMS commitment, Indonesia was
committed to find permanent solutions for those issues. Indonesia further drew Members'
attention to the non-paper proposed by G-33 on 3 October 2013 in this regard and suggested
discussions be taken place in the special session of the Committee on Agriculture. Norway
reminded Members not to read more into the paper as it was merely a reference document for the
Committee's future work. The paper did not contain guidelines for future work and Norway
believed that discussions should continue in this respect. The Republic of Korea proposed a more
comprehensive and fundamental approach for discussions. It highlighted the twelve notifications
that were previously submitted that applied Article 18.4 and suggested the Committee to base its
discussions on those notifications. Like Indonesia, India made reference to the G-33 proposal and
stated that this exercise should by no means prejudge the final decision on this issue. China
echoed India's statement and suggested the Committee not to adopt any formal decision on this
matter. In its view, the issue of excessive rate of inflation was related to the permanent solution in
implementing the ministerial decision on food security.

1.2 Brazil's domestic support programmes
1.2.1 Question by United States of America (AG-IMS ID 73026)
The United States of America appreciates Brazil's response to the question on Prmio
para Escoamento do Produto (PEP) and Prmio de Equalizao pago ao Produtor
(PEPRO) from the January 2014 Committee on Agriculture meeting, including data on
PEPRO (AG-IMS ID 72051).
a. The United States of America has repeatedly requested information on the
quantities of product shipped to specific destinations, including both domestic
and export destinations. The United States of America is disappointed that
Brazil has not been able to compile this data to date. When specifically might
the United States of America expect to receive this data?
b. The United States of America notes that much of the PEPRO data only notes
where product may not be shipped. The United States of America requests the
PEPRO data on a similar basis as the requested PEP data given the similarity of
the two programmes. In particular, please provide data on the quantities of
product shipped to specific destinations, including domestic and export
destinations. The United States of America notes Brazil's response to the
question on PEP from the September 2013 Committee on Agriculture
meeting (AG-IMS ID 71028). In that response, Brazil noted that the PEP
programme has been suspended and is under reassessment by the government.
c. What was the basis for the reassessment?
d. Has the government completed its reassessment? If so, what did it conclude?
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e. Given the similarity between PEP and PEPRO, was PEPRO also reassessed? If
so, what was concluded? If not, why was this programme not reassessed?
Answer by Brazil
a. Brazil cannot estimate when the requested data will be available.
b. At this moment, the requested information is unavailable.
c. The programme was reassessed to address concerns regarding its control mechanism, in
order to prevent irregularities.
d. The reassessment is still in progress, and the programme remains suspended.
e. No, because under the PEPRO the subsidy is paid directly to the producers (requiring a
simpler control mechanism), and not indirectly to processors/traders as is the case
under the PEP.
Follow-up: The United States of America expressed disappointment with Brazil's continued failure
to provide the requested data. As PEP was suspended, PEPRO remained of interest to the United
States of America. The United States of America was also interested in the trade trends of some
agriculture products such as feed grains. The European Union flagged interest and supported the
question.

1.3 Canada's proposed changes to tariff schedule
The United States of America appreciates Canada's response to question
AG-IMS ID 72049 regarding an amendment to Canada's Customs Tariff Schedule
affecting pizza food preparation products. Recognizing that Canada did not have enough
time to prepare a complete response to U.S. questions, the United States of America
repeats the following questions from January:
a. Please provide information on historical imports of the product(s) affected by
Supplementary Note 2 to Chapter 16 (referenced in AG-IMS 72049), and what
the impact of the Parliamentary motion has been on imports of these products.
b. By using an effective date that is retroactive, the measure appears to have
already impacted trade negatively without any stakeholders' input. What is the
purpose, if any, for using a retroactive date? What is the intended effect of
retroactive implementation?
c. Is Canada currently enforcing Supplementary Note 2 to Chapter 16? If yes,
please describe how it is being enforced, i.e., how is Canada verifying the
separate classification of the components of a food preparation in instances
where the components are comingled or mixed together? If it is not yet
enforcing the measure, please describe whether and how it intends to enforce
Supplementary Note 2.
d. In 2013, the Canada Border Services Agency revoked Tariff Classification
Advance Ruling No. 218973 (an advanced ruling on a certain pizza topping
product) citing Supplementary Note 2 to Chapter 16. The United States of
America understands that Supplementary Note 2 was not effective at the time
of the revocation of Advance Ruling No. 218973. Please explain the legal basis
and provide a list of all relevant measures regarding the revocation of this
advance ruling. Please also explain the legal basis for revoking the advance
ruling prior to the effective date of the Supplementary Note.
e. Are importers now subject to increased tariffs as a result of Supplementary
Note 2 to Chapter 16? Has any importer appealed or sought further review
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within Canada of the classification determination that resulted in the higher
tariffs? Please provide details on the application of the higher tariff rate on
affected products, including the products covered and volume of trade
concerned.
f. Are there any further proposals to amend Canada's tariff schedule in a similar
manner in the area of food preparations or other goods? If the answer is yes,
please identify and describe in detail those proposals. Are there any proposals
to amend the supplementary notes of any other chapter of Canada's tariff
schedule to target cheese and/or dairy products in a similar fashion? If the
answer is yes, please identify and describe in detail those proposals.
g. U.S. traders have raised concerns with the timing of the application of the
measure. Would Canada consider revoking or delaying application of
Supplementary Note 2?
Additionally, the United States of America requests a response to the following
questions.
h. The House of Commons Budget 2014 dated 11 February 2014 confirms the
Canadian Government's intention to proceed with the Ways and Means motion
to amend Canada's Customs Tariff Schedule to add a supplementary note to
Chapter 16. What are the specific legislative steps required to give the motion
measure legal effect and when does Canada anticipate initiating those steps?
i. Canada Border Services Agency issued Customs Notice 13-021 as of
29 November 2013, stating "the Canada Border Services Agency (CBSA) wishes
to advise of an amendment to the Departmental Consolidation of the Customs
Tariff effective November 29, 2013". The Notice contains the same language as
the Ways and Means motion to add the supplementary note. The Notice further
directs traders to "an amended version of the Departmental Consolidation of
the Customs Tariff, reflecting this change" on the CBSA Web site. What legal
effect does CBSA Customs Notice 13-021 have? What legal effect does the
amended Customs Tariff schedule of Canada have?
Answer by Canada
It is impossible to single out specific products in Canada's trade statistics for any given tariff
item and, in any case, it is too early to determine how the measure in question will impact
trade in affected products. Changes to trade patterns in the future could be influenced by
various factors. As such, it is impossible to assess the impact of the measure. This measure
was not implemented on a retroactive basis.
The measure was introduced through the tabling of a Notice of Ways and Means Motion on
22 November 2013 with an effective date of 29 November 2013. The tabling of a Notice of
Ways and Means Motion is a standard parliamentary procedure to give effect to domestic
taxation changes prior to such time that formal legislation can be brought forward.
Parliamentary convention dictates that taxation proposals are effective as soon as the
government tables a Notice of a Ways and Means Motion, even though the government's
taxation plans have not yet been officially adopted by way of legislation. In this regard, it is
the long-standing practice of Canadian governments to put tax measures into effect as soon
as the Notice of the Ways and Means Motions on which they are based are tabled in the
House of Commons, with the result that taxes are collected as of the date of this notice (or
an alternate date specified therein). In this particular case, there was a limited gap between
the tabling of the Notice of Ways and Means and its effective date, in order to discourage
further circumvention of the law (whereby certain goods were packaged in a specific,
deliberate manner solely to circumvent Canada's tariff structure), but also to ensure that
goods in transit were not impacted.
The government's 2014 federal budget, tabled in the House of Commons on
11 February 2014, reiterated the government's intention to modify the Customs Tariff
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through the addition of a new Supplementary Note to Chapter 16, to formally codify the
Notice of Ways and Means Motion tabled on 22 November 2013. Generally, legislative
amendments are made through legislation, which must be adopted by Parliament. The
legislation is introduced and then debated by both the House of Commons and the Senate.
Once the legislation has been passed by both chambers, it is presented for Royal Assent,
after which it becomes law. The specific legislative vehicle for implementing this amendment
has yet to be confirmed. Canada can provide more details as they become available.
Supplementary Note 2 to Chapter 16 of Canada's Customs Tariff clarifies that the individual
components of certain food preparations that include cheese are to be classified separately,
regardless of their packaging, in order to ensure consistent application of the law.
Specifically, this clarification addresses a gap whereby certain imported goods were
packaged in a specific, deliberate manner solely to circumvent Canada's tariff structure
(e.g. significant imports of a "pizza toppings" product containing 79% shredded mozzarella
cheese and 21% sliced pepperoni, packaged together in a single plastic bag and separated
by a sheet of wax paper to qualify as a "food preparation" in Chapter 16). All rates of duty in
Canada's Customs Tariff remain unchanged. No other such proposals are being considered
at this time.
Follow-up: Supported by New Zealand, the United States of America questioned Canadas
statement that the measure was not implemented on a retroactive basis. The United States was
concerned that stakeholders input was not taken into account. The United States of America
disagreed with Canada's assertion that some packaging practices circumvented Canada's the tariff
structure and considered these practices reflected the incentives created by Canada's TRQs. New
Zealand flagged the concern that the move to amend Canada's customs tariff schedule to add a
supplementary note affecting certain commercial "food preparations" would impose a new
prohibitively high tariff on what was previously zero duty rate.

1.4 Canada's dairy policies
1.4.1 Question by New Zealand (AG-IMS ID 73001)
In February, the Canadian Dairy Commission released programme guidelines for the
Planned Export Program for Cheese (PEPC). The purpose of the programme is described
as a mechanism to "encourage and support Canadian cheese manufacturers and
exporters in developing long term export markets for Canadian cheese". Given that
Canada uses nearly its entire export subsidy revenue outlays for "incorporated
products" and "other milk products" each year, could Canada please indicate whether
this will have an effect on other existing export programmes that use special milk
Class 5(d) permits?
Answer by Canada
The use of export subsidies for dairy products in terms of budgetary outlays and quantity is
consistent with Canada's WTO rights and obligations. In 2010-2011, Canada used 100% of
its annual outlay commitment levels for skim milk powder, other milk products and
incorporated products, while it was not fully utilized for cheese and butter. Canada remains
committed to its WTO rights and obligations and as such will operate the Planned Export
Program for cheese in a way to ensure these commitments are met.
The United States of America is concerned at the proliferation of Canada's special milk
pricing classes, which now include 39 different classes. Domestic food and industry
processors appear to receive a special milk class permit to purchase dairy inputs at a
subsidized price, predicated on a declaration that a competitive like-product has been
imported into Canada. These special milk prices range from whey used in animal feed to
cheese used in the manufacturing of further processed products, such as frozen pizzas.
These products are produced using the heavily discounted dairy inputs and are then sold
in domestic and foreign markets. The United States of America has noticed increasing
discrepancies between the export numbers published by the Canadian Dairy Commission
and the export numbers supplied by Statistics Canada in Canada's export subsidy
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notifications to the WTO Committee on Agriculture, in particular with regard to exports
of cheese. Please explain these discrepancies and how the dairy export subsidies in
Canada's notifications are calculated.
Answer by Canada
The use of export subsidies for dairy products in terms of budgetary outlays and quantity is
consistent with Canada's WTO rights and obligations. In 2010-2011, Canada used 100% of
its annual outlay commitment levels for skim milk powder, other milk products and
incorporated products, while it was not fully utilized for cheese and butter. Discrepancies
between Canada's export subsidy notifications and trade statistics can be explained by the
use of different data sources. Volumes of subsidized exports are reported by the Canadian
Dairy Commission, whereas total exports are reported by Statistics Canada. Statistics
Canada may revise its data up to four years after they were initially reported. Canada's total
exports also include exports of dairy products made from milk and/or other dairy ingredients
imported under re-export programmes, such as the Import for Re-Export Program (IREP),
and other exports that do not benefit from export subsidies.
Follow-up: New Zealand welcomed the assurance that Canada would continue to remain within its
export subsidy commitments, particularly since the new planned export programme for cheese
appeared to apply to products for which Canada used nearly its entire export subsidy revenue
outlays. New Zealand therefore continued to take an interest in this programme and whether it
would have an effect on other existing export programmes that used special milk class 5(d)
permits. New Zealand was also interested in the increasing discrepancies between the export
numbers of the Canadian Dairy Commission and the export numbers supplied by Statistics Canada
in the export notifications, which was noted by the United States of America in its question. The
United States of America flagged interest. The European Union continued to be concerned in the
operation of Canadian milk classes in general.

