RESTRICTED  WORLD TRADE  
ORGANIZATION  G/AG/R/37 
18 December 2003 
 (03-6652) 
Committee on Agriculture  
 
 
 
SUMMARY REPORT OF THE MEET ING HELD ON 20 NOVEMBER 2003  
 
Note by the Secretariat1 
 
 
1. The Committee on Agriculture held its thirty- seventh regular meeting on 20 November 2003 
under the chairmanship of Dr. Magdi Farahat of E gypt.  The agenda of the meeting as contained in 
WTO/AIR/2210 was adopted.  
PART I:  THE REVIEW PROCESS  
A. M ATTERS RELEVANT TO THE IMPLEMENTATION OF CO MMITMENTS UNDER THE REFORM 
PROGRAMME :  ARTICLE 18.6 
(a) Argentina:  European Communities – Export subsidies  
2. Argentina requested information from the EC  regarding export subsidies, as follows: 
(i) Whether the EC could identify all me asures, including implementation measures 
enacted by the EC member States, which authorized or referred to the provision of 
export subsidies.  The EC responded that pa yment of export subsidies was authorized 
in EC Council Regulations on the Common Or ganisation of Markets of agricultural 
products (so called "basic regul ations").  These basic regulations included a list of 
products with their Combined Nomenclature  codes and in a general manner defined 
the products subject to refunds and the "b asic" conditions for granting them.  More 
specific requirements and the rules for calculating the amounts were set out by means 
of implementation regulations (usually adopted by the EC Commission).  In accordance with these requirements and rules,  the Commission fixed the actual refund 
in specific periodic regulations published in the Official Journal of the European Union.  The EC stated that supplementing this "vertical" (product specific) regulation there existed horizontal legislation on fina ncial (EAGGF) and control aspects, as well 
as legislation concerning certification and customs purposes.  All the relevant 
legislation was available on the Internet (h ttp://europa.eu.int/eur-lex/es/index.html).  
 (ii) Whether for each of these measures, the EC could provide information regarding the 
products which may benefit from such e xport subsidies and the per unit export 
subsidy on a product-specific basis established in its regulations.  The EC referred to 
its response under paragraph 2(i) above. 
 (iii) Whether the EC could provide inform ation regarding budgeta ry outlays on export 
subsidies and quantities of subsidized exports  in 2002 and the most recent period in 
                                                     
 
1 This document has been prepared under the Secret ariat's own responsibility and is without prejudice 
to the positions of Members or to their rights or obligations under the WTO. G/AG/R/37 
Page 2  
 
2003.
2  The EC replied that the most recen t information available concerning export 
refunds had been communicated to the Co mmittee in notification G/AG/N/EEC/44 of 
11 June 2003 (for the marketing year 2001/02) in the format agreed for WTO notification purposes.  Concerning data for 200 2/03, the EC stated that it was not yet  
in a position to provide this data at th is meeting but would do so in due time.
 
 
 (iv) Whether the EC could list the countries of destination with respect to exports 
benefiting from an export subsidy in 2002 and the most recent period of 2003 and 
provide information concerning the re lated budgetary outlays and quantities 
exported.3  Furthermore, whether the EC could provide information on budgetary 
outlays and quantities of subsidized exports  of bovine meat to Indonesia, Japan, 
Korea, Philippines, Malaysia, Singapore, Th ailand and Viet Nam since 1995.  The EC 
responded that such statistics were not availabl e, nor was this type of information  the 
subject of reporting to the WTO. 
 
 (v) Whether the EC could list the countries of origin in the European Union with respect 
to exports benefiting from an export subsid y in 2002 and the most recent period in 
2003 and provide information concerning the related budgetary outlays and quantities 
exported.4  The EC noted that it was counted as one Member of the WTO and 
considered that the detailed information re quested by Argentina was irrelevant for the 
review process. 
 
3. Argentina requested that the EC provide a list of regulations (i.e. ge neral and implementation 
regulations) that were applicable or currently used to manage export refunds.  Argentina also 
reiterated its request for data c oncerning budgetary outlays and quantities of subsidized exports by 
product.  
4. The EC repeated that the regulations were published on its website but would be willing to 
help in locating the relevant information. 
(b) Argentina:  Hungary – Tariff quota underfill  
5. Argentina provided data (see Attachment hereto ) showing underfill with respect to Hungary's 
tariff quotas for milk and cream, corn and poultry.  Argentina sought clarification as to why these 
                                                      
2 Argentina requested the information for the products within the following product groups:  (a) Wheat 
and wheat flour:  wheat;  wheat flour;  (b) Coarse gr ains:  maize (corn);  grain sorghum;  cereal groats of 
common wheat;  cereal groats of common maize;  pellets of wheat;  pellets of maize;  rolled or flaked grains of wheat;  rolled or flaked grains of maize;  other worked grains of wheat;  other worked grains of maize;  malt;  
germ of cereal;  wheat starch;  maize starch;  wheat glut en;  glucose;  glucose syrup and its preparations for 
animal feeding;  bran sharps or other residues (tariff line 23.02);  (c) Other milk products:  non-concentrated milk;  non-concentrated cream;  butte rmilk;  yoghurt;  other products cons isting of natural milk constituent;  
preparations of a kind used in animal feeding (tariff lines ex 2309 10 and 2309 90);  (d) Bovine meat:  live 
animals;  fresh or chilled meat;  frozen meat;  edible o ffal (fresh, chilled and frozen);  salted, dried, smoked and 
in brine meat;  other prepared meat, meat offal or blood ;  (e) Poultry:  live animals;  fresh and chilled meat;  
frozen meat;  meat offal;  other prepared or preserved meat , meat offal or blood;  (f) Wines:  grape must;  grape 
juice and wine;  (g) Fresh fruits and vegetables (identify the amounts for each of the fruits or vegetables);  
(h) Processed fruits and vegetables (i dentify the amounts for each of the fruits  or vegetables);  (i) Incorporated 
products (identify the amounts for each of  the products included under this item). 
3 Argentina requested the information for the following product groups:  bovine meat;  poultry meat; 
eggs;  butter;  skimmed milk powder;  cheese;  other dairy;  cereals (including rice);  flour;  wine;  fresh fruit 
and vegetables;  processed fruit and vegetables.  
4 Argentina requested the information for the following product groups: bovine meat;  poultry meat;  
eggs;  butter;  skimmed milk powder;  cheese;  other dairy;  cereals (including rice);  flour;  wine;  fresh fruit 
and vegetables;  processed fruit and vegetables.      G/AG/R/37 
 Page 3 
 
