RESTRICTED  WORLD TRADE  
ORGANIZATION  G/AG/R/39 
16 July 2004 
 (04-3055) 
Committee on Agriculture  
   
SUMMARY REPORT OF THE ME ETING HELD ON 17 JUNE 2004  
 
Note by the Secretariat
1 
  
1. The Committee on Agriculture held its thirty-n inth regular meeting on 17 June 2004 under the 
chairmanship of Mr. Roald Lapperre of the Netherla nds.  The agenda of the meeting as contained in 
WTO/AIR/2331 was adopted. 
E
LECTION OF THE CHAIRPERSON  
2. The Committee took note that the Council for Trad e in Goods had agreed, at its meeting on 
27 April, inter alia , on the nomination of Mr. Roald Lapperre for election as Chairperson of the 
regular meetings of the Committee on Agriculture  (G/C/M/73).  The Committee confirmed, by 
acclamation, the election of Mr. Lapperre as Chairp erson of the Committee to hold office until the end 
of the first meeting in the year 2005 under Rule 12 of the Committee's Rules of Procedure (G/L/142).  
Many delegations and the Secret ariat thanked the outgoing Chairm an, Dr. Magdi Farahat, for his 
dedication and leadership as Chairman of the Committee. 
PART I:  THE REVIEW PROCESS  
A. M ATTERS RELEVANT TO THE IMPLEMENTATION OF CO MMITMENTS UNDER THE REFORM 
PROGRAMME :  ARTICLE 18.6 
(a) Australia:  European Communities – Export subsidies  
3. Australia sought clarification from the EC concerning the annual average budgetary outlays 
and subsidised quantities of agricultural exports that  the EC had provided to the ten new EC member 
States during the base period in respect of each produc t listed in the EC Schedule.  The EC responded 
that information concerning the destination of subsidised exports during the base period was not 
available.  The EC confirmed that sugar exports  from the Czech Republic, Hungary, Lithuania and 
Poland were now eligible for export refunds, for which there was a general budget.  The EC also 
provided, in response to Australia's request, revi sed data regarding imports of sugar from the ACP 
countries and India (see also G/AG/R/35, page 30 ):  1995/96 – 1,696.7;   1996/97 – 1,588.6;  
1997/98 – 1,630.5;  1998/99 – 1,622.8;  1999/00 – 1,549.1;  2000/01 – 1,647.9;  2001/02 – 1,600.1 
(thousand tonnes white sugar equivalent). 
(b) Canada:  European Communities – EC-25 ag riculture commitments concerning tariff quotas, 
domestic support and export subsidies  
4. Canada sought clarification as to when the prop osed modifications to the EC-15 Schedule in 
the context of the EC enlargement with respect to tariff quotas, domestic support and export subsidy 
commitments would be notified.  The EC advised that a revised Schedule w ould be introduced after 
conclusion of the negotiations pursuant to Article  XXIV of the GATT 1994.  In the meantime, the 
                                                      
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/39 
Page 2  
 
 EC-15 Schedule would be applie d and autonomous measures may be taken.  For example, on 
Canada's frozen ham exports to Poland (HS 0203.22.11), the EC-15 out-of-quota duty would be applied. 
(c) Canada:  Panama – Import permits limiting market access
 