1.5 China's Cotton Domestic Support
Is China in a position to respond to the questions asked by the United States of America
in AG-IMS ID 72052 regarding China's cotton support programme?
a. China noted in its last response that it would be notifying domestic support
shortly. Please provide an update on the intended timeframe for China to notify
domestic support notifications for recent years, in particular for years when
cotton price support was applied.
b. Please provide the Committee with specific information from its official
website(s) on various subsidy measures associated with price support,
including the legal mechanisms by which they are implemented, as well as
updated data on the accumulation, maintenance, and distribution of cotton
stocks since the program's inception?
c. The United States of America requests that China provide the Committee with a
brief summary of China's analysis on the economic impact and effects of
China's management of its sizable domestic cotton stocks on the world cotton
market, taking into account the large role China plays in both global supply and
demand of cotton.
Answer by China
a. Chinese government is preparing the notification for the years of 2009 and 2010. China
is finalizing the notification by asking various agencies to review and confirm the numbers.
Due to the huge amount of data and the involvement of over 10 departments and agencies,
China needs some time to guarantee the accuracy of the notification. When the notification
is ready, China will send it to the Committee without further delay.
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b. All information regarding cotton reserve can be found on the website of National
Development and Reform Commission. The legal documents for the mechanism are Notice
No.5 issued in 2011, No. 3 in 2012 and No. 20 in 2013. In 2011, the purchase price of
cotton reserve was 19,800 RMB per tonne. In 2012 and 2013, due to the increase of market
price, the purchase price increased to 20,400 RMB. The purchase, maintenance and
distribution of the reserve are carried out by China National Cotton Reserves Corporation.
The company buys and sells cotton through open trade in the national cotton exchange.
Profits or losses are possible depending on the fluctuating market prices.
c. China's cotton reserve has limited impacts on the world cotton market. The government
manages the reserve to safeguard farmers' interests. China purchases a certain amount of
cotton and sells some old reserve every year. The purchase begins after the harvest. The
government avoids bulk purchase within a short period of time, in order to prevent
interrupting the market by avoiding supply shortage. Neither does the government dump
large quantities of reserves on the market which would lead to price decreases.
Since China initiated the cotton reserve mechanism, China's cotton imports have been
steadily increasing while at the same time China has almost no exports. In 2011, China's
cotton import was 3.4 million tonnes, which increased to 5.1 million in 2012. In 2013, China
imported 4.1 million tonnes of cotton. The import price stayed around US$2 to US$3 per kilo
for all those years. China's trade is not interrupted by the reserve mechanism and China
does not export cotton to distort international supply.
From a world outlook, China also does not see any major impacts caused by China's cotton
reserve. According to the cotton report issued by USTR in March 2014, the world cotton
production remains at around 26 million tonnes while the world consumption maintains at
around 23 million tonnes in the recent years. Chinese national consumption stayed at
around 8 million tonnes. The world price slowly increased without much fluctuation. China is
not convinced that China's reserve polices have major and direct economic impacts on the
world cotton production, consumption, or prices and therefore does not consider that these
is an impact on the world market.
Annex 1 contains a monthly chart of average cotton prices in two years.
Follow-up: The European Union looked forward to receiving Chinas upcoming notification.

1.6 Costa Rica's compliance with AMS commitments
1.6.1 Question by Canada (AG-IMS ID 73002)
At the last meeting of the Committee on Agriculture, Costa Rica indicated that the date
of the elimination of the price support mechanism for rice is postponed to 1 March 2015,
as the rice sector needs more time to finalize its definition of the alternative mechanism
that is to replace the current price support mechanism. Canada takes this opportunity to
again thank Costa Rica for its commitment to transparency and willingness to engage
openly with Members.

a. Could Costa Rica provide an update on the progress made so far in developing
and defining an alternative mechanism that would bring Costa Rica in
compliance with its domestic support commitments?
b. Could Costa Rica inform this Committee of the options currently under
consideration?
Answer by Costa Rica
Costa Rica will be able to provide details regarding the alternative mechanism once it has
been defined. Costa Rica will notify the Committee in due course, as it has always done in
the WTO.
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The United States of America thanks Costa Rica for regularly updating this Committee on
its rice policies over the past several years during which time Costa Rica has notified an
Aggregate Measurement of Support (AMS) in excess of its bound commitments. The
United States of America appreciates the transparency provided in Costa Rica's
notification G/AG/GEN/116, but is disappointed to learn that the elimination of Costa
Rica's price support mechanism for rice has been postponed until 1 March 2015. It is the
U.S. understanding that Costa Rica's Law 8285, which established the National Rice
Corporation (CONARROZ), allows the Minister of Agriculture and Livestock (MAG) and
the Minister of Economy, Industry and Commerce (MEIC) representation on
CONARROZ's General Assembly and Board of Directors. The United States of America
also notes the leading role the General Assembly and Board of Directors takes in
CONARROZ's policy creation, approval, and implementation. Article 7 of Law 8285 and
its Regulations states that CONARROZ "shall suggest the price of rough rice and its
byproducts to the MEIC with the financial value the agro-industrialist must pay to
producers, as well as the prices consumers must pay for milled rice". The United States
of America also understands from Article 20, paragraph o that a responsibility of the
Board of Directors is to "approve, the recommendation for chaff and milled price prices
through technical studies, which shall be notified to the MEIC".
a. Please describe in more detail the role of the CONARROZ's General Assembly
and Board of Directors in price determination.
b. Will these policies continue after the adoption of Executive Decree
No. 38093-MEIC in March 1, 2015? With respect to the alternative mechanism
that the United States of America understands is to be introduced, the United
States of America repeats two questions asked in September 2013
(AG-IMS ID 71030) and in January 2014 (AG-IMS ID 72050):
i. Will producers be able to sell outside of the new system?
ii. What is Costa Rica's timeline for publishing these new policies and for
notifying them to the WTO?
Answer by Costa Rica
The role played by the Governing Board of the National Rice Growers Corporation
(CONARROZ) in setting the price of rice is limited to making a non-binding recommendation
to the Ministry of the Economy, Industry and Trade. The General Assembly of CONARROZ,
which brings together all producers and industrialists in the sector, does not take part as
such in the recommendation formulation process.
Pursuant to Law No. 7472 on the Promotion of Competition and Effective Consumer
Protection and its implementing regulations, the authority to set the price of rice lies solely
with the Executive, and specifically the Ministry of the Economy, Industry and Trade, which
is under no obligation to endorse the recommendation made by CONARROZ.
Executive Decree No. 38093-MEIC stipulates that the current rice pricing scheme will be
abolished as of 1 March 2015, which is the date set for completion of the definition of the
alternative mechanism. This will not involve any changes to the application of Laws
Nos. 8285 (creation of CONARROZ) and 7472 (Promotion of Competition and Effective
Consumer Protection).
i. and ii. See answer to AG-IMS ID 73002.
Follow-up: Canada, the United States of America and Uruguay thanked Costa Rica for the
transparency provided. The United States of America stressed the importance of this issue in which
a Member had been breaching its commitments over a number of years. Pakistan registered its
concern.
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1.7 Ecuador's domestic purchase requirements
Industry reports that the government of Ecuador is requiring importers to source a
specified percentage of products domestically, based on agreements signed between
Ecuador's Ministry of Agriculture, Ministry of Industries, and importers.
a. Please explain the legal basis for these new domestic purchase requirements
and how they are consistent with Ecuador's WTO obligations.
b. Does Ecuador intend to submit notifications to the WTO related to market
arrangements for agricultural products that include procurement of a domestic
product as a requisite for importing?
Answer by Ecuador
As regards the first question of the United States of America, Ecuador does not request
importers specifically to source a percentage of products domestically. What Ecuador is
driving and promoting is a change to its production matrix based for the most part on the
development of human knowledge and talent.
There is no law, regulation or stipulation requiring importers or domestic traders to purchase
a percentage of products domestically. The signed agreements to which the United States of
America refers are technical cooperation agreements drawn up at the wish and request of
the import/production sectors themselves that have a vested interest in the national
production promotion policy and are seeking activities to improve the production chain.
In order to be implemented, these production promotion agreements, which are fully
consistent with the WTO provisions, require - given Ecuador's production structure - the
import of capital goods and inputs. The conditions of competition for imports are thus not in
any way affected.
Moreover, these agreements are open to any interested production sector, which means that
there is no discrimination regarding their approval, and they are not contingent upon
meeting performance or absorption of domestic production requirements.
Follow-up: Canada flagged its interest.
1.8 India's market support price for rice
1.8.1 Question by Pakistan (AG-IMS ID 73053)
Pakistan appreciates the response provided by India regarding exports of rice in the last
two years (AG-IMS ID 72059). It appears that Indian rice exports increased 41% from
year 2011-2012 to 2012-2013. The exports of non-Basmati increased by 67%.
Based on the information available on the website of Food Corporation of India (FCI)
regarding support price (US$338 per tonne, 1 US dollar equals to 47.91 Indian rupees
for 2011-2012 and US$344.3 per tonne, 1 US dollar equals 54.45 Indian rupees for
2012-2013) for paddy common rice, it appears that during the same period there was an
increase of 24% in the rice MPS (Market price support) on the basis of procured quantity
as eligible production. However there was an increase of 7.3% on the basis of total
production as eligible production. Since Grade A rice procurement quantity was not
available therefore MPS for paddy common rice is used for this calculation. Price of
Grade A rice is Rs 30 per quintal higher than common rice.
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Table 1. RICE AMS (only market price support, other product specific rice AMS is not
included) (billion US$)
Commodity 2011-12 2012-13
Calculated on the basis of procured quantity as eligible production 2.64 3.28
Calculated on the basis of total production as eligible production 7.99 8.54
Source: Indian Economic Survey 2012-13, Directorate of Economics and Statistics, Department of Agriculture
and Cooperation, Ministry of Agriculture India. State Bank of India.

