RESTRICTED
WORLD TRADE WT/ACC/RUS/23/Add.1
9December 1997
ORGANIZATION(97-5377)
Original: English Working Party ontheAccession
oftheRussian Federation
ACCESSION OFTHE RUSSIAN FEDERATION
Additional Questions andReplies
Addendum
ThePermanent Mission oftheRussian Federation hassubmitted additional replies toquestions
raised afterthemeeting oftheWorking Party heldon22-23 July1997, withtherequest thattheybe
circulated tomembers oftheWorking Party. Thequestions andreplies arereproduced hereunder.
_______________
Agriculture
Domestic Support Tables
Question 158.
Weunderstand thattheDuma recently overrode thePresidential vetoontheLawontheState
Regulation oftheAgro-Industrial Complex. Wewould welcome assurances from theRussian
delegation thatthisdevelopment willnotaffect Russia 'sability tofulfilthecommitments regarding
domestic support foragriculture andexport subsidies thatitwillbeassuming upon accession
totheWTO.
Answer
TheLawOnStateRegulation oftheAgro-Industrial Complex, intheopinion oftheRussian
delegation, doesnotcontradict theWTO rulesandrequirements, including those concerning domestic
support andexport subsidies. Therefore theexistence ofthisLawshould notaffect Russia 'sability
toaccede theWTO. However, itshould bekeptinmind thattheobligations oftheRussian Federation
aretoberatified bytheFederal Assembly.
Question 159.
Thebaseperiod usedtoestablish commitments willneedtobebased onarecent three yearperiod
which reflects current agricultural support programmes.
Answer
Theposition oftheRussian Federation meets therequirements stated intheWTO Agreement
onAgriculture andsatisfies andcovers allitems ofinformation onthemarket access, domestic support
foragriculture andexport subsidies. Thecalculations forthebaseperiod (1989-1991) weremade on
thebasis ofobjective official budgetary andstatistical data.WT/ACC/RUS/23/Add.1
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Question 160.
Wewould appreciate fuller details concerning transport subsidies, toassess whether theyare
domestic orexport related.
Answer
Inorder toimplement theFederal Special-Purpose Programme ofStabilization ofthe
Agro-Industrial Complex intheRussian Federation Resolution No.224oftheGovernment ofthe
Russian Federation "OntheEconomic Conditions ofOperation oftheAgro-Industrial Complex inthe
Russian Federation in1997", dated 26February 1997, provided forreduced railrates (equal to
50percentoftheexisting ones) fortheperiod ofseasonal transportation ofcertain agricultural products.
Inparticular, thefreight ratesforrailway transportation ofsugar beets andcucurbits were reduced
by40percentinrelation totheotherwise applicable rates.
Resolution No.166oftheGovernment oftheRussian Federation "OnMeasures toProvide
Agricultural Producers withMineral Fertilizers andPlant-Protecting Chemicals in1997", dated
14February 1997, provided forreduced railway freight ratesforsupplies ofmineral fertilizers and
plant-protecting chemicals toagricultural producers.
Inbothcases, thepreferential railway freight rateswerefinanced byanappropriate rateincrease
withrespect tothetransportation ofother business cargoes within theRussian Federation foraperiod
ofoneyear.
Inorder toencourage theexportation ofbarley, oat,ryeandricesurpluses, Order No.1587-r
oftheGovernment oftheRussian Federation, dated 6October 1994, provided that50percentofthe
railway freight ratesincurred inthetransportation ofsuchproducts totheborder oranyports ofthe
Russian Federation should bereimbursed outofthefederal budget for1994.
Question 161.
Russia hasindicated thatexpenditures forforest management andtheupkeep oftheforest rangers
service arecovered under "operating expenses" insupporting table DS:1. These expenditures
should notbeincluded asforestry isnotcovered bytheAgriculture Agreement.
Answer
TheForest Code oftheRussian Federation transferred rights touseforest areas belonging
totheMinistry ofAgriculture andFood toagricultural producers inorder tomeettheirrequirements
forwood andotherresources. Accordingly, thebudget oftheMinistry ofAgriculture andFoodallocates
funds forthemaintenance ofsuchforest stock, andthese arereferred inDS:1.
Question 162.
Russia hasincluded support forpedigree livestock breeding initsnon-product-specific AMS for
want ofbreakdown dataforspecific types oflivestock. Weconsider thatthisshould beclassified
under product-specific support regardless ofthetypes ofbreeding stock involved.WT/ACC/RUS/23/Add.1
Page3
Answer
Theexpenses forpromotion ofpedigree livestock breeding areaimed atthepreservation of
valuable females andcompensating purchasers ofpedigree animals fortheircosts. Theexisting statistics
donotshow thebreakdown ofexpenses among livestock types.