 
tariff quotas were consistently underutilized when , at the same time, Hungary provided export 
subsidies on corn and poultry, and de minimis  domestic support on dairy products.   
6. Hungary undertook to provide a response. 
(c) Argentina:  Switzerland – Export subsidies  
7. Argentina requested information from Switzerla nd with respect to all measures, including 
implementation measures, that authorized or referre d to the provision of export subsidies.  Argentina 
also requested information regarding the eligible  products under each of these measures and the per 
unit export subsidy on a product-specifi c basis established in the regulations. 
8. Furthermore, Argentina sought information re garding budgetary outlays and quantities for 
each of the products included in th e incorporated products category. 
9. In response, Switzerland referred to its notif ication G/AG/N/CHE/25 of 25 March 2002 which 
had been prepared in accordance with the relevant notification requirements in G/AG/2 and in 
accordance with the Schedule of Switzerland-Liechtenstein.  The qua ntities and outlays notified that 
exceeded the annual commitment levels in 1999 were in conformity with the notification requirements 
in document G/AG/2, page 24, paragraph (i), and (using the flexibility of the Agreement on 
Agriculture) represented quantities or outlays lowe r than the respective commitment levels not 
utilized previously.  
10. Switzerland confirmed that the measures referred to in notification G/AG/N/CHE/25 were 
those currently in force.  Switzerland also advi sed that it would provide an updated export subsidy 
notification before the end of 2003. 
11. Argentina reiterated its request for informa tion concerning incorporated products.  The 
representative of Switzerland stated that he would revert to his capital. 
(d) Argentina:  United States – Export subsidies  
12. Argentina requested information from the Unite d States with respect to all measures, 
including implementation measures that authorized or  referred to the provision of export subsidies.  
Argentina also requested information regarding th e eligible products under each of these measures. 
13. The United States responded that the programm es that referred to the provision of export 
subsidies included the Export Enhancement Progr am (EEP) and Dairy Export Incentive Program 
(DEIP) under which cash bonuses were paid to US exporters, allowing them to meet prevailing world 
market prices for targeted US ag ricultural commodities.  The EEP had not  been used sin ce fiscal year 
2001.  The Commodity Credit Corporation (CCC) was authorized to make direct sales of dairy 
products from its inventories to export markets,  however, the CCC had not done so since 1995.  
Commodities eligible under DEIP initiatives were milk powder, butterfat, and cheddar, mozzarella, 
Gouda, feta, cream, and processed American cheeses .  Commodities eligible for EEP initiatives were 
wheat, wheat flour, rice, frozen poultry, barley, barley malt, table eggs, and vegetable oil. 
14. With regard to Argentina's request to provide data concerning destination countries of exports 
benefiting from an export subsidy in 2002 and the most recent period in 2003, the United States 
referred to the USDA and the WTO websites for the la test information regarding exports to specific 
destinations.   
15. The United States, in response to a question by Malaysia, confirmed that no export subsidies, 
including for exports of vegetable oils, had been  made available through the EEP since 2001.   G/AG/R/37 
Page 4  
 
(e) Canada:  United States – Farm Secur ity and Rural Investment (FSRI) Act 2002
 
16. Canada recalled that it had sought clarification at the September 2003 meeting as to whether 
and when the United States would be notifying an y new or modified programmes or measures under 
the FSRI Act that the United States considered to be exempt from domestic support reductions.  The 
United States had responded that the Act was still in the process of being implemented.  In light of 
public statements by the US Secretary of Agriculture indicating that the implementation process was 
now complete, Canada restated its question rega rding the US intentions to submit Table DS:2 
notifications.  
17. The United States replied that the Table DS:2  notifications for programmes under the 2002 
Farm Bill, for which exemption would be claimed,  were under preparation a nd would be submitted as 
soon as possible.   
18. Australia called on the United States to submit a notification as soon as possible.  Australia 
was particularly interested in programmes such as multi-year crop disaster and counter-cyclical payments.  Argentina and Brazil supported the questi ons by Canada.  Brazil noted that thus far no 
precise answers had been given as to how the United States intended to proceed with respect to the 
notification of its domestic support measures u nder the 2002 Farm Bill.  Brazil urged the 
United States to clarify this matter and recalled th at in line with Article 18.3 of the Agreement on 
Agriculture, any new or modified domestic support measures that were to be exempt from reduction 
commitment should be notified promptly.  This was a matter of transparency not only in relation to 
the implementation of the Agreement but also w ith an impact on the agriculture negotiations.  
(f) Canada:  India – Tariff quota for refined colza oil
 
19. Canada stated that, in accordance with India' s modifications to its Schedule XII effective 
3 February 2003 (WT/Let/440), India had establishe d a tariff quota of 150,000 tonnes of refined colza 
oil (HS 1514.90).  Canada requested that India provi de information as to how it had administered the 
tariff quota in 2003 (including information concerning the government agency or body that granted licences or access to the tariff quota, eligibility of applicants, how licences or access were allocated, 
whether there were any limitations on the period of va lidity or use of the licences granted, whether the 
tariff quota was applied on a calendar or marketing year).   Canada also sought cl arification as to when 
India intended to submit a Table MA:1 notification re levant to this tariff quota.  Canada emphasized 
the importance of this issue to the Canadian Governme nt and particularly to the Canadian industry.   
20. India responded that it had not been able to co llect the relevant information and undertook to 
provide a reply as soon as possible.  
(g) United States:  India – Tariffs above commitment levels
 
21. The United States recalled that it had raised questions at the March 2003 meeting with respect 
to India's tariffs on soya bean oil.  At the June  2003 meeting, the United States had submitted further 
questions to which India had not yet responded.  The United States was concerned that India had 
introduced a base import valuation scheme on imports of  soya bean oil under which India applied the 
bound tariff of 45 per cent to the fixed reference pr ice, resulting in a tariff for imported crude soya 
bean oil consistently above the WTO binding.  The fixed reference price on edible oils was revised 
when the average prevailing price was at least 10 per cent above or below the current reference price.  
However, amendments made on 3 December 2002, and on 14 May 2003, indicated that in practice 
this process failed to keep up with changes in worl d market prices.  The United States asked India to 
provide an explanation of this system, in partic ular the frequency of amendments to the reference 
price.  With respect to India's efforts to resolve suspected under-invoicing in the edible oil market, the 
United States sought clarification as to whether the fixed reference price on edible oils remained a 
long-term policy or whether India was considering al ternative methods to address this problem.     G/AG/R/37 
 Page 5 
 