Answer by India
India appreciates Pakistan's keen interest and efforts to help India work out its market price
support for rice. Pakistan may like to compare the figures with India's notifications for the
relevant years, which are under preparation.
Follow-up: Noting that Indias last domestic support notification was submitted for 2003 and only
6 months of 2004, Pakistan requested India to provide a timeline as regards when India would
provide its next notification. India replied that they were working on the notification but there were
constraints in the work.
1.9 India's national food security bill
According to India's Finance Minister, the estimate for India's food subsidy bill in
2014-2015 is Rs 115,000 crore (US$18.8 billion; note crore = 10 million) in the interim
budget. According to India's National Sample Survey Office the poverty gap per its latest
Consumption Expenditure Survey is Rs 55,744 crore (US$9.1 billion) in 2011-2012. In
other words, the cost of India's food subsidy bill is approximately twice the amount it
would cost to provide all below poverty households with enough cash to cross the
poverty line. The significant cost of the food subsidy bill compared to the poverty gap in
India highlights the large costs the government incurs in procuring, storing, and
distributing food grains that could otherwise be more effectively used to alleviate
poverty in India. The United States of America understands that the Finance Minister has
also capped the Food Corporation of India's reimbursements for costs incurred in
operating the food subsidy programme at the aforementioned Rs 115,000 crore
(US$18.8 billion).
a. Besides limiting expenditures, what steps is the government of India taking to
more efficiently implement its current policies? Further, does the
recently-passed National Food Security Act 2013 include any specific language
to address these concerns?
b. Given that the National Food Security Act 2013 directly impacts measures
reported under Annex 2 of the Agreement on Agriculture, when does India plan
to submit a DS:2 notification?
Answer by India
The inferences drawn by the United States of America in the chapeau of the question are
unwarranted.
The National Food Security Act, 2013 (NFSA) gives legal entitlement to distribution of
subsidized food grains under the Targeted Public Distribution System (TPDS). The TPDS is
already operational across all the states/union territories.
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The Act also provides for measures for reforms in TPDS. These include the following:
doorstep delivery of food grains to TPDS outlets;
application of information and communication technology tools including end-to-end
computerisation in order to ensure transparent recording of transactions at all levels,
and to prevent diversion;
leveraging ''aadhaar'' for unique identification, with biometric information of entitled
beneficiaries for proper targeting of benefits under this Act;
full transparency of records;
preference to public institutions or public bodies such as Panchayats, self-help groups,
co-operatives, in licensing of fair price shops and management of fair price shops by
women or their collectives;
diversification of commodities distributed under the Public Distribution System over a
period of time;
support to local public distribution models and grain banks;
introducing schemes, such as cash transfer and food coupons to the targeted
beneficiaries in order to ensure their food grain entitlements.
The amount mentioned in the Budget for 2014-15 are budget estimates and no cap as such
on food subsidy has been imposed.
Follow-up: Canada, the European Union and the United States of America requested India to
provide a Table DS:2 notification. India responded that the notification was still under preparation.
Pakistan was of the view that the bill provided a very big production incentive to farmers because
all procurements were achieved at administered prices that were set by the government. Pakistan
would like India to notify the programme properly according to Indias WTO commitments under
the Agreement on Agriculture. India considered Pakistans concern unwarranted at this stage as
the government had not published any information regarding how the public procurement would
be carried out.
1.10 India's sugar export subsidies
1.10.1 Question by Australia and Colombia (AG-IMS ID 73036 and AG-IMS ID 73067)
Australia understands that the Indian government decided to provide incentive
payments to Indian sugar exporters upon the export of sugar, as per The Gazette of
India, dated 28 February.
a. Can India explain the legal basis for this export subsidy, given that India has
no scheduled export subsidy commitments under the Agreement on
Agriculture?
b. With regard to the elements of this incentive payment, can India confirm that
the level of the payment is Indian Rupees 3300 per metric tonne of raw sugar?
c. When did the incentive payments referenced in the Gazette commence, and
when will they end?
d. What is the total value of all incentive payments made to date on the export of
sugar since 12 February 2014?
e. What is the total volume of raw sugar and refined sugar exports made since
12 February 2014 that have been subject to incentive payments?
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f. Can India provide the latest available average cost of production figures (on a
per metric tonne basis) for those Indian raw sugar producers that have
received incentive payments for the export of like product?
g. For the same like product, can India provide the average domestic price (on a
per metric tonne basis)?
h. Part (4) of paragraph 2 of the Sugar Development Fund (Amendment) Rules,
2014 states that the incentive payment will be recalculated every two months
after March 2014 taking into account the average exchange rate of the Indian
rupee vis--vis U.S. dollars. Under this bi-monthly review, is it possible for
India to terminate the incentive payment for reasons other than movement in
the average exchange rate?
i. Can India provide the anticipated total value of the incentive payments over
the expected duration of the scheme?
j. Under the scheme, is there a maximum cap applicable to the per metric tonne
incentive payment?
k. In accordance with the Bali 2013 Ministerial Declaration, can India explain
what, if any, steps it took to exercise utmost restraint with regard to its
decision to implement the incentive payments?
l. Can India indicate when an export subsidy notification covering this scheme
will be issued?
Answer by India
As one of the numerous steps contemplated/undertaken by the central government as well
as various state governments in the country to tackle arrears payments by sugar mills to
Indian sugarcane farmers, it was decided to promote product diversification in the Indian
sugar industry by incentivizing raw sugar production, since the industry traditionally
produces white sugar.
The model of the Indian sugar industry is quite different from the models in many other
countries. The sugar mills in the country neither own the sugarcane fields nor undertake
contractual cultivation. The raw material for the sugar industry, sugarcane, is cultivated by
estimated 5 million farmer families on individual land holdings which are extremely small
and scattered and in general range from 0.5 to 2 hectares.
The interventions by the government aim to infuse additional liquidity in the severely
stretched sector and are linked to cane payments to farmers by the sugar mills.
c. The intervention is effective from 28 February 2014. The current incentive levels are
expected to be reviewed before the commencement of 2014-15 sugar season or even
earlier.
d. No payment has been made under this scheme since 28 February 2014.
e. To date no payment has been made.
f. So far no incentive payments have been made for the exports of raw sugar.
g. No other domestic product is comparable with this new product, raw sugar.
h. Yes, the central government may amend or modify or discontinue the scheme at any
time as indicated in the notification.
i-k. The incentive budget will be reviewed from time to time.
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l. The scheme will be covered in the notification for the relevant year, which is under
preparation.
1.10.2 Question by Brazil (AG-IMS ID 73068)
Brazil is concerned with the impact in the world market and with the potential adverse
effects to the interests of other Members caused by subsidized sugar exports from India.
According to India's Official Gazette, dated 28th February 2014, raw sugar exporters
from India are entitled to export subsidies amounting to 3,300 Rupees per metric ton for
February and March, 2014. These subsidies will be subject to recalculation every two
months taking into account the average exchange rate of the Rupee vis--vis the
US Dollar.
In this regard, Brazil would like to raise the following questions:
a. Could India confirm whether these export subsidies for sugar have been
approved?
b. Could India indicate the amount of export subsidies it will grant in budgetary
outlays and subsidized quantities?
c. Given that there has been to date no legally-binding decision by the WTO to
extend the application of Article 9.4 of the Agreement of Agriculture, what
would be the legal basis for the provision of these export subsidies?
d. Could India confirm whether these subsidies are intended to reduce marketing
and/or transportation costs? If yes, how the actual costs incurred in the
marketing and/or transportation of exported sugar impact the provision of the
subsidy?
e. Could India explain:
i. the rationale for increasing so significantly the provision of export subsidies
for sugar; and
ii. the steps it took to ensure compliance with the Ministerial Declaration
adopted in MC-9 according to which Members shall exercise utmost restraint
with regard to any recourse to all forms of export subsidies?
Answer by India
See above.
1.10.3 Question by European Union (AG-IMS ID 73055)
According to media reports, Indian Cabinet of Ministers approved on 12 February 2014
an export subsidy of Rs 3,333 per tonne for export of four million tonnes of raw sugar.
Could India please confirm that such export subsidies have indeed been approved and if
so confirm the budget and the quantities concerned?
Answer by India
See above.
Follow-up: Converting the sugar export subsidy of Indian Rupees 3,300 per metric tonne into
US$0.054 per kilogramme or US$0.024 per pound based on the current exchange rate, Australia
pointed out that this export subsidy was significant, as it equated to roughly 16% to 14% of the
current world price based on the ICE NO.11 futures market for raw sugar which had been at
around US$0.16 - 0.17 per pound over the last month. Australia was concerned about the
possibility that domestic stocks of sugar in India were being exported into the world market with
export subsides. In Australias view, as India was the world 3
rd
largest exporter of sugar, this
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policy had the potential to seriously disrupt the world price for sugar, which had been already very
low. Australia was strongly concerned that such measure would not be consistent with the recent
Bali ministerial declaration to exercise the utmost restraint with regard to any forms of export
subsidies and all export measures with equivalent effect, and also constituted a breach of India's
WTO obligations. Australia was particularly interested in a response from India to one question
that had not been answered - the legal basis of this export subsidy. As producers and exporters of
sugar, Colombia, El Salvador and Paraguay shared Australias concern. Colombia stated that this
subsidy not only had given rise to concern to some of Colombias sugar producers but also could
have a negative impact on the world sugar market. Brazil noted that points c, d and e of their
questions to India remained unanswered. Canada, the European Union, New Zealand, Pakistan,
Thailand and the United States of America registered concern. Pakistan joined Australia and Brazil
in demanding India to respond to unanswered questions.

1.11 India's wheat stocks and exports
Canada thanks India for its responses and would like to follow-up on questions posed at
the January meeting of the Committee on Agriculture. India confirmed that 2 million
metric tonnes of wheat were indeed approved for exports in August 2013 at US$300 per
tonne and that, in keeping with market trends, the base price was lowered to US$260
per tonne. India also indicated that lowering the base price does not necessarily imply
that product will be sold at that price, and that so far, export prices were between
FOB US$279.52 and US$289.90 per tonne. Canada understands that the Food
Corporation of India, which according to India is holding stocks of 28 million metric
tonnes as of January 2014, purchases its wheat from producers at administered prices
through a minimum support price mechanism.
a. Could India elaborate on the specific elements considered under the ambit of
market trends when determining base price for wheat exports?
b. Could India elaborate on the process whereby its government determines what
volume of wheat stocks will be approved for export and what factors are
considered when determining timing of the export tenders?
c. Could India indicate what costs in addition to those related to market trends
are taken into consideration in determining an export price for wheat, for
example, transportation costs, storage costs?
d. Could India indicate if there is any intention to approve more exports of wheat
at the base price of US$260 per tonne once the 2 million metric tonnes have
been exported?
Answer by India
a and c. See answer to AG-IMS ID 73039.
b. During the current year a total quantity of 2 million tonnes has been approved for export
from the Central Pool stocks, to be completed by 30 June 2014 and accordingly
individual tenders are being floated.
d. Presently there is no new proposal for export of wheat on government account.
Expanding the background on the question submitted during the January Committee on
Agriculture meeting, the United States of America notes that export tenders published
by the state Trading Corporation of India Limited (STC), Minerals and Metals Trading
Company (MMTC), and Project and Equipment Corporation of India (PEC) between
15 November 2013 and 23 January 2014, report the government of India tendered more
than 1 million tonnes of wheat at prices ranging from US$278.20 - 289.90 per tonne.
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Further, the Food Corporation of India has published that the total economic cost of the
acquisition and distribution of wheat in 2013/2014 was US$316.79 per tonne, well
above the noted tender prices.
The United States of America resubmits its January 2014 Committee on Agriculture
question to India:
The United States of America is concerned that India is exporting wheat at prices well
below acquisition costs. For example, India's Commission on Agricultural Costs and
Prices in its discussion paper no 2 estimated that the cost of storing, handling, and
distributing wheat purchased by the government's Food Corporation of India equals
40% of the acquisition cost. For example, if India procured wheat in 2013/2014 at
13,500 rupees per tonne or US$221 per tonne (US$1 = 61 rupees), the United States of
America calculates a cost to port of US$310 per tonne. An export price of US$260 per
tonne is well below this cost to the India government.
a. Please provide figures on the cost to the Indian government of wheat at export
ports named in export tender documents published by the State Trading
Corporation of India Limited (STC), Minerals and Metals Trading Company
(MMTC), Project and Equipment Corporation of India (PEC), and any other such
entity; broken down by acquisition cost, storage cost, transport cost, other
cost.
b. Please also provide the winning bids on wheat export tenders for MMTC, STC
and PEC via this port.
Answer by India
The inferences drawn by the United States of America in the chapeau to the resubmitted
question are unwarranted.
a. The acquisition cost and incidental charges for 2 million tonnes of wheat exports from
the Central Pool stocks of FCI during 2013-2014 (December 2013 February 2014
period) include pooled cost of grains to FCI, handling charges, gunny cost,
administrative charges, statutory taxes and storage charges for a period of six months.
b. Details of the bids cannot be provided because of commercial considerations.
Follow-up: Australia, Pakistan and Ukraine shared Canada's and U.S. interest in India's export
policies on wheat. In view of the large number of questions raised to India, the United States of
America considered a plurilateral meeting as suggested by India useful to address some of the
issues. With respect to India's notifications, the United States of America sought clarification
regarding the timeline for submission. Pakistan and Ukraine supported the U.S. request. India
clarified that it had not proposed a plurilateral meeting but would consider it based on Members'
suggestions. India reiterated the challenges involved in the process of preparing notifications for
developing countries.

1.12 Saint Lucia's domestic purchase requirements for poultry and pork
The United States of America welcomes Saint Lucia's notification of its import licensing
procedures and the copies of the law and order that implement such requirements to the
WTO Import Licensing Committee (G/LIC/N/1/LCA/4 and G/LIC/N/1/LCA/4/Corr.1).
The United States of America notes that the External Trade Act at Section 3 (1) states
that "The Minister may by order published in the Gazette and in a newspaper circulating
in the island (b) prohibit absolutely or limit the importation of any goods if in his or
her opinion such action is in the interest of the island and may for the same reason
make by order any such imports subject to such conditions as he or she may think fit".
Based on the External Trade Act, Section 3(1), it appears that the domestic purchase
requirements for chicken and pork would constitute "conditions" that should be
published as an order.
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a. Please state whether an order establishing that an importer must purchase
domestic product in order to receive an import license for chicken or pork was
published, and if so, where.
b. Additionally, please explain how Saint Lucia's domestic purchase requirements
for poultry and pork are consistent with Saint Lucia's WTO obligations,
including Article 4.2 of the Agreement on Agriculture and Article III:4 of
the GATT 1994.
c. When will Saint Lucia respond fully to the questions asked by the United States
of America during COA meetings in September 2013 (AG-IMS 71032) and
January 2014 (AG-IMS 72055)?
Answer by Saint Lucia
Saint Lucia undertook to provide a response at a later stage.
1.13 Thailand's paddy pledging scheme
Canada appreciates Thailand's participation in informal consultations on this issue.
However, Canada regrets that its questions to Thailand on its Paddy Pledging Scheme
since the November 2012 meeting remain unanswered.
a. Could Thailand indicate whether it intends to answer these questions in the
near future? If so, could Thailand provide information on the timelines for
providing the requested information?
b. While the Committee is still expecting Thailand's domestic support notifications
for 2007 and subsequent years, could Thailand please provide an estimate of
government expenditures related to the purchase of rice under the Paddy
Pledging Scheme?
Preliminary Answer by Thailand
b. Under the current paddy pledging scheme, the government operates the scheme mainly
with revolving funds in the procurement. The government expenditures accordingly will
cover the payment of different rates of interests, administrative cost, and other fixed cost in
operation. Because of the nature of the programme, Thailand will not be able to know the
exact expenditure until the closing of account for each year.
There have been a number of press reports regarding Thailand's rice policy recently.
These reports have indicated that Thailand may suspend or end its current rice policy.
a. Please provide an update on the status of Thailand's Paddy Pledging Scheme.
Please provide specific details with regards to if and how the programme will
be continued going forward.
b. If the policy is being permanently eliminated, what steps, if any, is the
government considering in order to replace it with a new policy scheme?
The United States of America notes press reports indicating that in February Thailand
tendered 600,000 tonnes of rice from government stocks to exporters at an estimated
10,000-11,000 baht (US$307-338) per tonne. In January, Thailand reportedly tendered
150,000 tonnes of rice at prices 7-19% below market prices. The United States of
America also understands from press reports that Thailand will be seeking to sell 1
million tonnes of rice per month.
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c. Please provide data to confirm the volume and price of these and other
tenders.
d. What steps will Thailand take to ensure export prices remain in line with its
WTO commitments?
The United States of America also resubmits its question from the January Committee
meeting:
e. The United States of America notes that Thai rice prices have declined
dramatically in 2013. Further, Thailand has gone from the highest-priced
supplier to one of the lowest over the past two years. In AG-IMS ID 71033,
Thailand indicated that it was taking measures to minimize the impact on
markets of its release of government rice stocks. Press reports in Thailand have
also indicated that Thailand has sold rice at below market prices.
i. What factors have contributed to this dramatic decline in Thailand's export
prices?
ii. Has Thailand evaluated whether it needs to take any additional steps to
minimize the impact of its stock releases on markets, including displacing
exports of other countries due to its low prices?
f. Press reports in Thailand note that even at these low prices, Thailand is finding
it difficult to find buyers for its rice and is simultaneously under pressure to sell
stocks in order to fund its rice subsidy programme, which is currently late in
making payments to its producers. Given the current situation, what, if any,
changes does Thailand plan to make to its rice pledging scheme to address
these concerns?
g. Please provide an update on the following aspects of Thailand's rice pledging
scheme.
i. How much rice has been procured by the government in the current crop
year?
ii. How much rice does Thailand currently have in government stocks?
iii. What is the current support price for rice in Thailand?
iv. What is the support price for the upcoming rice crop year?
h. Thailand last made a domestic support notification for the year 2007.
Thailand's rice domestic support has undergone several reforms since that time
and is much different today than it was seven years ago. The United States of
America notes this significant delay in notifications and requests an update on
when Members can expect Thailand to come into compliance with its
notifications requirements.
Preliminary Answer by Thailand
On the information that the Unite States of America requested on many aspects of the
pledging scheme, Thailand will make the best effort to gather the information. Thailand
would also like to note that some of the information is commercially confidential under the
law.
a. The existing pledging scheme began on 1 October 2013 and ended on
28 February 2014 except for the rice planted in the south for which the programme
will end on 31 July 2014. Since the dissolution of parliament in December 2013,
the government agencies are currently functioning under the caretaker
government. Any new programme will only be subject to the new administration.
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As for the current pledging scheme, as explained previously, Thailand is gathering
information and data from the provinces and the final expenditures will be notified
when Thailand closes the account for the scheme.
e.
i. In 2013 world prices of rice fell overall due to the increasing volume of rice in the
world market, and Thai rice price was no exception. In any case, according to
different statistics, Thailand's rice export volume has decreased for the past few
years and so has Thailand's export share in the world market. When compared with
other countries rice prices at the equivalent quality, Thai rice prices are still
relatively high.
Follow-up: The United States of America raised concern on press reports about Thailand selling
730,000 tonnes of rice stocks at US$380 per tonne, which implied huge losses given the value of
the stock per tonne was considerably higher than the sale price. The European Union and Pakistan
shared the concern. Canada and the European Union welcomed Thailand's upcoming domestic
support notification for 2008. Uruguay indicated interest in the issue.