Question 163.
Russia indicates thatthetaxbenefits were calculated onthebasis ofagricultural enterprises
compared withindustrial enterprises. Arethetaxbenefits directed onlytotheagriculture sector?
Answer
Inaccordance withthetaxlegislation, suchtaxprivileges aregranted totheagricultural sector
only.
Question 164.
Russia states thatelectric power allowances wereestimated onthebasis ofdifferences intherates
charged toagriculture andtoindustry. Wewould appreciate further details onthenature of
these allowances. Aretheydirected onlytotheagriculture sector?
Answer
Pursuant toResolution No.224oftheGovernment oftheRussian Federation dated
26February 1997, forthecurrent year, theFederal Energy Commission oftheRussian Federation
wasdirected torecommend thatregional energy commissions fixpreferential tariffs forelectric power
usedbyagricultural producers fortheirproduction needs which should notexceed 50percentofthe
average power tariffpayable bylocalconsumers intherelevant region. Analysis proves thatthetariffs
fixedbytheregional energy commissions foragricultural operations differ among Russian Federation
regions andrange broadly inanumber ofinstances. Moreover, pursuant toResolution No.389of
theGovernment oftheRussian Federation "OnStage-by- Stage Termination ofCross-Subsidizing in
Sectors Dominated byNatural Monopolies", dated 30April 1997, stage-by-stage cancellation of
preferential power tariffs foragricultural consumers isenvisaged beginning in1998.
Question 165.
Forsupporting table DS:1, general services "themaintenance ofgovernment-funded institutions
(Ministry ofAgriculture andFood, Committee ontheFood Industry, Land Committee, State
Grain Inspectorate, Maintenance ofRegional Institutions)", thefigures for1993 and1994 have
been amended. What isthebasis fortheamended figures?
Answer
Thedataonthe"maintenance ofgovernment-funded institutions" (theMinistry ofAgriculture
andFood, theState Committee forLand Resources andLand Management (Roskomzem), theState
Grain Inspectorate andregional institutions) havebeenadjusted inthecourse ofseparating thefigures
intofederal andregional levels.WT/ACC/RUS/23/Add.1
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Question 166.
These programmes relate tomaintenance ofgovernment-funded institutions. What isthenature
ofthesupport andhowdoesitmeet thecriteria ofparagraph 2,Annex 2oftheAgriculture
Agreement?
Answer
These programmes correspond tothecriteria ofSection 2,Annex 2totheAgreement on
Agriculture andmeetthegeneral criteria ofSection 1,Annex 2totheAgreement onAgriculture.
Question 167.
Given thatsub-federal authorities may have theauthority toprovide financial support to
agriculture, cantheRussian Federation Government ensure thatsub-federal authorities willnot
actinsuchawaythatRussia breaches itsWTO commitments?
Answer
After accession totheWTO, theRussian Federation willtakesuchreasonable measures as
maybeavailable toit,toensure theobservance oftheprovisions oftheWTO Agreements byregional
andlocalgovernments andauthorities within theRussian territory.
Question 168.
Russia hasstated intheanswer toquestion 28ofWT/ACC/RUS/9/Add.1 thatthefunctions of
local authorities donotinclude (except insome cases) theregulation ofprices onagricultural
products andfood. Could Russia provide alistofsuchexceptions anddetails oflocalauthorities
regulations withregard totheexceptions?
Answer
Stateregulation ofprices andratesiscurrently performed pursuant toDecree No.221ofthe
President oftheRussian Federation "OnMeasures toSystematize theStatePrice/Rates Regulation",
dated 28February 1997. TheRussian Federation Government hasdefined thelistofindustrial-technical
products, consumer goods andservices forwhich theStateregulation oftheprices/rates inthedomestic
market oftheRussian Federation istheresponsibility oftheGovernment oftheRussian Federation
andfederal executive authorities. Inaccordance withthelistsoapproved, theexecutive authorities
oftheRussian Federation regions regulate onlytheprices ofbabyfoodproducts. Such regulation is
implemented attheretail price level, i.e.themaximum margin onbaby foods (including food
concentrates) should befixed.
Question 169.
According toArticle 1(a)oftheAgreement onAgriculture “AMS”isthesupport provided for
anagricultural product infavour oftheproducers ofthebasic agricultural product or
non-product-specific support provided infavour ofagricultural producers ingeneral. Suchsupport
issubject toreduction unless thesupport respects thecriteria laiddown inAnnex 2tothe
Agreement.