 
22. India responded that the tariffs applied on soya  bean oil were based on prices published in the 
"Oil World Weekly" for the ports FOB Brazil and FOB Argentina since the bulk of imports were from 
these countries.  The trends in international prices we re reviewed on a weekly basis, as indicated in 
India's earlier reply on this issue.  India had consis tently ensured that the applied rates of duty did not 
exceed the bound rate of 45 per cent.  The tariff valu es were based on relevant published prices, while 
the US methodology was evidently based on trade sources.  India stated that the present system was 
reliable, neutral and transparent and the tariff valu es were amended upwards or  downwards consistent 
with movements in international prices.  
23. The United States inquired as to how often the applied tariff rates were adjusted.  As a 
preliminary response, India stated that the trends in international prices were reviewed on a weekly 
basis and the reference prices were revised accordingly.  
(h) United States:  India – Grain export subsidies  
24. The United States noted that it had raised concer ns at previous Committee meetings about the 
possibility that India had begun using export subsidies to market burgeoning stocks of wheat and rice.  
As the United States had not yet received a reply, it requested that India provide clarification as 
follows: 
(i) Whether India could confirm that it provi ded domestically procured wheat and rice to 
exporters at prices below the prevailing world market prices.  India recalled that it had already confirmed in a reply to a sim ilar question posed by Thailand at an earlier 
meeting that procurements of wheat and ri ce by the Food Corporation of India were 
made at the Minimum Support Price announced by the Government every year for 
distribution under various poverty allevia tion and other welfare schemes and for 
buffer stocking operations.  Any surplus st ocks available could be purchased by 
exporters or by domestic traders and consumer s at the Open Market Sale Price, which 
was higher than the price at which wheat and rice were distributed domestically under 
the poverty alleviation and other welfare schemes. 
(ii) Whether India could confirm that it provide d rice and wheat to exporters at prices that 
did not allow it to recover its procurement costs.  India replied that there was no linkage between procurement costs and the Open Market Sale Price at which exporters could purchase surplus stocks. 
(iii) Whether the export price was generally av ailable domestically.  India reiterated that 
exporters or domestic traders and consum ers could purchase surplus stocks at the 
Open Market Sale Price. 
(iv) Whether India could comment on the statement that it appeared that India was 
subsidizing its exports of wheat and ri ce, although it did not have specific export 
subsidy commitments for these products.  I ndia responded that the export subsidies 
for wheat and rice were extended consisten tly with India's rights and obligations 
arising from Article 9.4 read in conjunctio n with Article 9.1(d) and (e) of the 
Agreement on Agriculture. 
(v) Whether India planned to make revision s to its wheat and rice export programmes in 
light of recent recommendations by the Indian Food Ministry on grain policy.  India replied that revisions to existing policy were  made from time to time and that India 
remained committed to meeting its obligati ons under the Agreement on Agriculture. G/AG/R/37 
Page 6  
 
B. R
EVIEW OF NOTIFICATIONS  
(a) Notifications in respect of which questions have  been raised in advan ce of the issuance of the 
convening airgram  
 25. The Committee reviewed the following no tifications as listed in the agenda: 
 (i) on the administration of tariff and other quota commitments (Table MA:1):  from 
China (CHN/2) and Poland (POL/57); 
 (ii) relating to imports under tariff and ot her quota commitments (Table MA:2):  from 
Bulgaria (BGR/9) and China (CHN/3); 
 (iii) in the context of the special safegua rd (Tables MA:3 to MA :5):  from the Czech 
Republic (CZE/49 and CZE/50) and Japan (JPN/84); 
 (iv) relating to domestic support commitme nts (Table DS:1):  from Estonia (EST/10), 
Nicaragua (NIC/16) and Romania (ROM/20);  and 
 (v) relating to new or modified domestic support measures exempt from reduction 
(Table DS:2):  Estonia (EST/11) and Latvia (LVA/8). 
26. Specific points raised with respect to the notif ications listed above and the responses thereto 
are summarized in Part I of the Annex to this report.   As the Chairman had indicated when the agenda 
was adopted, with respect to notification G/AG/ N/CZE/49, Australia had submitted an additional 
advance question concerning the volume-based SS G on certain dairy products which erroneously 
appeared in the airgram under the notificatio n G/AG/N/CZE/50.  Regarding the notification 
G/AG/N/CZE/50, Australia's question pertained to details concerning the volume-based SSG on pork 
rather than dairy products as indicated in the airgram. 
 The United States withdrew the question to 
China concerning licensing requirements in relation to the notification G/AG/N/CHN/2. 
(b) Notifications subject to review in respect of which no questions have been raised in advance  
of the issuance of the convening airgram  
 
27. The Committee took note of the following notificatio ns, which had been circulated in advance 
of the date on which the notice convening the present meeting was issued but in respect of which no 
questions had been raised by that date under the Committee's Working Procedures: 
(i) on the administration of tariff and other quota commitments (Table MA:1):  from 
Israel (ISR/27/Corr.1) and Lithuania (LTU/1); 
(ii) relating to imports under tariff and other quota commitments (Table MA:2):  from 
El Salvador (SLV/20) and Ni caragua (NIC/12 and NIC/14); 
(iii) in the context of the special safeguard (Tables MA:3 to MA:5):  from Canada 
(CAN/51), El Salvador (SLV/18), Japan (JPN/84/Corr.1 and JPN/85), Nicaragua 
(NIC/13), Romania (ROM/18), South Africa (ZAF/49) and Chinese Taipei (TPKM/11); 
(iv) in the context of domestic support commitmen ts (Table DS:1):  from El Salvador 
(SLV/19), Latvia (LVA/7/Rev.1), Nicara gua (NIC/11), Slovenia (SVN/25/Corr.1) 
and South Africa (ZAF/47);  G/AG/R/37 
 Page 7 
 
 
(v) on export subsidy commitments (Tables ES:1 to ES:3):  from El Salvador (SLV/17), 
Honduras (HND/14 and HND/15), Japan (JPN/86), Jordan (JOR/4), Nicaragua (NIC/15), Peru (PER/6), Romania (ROM/19) and South Africa (ZAF/48); 
(vi) on export prohibitions and restrictions (T able ER:1):  from Bulgaria (BGR/10). 
(c) Notifications circulated or made available after the notice convening the meeting was issued
 
 
28. The following notification was subject to prelimin ary review and is to be reverted to at the 
next meeting for substantive review in accordan ce with paragraph 9 of the Committee's Working 
Procedures (G/AG/1): 
(i) relating to imports under tariff and othe r quota commitments (Table MA:2):  from 
Nicaragua (NIC/14/Corr.1).  
(d) Points concerning notifications raised at previous meetings  
 29. There was no discussion under this agenda item.  
(e) Counter notifications under Article 18.7 of the Agreement
 
30. The Committee took note that no counter-notifi cations had been received under Article 18.7 
of the Agreement. 
(f) Deferred replies to questions raised under the Review Process  
 31. The deferred reply received from Israel regarding its Table MA:1 notification 
(G/AG/N/ISR/27) is summarized in Part II of the Annex to this report.   
32. Following the November meeting, the Secretar iat received deferred replies from Hungary 
under Article 18.6 of the Agreement concerning the matter Argentina – Hungary:  Tariff quota 
underfill, and from Nicaragua concerning its Tabl e DS:1 notification (G/AG/N/NIC/16).  These 
replies are included in Part II of the Annex to this report.   
(g) Overdue notifications
 