1.14 Turkey's domestic support and export subsidies
1.14.1 Question by European Union (AG-IMS ID 73056)
a. Given that Turkey has not submitted domestic support (DS:1) and export subsidies
(ES:1) notifications to the Committee on Agriculture since 2001 and 2000
respectively, could Turkey please indicate when it intends to submit these overdue
notifications to the WTO?

b. In the meantime, could Turkey please confirm that since 2001 its budgetary outlays
and eligible quantities of subsidized exports, including for citrus fruits, have
remained within its commitments?

c. Could Turkey please confirm that its AMS has remained since 2002 below its de
minimis level?

Answer by Turkey
The Relevant Turkish institutions, mainly the Ministry of Economy and the Ministry of Food,
Agriculture and Livestock have been working on Turkey's overdue notifications. However,
the process is still ongoing and has not been completed yet. Therefore, Turkey will be able
to submit the notifications only after the work is finalized.
Follow-up: The European Union reiterated its request for Turkey to update its notifications, and
sought Turkey' specific reply to the question on citrus fruits. The Philippines registered continued
interest in this issue.
1.15 Turkey's destination of wheat flour sale
The United States of America appreciates Turkey's response to AG-IMS ID 72057
regarding sales of Turkish wheat flour made from the Turkish Grain Board (TMO) wheat
sales.
In Turkey's response, it states that "As a legal entity truly autonomous in its activities,
TMO determines purchase and sale prices of products within its area of activity through
decisions taken by the Board of Directors".
a. Does the Board of Directors have the authority to operate TMO at a profit loss
resulting from procurement prices set above world prices and sales prices set
at world prices? If so, how is the profit loss covered?
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Turkey also states that "TMO currently does not make wheat purchases as part
of inward processing schemes".
b. Does TMO sell wheat to domestic mills specifically for the export of flour? If so,
please provide the volume of TMO wheat sold to millers specifically for export
for the past three years. Please also include data listing the quantity of bran
exported and nationalized against the inward processing system for wheat
flour exports.
c. Please share data for the last three years listing the quantity and quality of
wheat imported and quantity and quality of flour exported under Turkey's
inward processing system.
Answer by Turkey
a. TMO is a fully autonomous entity in its commercial activities and the same applies to the
responsibility of TMO's Board of Directors in its management activities. Responsibility for
the management of TMO is in line with the principles specified in related legislation. As
an autonomous entity, TMO operates both its commercial and management activities
according to the requirements of the economy.
b. TMO carries out both purchasing of grain directly from producers and selling of grain to
domestic users by only taking stock adequacy, climate, production, world prices,
domestic market conditions, profitability and efficiency into account.
c. See Annex 2.
Follow-up: Taking note of Turkey's response to the previous question that it was preparing
outstanding notifications, the United State of America believed that those notifications might
provide answers to some of the U.S. questions. The Russian Federation as an exporter of wheat
and wheat flour and the Philippines expressed interest in the issue. The European Union flagged its
continued concern.
1.16 U.S. Farm Bill
1.16.1 Question by Indonesia (AG-IMS ID 73043)
On 7 February 2014, a new Farm Bill (the Agriculture Act of 2014) was signed into law.
The cost of the Act is estimated at US$956 billion. The Bill is issued in an environment of
high farm income. As one of the biggest agriculture spenders in absolute and per capita
terms, any policy related to subsidy in the United States of America always has an
outsized impact on global food security prospect.
United States of America is one of Indonesia's main trading partners especially on
agriculture. Any policy change in the United States of America will have direct influence
on the agriculture market and on the fate of large portion of vulnerable farmers in
Indonesia. In this regard, Indonesia would like to ask some preliminary questions to the
United States of America:
a. The Bill is estimated to cut US$8 billion from the Supplemental Nutrition
Assistance Program or SNAP (food stamp) by changing eligibility rules. Can the
United States of America explain further the new eligibility requirements to
receive food stamps?
b. The Bill will end income transfer programme to price support to producers.
What are the reasons for this shifting?
c. For eligible crops, the Bill requires U.S. farmers to make an irrevocable choice
between two programmes for countercyclical price protection: Price Loss
Coverage (PLC) and Agricultural Risk Coverage (ARC). The choice will be in
effect for the 2014 to 2018 crop years.
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i. Could the United States of America explain the eligibility criteria for the
producers to enrol in the two schemes?
ii. How does the Price Loss Coverage operate?
iii. How does Agricultural Risk Coverage operate?
iv. What is the difference between Agricultural Risk Coverage based upon
county and individual revenue level?
d. Relating to Price Loss Coverage, the United States of America sets "reference
prices" for all programme crops, among others: wheat, corn, rice, soybean,
other oilseeds, peanuts, dry peas, grain sorghum, barley, oats, lentils, small
chickpeas, large chickpeas.
i. How are "reference prices" calculated for such products?
ii. What elements are taken into account in setting the "reference price"?
iii. What is the relation between "reference prices" and market prices for the
crops under the programme?
iv. Will the "reference prices" be adapted?
e. It seems that the crop insurance becomes the foundation of the Farm Bill and
the primary safety net for producers. The federal crop insurance programme
makes available subsidized crop insurance to agriculture producers. More than
100 crops are insurable. The Bill increases funding for crop insurance relative
to baseline levels by an additional US$5.7 billion over 10 years. Could the
United States of America explain the reason of the huge increase in crop
insurance?
f. The Agricultural Risk Coverage will provide payment if actual crop revenue falls
below established revenue guarantee.
i. How is the threshold amount for the revenue guarantee set?
ii. What factors are taken into account in establishing such threshold?
iii. How are insurable yields established?
iv. Will the production history determine the revenue guarantee threshold?
v. Can the United States of America explain rice margin insurance?
g. The Bill also creates a Supplemental Coverage Option. Could the United States
of America explain how this programme operates?
h. The Bill will provide livestock indemnity payment to eligible producers on farms
that have excessive livestock losses due to adverse weather.
i. How is the parameter of excessive losses determined?
ii. Is there any cap to such payment?
i. In many occasions, the United States of America advocates the importance of
reform in agriculture by minimizing government intervention to the market.
Could the United States of America explain to what extent the Farm Bill reflects
the U.S. interest in reforming trade in agriculture?
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j. Can the United States of America guarantee that the implementation of the
Farm Bill will comply with the U.S. commitments in WTO?
Answer by United States of America
The United States of America appreciates Indonesia's interest in the Agricultural Act of 2014
(2014 Farm Bill). The 2014 Farm Bill does make some major changes to U.S. food and farm
policy. With respect to spending, it reduces estimated spending by US$17 billion a year.
Further, around 80% of spending in the 2014 Farm Bill (US$756 billion over 10 years) is
projected for nutrition assistance for low-income and food insecure households for the
purchase of any food product, domestic or imported.
a. Most U.S. states have considered Low-Income Home Energy Assistance Program
(LIHEAP) payments in their calculation of SNAP benefits. Close to one-third of states
have issued nominal LIHEAP payments (typically US$1 to US$5 dollars per year) to
increase SNAP benefits. The 2014 Farm Bill amends how LIHEAP payments are treated in
the calculation of SNAP benefits, which is expected to reduce SNAP benefits and
accounts for most of the estimated cuts in SNAP.
b. The 2014 Farm Bill does not end income-support programmes in favour of price support
programmes for producers. The Bill does end the direct and countercyclical payment
programmes and the Average Crop Revenue Election programme. Most producers who
participated in the repealed programmes may choose to enrol in either the Price Loss
Coverage (PLC) programme, a new counter-cyclical type programme, or the Agriculture
Risk Coverage (ARC) programme, a revenue-loss programme. There are no new price
support programmes under the 2014 Farm Bill and the market price support programme
for dairy products is eliminated.
c.
i. The 2014 Farm Bill has not yet been fully implemented. As a result, the
administrative provisions for these and other programmes have not yet been
established. The text of the 2014 Farm Bill states that "actively engaged producers on
a farm" are permitted to enrol in these programmes. However, the 2014 Farm Bill
leaves this term to be defined by the Secretary of Agriculture. The 2014 Farm Bill
also places a limit on eligibility to receive farm programme benefits based on income.
Under the new bill, an individual with an annual adjusted gross income (AGI) above
US$900,000 (including nonfarm income) is ineligible to receive payments from these
and other commodity and conservation programmes. The 2014 Farm Bill also limits
total payments from PLC, ARC, and the marketing assistance loan programme to
US$125,000 for each individual actively engaged in farming. A spouse may receive up
to an additional US$125,000.
ii. The Price Loss Coverage (PLC) programme is a new countercyclical price programme
that makes payments to producers when market prices fall below the legislated
reference price. The PLC programme is decoupled from production and is based on
historical "base" acres. The payment rate is the difference between the reference
price and the annual national-average market price (or marketing assistance loan
rate, if higher). For each enrolled commodity, the payment amount is the payment
rate, multiplied by 85% of base acres of the commodity, multiplied by the historical
"payment" yield. Producers may choose which of their covered commodities to enrol
in PLC, but once the election is made it remains in place for the life of the 2014 Farm
Act.
iii. The Agriculture Risk Coverage (ARC) programme is a new revenue-based
programme that makes payments to producers when revenue drops below a
percentage of the "benchmark" revenue. As with the PLC programme, the ARC
programme bases payments on 85% of historical "base" acres. Further, producers
may choose county-based or individual coverage.
County-based Coverage
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For producers choosing county-based ARC, payments are provided to producers
with historical "base" acres when county crop revenue (actual average county
yield times national farm price) drops below 86% of the county benchmark
revenue (5-year Olympic average county yield times 5-year Olympic average of
national price or the loan ratewhichever is higher for each year). For each
covered commodity enrolled on the farm, the county ARC payment amount is the
difference between the per-acre guarantee (as calculated above) and actual per-
acre revenue, times 85% of base acres of the commodity.
Individual Coverage
For producers choosing individual ARC coverage, payments are based on the
difference between an individual farm guarantee and actual individual farm
revenues. The farm's individual ARC guarantee equals 86% of the farm's
individual benchmark guarantee, defined as the ARC guarantee price (the 5-year
Olympic average of national price or the loan ratewhichever is higher for each
year) times the 5-year Olympic average individual yield, summing across all
crops on the farm and weighting by plantings. The payment amount is the
individual farm payment rate (the difference between the individual farm
guarantee and actual individual farm revenue, but no greater than 10% of the
farm's benchmark revenue) times 65% of base acres for all covered commodities
for the individual farm.
iv. See response to how ARC operates.
d.
i. Reference prices were determined by Congress and fixed for the duration of the 2014
Farm Bill.
ii. A variety of factors were used to determine the reference prices, including but not
limited to market conditions, market outlooks/forecasts, and policy implications.
iii. The difference between the reference price and the annual national-average market
price is used to determine the payment rate in the PLC programme.
iv. The reference prices are fixed for the life of the 2014 Farm Bill.
e. Most of the funding increase stems from two new insurance products, the Stacked
Income Protection Plan (STAX) and the Supplemental Coverage Option (SCO).
f.
i. The ARC revenue guarantee is set at 86% of historical revenue at either the county
or farm level. ARC payments are limited to no more than 10% of the benchmark
revenue. The programme was designed to provide payments only for losses not
already covered by traditional crop insurance, where typical coverage is 50-75% of
losses.
ii. See response to how the revenue guarantee is set.
iii. The ARC programme is a revenue-based programme that makes payments to
producers on a commodity basis when revenue drops below a percentage of the
"benchmark" revenue. ARC does not insure yields. Revenue (i.e., price times yield) is
calculated, in part, using either the 5-year Olympic average county yields or 5-year
Olympic average individual yields, depending on enrolment.
iv. The ARC programme only provides a revenue guarantee for producers with historical
"base" acres of covered commodities on a commodity-basis.
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v. The 2014 Farm Bill mandates the U.S. Department of Agriculture Risk Management
Agency (RMA) to develop and approve a margin coverage policy for rice producers
for the 2015 crop year, but is not related to the ARC programme. RMA has not yet
developed this policy, but as with other crop insurance products, it will be developed
as an actuarially sound programme.
g. The Supplemental Coverage Option (SCO) offers producers additional area-based
insurance coverage in combination with coverage by traditional crop insurance policies.
The SCO offers producers the opportunity to purchase revenue coverage based on
county average yield or revenue. SCO coverage is not available to producers who elect
to participate in the ARC programme or Stacked Income Protection Plan (STAX).
h.
i. The Livestock Indemnity Program (LIP) provide compensation to eligible livestock
producers who have suffered livestock death losses in excess of normal mortality due
to adverse weather and attacks by animals reintroduced into the wild by federal
government or protected by federal law.
ii. LIP payments are equal to 75% of the market value of the applicable livestock on the
day before the date of death. Individuals are limited to a total of US$125,000
annually in payments under the LIP, LFP, and ELAP programmes.
i. The United States of America continues to advocate for reform in agriculture and
minimizing government interventions in markets. The 2014 Farm Bill reduced overall
agricultural spending and has further reduced the U.S. government's direct interventions
in agricultural markets with the elimination of the Dairy Product Price Support Program
and the Dairy Export Incentive Program. Further, the United States of America believes
that all Members are permitted to provide domestic support that is within their
commitments. The United States of America repeatedly advocates for Members to make
reforms that will ensure their compliance with WTO rules. The 2014 Farm Bill remains
fully within U.S. WTO obligations.
j. Compliance with WTO obligations was one of the key objectives of the Congress when
developing this Farm Bill. The Farm Bill is expected to keep support levels well below the
WTO maximum allowed level.
Follow-up: Argentina and Pakistan voiced appreciation for the U.S. presentation at the informal
session and requested the presentation to be circulated to the whole Membership. Argentina
wished to continue monitoring U.S. compliance with its WTO commitments and with the framework
of Doha Round negotiations regarding substantial reduction of domestic support and export
subsidies. Canada indicated interest and reserved the right to follow up on this matter. Noting that
the new bill resulted in a decrease in Amber Box programmes but at the same time shifted some
Green Box measures to Amber Box measures even though the shift depended on prices, Pakistan
intended to monitor the impact of the bill. Pakistan further suggested other Members to conduct
similar exercises if new bills were adopted.