5. Canada raised its concerns rega rding Panama's repeated attempts over the past several years 
to limit imports of agricultural products through its administration of import permits.  Panama had 
recently reduced by 50 per cent an importer's ab ility to import pre-cooked frozen potatoes from 
Canada by issuing import permits for only half of the importer's normal monthly shipment.  Canada 
requested that Panama resume trade practices in  accordance with its WTO obligations and grant 
importers the full volume of their request. 
6. Panama stated that it would respond to Canada's questions as soon as possible. 
(d) Canada:  United States – Skim milk powder provided as food aid  
7. With reference to the United States' responses c oncerning the Article 18.6 matter of skim milk 
powder (SMP) food aid raised at the March 200 4 Committee meeting, Canada sought further 
clarification regarding the use of the proceeds of SMP food aid that was bartered or monetized 
(see G/AG/R/38, paragraphs 16-17).  Canada requ ested the United States to provide information 
regarding the type and the origin of the equipmen t, technical assistance and training provided under 
the Dairy Link Pilot Project, using proceeds from m onetization of donated milk powder.  It also 
requested information regarding the origin and manufacturer of a "newly developed fortified 
beverage" to be distributed to beneficiaries in Viet Nam by Land O'Lakes, using monetization 
proceeds. 
8. The United States responded that the food aid agreement with Land O’Lakes under the Dairy 
Link Pilot Project did not specify the origin of the equipment.2  There was no requirement that 
equipment be manufactured in the United States.  Regarding technical assistance, proceeds may be used to cover expenses of experts and material.  For example, teachers would be provided with 
training on food borne illnesses in order to ensure f ood safety.  Assistance and training was provided 
by local leaders in the dairy industry, by dairy a nd livestock experts, and by Land O’Lakes staff with 
expertise on dairy developm ent and school milk projects.  With respect to the types of nutritional 
products being developed with the proceeds from monetization, Land O’Lakes was working with 
local processors in designing new products.  Land O’Lakes also bartered or used the monetization 
proceeds to acquire locally produced UHT milk and/or fortified biscuits.  Furthermore, the 
monetization proceeds were used to cover the di stribution costs within Indonesia and Viet Nam. 
9. Canada noted the existence of large stocks of SMP held by the Credit Commodity 
Corporation and sought clarification as to whether the USDA was expecting an increase of the volume of SMP donated as food aid in 2004.  The United States responded that the volume of Section 416(b) SMP food aid donations in fiscal year 2004 amounted  to 75,000 tonnes, valued at $147 million, 
including transportation costs.  There were no Section 416(b) SMP donations scheduled for fiscal year 
2005. 
10. Canada also sought further clarification as to  how the United States ensured that monetized 
SMP was not sold at below market prices.  The Un ited States responded that the laws and regulations 
                                                     
 
2 Types of equipment to be provided to the selected  processors include: utilities hardware and hook-up, 
computer and office equipment, delivery bikes with cold boxes, in-school cold boxes, motor bikes, processing 
and packing equipment, miscellaneous stainless steel piping and valves, and inland transport costs of equipment 
in Viet Nam.    G/AG/R/39 
 Page 3 
 
of the US food aid programs required monetized comm odities to be sold at reasonable local market 
prices.  The foreign government or private volunt ary organization concerned was required to gather 
market information and ensure that the sales woul d not undercut market prices.  The donor included 
estimated prices in the food aid agreements and pr ior to signing, the donor compared these estimated 
prices to local and world market prices, with adjust ments for quality and other market factors.  During  
implementation, the donor received semi-annual repor ts from the in-country organizations.  The donor 
reviewed the results of the monetization process and followed up on any unusual items, including 
lower than expected prices.  Market participants may also raise concerns about price, and the donors 
may investigate these situations. 
11. With respect to Canada's query regarding the meaning and responsibility of the "donor" 
referred to above, the United States responded the US Government was a donor of the product, but 
also the Private Voluntary Organizations acted in the capacity of donors, as well as in-country partner 
organizations.  In this context, the interest was to  assure at each relevant step that the responsible 
actors undertook the appropriate considerations and measu res to assure that a project fell within all the 
stipulated goals and guidelines. 
(e) EC:  Australia – Financial opera tions of the Australian Wheat Board  
 