 
33. The Committee took note of the room document,  dated 19 November 2003, made available by 
the Secretariat showing the current status of compliance with the notification obligations.   
34. With reference to the room document, Romania requested that its Table ES:2 notification for 
calendar years 2000, 2001 and 2002 be reflected.  Ar gentina stated that it was concerned about the 
delays by Members with domestic support measures in notifying these measures to the Committee.  
Argentina urged that progress be made in this regard. 
(h) Addenda to Table MA:1 notifications  
 35. The Committee took note that the following Members administering tariff quotas had 
submitted the requisite Table MA :1 Addenda in accordance with the General Council Decision of 
December 2000 (paragraph 1.1 of WT/L/384 refers):   Australia, Canada, the Czech Republic, the EC, 
Hungary, Japan, Latvia, New Zealand, Norway , Slovenia, Switzerland, Thailand, and the 
United States.  The Chairman urged those Members administering tariff quotas which had not yet done so to provide Addenda to their Table MA:1 no tifications in accordance with the General Council 
Decision in WT/L/384. G/AG/R/37 
Page 8  
 
P
ART II:  OTHER MATTERS WITHIN THE PURVIEW OF THE COMMITTEE  
 
A. I MPLEMENTATION OF ARTICLE 10.2  OF THE AGREEMENT ON AGRICULTURE , ON THE 
DEVELOPMENT OF INTERNATIONALLY AGREED DISCIPLINES TO GOVERN THE PROVISION OF 
EXPORT CREDITS , EXPORT CREDIT GUARANTEES OR INSURANCE PROGRAMMES (G/AG/16,  
SECTION  A) 
 36. Argentina recalled the statement that it had made under this agenda item at the September 
meeting of the Committee (G/AG/R/36, paragraph 35).  
B. A
NNUAL MONITORING EXERCISE ON THE FOLLOW -UP TO THE MARRAKESH MINISTERIAL 
DECISION ON MEASURES CONCERNING THE POSSIBLE NEGATIVE EFFECTS OF THE REFORM 
PROGRAMME ON LEAST -DEVELOPED AND NET FOOD-IMPORTING DEVELOPING COUNTRIES , 
INCLUDING THE FOLLOW -UP TO THE COMMITTEE 'S RECOMMENDATIONS ADOPTED BY THE 
GENERAL COUNCIL (G/AG/16,  SECTION B)  
 
37. The Committee took note of the following Table NF :1 notifications that were received since 
the last annual monitoring exercise of the NFIDC Decision in November 2002:  Argentina (G/AG/N/ARG/21), Australia (G/AG/N/AUS/51), Brazil (G/AG/N/BRA/20), Canada (G/AG/N/CAN/52), Cuba (G/AG/N/CUB/22), EC (G/AG/N/EEC/46), Japan (G/AG/N/JPN/87), South Africa (G/AG/N/ZAF/50), Switzerland (G/AG/N/CHE/30) and the United States 
(G/AG/N/USA/46).  New Zealand informed the Committee that it would shortly submit an updated 
Table NF:1 notification. 
38. A revision of the Secretariat background note for the purpose of facilitating the annual 
monitoring exercise was circulated as G/AG/W/42/Rev.6 dated 31 October 2003.  The contributions by the observer organizations under this agenda item (FAO, IMF, International Grains Council and 
the World Bank) have been circulated in document G/AG/GEN/64 dated 5 December 2003.  
39. With reference to the statements by the IMF and the World Bank, Cuba and the United States 
welcomed the initiatives of these institutions aimed at  mitigating any negative effects of multilateral 
trade liberalization on LDCs and NFIDCs.  For its part, Cuba considered it important that multilateral 
initiatives in the context of the Marrakesh NFIDC D ecision, including alternatives to the Revolving 
Fund proposal, cover all countries on the WTO NFIDC list.  Egypt sought clarification regarding the 
details of the World Bank programme of enha nced assistance to help countries meet new 
commitments made in the Doha Round (G/AG/GEN/ 64, page 18).  The EC invited the observer 
organizations, especially the World Bank, to gi ve consideration to providing assistance in the 
framework of the Sectoral Initiative on Cotton by Benin, Burkina Faso, Chad, and Mali. 
C. A
NNUAL CONSULTATION UNDER ARTICLE 18.5  OF THE AGREEMENT ON AGRICULTURE WITH 
RESPECT TO MEMBERS ' PARTICIPATION IN THE NORMAL GROWTH OF WORLD TRADE IN 
AGRICULTURAL PRODUCTS WITHIN THE FRAMEWORK OF THE COMMITMENTS ON EXPORT 
SUBSIDIES UNDER THE AGREEMENT  (G/AG/W/32/R EV.6). 
 40. With reference to the Secretariat sta tistical background note (G/AG/W/32/Rev.6),
 Argentina 
noted that for a number of products, such as for example wheat and wheat flour, in certain years a 
relatively high share of the world market was attribut ed to the "rest of the world".  In such cases, it 
would be useful to have a better break-down of th e data and identify other exporters with sizeable 
exports.   
41. The EC observed that an increased share of world exports was captured by countries other 
than the EC and the United States.  For example, since 1995 the exports of other countries had increased by approximately 30 per cent for wheat, 20 per cent for sugar, 25 per cent for rice and 
11 per cent for  milk powder.  In the view of th e EC, this was a positive development which showed  G/AG/R/37 
 Page 9 
 
 
that other Members had indeed benefited from trad e liberalization resulting from the Uruguay Round.  
With respect to food aid the EC noted that fo r some time the EC had been a demandeur for 
establishing rules to govern food aid.  When large quantities of products were put on the international 
markets in the context of food aid, there was us ually a drop in prices on the world market, although 
the United States would argue that during times of lo w prices it was cheaper to put large quantities of 
food aid on the market.  In the view of the EC, this was a good example why better rules and criteria were needed in this area. 
42. Australia stated that, the EC observations notw ithstanding, the international markets of many 
agricultural products remained highly distorted a nd significant progress had to be made to enable 
Members with a comparative advantage in pro ducing such products to benefit from trade. 
D. M
ATTERS RAISED UNDER "OTHER BUSINESS " 
 
(a) Annual Report to the Council for Trade in Goods  
43. In line with the Committee's practice in the pr evious years, the Chairman had circulated a 
short factual report for the Council for Trade in Goods on the work undertaken by the Committee in 
the course of 2003 before this meeting, in order to  facilitate consideration of this matter.  The 
Committee took note of the report and agreed that  the report, updated as appropriate, would be 
submitted to the General Council on the res ponsibility of the Chairman (G/L/662 dated 
21 November 2003). 
(b) Date of Next Meeting  
44. The next regular meeting of the Committee on Agriculture will be held on Thursday, 
25 March 2004.  The airgram convening the meeting and containing the draft agenda will be issued on 
Monday, 15 March 2003. G/AG/R/37 
Page 10  
 
ANNEX
 
 
   Page  
Part I  Review of notifications by th e Committee on Agriculture on 
20 November 2003   
 