2 POINTS RAISED IN CONNECTION WITH INDIVIDUAL NOTIFICATIONS
2.1 ADMINISTRATION OF TARIFF AND OTHER QUOTA COMMITMENTS (TABLE MA:1)
2.1.1 Russian Federation (G/AG/N/RUS/2)
AG-IMS ID 73005: Question by Australia - Transparency issues
Australia welcomes the Russian Federation's notification and seeks clarification on the
basis of the quota allocations for dry whey. Australia suspects that the description in the
notification may contain a typographical error.
Answer by Russian Federation
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The Russian Federation thanks Australia for this question and would like to confirm that
there was a typographical error in the above mentioned notification. The Russian Federation
would like to draw Members' attention to the Corrigendum of the notification
(G/AG/N/RUS/2/Corr.1) which has been circulated to Members.
2.2 IMPORTS UNDER TARIFF AND OTHER QUOTA COMMITMENTS (TABLE MA:2)
2.2.1 Ecuador (G/AG/N/ECU/38)
AG-IMS ID 73044: Question by United States of America - Transparency issues
The United States of America notes that in the footnotes of G/AG/N/ECU/38, Ecuador
states that "no in-quota imports were recorded given that the tariffs in force in 2012
were below the maximum in-quota rate. The exception is subheading 02071400, the
tariff level of which was higher than that of the quota, but no imports were requested".
a. What is the official process for requesting imports of 02071400?
b. Where can importers and exporters find information about the request
procedure?
Answer by Ecuador
a. This tariff heading is subject to automatic import licensing, and the relevant sanitary
requirements must be met before an import licence can be issued.
b. Importers and exporters can obtain information on import procedures from the national
notification bodies.
Follow-up: The United States of America sought clarification regarding whether import licenses
would automatically be given to importers once sanitary requirements were met. Ecuador
confirmed this in its written response.

2.2.2 Norway (G/AG/N/NOR/74)
AG-IMS ID 73058: Question by European Union - Transparency issues
The commitments of Norway comprise more than 230 bound tariff quotas, while the
notification includes only about 20 of them. The European Union would once again like
to request Norway to include all bound tariff quotas in the notification as a matter of
transparency.
Answer by Norway
The notification of imports under TRQs for the calendar year 2001 (G/AG/N/NOR/38) was
the first notification in which Norway did not include TRQs for which a tariff only regime
applies. In accordance with the Norwegian schedule, the in-quota tariff rates for the majority
of the current access quotas have been at the level of the bound MFN tariff for the
corresponding tariff line as of calendar year 2000. Since Norway has fulfilled its
commitments for the current access quotas with a tariff-only regime, these have not been
included in the notifications, as has been explained on the cover sheet of every
TRQ notification since the notification of TRQ commitments for the calendar year 2001
(G/AG/N/NOR/38, G/AG/N/NOR/46, G/AG/N/NOR/50, G/AG/N/NOR/53, G/AG/N/NOR/56,
G/AG/N/NOR/63, and G/AG/N/NOR/67). Norway therefore does not notify these TRQs.
Follow-up: The European Union reserved the right to raise follow-up questions on this issue.