12. With reference to reports that the Australia n Wheat Board envisaged writing off Iraq's debts 
resulting from wheat deliveries, the EC sought clar ification from Australia as to how the taxpayer 
money involved in this debt write-off would be notified. 
13. Australia responded that entitlement to the de bt had passed to the Australian Government 
after contracted export credit insura nce claims were paid to the th en Australian Wheat Board in the 
early 1990s, a situation similar to the position of ot her Paris Club creditors to Iraq.  The Australian 
Government had announced that it was prepared to fo rgive the vast majority of this debt, subject to 
negotiations in the Paris Club.  In these circumstan ces, no government payments had to be notified to 
the WTO. 
(f) United States:  Turkey – Ban on rice imports;  WTO consistency of new quota system for 
grains  
14. Referring to reports that Turkey had refused to issue import licenses for rice since August 
2003, the United States sought clarification as to how Turkey justified its continued de facto ban on 
rice imports in light of its WTO obligations, incl uding the Agreement on Agri culture, and as to when 
the ban would be lifted.    The United States also sought clarification concerning WTO conformity of 
Turkey's new quota system to help reduce the stocks  of the Turkish Grain Board.  In addition, the 
United States requested further information concerning the recent Decree on the implementation of a 
quota system for corn imports. 
15. Turkey responded that the country was a net-importer of rice, as well as corn.  Its rice imports 
totalled 270,000 tonnes in 2002, 355,000 tonnes in 2003, and 110,000 tonnes in the first quarter of 2004.  In September 2003, just before the rice harvest , total rice supplies in the domestic market were 
estimated at 420,000 tonnes, including an expected rice harvest of 223,000 tonnes.  These supplies 
were expected to meet demand until the end of June  2004.  For the period of June 2004 to the new 
harvest season, the Government est ablished a tariff quota to meet the domestic needs (Ministerial 
Decree No. 2004/7135 published in the Official G azette dated 24 April 2004).  Within the quota, 
120,000 tonnes of paddy rice and/or equivalents were a llowed to be imported at tariffs that are below 
bound rates. 
16. Turkey stated further that it had imported 1.82 million tonnes of corn in 2003.  The 
Government decided to establish a tariff quota of  900,000 tonnes of corn in order to meet the 
domestic demand for the three months prior to the 2004 harvest.  The in-quota tariff was 25 per cent, 
which is considerably lower than Turkey's bound rate. G/AG/R/39 
Page 4  
 
 17. Turkey stated that the objectives of these me asures were to help stabilise and balance the 
domestic market.  For its part, Turkey considered that these measures were consistent with the WTO commitments and obligations of Turkey.  In any event, rice and corn can be imported freely at 
Turkey's bound out-of-quota tariff rates. 
18. As a follow-up question, the United States sought clarification as to why recent requests for 
rice quota allocations had been approved, while re quests for out-of-quota allocations were denied.  
Turkey responded that it was ready to pursue th is issue bilaterally with the United States. 
B. R
EVIEW OF NOTIFICATIONS  
19. The EC informed the Committee regarding its in tentions with respect to notifications  
following the enlargement of the European Union from 15 to 25 member States on 1 May 2004.  The 
EC stated that the new EC member States would, to some extent, continue to notify on their own 
behalf for the reporting periods up to and includi ng 2003.  For market access (except Table MA:1) 
and export subsidies, the EC intended to provide separate notifications for the reporting periods 
covering 1 January 2004 to 30 April 2004.  For th e reporting periods from 1 May 2004 onwards, the 
EC would provide merged EC-25 market  access and export subsidy notifications. 
20. With respect to domestic support, the EC consid ered that notifications which are split in the 
middle of a reporting year do not respond to the ob ligation of respecting this particular annual 
commitment.  The EC intended therefore to produ ce a merged domestic support notification already 
for the period 2003/2004.  In this way a revi ew of the EC-25 respecting its domestic support 
commitments was made possible at the earliest moment in time. 
21. The EC stated further that the Committee would be kept informed about arrangements 
concerning new and modified tariff quotas through the regular Table MA:1 notification.  In addition 
to timely notification of individual arrangements, the EC intended to give an overall MA:1 update 
including addenda once the GATT Article XXIV negotiations had been concluded. 
(a) Notifications in respect of which questions have  been raised in advan ce of the issuance of the 
convening airgram  
 22. 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 
Japan (JPN/91), Chinese Taipei (TPKM/13); 
 (ii) relating to imports under tariff and ot her quota commitments (Table MA:2):  from 
Hungary (HUN/34), Japan (JPN/92), Latvia  (LVA/9), Poland (POL/62 & POL/63) 
and Chinese Taipei (TPKM/14); 
 (iii) in the context of the special safegua rd (Tables MA:3 to MA:5):  from Hungary 
(HUN/36),  Japan (JPN/94, JPN/95 & JPN/96); 
 (iv) relating to domestic support commitmen ts (Table DS:1):  from Chile (CHL/14), 
Cyprus (CYP/14), the European Communities (EEC/49), Hungary (HUN/33), Japan 
(JPN/98) and the United States (USA/51); 
 (v) relating to new or modified domestic support measures exempt from reduction 
(Table DS:2):  from the Slovak Republic (SVK/43).  G/AG/R/39 
 Page 5 
 