Insupporting table DS:1 (green policies), theRussian authorities have listed “Upkeep ofsocial
infrastructure facilities (themaintenance ofhousing, schools, hospitals andother institutions,WT/ACC/RUS/23/Add.1
Page5
theprovision ofpartial compensation forthecostoffuelforheating purposes) ”asanagricultural
support measure. Thisisassumed tomean thattheRussian authorities consider suchpayments
as“non-product-specific support infavour ofagricultural producers ingeneral.
Could theRussian authorities explain howsimilar social infrastructure isfunded intowns and
cities andifsuchfunding isconsidered assupport toother sectors e.g.under theAgreement on
SubsidiesandCountervailingMeasures?Ifthefundingisnotconsideredassupporttoothersectors,
could theRussian authorities explain whythefunding istreated differently fortheagricultural
sector?
Answer
Financing ofruralsocial infrastructure isconsidered assupport foragriculture duetothefact
that,incontrast tocities, thesocial assets weretraditionally maintained attheexpense ofagricultural
enterprisesthemselves.Thereforethefundingofsuchexpensespracticallymeanssupportforagriculture.
Formore information onsupport forother sectors seeInformation ontheSubsidies System
intheRussian Federation (WT/ACC/RUS/22 andAddenda 1-2).
Concerning answers toquestions aregiven indocument WT/ACC/RUS/17/Add.1
Question 170.
Question 192:DS:5 showed theprices atwhich products were procured forpublic stockholding.
Question 228:Eligible production isprocurement tomeet theState’sneeds. These purchases are
made byvarious organizations foravariety ofpurposes asdetermined bygovernmental agencies.
Question 230:Average prices atwhich products arepurchased bythegovernment were usedas
administrative prices foreachproduct. Applied administrative prices arebased onmarket prices
asbestdetermined bygovernmental agencies.
Insupporting table DS:1, theRussian authorities have described “Public stockholding forfood
security purposes asfollows: Expenses forestablishing federal andregional food stocks (the
provision ofgovernment budget loans tosetupfoodstocks tosupply areas intheFarNorth,
establish reserves, andmeet other state needs).
Could Russia explain whether thequantities ofeligible production intable DS:5 areused, totally
orpartly, tomeet thestate needs forwhich theexpenditure arelisted intable DS:1? (example:
In1993theeligible production forwheat intable DS:5 isindicated as15,085,000 t.Arethebuying
price, storage costs, distribution costs, transport cost,losses etc.ofthisquantity orapartthereof
captured bytheexpenditure listed inDS:1 i.e.for1993 thesumof23,201,080 mil.rubles).
Answer
Pending.
Question 171.
Could Russia explain theaimandthefunctioning oftheregime(s) withadministered prices, in
particular:
- What istheaimoftheregime e.g.toensure availability forState needs, toensure farmers
income, toensure lowconsumer prices?WT/ACC/RUS/23/Add.1
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- Which criteria areusedforfixing administered prices andwhofixes theprices?
- Aretheadministered prices identical forthewhole Russian Federation orareseveral prices
applied?
- When aretheprices fixed (e.gannually before theharvest, pluriannually) andinwhich
legal instrument aretheprices publicized?
- AretheRussian authorities obliged tobuyallproducts offered bythefarmers orare
quantitative limits applicable?
- Arethefarmers obliged tosellproducts togovernmental agencies orcantheysellthewhole
harvest ontheopen market iftheysowish?
- When aretheproducts released from stocks (according tothemarket situation, forspecific
uses, forobligatory export etc.)?
- How aretheselling prices determined when theproducts arereleased from stocks?
- Who determines theselling prices?
Answer
Thepurpose offixing administered prices issimply toprovide anorientation forproducers
indetermining theirowncontractual prices.
Theaimofthispricing regime isthelevelofguaranteed purchase prices (uniform forallregions)
taking intoaccount theprices prevailing inthedomestic andinternational markets, asascertained by
theMinistry ofEconomics, theMinistry ofFinance andtheMinistry ofAgriculture andFood and
notified toagricultural producers asanorientation through theagro-industrial authorities ofthe
Russian Federation regions.
Theadministered prices provide orientation throughout theRussian Federation.
During 1995 and1996, theguaranteed purchase prices were revised andnotified toregions
onaquarterly basis. In1997, taking intoaccount theevolving situation inthedomestic market and
thedecreasing inflation rate,thepurchase prices fixed inMarch thisyearwere notadjusted.
Theyarenotobliged todoso.TheRussian authorities purchase products asnecessary depending
ontheavailability offinance.
Farmers arenotobliged toselltogovernmental agencies.