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2.2.3 Tunisia (G/AG/N/TUN/44)
AG-IMS ID 73057: Question by European Union - Tariff quota fill
Tunisia notified that it imported 1,831 tonnes of cheese under a TRQ of 1,500 tonnes in
calendar year 2012. Could Tunisia please clarify why it notified imports beyond the
TRQ volume?
Answer by Tunisia
Tunisia undertook to provide a response at a later stage.
2.3 DOMESTIC SUPPORT COMMITMENTS (TABLE DS:1)
2.3.1 Botswana (G/AG/N/BWA/19)
(including Table DS:2)
Compared to Botswana's previous domestic support notification, Botswana has
introduced several new programmes including "Agricultural Research", "Disease and
Pest Control", "National Master Plan for Arable Agriculture and Dairy Development",
"Cattle Identification" and "Foot and Mouth Disease Compensation". According to
Article 18.3 of the Agreement on Agriculture, it appears that these newly notified
programmes should have corresponding Table DS:2 notifications. Is Botswana planning
to provide these notifications?
Answer by Botswana
All the programmes referred to (except NAMPAADD) were introduced before 1995
(i.e. before G/AG/2 came into force, a document which instructs all Members to notify new
measures) and therefore, were not considered to be new. These programmes have been
included in every notification except those years when no support was provided. NAMPAADD
was introduced in 2002 and has also been included in Botswana's previous notifications
(G/AG/N/BWA/10 and G/AG/N/BWA/13) except when no support was provided. Botswana
regrets the lack of the corresponding Table DS:2 notification that is clearly an oversight and
Botswana will do all that is necessary to make sure that it will be submitted in due course.
AG-IMS ID 73046: Question by United States of America - Investment subsidies
generally available to agriculture
Botswana notifies a transport subsidy under "investment subsides generally available to
agriculture" as per Article 6.2. Please provide details with regards to how the
transportation subsidy is implemented.
Answer by Botswana
The transportation subsidy is administered by a state agency, Botswana Agricultural
Marketing Board (BAMB). BAMB was set up to provide alternative market for cereal crops
produced by low-income or resource-poor farmers who constitute majority of farmers. The
subsidy is aimed at transporting produce from remote rural areas to the markets
(i.e. villages, towns and cities). Due to distance to the markets, the government of
Botswana provides a transport subsidy to BAMB in order for BAMB to hire private transport
to transport produce from the remote rural areas to BAMB depots.
2.3.2 Brazil (G/AG/N/BRA/32)
Please explain why debt rescheduling is reported under both Supporting Table DS:2
and DS:9?
Answer by Brazil
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Debt rescheduling was reported under those two tables because it encompasses the
rescheduling of both (i) production credit for agricultural inputs available to family farmers
and investment credit generally available to producers, falling under Art 6.2; and (ii)
production credit available to all producers (excluding family farmers), which is included in
Brazil's non-product-specific AMS.
a. No support is reported for cotton and coffee, although programmes exist for
these products. Please explain why Brazil has not reported any support.
b. No support for maize is reported in 2011 in Supporting Table DS:4, although
substantial support (US$423 million) is reported in 2010. Please explain why
support is not reported for 2011.
Answer by Brazil
a. No such report was made because no effective support was granted in the covered
period for coffee and cotton.
b. The amount of supported production varies according to market prices and the budget
available at the time.
AG-IMS ID 73006: Question by Canada - General services: research
Canada notes that in Calendar Year 2012 under General Services, Brazil has notified a
measure called "Agricultural research programme" with payments of US$224.9 million.
a. As this measure has not been in previous notifications, could Brazil elaborate
on the types of agricultural research projects that have received funding?
b. As this appears to be a new measure, could Brazil indicate when it will submit a
Table DS:2 notification to provide the Committee with more information?
Answer by Brazil
a. The programme encompasses all the regular research carried out by EMBRAPA, including
activities related to particular products as well as environmental aspects.
b. The programme does not constitute a new measure, for it merely presents pre-existent
activities under a new title. However, Brazil will evaluate whether to submit a Table DS:2
notification.
AG-IMS ID 73007: Question by Canada - General services: extension and advisory
services
Canada notes under extension of advisory services that the expenditures related to
"Acquisition of equipment by municipalities for services in rural areas" has increased
three-fold from US$243 million in 2011 to US$749 million in 2012.
a. Could Brazil elaborate as to the types of equipment purchased by municipalities
to provide services in these rural areas?
b. Could Brazil outline the process whereby the municipalities apply or request
the purchase of this equipment?
c. Could Brazil also provide a list of municipalities that were in need of this type
of equipment?
Answer by Brazil
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a. The main types of equipment purchased are tractors, excavators, motor graders,
compactors and trucks, given that the main extension service provided by Brazilian
municipalities is the maintenance of unpaved roads.
b. Usually the federal government signs agreements with the concerned municipalities at
their request.
c. The requested information is not available at this moment.
AG-IMS ID 73008: Question by Canada - General services: extension and advisory
services
Canada notes that payments related to "Extension services on rural development"
increased from US$16.4 million in 2011 to almost US$190 million in 2012. Could Brazil
elaborate as to the reasons for this phenomenal increase in expenditures over the
course of a year?
Answer by Brazil
The increase was due to the importance of meeting public policy objectives through these
expenditures, as well as to the greater availability of funds for them in the Federal Budget
for the period in question.
AG-IMS ID 73028: Question by United States of America - General services: extension
and advisory services
Regarding Supporting Table DS:1 (1) (vi) Extension, the United States of America
notes that spending on extension services in 2011 (US$1.6 billion) increased to almost
double the level reported in 2009 (US$780 million). Please explain the substantial
increase.
Answer by Brazil
The increase was due to the importance of meeting public policy objectives through these
expenditures, as well as to the greater availability of funds for them in the Federal Budget
for the period in question.
AG-IMS ID 73009: Question by Canada - Public stockholding for food security purposes
Canada notes that under public stockholding for food security purposes expenditures
related to "management of public stockholding program" decreased substantially from
US$283 million in 2011 to US$0.38 million in 2012. Canada understands that
expenditures are for the management of the food supply system and pest and disease
control related to public stocks. Could Brazil elaborate on the reasons for this change in
expenditures?
Answer by Brazil
As noted by Canada, expenditures for the management of the food supply system used to
be included in this item. Nonetheless, in 2012 the Federal Budget as a whole has been
significantly altered, and as a result it now contains only information on general
management expenditures, without disaggregation by programmes. The figures for 2012 are
smaller because they include only the expenditures on pest and disease control, which
represent a lesser part of the management expenditures for public stocks
AG-IMS ID 73010: Question by Canada - Public stockholding for food security purposes
Canada notes that, under public stockholding for food security purposes, expenditures
related to "Programme of acquisition of agricultural products from family farming"
increased significantly from US$20.2 million in 2011 to US$203.4 million in 2012.
a. Could Brazil elaborate as to the reasons for this increase in expenditures?
b. Could Brazil provide a list of the types of agricultural products that are acquired
from family farms and their respective volumes?
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Answer by Brazil
a. The correct figure that should have been notified for 2011 is US$465.2 million. A
corrigendum will be submitted soon.
b. In 2012, 390 different kinds of foodstuff were purchased under the programme. The
information on the products and the volumes acquired is not available at the moment.
AG-IMS ID 73029: Question by United States of America - Public stockholding for food
security purposes
Regarding Supporting Table DS:1 (2) Public Stockholding, the United States of
America notes that spending declined substantially in 2010 (US$304 million) and 2011
(US$205 million) from the figure reported in 2009 (US$653 million). Please explain why
Brazil has moved away from this type of programme.
Answer by Brazil
The correct figure that should have been notified under the "Program of acquisition of
agricultural products from family farming" for 2011 is US$465.2 million. Accordingly, the
correct figure for Public Stockholding for Food Security Purposes in 2011 should have been
US$749.1 million. A corrigendum will be submitted soon.
The correct numbers in Supporting Table DS:1 (2) Public Stockholding for Food Security
Purposes should be (values in million US dollars): 237 in 2008/2009, 653 in 2009/2010,
749 in 2010/2011, and 205 in 2011/2012.
The expenditures under the programme decreased in 2012 due to the drought that occurred
in the northeast of the country.
AG-IMS ID 73011: Question by Canada - Direct payments: payments for relief from
natural disasters
Canada notes that the expenditures related to the "Warranty-Crop Fund" (government
sponsored agricultural insurance) increased significantly from US$77.7 million in 2011
to US$302 million in 2012.
Could Brazil confirm that this programme meets the criteria of paragraph 8(a), Annex 2,
more specifically, the production loss exceeds 30% in either: (a) the average production
in the preceding three-year period or (b) a three-year average based on the preceding
five-year period, excluding the highest and lowest entry.
Answer by Brazil
Brazil considers that the measure, which provides relief for natural disasters, complies with
the criteria set out in paragraph 8 of Annex 2 of the Agreement on Agriculture. The Ministry
of Agrarian Development is in charge of the Warranty Crop Program, a social programme
which granted R$640.00 in 2011 and R$680.00 in 2012 per family farmer applying for it
(the payment of a fee is required for the application) in the event that the government
formally recognizes that a natural disaster occurred. Family farmers can benefit from the
programme whenever their losses reach at least 50% of their production. In addition,
incurred losses should be of at least 50% of the crop. The programme does not cover the
entire Brazilian territory, as it is confined geographically to the northeast region and the
north of Minas Gerais and Esprito Santo States, areas with high drought incidence. The
reason for the increase of the expenditures was the drought that occurred in the northeast
region in 2012.
Follow-up: Canada requested Brazil to clarify whether the reference period for the "Warranty-Crop
Fund" was a 3-year average or an Olympic 5-year average.
AG-IMS ID 73030: Question by United States of America - Investment subsidies
generally available to agriculture
Are the investment credits noted in Supporting Table DS:2 generally available?
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Answer by Brazil
Yes. They are available for all producers and cooperatives under the same conditions.
AG-IMS ID 73033: Question by United States of America - Market price support
a. Regarding Supporting Table DS:5, the United States of America notes that the
minimum support price for wheat went down from US$329.05/tonne in
2010/2011 to US$254.19/tonne in 2011/2012. Please explain why there was
such a large decrease within one year.
b. Please explain why total production is not used for the minimum support price
calculation if the wheat is grown in locations eligible to receive the
government's minimum support price.
Answer by Brazil
a. The increase was due to the definition of the minimum price for the product at a lower
level in the 2011/2012 crop-year.
b. The total production is not used as a reference for the support because the benefited
production is actually limited and depends on the available budget outlays. Distinct
programmes may apply for the same product, although with different beneficiaries, in
the same region and crop year. Similar situations occur regularly, as showed in Brazil's
notifications.
Follow-up: The United State of America indicated its intention to raise follow-up questions such as
whether "debt rescheduling" (AG-IMS ID 73031) reported in two supporting tables were different
programmes.
2.3.3 European Union (G/AG/N/EU/10/REV.1, G/AG/N/EU/17)
AG-IMS ID 73047: Question by United States of America - Market price support: Eligible
production
The United States of America notes that the revision to the European Union's domestic
support notification for 2009/2010 now includes eligible production in Supporting
Table DS:5 for barley. The result is an increase in the Total Aggregate Measurement of
Support. The United States of America also notes that the European Union stated in
AG-IMS ID 69053 that the Health Check of the CAP set the limit of buying of barley,
among other commodities, at "zero" as provided in Article 13.1(a) of Council Regulation
(EC) 1234/2007 and therefore public intervention is not automatically available for
these products.
a. Please confirm this was the result of a public intervention in 2009/2010.
b. What specific factors were used to determine the use of the public intervention
in 2009/2010?
Answer by European Union
The European Union's notification G/AG/N/EU/10 which covers spending in the marketing
year 2009/2010 includes the changes resulting from the decisions of the Health Check of the
CAP, which sets limits of buying into public intervention at zero for durum wheat, barley,
maize, sorghum and paddy rice as provided for in Article 13(1)(a) of Council Regulation
(EC) No 1234/2007. As a result, public intervention is not automatically available for these
products. The notification has been revised (G/AG/N/EU/10/Rev.1) in order to correct the
market price support for barley and sorghum, for which the limits of buying into intervention
at zero entered into force only from marketing year 2010/11, as reflected in the latest
notification G/AG/N/EU/17.
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AG-IMS ID 73012: Question by Canada - Other product-specific AMS/EMS
Canada appreciates the European Union providing a revised notification indicating a
change from zero product specific support for both barley and sorghum to
EUR 2,109.7 million and EUR 9.5 million, respectively. Could the European Union
elaborate on the reasons for revising these amounts in G/AG/N/EU/10/Rev.1?
See above.
AG-IMS ID 73015: Question by Canada - General services: infrastructural services
Canada notes that payments related to infrastructural services have increased from
EUR 1,866 million in 2009/2010 to EUR 2,311 million in 2010/2011. Could the European
Union elaborate on the reasons for this increase in spending?
Spending on rural development measures in the European Union takes place under the
7-year programming framework on the basis of national/regional rural development
programmes prepared by European Union member states. Within this period there are
variations in the level of spending from one year to another. The variations are related to
the rhythm of implementation and financial execution of the programmes in the member
states. Payments may be delayed during the first years when the programmes have to be
drawn up, adopted and implemented. Also the financing of the projects requires preparatory
work by the managing authority of the programme. There is indeed a general increase in
expenditure in 2011-2013 compared to the previous years.
AG-IMS ID 73013: Question by Australia - General services: other
Australia notes that the European Union notifies "farm relief" under other farm services
(General Services, paragraph viii). In its answer to a question by the United States of
America in 2012 (AG-IMS 66058), the European Union explained that farm relief
included "sickness schemes which aim to help farmers in the smooth running of their
operations". Could the European Union advise whether its farm relief programmes
constitute direct payments (including payments in kind) to producers, and if so, how
this complies with the requirements of Annex 2 Paragraph 2 that general services shall
not involve direct payments to producers?
The European Agricultural Fund for Rural Development (EAFRD) provides support to cover
costs arising from the setting up of farm relief services. This support is not a direct payment
to farmers, as the beneficiary of the support is the service provider. The support decreases
over a maximum period of five years from the setting up of the service.
AG-IMS ID 73016: Question by Canada - General services: other
Canada notes that the payments related to other farm services have increased from
EUR 813.4 million in 2009/2010 to EUR 1,489 million in 2010/2011 and that the
description of the measure references member states' measures.
a. Could the European Union elaborate on the reason(s) for this increase in
spending?
b. Could the European Union indicate which member states also provide payments
related to other farm services and the respective amounts?
Spending on rural development measures in the European Union takes place under the
7-year programming framework on the basis of national/regional rural development
programmes prepared by European Union member states. Within this period there are
variations in the level of spending from one year to another. The variations are related to
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the rhythm of implementation and financial execution of the programmes in the member
states. Payments may be delayed during the first years when the programmes have to be
drawn up, adopted and implemented. Also the financing of the projects requires preparatory
work by the managing authority of the programme. There is indeed a general increase in
expenditure in 2011-2013 compared to the previous years.
The measures notified under "other farm services" are measures which relate to improving
the quality of life in rural areas, diversification of the rural economy and local development
strategies. These measures have been implemented in all EU Member States. The amount of
expenditure by member state is proportional to their expenditure in the total Rural
Development envelope.
AG-IMS ID 73048: Question by United States of America - General services: other
Regarding Supporting Table DS:1, "Other farm services" increased substantially from
2009/2010 to 2010/2011. What was the reason for this increase?
See above.
AG-IMS ID 73014: Question by Australia - Direct payments: income insurance and
income safety-net programmes
Australia notes that the European Union's expenditure under (e) Income Insurance and
Safety-net Programmes has increased by around 30% from 2009/2010 to 2010/2011.
Could the European Union kindly explain the reasons for this increase?
Spending on income insurance and safety-net programmes fluctuates from one year to
another. The slight increase from 2009/2010 to 2010/2011 was caused by an increase in the
number of beneficiaries. Australia will note that the 30% increase corresponds to an
increase of five million euro.
AG-IMS ID 73017: Question by Canada - Payments based on fixed areas or yields
Canada notes the dramatic decrease in per hectare compensatory payments to
producers of cereals, oilseeds, protein crops, grass silage, including set aside from
EUR 1,434.9 million in 2009/2010 to EUR 3.8 million in 2010/2011. Could the European
Union account for this change?
The 2003 CAP Reform introduced a decoupled direct payment scheme, the Single Payment
Scheme. The Health Check reform (presented in the Table DS:2 notification G/AG/N/EU/11)
further extended the decoupling of direct support to farmers to almost all sectors and
abolished many coupled payments. The decrease in spending for many Blue Box payments
that is visible in the latest EU notification is due to the implementation of the Health Check
reform. In particular for the schemes mentioned by Canada, the specific quality premium for
durum wheat, the supplementary aid for durum wheat and the arable crop area payments
are abolished from 1 January 2010, while the beef special premium and the beef slaughter
premium are abolished from 1 January 2012.
AG-IMS ID 73018: Question by Canada - Payments based on fixed areas or yields
Could the European Union explain the dramatic drop in payments for quality premium
and supplements to per hectare compensatory payments to durum wheat from
EUR 129.3 million in 2009/2010 to EUR 0.5 million in 2010/2011?
Scheme. The Health Check reform (presented in the DS:2 notification G/AG/N/EU/11)
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AG-IMS ID 73019: Question by Canada - Livestock payments made on a fixed number of
head
Could the European Union explain the drop in payments under the special premium for
producers holding male bovine animals from EUR 105.3 million in 2009/2010 to
EUR 82.3 million in 2010/2011?
AG-IMS ID 73020: Question by Canada - Livestock payments made on a fixed number of
head
Could the European Union explain the drop payments under the slaughter premium
within nationally fixed maximum number of head (calves and adults) from
EUR 335.1 million in 2009/2010 to EUR 61.5 million in 2010/2011?
AG-IMS ID 73021: Question by Canada - Non-product-specific AMS
Canada notes the inclusion of a new measure called "temporary exceptional support
measures (Green harvesting and non-harvesting)" and the associated payment of
EUR 128.7 million.
a. Could the European Union describe the circumstances requiring this temporary
exceptional support?
b. Could the European Union elaborate on the differences, if any, between this
measure's green harvesting and non-harvesting compared with the measure
called "green harvesting and non-harvesting"?
The temporary exceptional support measures for the fruit and vegetables sector that are
notified in the EU's notification G/AG/N/EU/17 are related to the fruit and vegetables market
crisis that followed the Escherichia coli outbreak in May 2011. The sudden loss of consumer
confidence due to the perceived public health risks caused significant disturbance of the
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European Union fruit and vegetables market. In order to cope with the crisis, exceptional
support was granted to increase financing for some of the measures existing in the fruit and
vegetables sector. The spending on the measures under the temporary exceptional support
was notified separately for transparency purposes in order to allow Members to clearly
distinguish between the spending on the usual measures in the sector and the exceptional
spending related to the crisis.
2.3.4 Guatemala (G/AG/N/GTM/45)
a. Please confirm that domestic support programmes listed in G/AG/N/GTM/45
come from Guatemala's domestic funding sources and not from outside donors
(e.g., WFP, FAO, U.S. Department of Agriculture, etc.).
b. Does Guatemala intend to submit a Table DS:2 notification for new or modified
domestic support measures such as PRODERT, PROCHUCH, and Special Training
Program for Food Security (PESA)?
Answer by Guatemala
a. Annex 3 contains a table showing which of the measures in question have domestic
funding sources, and which ones have external sources.
Information for 2002 and 2003 is not available yet: the fact that there was no Integrated
Accounting System at the time means that it will take longer time to gather the
information.
b. Guatemala is currently preparing the relevant DS:2 Tables which it will then submit
through the appropriate channels.
AG-IMS ID 73050: Question by United States of America - General services:
infrastructural services
Please describe how the training for silo manufacturers and delivery of silos to rural
families adheres to Annex 2, paragraph 2(g), which states that "In all cases the
expenditure shall be directed to the provision or construction of capital works only, and
shall exclude the subsidized provision of on-farm facilities other than for the reticulation
of generally available public utilities".
Answer by Guatemala
Post-harvest support focuses on effective post-harvest handling at national level in order to
achieve the sustainability of post-harvest activities.
The measure is promoted by the international community and is articulated through the
FAO. Its purpose is to help preserve and ensure the protection of staple grains as a means
of supporting food security among rural families. The issue of post-harvest handling of
staple grains and the food crisis are a worldwide concern, and at its seventh special session
in 1975, the United Nations General Assembly accordingly adopted a resolution assigning
priority to post-harvest handling and setting the goal of reducing post-harvest losses by
50%.
Objectives
Its objectives include reducing staple grain losses for small and medium size producers that
make proper use of post-harvest technology, by manufacturing metal silos for post-harvest
grain storage by rural families; strengthening the transfer and ensuring the sustainability of
post-harvest activities, by consolidating the silo manufacturers' entrepreneurial development
and enabling them to make their own organizational arrangements.
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Justification
Guatemala regards this as an infrastructure service that does not include subsidies to inputs
or operating costs, or preferential user charges, and is not related to the subsidized
provision of on farm facilities. This measure is therefore considered to fall within the scope
of Annex 2, paragraph 2(g).
AG-IMS ID 73051: Question by United States of America - Direct payments: payments
under regional assistance programmes
Please describe how the credit support for small producers in the Chorti area meets the
requirements listed in Annex 2, paragraph 13.
Answer by Guatemala
The Agricultural Development Project for Small Producers in Zacapa and Chiquimula
(PROZACHI) covers 1,290 km
2
in the departments of Zacapa and Chiquimula, in the
northwestern part of Guatemala. The department of Zacapa includes the municipalities of
Zacapa and La Unin, and the department of Chiquimula includes those of Jocotn,
Camotn, Olopa, Quezaltepeque, San Juan Ermita and San Jacinto.
Target group
The target group comprises all agricultural producers in the project area, that is,
approximately 12,500 rural families, of which 5,200 or 40% - are direct beneficiaries, and
of these it is hoped to benefit 3,200 women (61%). Given the state of poverty of the local
population, the project will be of direct benefit to families living in the area.
Objectives and components
The general objective of the programme is to raise the real income of poor farmers in the
area by boosting food productivity and production through the diversification of economic
and household-related activities.
The specific objectives of the PROZACHI project are: (a) to increase productivity and
production of staple grains; (b) to increase the production of permanent cash crops and
improve the coffee processing and marketing systems; (c) to raise nutrition levels by
promoting small-scale livestock development activities; (d) to improve, diversify and
streamline production activities carried out by women in rural areas; (e) to make
appropriate use of the land in order to minimize the risk of erosion, with due regard for the
real income of rural families; and (f) to develop the region's basic and social infrastructure.
Justification
Guatemala considers that the measure comes under Annex 2, paragraph 13, because
payments made under the project are for producers from disadvantaged regions, within a
specific geographical area that is regarded as being disadvantaged. The payments are not
related to the type or volume of production, and are available to all producers.
2.3.5 India (G/AG/N/IND/7)
AG-IMS ID 73054: Question by Pakistan - Input subsidies available to low-income or
resource-poor producers
Below are follow-up questions on non-product specific subsidies under Article 6.2
(AG-IMS ID 72004).
It is Pakistan's understanding that input subsidies exempted under Article 6.2 are
available to all farmers, whether they are growing for their own food (resource-poor low
income producers) or they are growing in commercial quantities.
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a. Could India please inform that which steps have been taken to ensure that
Article 6.2 input subsidies (seed, fertilizer, diesel, electricity etc.) are used only
by the low-income resource poor producers?
b. Is it correct that input subsidies (non-product specific) are available to the
producers of all rice varieties?
c. Are there any product-specific input subsidies reported previously or provided
under Article 6.2?
d. Could India please indicate the total (non-product specific) subsidies of the
type exempted under 6.2 in G/AG/N/IND/7 that were provided in the last two
years (2011-2012 and 2012-2013)?
Answer by India
Input subsidies covered under Article 6.2 of the Agreement on Agriculture are generally
available to low income or resource poor producers. In India such producers account for the
vast majority of farmers.
The total non-product specific subsidies of the type exempted under Article 6.2 for the two
years 2011-2012 and 2012-2013 will be indicated in the notifications for these two years.
These notifications are under preparation.
Follow-up: Pakistan insisted that India provide responses to points b and c of its question. India
was also requested to explain the distinction between low-income or resource-poor farmers and
those who produced at a commercial scale. In Pakistan's understanding, no country could become
a world's top exporter of a product if all producers were at subsistence level and therefore there
must be commercial production in India. On point b, India confirmed that input subsidies were
available to all low-income or resource-poor producers of rice. On point c, India asked Pakistan to
refer to its notifications. Concerning the follow-up question, Pakistan was invited to refer to India's
agricultural census regarding the average size of India's farms and to the AGST table for the
definition of low-income or resource-poor farmers.