23. Specific points raised with respect to the notif ications listed above and the responses thereto 
are summarized in the Annex to this report. 
(b) Notifications subject to review in respect of which no questions have been raised in advance  
of the issuance of the convening airgram  
 24. 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 
Barbados (BRB/15), Guatemala (GTM/31) and the Slovak Republic (SVK/39/Rev.1); 
(ii) relating to imports under tariff and other quota commitments (Table MA:2):  from 
El Salvador (SLV/22) and Tunisia (TUN/29); 
(iii) in the context of the special safeguard (Tables MA:3 to MA:5):  from the Czech 
Republic (CZE/54), Chinese Taipei (TPKM/15 & TPKM/16) and Tunisia (TUN/28); 
(iv) in the context of domestic support commi tments (Table DS:1):  from Armenia 
(ARM/2), Hungary (HUN/37), Macao, China (MAC/15) and Nicaragua 
(NIC/16/Rev.1);  
(v) in the context of new or modified domes tic support measures exempt from reduction 
(Table DS:2):  from Armenia (ARM/3); 
(vi) on export subsidy commitments (Tables ES: 1 to ES:3):  from Argentina (ARG/23), 
Chile (CHL/16), Cuba (CUB/25), Georgia (GEO/4), Guatemala (GTM/30), Hungary 
(HUN/35), Japan (JPN/97), Macao, China (MAC/14), the Slovak Republic (SVK/44) 
and the United States (USA/53). 
25. Australia complimented Nicaragua for the im provements in its revised domestic support 
notification (G/AG/N/NIC/16/Rev.1). 
(c) Notifications circulated or made available after the notice convening the meeting was issued
 
26. The following notifications were subject to prelimin ary review and are 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 
Bulgaria (BGR/11); 
(ii) in the context of the special safegua rd (Tables MA:3 to MA:5): from Bulgaria 
(BGR/12) and Uruguay (URY/28); 
(iii) on domestic support commitments (T able DS:1):  from Uruguay (URY/27). 
(d) Points concerning notifications raised at previous meetings  
 27. There was no discussion under this agenda item. G/AG/R/39 
Page 6  
 
 (e) Counter-notifications under Article 18.7 of the Agreement
 
28. 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  
 
29. Mexico noted that Panama had yet to respond to  the questions that Mexico had raised under 
Article 18.6 at the March 2004 meeting in relation to Panama's applied ta riffs on dairy products 
(see G/AG/R/38, paragraphs 37-38).  Panama stat ed that it would respond as soon as possible.  
Colombia recalled its interest in this matter. 
(g) Overdue notifications  
 