 (i) administration of tariff and other quota commitments (Table MA:1 ):  China 
(CHN/2) and Poland (POL/57); 11 
    
 (ii) imports under tariff and ot her quota commitments (Table MA:2 ): Bulgaria 
(BGR/9) and China (CHN/3); 13 
    
 (iii) use of the special safeguard (Tables MA:3-MA:5 ):  the Czech Republic 
(CZE/49 and CZE/50) and Japan (JPN/84); 16 
    
 (iv) domestic support commitments (Table DS:1 ): Estonia (EST/10), Nicaragua 
(NIC/16) and Romania (ROM/20);  and 17 
    
 (v) new or modified domestic support measures exempt from reduction 
(Table DS:2) :  Estonia (EST/11) and Latvia (LVA/8). 21 
    
Part II  Deferred replies to questions raised under the Review Process   
 (i) 
  
(ii) 
 
(iii)   reply provided by Hungary under Article 18.6 of the Agreement concerning the 
matter of Argentina – Hungary:  Tari ff quota underfill (G/AG/R/37, page 2 
refers). 
reply provided by Israel relating to tariff quota administration:  ISR/27 
(G/AG/R/35, pa ge 9 refers) 
reply provided by Nicaragua relating to domestic support co mmitments:  NIC/16 
(G/AG/R/37, page 18 refers). 22 
 
 
22 
 
22 
    
Attachment  
    
  Data provided by Argentina under Ar ticle 18.6 of the Agreement concerning 
the matter of Argentina – Hungary:  Tariff quota underfill 23 
     G/AG/R/37 
 Page 11 
 
 
ANNEX – PART I  
 
Review of notifications by the Committee on Agriculture on 20 November 2003  
 
Summary of specific points raised and responses thereto  
 
Table MA:1 Notifications  
China     G/AG/N/CHN/2      Tariff  Quota Administration   (Table MA:1) 
Points raised by other Members  Response by Notifying Member 
United States - 
Processing trade :  Sought clarification regarding the 
status of imported products entering bonded areas or 
export processing zones.  Article 9 of China's new TQ regulations for 2004 exempts such products from 
obtaining TQ certificates.  However, Articles 27 and 
20 appear to contradict this. 
Requested confirmation of whether a TQ certificate is 
necessary to import into bonded areas and/or export 
processing zones, and if so, questioned its necessity when such products seem destined for further 
processing and re-export.  
Section 2 of Article 9 of the Interim Measures on 
Administration of Tariff Rate Quota for Import of 
Agricultural Products (Interim Measures)  clearly 
stipulates that "importation of products into the 
bonded warehouses, bonded areas and export 
processing zones is not subject to application of the TQ certificate for Agricultural Imports." 
Transparency :  Noted its continuing concern about 
the commitment of the Chinese administrative 
agencies (MOFCOM and SDRC) to provide business 
information regarding TQ holders, as envisioned in 
the Head-notes to the A ccession Agreement (Part I, 
Section 1-B of Schedule CL II), and in the recently 
revised TQ regulations for 2004.   
Requested confirmation of China's commitment to 
facilitating the release of such information upon 
request. Confirmed the willingne ss of the competent 
department in China to provide, on request, the 
information of those enterprises that have expressed 
their consent to the government to do so.  The 
information may include the name and nature of the enterprise as well as the volumes of TQs obtained in 
allocation or reallocation. 
TQ allocations by nature of enterprise :  Reiterated 
request made at the September CoA meeting for 
information regarding the composition of TQ holders by type of enterprise (state-owned enterprises, non-
STEs, foreign invested enterprises, etc.). China's TQ rules stipulate that the same application 
and allocation criteria are applicable to all enterprises 
regardless of their nature.  Since a large number of Chinese enterprises are undergoing restructuring 
following reforms in China, it is impossible to 
compile statistics of TQ allocation by type of enterprise or to provide the composition of TQ 
holders by type. 
Other issues :  Reiterated previous request for the 
rationale behind the special rules for TQ allocations 
and reallocations based on the "contract method" and 
"first-come, first-served method" (Articles 10, 12, 13, 15, 24 and 26 of the Interim Measures ). These articles cover the concept of "contract-based 
first-come, first-served method", rather than two 
separate methods of "contract method" and "first-
come, first-served method".  In practice, only the allocation of the TQ for wool and wool tops is 
subject to the "contract-based  first-come, first served 
method". 
 
 G/AG/R/37 
Page 12  
 
Poland     G/AG/N/POL/57      Tariff  Quota Administration   (Table MA:1) 
Points raised by other Members  Response by Notifying Member 
Canada - Noted change in allocation method of 
numerous TQs to "in proportion to the quantity 
applied for".  Explanation sought as to how this 
allocation method, combined with the quota being 
divided into equal parts for each quarter, will allow the quota allocation provided by each import permit 
to be economically viable. The change ensures broad,  non-discriminatory access 
for importers to TQs in cases where demand exceeds 
TQ volumes; the proportionality rule applies only in 
these cases.  The coefficient is calculated by the 
Agency for Agricultural Markets and published in its journal and website.  In cases where there are only a 
few applicants this information is also relayed to 
them directly. 
 
  G/AG/R/37 
 Page 13 
 
 
Table MA:2 Notifications 
 
Bulgaria    G/AG/N/BGR/9     Tariff Quota Fill (Table MA:2) 
Points raised by other Members  Response by Notifying Member 
United States – Explanation sought for considerable 
TQ underfill of several products including high 
quality beef (02013000, 0202300), frozen chicken 
parts and offal (020714), wheat and meslin 
(10019000), wheat and meslin flour (11010000), sunflower seed oil (12060091), chewing gum, 
liquorice extract, and other sugar confectioneries 
(1704), chocolate bars and other chocolate 
preparations (1806). 
 No measures are applied which might constitute 
obstacles for in-quota imports.  TQ fill is influenced 
by the market.  The principle "first-come, first-
served" is applied for imports under TQs. 
The factors which may explain the underfill of the 
TQs in question vary from one product to another.  
For most products local production exists.  
Chewing gum, other sugar confectionery, chocolate 
bars and other chocolate preparations  
Some foreign investors in Bulgaria prefer to produce 
for the domestic market and/or export and have no 
interest in importing.  
Wheat or meslin flour and sunflower seed oil  
In 2002, Bulgaria applied MFN tariff rates equal to or 
lower than the scheduled commitments for in-quota 
tariff rates.   
Wheat and meslin  
Since 1999 Bulgaria has allowed duty-free access in 
the framework of autonomous tariff quotas applied 
on a year-by-year basis;  however the quantity of 
150,000 tonnes of imports per year has not been 
reached. 
Questioned whether the in-quota duty was "minimal" for some of the items, including frozen chicken parts 
and offal and enquired whether Bulgaria had 
considered reducing the in-quota tariff to ensure import opportunities. Bulgaria does not intend to reduce the in-quota tariffs 
on an autonomous basis. 
Follow-up question from the United States – 
Requested confirmation that no import obstacles 
were in place and that one reason for underfill could be local production.   
 