The United States of America also raised a follow-up question as follows: "The United States of
America understands that Indian landholding laws have been framed by state governments.
Therefore ceilings on individual land holding size vary from state to state. However, overall, a
farmer is not allowed to have more than 10 hectares of irrigated land. Therefore, it is the U.S.
understanding that from a legal perspective, many Indian farmers are legally bound to the
definition of 'low-income or resource-poor' since owning less than 10 hectares is the criteria. The
United States of America would like to ask India to provide statistics from any Indian statistical
study or survey or from other sources regarding the distribution of average household income with
website links or copies of cited studies or surveys. With this, the United States of America would
like a breakdown of input subsidies by type, including seed, fertilizer, diesel, electricity, etc." India
made some preliminary comments. It stated that the criterion of holding no more than 10 hectares
of land was the definition for low-income or resource-poor producer as indicated in India's AGST
table. As for the land ceiling law, certain types of lands were exempted such as coffee plantation.
Finally India invited the United States of America to consult its next domestic support notification
for the breakdown of input subsides.

2.3.6 Indonesia (G/AG/N/IDN/30, G/AG/N/IDN/34)
AG-IMS ID 73052: Question by United States of America - Public stockholding for food
security purposes
The United States of America repeats questions previously asked in AG-IMS ID 71031
and AG-IMS ID 72036 since Indonesia has not notified Supporting Tables DS:4 and DS:5,
nor submitted a revision to its notification for administered prices during 2001-2004.
Could Indonesia please explain and provide further clarity regarding the acquisition of
stocks for its public stockholding for food security purposes programme in light of
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seemingly contradictory information in its notifications and responses to questions in
the Committee? Please address the following points:
a. The United States of America notes that Indonesia states that stocks are
procured at administered prices, which take market prices into account but are
not the sole determining factor (G/AG/W/111, AG-IMS ID 70026).
b. The United States of America also notes that Indonesia has not provided a
Supporting Table DS:4 or Supporting Table DS:5 to account for the use of
administered prices per footnote 5 of paragraph 3 of Annex 2 of the Agreement
on Agriculture.
c. Further, the United States of America understands Indonesia's response to part
(b) of AG-IMS ID 70031 to state that no administered price was reported after
2001 due to Indonesia's procurement being for buffer stock operations. This
appears to be inconsistent with the aforementioned footnote 5.
Answer by Indonesia
Indonesia has a programme named credit programme for energy and food sustainability.
This programme is intended to support low-income resource-poor farmers to develop their
staple food crops such as rice, cassava, sugarcane, and other food commodities.
Through this programme, farmers will be able to get loans from state-owned enterprise
banks for around US$10,000 per farmer with commercial interest rate around
10.5% - 11.5%. This interest rate is relatively higher compared to other countries, including
neighbouring Asian countries. Therefore, the government has to provide the interest rate
subsidy to enable low income resource poor farmers to take advantage of the loan scheme
to continue their production.
Around 50% of the interest loan will be borne by the government and farmers will have to
pay another 50%. Indonesia would like to clarify that in 2012, the total amount of the
interest rate subsidy that was paid by the government was IDR 196 billion or around
US$20 million. From 2007-2012, the total amount was IDR 630 billion or around
US$66 million.
Regarding the U.S. question on administered price, the price is set by government taking
into account previous domestic market price and cost of production by farmers. The
administered price is used for domestic procurement for low-income resource-poor farmers.
However, in most cases, the administered price is below the market price. This encourages
farmers to sell their commodities to traders or to the market. This condition makes BULOG
as a state trading enterprise responsible for rice procurement to procure its stock at the
market price both from domestic source and international market.
For the last 3 years, the administered price has been set at IDR 6,600 and has not changed
since then and it is always below the market price of rice. This administered price is only
applied to very limited volumes, around 5%-10% of total domestic consumption for rice.
Concerning the notification on Supporting table DS:4 and DS:5, the capital is still preparing
the notification. Indonesia expects to notify Supporting table DS:4 and DS:4 as soon as
possible.
2.3.7 Jordan (G/AG/N/JOR/16)
AG-IMS ID 73022: Question by Canada - Excessive rates of inflation
Canada would like to reiterate its appreciation for Jordan's commitment to transparency
in providing both unadjusted and adjusted numbers in its notification to the Committee
and would like to follow-up on Jordan's response. In light of Jordan's response, Canada
understands that, in calculating a Member's Current Total AMS, paragraph 8 of Annex 3
of the Agreement on Agriculture requires the external reference price to be fixed.
Canada recognizes that Article 18.4 provides that in the review process, Members (the
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Committee) shall give due consideration to the influence of excessive rates of inflation
on the ability of a Member to abide by its domestic support commitments. However,
Canada is of the view that Article 18.4 does not provide a methodology for adjusting a
Member's fixed external reference prices, and does not provide a methodology that
would consider accumulated inflation since the fixed external reference prices' reference
period, as a measure of excessive inflation affecting a Member's ability to abide by its
domestic support commitments.
a. Is Jordan planning on implementing changes in its domestic support
programmes to ensure that its unadjusted Current Total AMS for subsequent
years falls within its domestic support commitments?
b. Could Jordan provide any other information that could help the Committee
understand the particular methodology it has used, including the timing and
the basis for it?
Answer by Jordan
a. Currently there is no plan to change domestic support programmes.
b. Article 18.4 did not provide for the methodology for adjusting fixed external reference
price due to influence of excessive rates of inflation. Therefore, Jordan based the
calculation of inflation rate on average consumer price index for cereal from 1997-2010.
2.3.8 Norway (G/AG/N/NOR/73)
AG-IMS ID 73059: Question by European Union - Market price support
The European Union notes that Norway's market price support for barley increased by
more than 27% in 2012 compared to 2011. What are the reasons behind this increase?
Apart from an increase in the applied administered price and in production, have there
been policy changes?
Answer by Norway
No, there have not been policy changes. The main reason for the increase in AMS for barley
from 2011 to 2012 is the increase in production volume. This is a "natural" variation due to,
for instance, weather conditions influencing the annual production levels. In addition the
administered price was increased for all types of grain. For barley the increase was
0.07 NOK/kg, from 2.12 NOK/kg in 2011 to 2.19 NOK/kg in 2012.
2.3.9 Ukraine (G/AG/N/UKR/18)
AG-IMS ID 73023: Question by Canada - Other product-specific AMS/EMS
Canada observes that product-specific support provided to hops production, under a
measure which provides "compensation of costs of production", amounted to 119% of
that product's value of production in 2009, 95% of value of production in 2010 and
115% of value of production in 2011. Could Ukraine provide an explanation as to how
payments can exceed the value of production for hops?
Answer by Ukraine
Financial support for the development of hop cultivation is provided in accordance with the
procedure for charging fees and use of funds for the development of viticulture, horticulture
and hop cultivating, approved by the Resolution of the Cabinet of Ministers of Ukraine #587
of 15 July 2005.
Financial support is provided to entities engaged in hop cultivation, to compensate for their
expenses related to:
carrying out works on laying the plants (design, soil preparation and planting,
construction of trellis) and the acquisition of hanging materials for hops according to the
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standards of the cost per hectare, which are defined depending on planting schemes and
other technological features and costs of the relevant works;
care for productive plantations of hops with consideration of their average yield, the
volume of the hop products sold during the preceding three years (for new enterprises
the average yield in Ukraine for the past three years is taken into consideration) with
quality indicators defined in accordance with the National Standard of Ukraine
7067:2009 "Hops. Specifications, National Standard of Ukraine 4099:2009 Hops.
Sampling rules and test methods" within the established standards (25% of the budget
allocated for hop development);
purchase of machinery and appliances (including imported items, which are not
produced in Ukraine) for hop manufacturing operations
AG-IMS ID 73024: Question by Canada - Excessive rates of inflation
Canada observes that Ukraine has again indexed the reference price for sugar produced
from sugar beets. In Supporting Table DS:5, regarding the calculation of market price
support for sugar produced from sugar beets, document, WT/ACC/SPEC/UKR/1/Rev.12,
specifies that Ukraine's fixed external reference price for 20042006 is Hrv 1,747.33 per
tonne. Canada would like to once again point to the provisions contained in Paragraph 8,
Annex 3 of the Agreement on Agriculture, which require the external reference price to
be fixed. Ukraine has not adequately demonstrated so far how the indexing of the
reference price follows the rules of the agreement. Canada raised similar questions, as
did Japan, the European Union, Norway and Australia, during the June 2011 and
November 2012 meetings of the Committee and notes that Ukraine's response
repeatedly cited Article 18.4 as providing accommodation for its methodology. Ukraine
also indicated that it intends to use this methodology in future notifications. Canada
would like to reiterate that the appropriate methodology for calculating market price
support is described in paragraph 8, Annex 3 of the Agreement on Agriculture after
which due consideration shall be given, by this Committee, regarding the influence of
excessive inflation on a Member's ability to abide by its commitments as described in
Article 18.4.
Could Ukraine please indicate when it will provide revised notifications which would
include the accurate fixed external reference price of Hrv 1,747.33 per tonne for sugar
produced from sugar beets and revised Current Total AMS numbers for 2009, 2010 and
2011?
Answer by Ukraine
In the calculation of the market price support for sugar produced from sugar beets, the fixed
external reference price 1747.3 UAH/tonne was adjusted for inflation using the consumer
price index each year after the base period.
The application of external reference price without adjustment for inflation would be
incorrect and would not reflect the actual level of product support because applied
administered price increases annually due to excessive inflation and corresponding increased
cost of inputs for sugar production.
At present, the national sugar-beet industry faces a number of problems that need to be
legally regulated. In particular, the sale of sugar produced in excess of quota "A" and the
abolition of the minimum prices for sugar beets and quota "A" sugar as sugar (produced of
beets) is subject to government price regulation and the approval of minimum prices is
regulated by other current regulation.
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As the WTO Members have been previously informed, the Ministry of Agrarian Policy of
Ukraine has prepared the draft Law of Ukraine "On amending the law of Ukraine 'On state
regulation of production and sale of sugar' (the production and supply of sugar to the
domestic market)" (registration number 2856 from 18 April 2013). The draft law is aimed
at:
maintaining the productive capacity of the sugar industry;
formation of pro-market investment, credit and pricing policies for factory beets and
sugar;
settling the issue of sale of sugar produced over quota "A";
preservation and improvement of the quoting mechanism for manufacturing and
supplying on the domestic market of sugar (quota "A"); and
abolition of minimum prices for sugar beets and sugar quotas "A".
The abovementioned draft law has already been considered by the Committee of the
Verkhovna Rada of Ukraine on Agrarian Policy and Land Relations. Due to the current
changes in the government of Ukraine, the abovementioned draft law of Ukraine "On
amending the law of Ukraine 'On state regulation of production and sale of sugar'" is
submitted for reconsideration and re-approval by the responsible governmental bodies.
2.3.10 United States of America (G/AG/N/USA/80/REV.1, G/AG/N/USA/89/REV.1,
G/AG/N/USA/93)
AG-IMS ID 73060: Question by European Union - General services: other
The European Union notes that spending under "underwriting gains to insurers" notified
under General Services varies considerably over the period 2009 2011 reflected in the
three recent notifications. At the same time the other elements of the administrative
spending of the Risk Management Agency notified under General Services remain quite
stable.
a. Could the United States of America explain the substantial variations of the
"underwriting gains" from one year to another?
b. Could the United States of America explain how it is that "underwriting gains"
record a positive spending amount in the notifications in the years when loss
claims exceed premium income? (On the basis of the information on the
website of the USDA's Risk Management Agency, premium income exceeded
the claims under the federal crop insurance in 2010, while loss claims exceeded
premium income in 2009 and 2011).
a. Underwriting gains to insurers vary from year to year according to the amount of insured
losses that occur, whereas administrative and operating reimbursements to insurers are
based on premium volume, which is relatively more stable from year to year. Risk
Management Agency administrative and operating expenses are budgeted costs for
operating the government administrative structure for the crop insurance programme
and not tied to specific programme parameters.
b. The U.S. government and insurance companies share underwriting gains and losses
according to the terms set out in the Standard Reinsurance Agreement. Underwriting
gains generally vary from year to year according to the amount of insured losses that
occur. The United States notifies underwriting gains on a fiscal year basis for constancy
with the notification of other programmes in Supporting Table DS:1. The underwriting
gains reported on a fiscal year basis, rather than on a crop year basis, obscures the
timing of the underwriting gain payments. A larger share of underwriting gains for a
given crop year can end up being reported in the next fiscal year at the expense of the
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previous fiscal year, depending on the accuracy of the projections at the time. Reporting
on a crop year basis provides the better representation of the actual timing of
underwriting gain payments to insurance companies. However, in the long run the total
underwriting gains, on a crop-year or fiscal-year basis balance out, with both showing a
total of about US$12 billion paid to insurance companies during 2003 to 2013.
AG-IMS ID 73061: Question by European Union - Market price support
Regarding G/AG/N/USA/80/REV.1,
a. In relation to the explanation in footnote 2, could the United States of America
explain the reason behind the temporary increase in the applied administered
prices for the two dairy products in 2009?
b. Could the United States of America explain how they identified the "eligible
production" of nonfat dry milk and cheddar cheese for the purpose of the
calculations made in Supporting Table DS:5?
c. The MPS for butter, nonfat dry milk and cheddar cheese do not seem to add up
to the "total dairy" amount. Could the United States of America confirm the
calculations?
a. The temporary increase in the applied administered price was made to address falling
market prices at the time. The increase was made temporary to minimize longer term
interventions in the dairy sector.
b. "Eligible production" is the reported annual production quantity for each product as
provided by the U.S. Department of Agriculture National Agricultural Statistics Service.
c. This was an error in the revision to the notification as the "Total market price support" in
column 8 was not included for cheddar cheese and nonfat dry milk at the applied
administered price of US$2,491.223/tonne and US$1,763.698/tonne, respectively. The
value in column 8 should read US$1,615.394 for cheddar cheese and US$270.730 for
nonfat dry milk. The correct information can also be found in G/AG/N/USA/80.
AG-IMS ID 73062: Question by European Union - Non-product-specific AMS
In the latest notifications presented by the United States of America, the European
Union observes a substantial increase in spending on premium subsidies to producers
under the crop and revenue insurance subsidised by the Federal Crop Insurance
Corporation (in Supporting Table DS:9).
a. Could the United States of America indicate what percentage of farmers made
use of this insurance over the three latest years notified 2009 - 2011?
b. How is "revenue" defined for the purpose of the insurance?
a. The United States of America does not track the percentage of farmers who enroll in
crop insurance. In 2009, 2010, and 2011, the net acres insured did not change
substantially (approximately 265 million acres) indicating that there was not a significant
change in the crop insurance participation rate. The increase in spending to producers
under the crop insurance programme instead is mostly accounted for by an increase in
commodity prices. An increase in commodity prices increases insured liabilities which, in
turn, increase the amount of the premium and subsidy.
b. The U.S. Department of Agriculture Risk Management Agency defines revenue as yield
times market price.
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AG-IMS ID 73064: Question by European Union - Classification of measures
In G/AG/N/USA/80/Rev.1 and G/AG/N/USA/89/Rev.1, the United States of America
notes that the reporting on the Rural Energy for America was corrected in the
notifications. Could the United States of America explain why they consider this change
was necessary?
The Rural Energy for America programme provides grants and loan guarantees to both farm
and non-farm rural small businesses to purchase renewable energy systems and make
energy efficiency improvements. Specific data on what share of grants and loan guarantees
were awarded to farmers and ranchers are not available. Further, the programme has been
changed through legislation over time, and in light of those changes, the United States of
America reviewed how the programme is notified. The United States of America has decided
to report this as non-product specific support since some of the expenditure may be
providing direct assistance to producers in upgrading energy systems on their farms.
2.4 EXPORT SUBSIDY COMMITMENTS (TABLES ES:1, ES:2 AND ES:3)
2.4.1 Brazil (G/AG/N/BRA/33)
AG-IMS ID 73065: Question by European Union - Government involvement
Could Brazil provide information on the PAA programme (Programa de Aquisio de
Alimentos) as applied by the Brazilian government? According to the publicly available
data, the Brazilian government purchased 830,000 tonnes of food amounting to a cost of
R$1,75 billion in 2012 under the PAA and this amount is partly or fully exported as food
aid. Are those amounts reflected in the Brazilian export subsidies or in any other
notification? Could Brazil explain how the measures applied by the government in the
context of this programme comply with the definition of export subsidies as laid down in
Article 1(e) of the Agreement on Agriculture, given that the purchased products are
exported?
Answer by Brazil
The amounts mentioned in the question do not reflect the Brazilian official data. According to
the Federal Budget, the total cost of the programme was R$422.5 million in 2012, notified
as a Green Box measure under the "program of acquisition of agricultural products from
family farming". The quantity purchased under the programme was 297,600 tonnes of food,
according to CONAB's Annual Report, the operational body of the programme. The products
that are the object of international food aid have come either from government stockpiles
(mostly purchased under Marketing Price Support Program, as notified in the Supporting
Tables DS:5) or acquisitions for international humanitarian purposes. None of the modalities
of purchase are contingent upon export performance.
2.4.2 European Union (G/AG/N/EU/18)
AG-IMS ID 73025: Question by Australia - Transparency issues
Australia notes the reported remarks of the European Commissioner for Agriculture and
Rural Development on 16 January 2014, in particular that:
"Since 1 January, EU legislation is also very clear: export refunds have ceased to exist as
a means of systematically supporting a sector. Moreover, I would like to tell you this
evening, in the framework of preferential partnership agreements with African
countries: I am prepared to go one step further. I am ready to propose to stop, once and
for all, the use of export refunds to those developing country destinations even in
times of crisis when this instrument can still be used. This commitment will bring our
agricultural policy fully into line with EU development policy."
Australia recognises this statement as reflecting both reform undertaken, and also a
proposal for another further step in the right direction. At the same time, Australia
considers that while welcome, this reform will continue to fall short of the commitment
to the parallel elimination of all forms of export subsidies and disciplines on all export
G/AG/W/126