30. The Committee took note that the Secretariat ha d made available a revised and updated room 
document, dated 24 March 2004, showing the curre nt status of compliance with notification 
obligations.  The room document has been revised (i ) to set out the notification obligations including 
the respective timelines as provided for in docum ent G/AG/2 concerning "Notification Requirements 
and Formats", (ii) to include a listing of all Memb ers that have submitted Table ES:3 and Table NF:1 
notifications in the 1999 to 2003 implementation year s (see page 12), and (iii) to indicate where the 
comprehensive Table MA:1 notification has been revised or supplemented, and where the required 
food aid information – in column 5 of Table ES:1 – is outstanding. 
31. Argentina noted that the Table ES:1 notifica tion for 2001 from the Czech Republic appeared 
to be outstanding, while for earlier years and for 2002 relevant notificati ons had been submitted. 
32. Australia recalled the need to provide notifica tions to the Committee in a timely manner, to 
facilitate, amongst other things, analysis of proposals submitted in the ongoing negotiations. 
(h) Addenda to Table MA:1 notifications  
 
33. 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. 
P
ART II:  OTHER MATTERS WITHIN THE PURVIEW OF THE COMMITTEE  
 
A. I MPLEMENTATION -RELATED ISSUES  
 
34. The Committee took note that this agenda item concerned the implementation of Article 10.2 
of the Agreement, as well as an examination of possible means of improving the effectiveness of the 
implementation of the NFIDC Decision (G/AG/16, Sections A and B), including the proposal by the WTO African Group concerning the NFIDC Decision (TN/CTD/W/3/Rev.2, paragraph 52). 
35. Argentina recalled the statement it had made at  previous meetings and at the September 
meeting of the Committee concerning the matter of implementation of Article 10.2 of the Agreement 
(see G/AG/R/36, paragraph 35). 
  G/AG/R/39 
 Page 7 
 
B. MATTERS RAISED UNDER "OTHER BUSINESS " 
 
Date of next meeting 
 
36. The next regular meeting of the Committee on Agriculture will be held on Thursday, 
23 September 2004.  The airgram convening the mee ting and containing the draft agenda will be 
issued on Monday, 13 September 2004.  The Committ ee took note that the Committee, at the meeting 
on 23 September, will hold its third annual Transitional Review under pa ragraph 18 of the Protocol of 
the Accession of the People's Republic of China an d that any questions or comments that Members 
may have in the context of the Transitional Revi ew should be submitted by  2 August 2004, with a 
copy to the Secretariat. 
Request for observer status in the Committee 
 
37. The Committee took note of the recently received request for observer status in the 
Committee from the Organisation of the Eastern Ca ribbean States (OECS), as reflected in document 
G/AG/W/29/Rev.6 dated 14 June 2004. G/AG/R/39 
Page 8  
 
 
ANNEX
 
 
   Page  
 Review of notifications by the Co mmittee on Agriculture on 17 June 2004   
 
 (i) administration of tariff and other quota commitm ents (Table MA:1 ):  Japan 
(JPN/91), Chinese Taipei (TPKM/13); 9 
    
 (ii) imports under tariff and ot her quota commitments (Table MA:2 ):  Hungary 
(HUN/34), Japan (JPN/92), Latvia (L VA/9), Poland (POL/62 & POL/63) and 
Chinese Taipei (TPKM/14); 10 
    
 (iii) use of the special safeguard (Tables MA:3-MA:5 ):  Hungary (HUN/36) and 
Japan (JPN/94, JPN/95 & JPN/96); 12 
    
 (iv) domestic support commitments (Table DS:1 ):  Chile (CHL/14), Cyprus 
(CYP/14), the European Communities (EEC/49), Hungary (HUN/33), Japan (JPN/98) and the Unites States (USA/51); 14 
    
 (v) new or modified domestic support measures exempt from reduction 
(Table DS:2) :  the Slovak Republic (SVK/43). 24 
  G/AG/R/39 
 Page 9 
 
Review of notifications by the Co mmittee on Agriculture on 17 June 2004 
 
Summary of specific points raised and responses thereto  
 
 
Table MA:1 Notifications 
 
Japan     G/AG/N/JPN/91      Tariff Quota Administration  (Table MA:1) 
Points raised by other Members  Response by Notifying Member 
New Zealand – Welcomes the introduction of 
reallocation mechanisms for all tariff quotas. Could 
Japan give an indication of the volumes of quota 
being returned in fiscal y ear 2003?  What tonnages 
are involved in the reallocation of TQs and has the 
introduction of the mechanism allowed more new 
entrants to enter the market? The reallocation mechanis m was introduced on 
1 April 2003 but in its first year of operation no quota 
allocations were returned from initial quota holders. 
 