 
Enquired whether local prices for these products 
were equivalent to world market prices or whether 
there was some difference, i.e. a minimum price requirement. Domestic prices, i.e. thos e offered for wholesale, 
retail sale or quoted on the commodity exchange, are 
determined on the basis of demand and supply.  The liberal import regime applied by Bulgaria ensures a 
competitive pressure on the domestic market.  
Local prices of beef and chicken meat are comparable 
with international prices.  Over the last few years 
domestic prices of wheat and sunflower seeds have 
been increasing.  Prices of  chocolate preparations on 
the domestic market are still slightly below the prices 
on the markets of most developed countries. 
No minimum price requirements exist. 
 
 G/AG/R/37 
Page 14  
 
China     G/AG/N/CHN/3     Tariff Quota Fill (Table MA:2) 
Points raised by other Members  Response by Notifying Member 
Australia – Clarification sought regarding the 
division of China's wool and cotton quotas between 
general trade and processing trade in 2002. In 2002, the quotas of wool were 170,000 tonnes for 
general trade and 94,500 tonnes for the processing 
trade.  The quotas of cott on were 318,500 tonnes for 
general trade and 500,000 tonnes for the processing 
trade. 
 Total 
in-quota 
imports
(tonnes) Volumes 
for general 
trade 
(tonnes) %  
of 
total Volumes for 
processing 
trade 
(tonnes) %  
of 
total 
Wool 192,000 115,000 59.9 43,000 22.4 Proportion of total in-quota imports of wool and 
cotton accounted for by general trade and the 
processing trade. 
Cotton 177,000 42,000 23.7 133,000 75.1 
Enquired whether China had re-allocated any unused wool or cotton quota from general trade to processing 
trade, or vice versa, in 2002. China did not transfer any unused wool or cotton 
quotas from general trade to processing trade, or vice 
versa, because neither the qu otas for general trade nor 
those for processing trade were completely utilized. 
Follow-up comment from Australia :  Stressed that the 
key issue for Australia is th e split of quota (especially 
for wool and cotton) between processing trade and general trade for products under the TQ system 
which affects the ability to export to China.  
Japan - Noted low fill rates for most notified products 
(maximum rate of 72.2% fo r wool), especially for 
corn, rice, wheat and rape-seed oil (0.2%, 5.9%, 7.5% 
and 8.9%, respectively).  Requested the following information: 
- In-quota imports through state trading enterprises 
and non-state trading enterp rises respectively (for all 
products notified); 
- Reasons for the low fill rates for in-quota imports 
through state trading enterp rises and non-state trading 
enterprises respectively (for all products notified). State trading enterprises may import TQ products by 
using their own tariff quotas or act as agents for other 
quota-holders.  Non-state trading quota-holders may 
entrust importation to state trading enterprises or other enterprises with trading rights.  Non-state 
trading quota-holders with trading rights can also 
import products autonomously.  Therefore the requested statistics are not available.
 
There was generally little demand for imported products because of lower domestic prices during the 
same period. 
Thailand – Requested reasons for the very low fill rate of the TQ for rice (5.94%). The domestic price of rice is lower than the world 
price.  There was a relatively weak demand for Thai 
fragrant rice and almost no demand for other types of foreign rice in the domestic market. 
United States - Noted underfill of the TQs for corn 
and rice and sought explanation of their 
administration. 
  
 
  
 
 
 In 2003, China allocated agricultural TQs in line with 
the timetable and quantity committed and provided in 
the Interim Measures .  Most end-users obtained but 
failed to use their shares of the corn and rice TQs. 
Before reallocation, 4,979,000 tonnes of corn TQs 
were returned, of which only 110,120 tonnes were applied for later.  Therefore, all applications were 
satisfied.  For rice, the re turned TQs amounted to 
2,586,896 tonnes, of which only 920,000 tonnes were applied for later and all applications were granted.  
The reason for the return of the corn and rice TQs 
and low fill rates was that end-users did not import 
due to lower domestic prices and abundant supplies.  G/AG/R/37 
 Page 15 
 
 
China     G/AG/N/CHN/3     Tariff Quota Fill (Table MA:2) 
Points raised by other Members  Response by Notifying Member 
United States (continued) - Requested the total and 
average quantities allocated to TQ recipients. The average quantities by product were as follows:
 
  wheat: 42,400 tonnes 
 corn: 29,000 tonnes 
 rice: 22,600 tonnes 
 soybean oil: 7,292 tonnes 
 rape-seed oil: 5,468 tonnes  palm oil: 2,092 tonnes 
 sugar:  14,769 tonnes 
 cotton: 1,497 tonnes G/AG/R/37 
Page 16  
 
Tables MA:3 to MA:5 Notifications 
 
Czech Republic     G/AG/N/CZE/49     Volume-Based Special Safeguard (Table MA:3) 
Points raised by other Members  Response by Notifying Member 
Australia – With reference to the transparency 
requirements set out in Article 5.7, level of duty 
levied (including calculation method) on: 
 
 
Meat and edible offal of the poultry of the species 
Gallus domesticus ) 
Butter and other fats and oils derived from milk, 
Dairy spreads  The level of the additional duties was calculated in 
accordance with relevant  provisions of the 
Agreement on Agriculture (not exceeding one-third 
of the ordinary customs duty in effect in the year in which the action was taken) and are as follows: 
14.3 per cent; 
 
22.6 per cent. 
 
 
Czech Republic     G/AG/N/CZE/50     Volume-Based Special Safeguard (Table MA:3) 
Points raised by other Members  Response by Notifying Member 
Australia – With reference to the transparency 
requirements set out in Article 5.7, level of duty 
levied (including calculation method) on:  
 
 
Meat of swine, fresh, chilled or frozen  The level of the additional duty was calculated in 
accordance with relevant  provisions of the 
Agreement on Agriculture (not exceeding one-third of the ordinary customs duty in effect in the year in 
which the action was taken) and is as follows: 
12.8 per cent. 
 