- 45 -

measures with equivalent effect, as set out in the 2005 Hong Kong Ministerial
Declaration, and then reaffirmed by Ministers in Bali. In this context, Australia notes
that while the European Union pays no export refunds, its level of export subsidies on
sugar has generally remained at or above its export subsidy commitment levels. Will the
European Union ensure that the physical quantity of EU sugar exports subject to export
subsidies for the 2013/2014 marketing year complies with its obligations. Consistent
with Ministers' commitment to enhance transparency and to improve monitoring in
relation to all forms of export subsidies and all export measures with equivalent effect,
Australia reiterates its previous request for the European Union to provide data on the
physical volume of sugar exports.
The European Union fully supports the objective of parallel elimination of all forms of export
subsidies and disciplines on all export measures with equivalent effect as was reaffirmed by
Ministers in Bali. The European Union has always respected its bound commitments and also
intends to do so in the future, including on export subsidies for sugar. EU trade statistics,
including on sugar exports, are available via EU statistical office Eurostat
2
.

2
See http://epp.eurostat.ec.europa.eu/newxtweb/setupdimselection.do#

G/AG/W/126

- 46 -

ANNEX 1
CHART OF MONTHLY AVERAGE U.S. SPOT PRICE AND A-INDEX FOR COTTON
(AG-IMS ID 73035)

Source: Cotton report by USTR for March 2014
G/AG/W/126

- 47 -

ANNEX 2
TURKEY'S COMMON WHEAT IMPORTS (TOTAL) (AG-IMS ID 73042)
YEAR Quantity (tonnes)
2011 4,729,257
2012 3,490,343
2013 3,463,294

TURKEY'S COMMON WHEAT FLOUR EXPORTS (TOTAL)
YEAR Quantity (tonnes)
2011 1,984,515
2012 1,993,012
2013 2,142,771

G
/
A
G
/
W
/
1
2
6

-

4
8

-

ANNEX 3
FUNDING SOURCES OF GUATEMALA'S DOMESTIC SUPPORT PROGRAMMES LISTED IN G/AG/N/GTM/45 (AG-IMS ID 73049)
Measure type Name Description of measure with
reference to criteria in
Annex 2
Source of funding
2004 2005 2006 2007 2008 2009 2010 2011 2012
DS ED DS ED DS ED DS ED DS ED DS ED DS ED DS ED DS ED
General Services,
Agricultural Research
Services (Annex 2,
paragraph 2(a))
Institute of Agricultural
Science and Technology
Research and development
of seed varieties
X X X X X X X X X X X
Restructuring
of agrifood production
Agrifood research X X X X X X X X X X X X
Extension and training
(Annex 2,
paragraph 2(c))
Agricultural training
schools (EFAS)
Agriculture-oriented basic formal
education and technical training
for students in rural areas
X X X X X X X X X X
Fruit-growing
and Agroindustry
Development Project
(PROFRUTA)
Support for fruit-growing
and agroindustry development in
the form of training and technical
assistance for producers
X X X X X X X
Maya Center agrifood
services
Technical assistance and training
for small and medium-size
producers in agriculture-,
livestock-, agroindustrial
development- and
gender-related matters
X X X X X X X X
PRODERT Implementation of production
projects
X X X X
PROCUCH Implementation of production
projects
X X X X X
Comprehensive project
for Chort communities
Implementation of production
projects
X X
Special Programme for
Food Security (PESA)
Training and technical assistance
for food production
X X X X X
Watershed conservation Watershed management
and conservation
X X X X X X X

G
/
A
G
/
W
/
1
2
6

-

4
9

-

Measure type Name Description of measure with
reference to criteria in
Annex 2
Source of funding
2004 2005 2006 2007 2008 2009 2010 2011 2012
DS ED DS ED DS ED DS ED DS ED DS ED DS ED DS ED DS ED
Rural Development
Programme, Phase
One: The Western
Region
Implementation of production
projects
X X X X
Support for rural
economies
Training and technical assistance
to galvanize the rural economy
X
PROBOTEN Technical assistance in managing
and maintaining forest
plantations
X
g. Infrastructure
services
(Annex 2,
paragraph 2(g))
Post-harvest
management
Training for silo manufacturers
and delivery of silos to rural
families
X X X X X X X X X X
h. Domestic food aid
(Annex 2, paragraph 4)
Food security support Food aid for vulnerable segments
of the population
X X X X X X X X X X X X X
i. Structural adjustment
assistance provided
through investment
aids
(Annex 2,
paragraph 11)
PLAMAR / DIAPRYD Credit support for irrigation
systems in agricultural
areas affected by seasonal water
deficit
X X X X X X X X X X X X
Pest and disease
control
(Annex 2,
paragraph 2(b))
Integrated pest and
transfer management
Integrated pest management X X X X X
Aid for relief from
natural disasters
Support for the
population affected
by Tropical Storm
Agatha, Government
Decision No. 15-2010
(Food aid) X X
Environmental
programmes (Annex 2,
paragraph 12)
Forests and Water Trust
Fund for Concord
Guatemalan
Government-initiated project for
the reforestation of municipally
owned areas and/or areas
without forest cover, with
financial incentives for former
civil patrol members to restock
an anticipated 25,000 hectares
of deforested soil
X X X
c. Domestic food aid
"Supertortillas"
for enhanced nutrition
Provision of enriched flour X
DS/Domestic Source
ED/External Donors
__________

Compilation of Responses To Questions Raised During The Wto Committee On Agriculture Meeting On 21 March 2014

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