 
 
Chinese Taipei     G/AG/N/TPKM/13      Tariff Quota Administration  (Table MA:1) 
Points raised by other Members  Response by Notifying Member 
Australia – How are releases of individual quota 
amounts scheduled during the quota year? 
 
 
How are importers and processors notified of such 
releases? 
 
   
When is the schedule of planned quota releases 
published? For agricultural and fish products subject to a TQ 
regime, the quota amounts for each year are specified 
in Chapter 98 of the "Customs Import Tariff", and are 
published on the website of the Department of 
Customs Administration, Ministry of Finance. 
Every year, the Ministry of Finance publishes the 
applications for allocation and other related 
information concerning the implementation of TQs, 
including quota amounts.  In order to ensure that all importers and exporters are aware of the 
opportunities, the Ministry of Finance also notifies 
relevant import/export associations as to how they may join in the quota allocation. 
In addition to publicatio n of the quota amounts in 
Chapter 98 of the "Customs Import Tariff", pursuant 
to paragraph 28 of the Working Party Report, the 
Ministry of Finance publishes the applications and 
quota for allocations well ahead of the start of the quota year, generally before 31 August of the 
previous year. 
 
 G/AG/R/39 
Page 10  
 
 
Table MA:2 Notifications 
 
Hungary    G/AG/N/HUN/34     Tariff Quota Fill (Table MA:2) 
Points raised by other Members  Response by Notifying Member 
Australia – We note the low fill rates (less than 10%) 
for milk and cream (HS 0401, 0402), beer (HS 2203) 
and wine and champagne (HS 2204).  What are the 
reasons for such low fill rates? Milk and cream.  The quota was originally 
established as a minimum access commitment based 
on domestic consumption in the base period.  
Consumption has since decr eased significantly and 
major users of milk powder have switched to whey 
powder as a lower-priced input. 
Beer, wine and champagne .  Hungary is a significant 
and competitive producer and exporter.  Furthermore, 
for these products more fa vourable access conditions 
were granted within the framework of preferential 
agreements. 
 
 
Japan     G/AG/N/JPN/92     Tariff Quota Fill (Table MA:2) 
Points raised by other Members  Response by Notifying Member 
New Zealand – Fill rates for a large number of dairy 
quotas remain below 50% again in fiscal year 2002.  
These rates have not been improving since 1995.  We understand from previous answers of Japan that this 
is thought to be due to a lack of domestic demand for 
these products.  If demand has been so consistently low over this period, why can not Japan move to a 
tariff-only regime at the in-quota tariff rate?  What 
are the reasons for re taining a complicated 
administration system for quota allocation when the 
quota is not being utilised because of low domestic 
demand? Under the Uruguay Round Agreements, Members 
undertook commitments to  provide market access 
opportunities but there is no commitment to fill the quotas.  There are no legislative barriers in Japan's 
system. In order to increase the fill rates of the 
quotas, Japan considers that  it is necessary for the 
private sector in the expo rting countries to make 
efforts to expand their markets.  Japan is, therefore, 
not considering changing its TQ system for reasons of low fill rates.  
 