 
Japan     G/AG/N/JPN/84     Volume-Based Special Safeguard (Table MA:3) 
Points raised by other Members  Response by Notifying Member 
Australia – With reference to the transparency 
requirements set out in Article 5.7, level of duty 
levied (including calculation method). 39.67 yen/kg., one-third of the out-of-quota rate (119 
yen/kg.), to be maintained from 1 October 2003 to 
31 March 2004.  The measure is fully in line with 
Article 5.4. 
Follow-up question from Argentina :  Keeping in 
mind Article 5.2, enquired whether the duty was 
levied on products subject to tariff quota. The duty is only levied on out-of-quota imports.   G/AG/R/37 
 Page 17 
 
 
Table DS:1 Notifications 
 
Estonia   G/AG/N/EST/10      Domestic Support (Table DS:1)  
Points raised by other Members  Response by Notifying Member 
Australia/New Zealand - Annex 2, Paragraph 11 –  
Structural adjustment a ssistance provided through 
investment aids   
Noted the 156.43 EEK (US$11.5 million) increase in 
the SAPARD Programme since Estonia's previous 
notification and sought confirmation of compliance 
with Annex 2, para. 11 criteria, particularly relating 
to decoupling (paras. 11(b ) and (c)).  Whether the 
programme was only in place for the time period necessary for the accomplishment of the stated aim of 
the programme.  
 The SAPARD programme is  the EU pre-accession 
aid programme for agriculture and rural development 
in the EU candidate countries. Regulation 1268/1999 
of the European Council lays down the framework of 
SAPARD.  
The programme is clearly defined, limited in time 
and money.  Payments are not related to, or based on, the type or volume of production, or based on 
domestic or international prices.  Payments are limited to compensation for structural disadvantages, 
and do not mandate or in any way designate the 
agricultural products to be produced.  Compliance with the criteria of Annex 2, para. 11,  particularly (b) 
and (c), is thus confirmed. 
Sought confirmation that the 'Special Accession Programme for Agriculture and Rural Development' 
is correctly entitled, previously notified as 'Special 
Assistance Programme for Agriculture and Rural 
Development'. Confirmed.  The current notification gives the official 
and corrected name of the SAPARD programme: 
Special Accession Progra mme for Agriculture and 
Rural Development. 
Australia – Requested examples of the types of 
projects funded under the SAPARD programme 
which achieve the objective of the "enhancement of 
the competitiveness of agriculture", (see http://www.erda.ee/english/newsletters/2_structuralfu
nds_preparation.html). 
 SAPARD investments are aimed at bringing 
agricultural production into conformity with EU 
requirements, with the following priorities being 
specified in the Estonian Rural Development Programme:  
- to support the agricultural sector and processing 
industry in meeting EU veterinary, phyto-sanitary, 
hygiene, environmental, and animal protection 
requirements;   
- to diversify rural economic activities by maintaining 
existing or creating new jobs (concerns mainly 
persons leaving traditional agriculture);   
- to develop social and phys ical infrastructure in rural 
areas to ensure better living conditions and business 
environment;   
- to renovate and develop villages and 
protect/maintain cultural heritage of rural areas;  
- to stabilize and improve the environment to secure 
sustainability of rural areas. G/AG/R/37 
Page 18  
 
Estonia   G/AG/N/EST/10      Domestic Support (Table DS:1)  
Points raised by other Members  Response by Notifying Member 
New Zealand – Loan Guarantees programme   
Compliance with Green Box criteria. Loan guarantees to rural entrepreneurs are provided 
by the Rural Development Foundation, giving 
additional security on loans taken by farmers and 
rural entrepreneurs.  As agricultural production has 
been continuously decreasing and land is not yet 
accepted as mortgage by the financial institutions, the 
additional guarantee becomes necessary if the collateral offered by the entrepreneur is not 
sufficient.  
In this area, Estonia faces a market failure, since the 
commercial banks do not offer this kind of service to 
the rural sector.  Therefore, a state foundation is engaged in this activity, whereas the loans are 
provided at the average market interest rate.  
As the aim of Loan Guaran tees programmes shows, it 
is in accordance with Annex 2 paragraph 11 (b), (c), 
(e) and (f) – the aid payments are neither related to, nor based on, the type or volume of production or 
prices – domestic or international.  The aid payments 
do not mandate or in any way designate the agricultural products to be produced and the amount 
of payments is limited to the level to compensate for 
the structural adjustment. 
 
 
Nicaragua     G/AG/N/NIC/16      Domestic Support (Table DS:1)  
Points raised by other Members  Response by Notifying Member 
Australia – Suggested that Annex 2 paragraph 
headings be used in the listing of General Services 
programmes and that the same names be used for the 
same programmes when filling out subsequent notifications to aid identification of new programmes 
being established that may require particular 
examination by the Committee. To be provided. 
  G/AG/R/37 
 Page 19 
 
 
Romania     G/AG/N/ROM/20      Domestic Support (Table DS:1)  
Points raised by other Members  Response by Notifying Member 
Green Box 
Australia - Annex 2, Paragraph 2(g) – Infrastructural 
services  
Sought explanation for large increase (almost 
doubling) of expenditures.   
Whether these increased pa yments meet the criteria 
set out in Annex 2, para. 2(g) that such expenditure 
are for capital works only, and not directed to on-
farm facilities or input subsidies. Due to changes in climatic conditions in recent years, 
particularly drought, Romania implemented a 
programme for re-establishment of the national 
system of irrigation. 
Budgetary outlays were de stined only for the re-
establishment of the national system of irrigation and 
increased expenditures were due to an increase in the 
area on which the system is implemented. 
 
New Zealand - "Direct payments to producers" and 
"Subsidies for general inputs"  
Reasons why these measures are consistently notified 
in the Green Box and compliance with the 
fundamental requirement of Annex 2:  that measures 
are not linked to production and have no, or at most 
minimal, trade-distorting effects. According to Part IV of the Romanian Schedule, 
"Direct payments to producers" and "Subsidies for 
general inputs" represent Green Box measures. 
These measures are part of national programmes for 
maintaining and improving the biological material of 
animal and plant origin and thus are in full 
conformity with the fundamental requirements of 
Annex 2. 
Amber Box 
Australia - Noted the introduction of 13 new products 
for which market price support is provided.  Reasons 
for this significant policy change and whether there 
was any link between the new programmes and the 
concurrent elimination of non-product-specific input subsidies. The granting of specific support for agricultural 
products represents a permanent objective of 
Romanian agriculture policy. 
The small number of agricu ltural products receiving 
support in 2002 was due to the lack of financial 
resources in the context of the negative rate of growth 
registered for the period 1997-1999.  Although the 
slight growth from 2001 generated a small increase in 
budgetary resources, thes e were insufficient for 
implementing all the measures stipulated in the agricultural reform programme. 
Taking into account all these facts and also the 
negative results for the agricultural year 2002, 
especially due to drought, the priorities in granting 
financial support were reconsidered.  Thus in 2002 
the allocation of funds for non-product-specific 
support was suspended in favour of product-specific 
support.  Even under these conditions, the support 
granted in year 2002 is far below the de minimis  
level. G/AG/R/37 
Page 20  
 
Romania     G/AG/N/ROM/20      Domestic Support (Table DS:1)  
Points raised by other Members  Response by Notifying Member 
New Zealand – Reasons for change in calculation 
methodology from AMS to EMS. 
Article 1(a)(ii) sets out that the calculation of the 
AMS should use the same methodology as that used in Part IV of a Member's Schedule. Annex 4(i) sets 
out that an EMS should only be calculated when using the AMS is not practicable. 
This means that Romania should be using the same 
methodology for calculating the AMS as was used 
when the Schedule was established, and in that case it 
was the AMS methodology.  The use of a consistent methodology when calculating a country's AMS 
ensures to accurately compare levels of spending 
between years.  Romania has previously calculated its domestic support spending using the AMS 
calculation.  Pointed out that in the Uruguay Round, Romania 
opted for commitments under de minimis as it was 
impossible to have all the necessary data for the 
calculation of AMS.  This situation remains 
unchanged. Romania's notification is based on this 
reality and option. 
A mistake was made in the notification;  it will be 
rectified through a corrigendum, by replacing 
Supporting Tables DS:4 and DS:8 with Supporting 
Tables DS:4, DS:5 and DS:7 (G/AG/N/ROM/20/Corr.1 dated 15 December 2003). 
  G/AG/R/37 
 Page 21 
 
 
Table DS:2 Notifications 
 
Estonia     G/AG/N/EST/11    New or  Modified Domestic Support (Table DS:2)  
Points raised by other Members  Response by Notifying Member 
Canada – Compensation of damage (drought) 
inflicted on agricultural production or means of 
production   
Noted that support under this scheme was granted to 
producers who suffered a greater than 30% drop from 
"normal" levels of production.  Requested 
clarification of what constitutes "normal production" and how it meets the criteria of Annex 2, para. 8(a). Confirmed that the production loss was calculated on 
the basis set out in Annex 2, para. 8(a), using the 
reference period 1999-2001. 
 
Latvia     G/AG/N/LVA/8    New or  Modified Domestic Support (Table DS:2)  
Points raised by other Members  Response by Notifying Member 
Renovation of technical equipment of agricultural 
production   
Australia/Canada – Requested further details on the 
programme to confirm that  payments are available 
only to producers suffering objectively-demonstrated structural disadvantages, as required by Annex 2, 
para. 11(a). 
Sought explanation of how payments are limited to 
the amount required to compensate for the structural 
disadvantage suffered by these producers, as required by Annex 2, para. 11(f). Assistance is provided in grant form, partially 
(generally up to 30%) covering investment in 
physical restructuring of a farm following the 
massive land and assets privatization reforms in the 
1990s.  The programme was developed in response to 
a comprehensive study on the status of technological development of newly established farming units.  The 
criteria and aim of this support is linked to the 
method of estimation of the economical value of a farm. 
Liquidation of consequences of natural disaster  
Canada – Compliance of the measure with the criteria 
of Annex 2, para. 8.  Information concerning time 
period that is employed in determining production 
losses; how much of a loss is required before 
producers become eligible for compensation. The aim of the programme is  to encourage farmers to 
insure their crops against potential losses from 
natural disasters.  The programme is designed in 
collaboration with insurance companies to set the 
limits for losses for particular crops.  Specific levels of losses are expressed in value terms, exceeding 
which, compensation becomes operational.  The 
limits for losses are close to 100% of costs incurred until the crop is lost.  An estimation of potential 
losses is made based on production levels registered 
during previous three years on a particular farm.  The 
government participates in the scheme partially 
covering the insurance premiums.  
Since the measure is provided through publicly-
funded programmes, no tran sfers from consumers are 
involved and it has no effect  on prices.  This measure 
complies with Annex 2, paragraph 8. G/AG/R/37 
Page 22  
 
ANNEX – PART II  
 
Deferred Replies to Questions Raised under the Review Process  
  
(i) Reply provided by Hungary under Article 18. 6 of the Agreement concerning the matter of 
Argentina – Hungary: Tariff quota underfill (G/AG/R/37,  page 2 refers) 
 
 Hungary considers that the issue of tariff quota underfill is not a matter which falls under 
Article 18.6 of the Agreement on Agriculture since Members have no obligation in this respect.  The 
fact that the question touches upon export subsid ies and domestic support does not justify its 
discussion under this agenda item either because Ar gentina has not raised any question regarding 
Hungary's compliance with its obligations in these two areas. 
  
(ii) Reply provided by Israel concerning Table MA:1 notification 
 
Israel     G/AG/N/ISR/27      Tariff Quota Administration   (Table MA:1) 
(G/AG/R/35, page 9 refers) 
Points raised by other Members  Response by Notifying Member 
Canada – Reason for changing the sweet corn TQ 
allocation from a pro rata  system to a lottery system 
and information requested on how the lottery system 
is conducted. In order to facilitate trade,  the Ministry of Trade and 
Industry considered some modifications in the 
allocation of the sweet corn TQ.  Erroneously, Israel 
notified a change from the pro rata  system to a 
lottery system (one of many alternatives).  The allocation system in fact did not change for the year 
2002 and the pro rata  system was used.  In the year 
2003 the Ministry applies a first-come, first-served method to allocate the TQ.  Accordingly, a 
corrigendum to the notification has been submitted 
(G/AG/N/ISR/27/Corr.1 refers). 
 
 
(iii)  Reply provided by Nicaragua concerning Table DS:1 notification   
 
Nicaragua     G/AG/N/NIC/16      Domestic Support (Table DS:1) 
(G/AG/R/37, page 18 refers) 
Points raised by other Members  Response by Notifying Member 
Australia – Suggested that Annex 2 paragraph 
headings be used in the listing of General Services 
programmes and that the same names be used for the 
same programmes when filling out subsequent 
notifications to aid identification of new programmes being established that may require particular 
examination by the Committee. Nicaragua has taken note of Australia's suggestions 
and will be making the corresponding changes in the 
notification in the coming days.  G/AG/R/37 
 Page 23 
 
 
Attachment  
 
Data provided by Argentina under Article 18.6 of the Agreement concerning the matter of 
Argentina – Hungary:  Tariff quota underfill 
  
Product Year TQ underfill Export subsidies 
2001 178,115 tonnes 
2000 177,645 tonnes 
1999 160,356 tonnes 
1998 143,591 tonnes 
1997 129,802 tonnes 
1996 93,222 tonnes Milk and cream 
0401/0402 
1995 94,911 tonnes  
  
n/a 
    
2001 220,643 tonnes 3,000 tonnes 
2000 222,553 tonnes 74,000 tonnes 
1999 201,311 tonnes 449,058 tonnes 
1998 176,519 tonnes 481,262 tonnes 
1997 149,312 tonnes 0 tonnes 
1996 115,198 tonnes 0 tonnes Corn 1005 (for 
export subsidies 
1005.90) 
1995 116,827 tonnes 528,335 tonnes 
    
2001 11,008 tonnes 8,000 tonnes 
2000 10,576 tonnes 12,000 tonnes 
1999 9,646 tonnes 14,463 tonnes 
1998 4,432 tonnes 20,277 tonnes 
1997 7,130 tonnes 16,723 tonnes 
1996 7,195 tonnes 12,690 tonnes Poultry and 
poultry meat 
0105;  0207 (for export subsidies 0207.12) 
1995 6,748 tonnes 19,846 tonnes 
 
Source :  WTO notifications of Hungary. 
 
 
 
__________