 
Latvia     G/AG/N/LVA/9      Tariff Quota Fill (Table MA:2) 
Points raised by other Members  Response by Notifying Member 
Australia – Latvia recorded no in-quota imports of 
items subject to tariff quotas (other wheat and meslin, 
barley, oats and raw cane sugar for further 
processing) in 2001 and 20 02.  What are the reasons 
for this lack of in-quota imports? The opening of the scheduled TQs was announced 
according to the procedure pr escribed in the national 
legislation.  There was no interest observed from the 
importers for these tariff quotas.  G/AG/R/39 
 Page 11 
 
Latvia     G/AG/N/LVA/9      Tariff Quota Fill (Table MA:2) 
Points raised by other Members  Response by Notifying Member 
Australia (cont'd)  
Were there any imports of the products concerned, 
including under preferential trade arrangements, 
during the relevant periods?  If so, what were the 
volumes of such imports?  
The in-quota tariff rate for wheat, meslin, barley and 
oats is 25% ad valorem  and at the same time imports 
of these products took place under preferential  
arrangements under free trade agreements.  There was no market demand for raw cane sugar for further 
processing due to very limited refining capacity. 
 
Preferential imports during the 
period (tonnes) Tariff item number 
2001 2002 
100190  78 69 
100300  130 47 
10040000  1,361 1,322 
170111101 0.26 - 
 
 
Poland    G/AG/N/POL/62 & POL/63     Tariff Quota Fill (Table MA:2) 
Points raised by other Members  Response by Notifying Member 
Australia – Reasons for the low fill rates (less than 
10%) for a wide range of products, including beef, 
dairy products, wheat and other cereal flours, 
rapeseed and wine in 2002 and 2003? In 2002 and 2003 the products covered by the WTO 
quotas including beef, milk products, cereal flours, 
rapeseeds and wine fell also under preferential 
arrangements resulting from free trade agreements concluded by Poland, i.e. CEFTA.  Under these 
agreements, access to the Po lish market for some of 
these products was more favorable than access under WTO quotas.  In the agreement between the EC and 
Poland some agricultural products in 2002 and 2003 
were also covered by duty-free quotas. 
Another important reason for low fill rates is the 
competitiveness of Polish products with lower prices 
on the domestic market.  As regards the beef TQs, demand for beef is relatively weak compared to other 
types of meat, such as pigmeat.  Total imports of beef 
amounted to around 20 tonne s in 2002 and to around 
350 tonnes in 2003. 
 
 
Chinese Taipei    G/AG/N/TPKM/14     Tariff Quota Fill (Table MA:2) 
Points raised by other Members  Response by Notifying Member 
Australia – Just over one third of the quota for liquid 
milk was filled in 2003.  What are the reasons for this 
relatively low fill rate? The allocation of quotas for TQ products for each 
year is based on the principle of transparency and the 
market mechanism.  Therefore, the fill rate for the quota of liquid milk depends entirely on market 
demand and the willingness of importers to import. 
The quantity of liquid milk imported in 2003 actually 
increased by 49% compared to 2002.  Furthermore, 
85,730 tonnes of dehydrated milk was imported in 2003, amounting to a total value of US$239,436,000. 
 
 G/AG/R/39 
Page 12  
 
 
Tables MA:3 to MA:5 Notifications 
 
Hungary     G/AG/N/HUN/36     Annual Summary of Special Safeguard Actions (Table MA:5) 
Points raised by other Members  Response by Notifying Member 
Australia – In accordance with the transparency 
requirements set out in Article 5.7 of the Agreement, 
could Hungary please provide information on the 
level of duty levied on the products (including the method of calculation) when using the price-based 
SSG. 
Follow-up comment by Australia  – Called for greater 
transparency in light of footnote 2 to Article 5 of the 
Agreement.   Hungary used the method of calculation contained in 
Article 5 of the Agreement.  The level of additional 
duty depends on the actual import price of a given 
shipment, thus it is transaction-specific.  No statistical data are available on the average duty level. 
 
Hungary took note of the comment. 
 
 
Japan     G/AG/N/JPN/94, JPN/95 & JPN/96     Special Safeguard (Tables MA:4 & MA:5) 
Points raised by other Members  Response by Notifying Member 
Australia – In accordance with the transparency 
requirements set out in Article 5.7 of  the Agreement, 
could Japan provide information on the level of duty 
levied on the products, including the method of 
calculation? 
 
 
  
New Zealand – With respect to notification 
G/AG/N/JPN/96, the provisions of Article 5 were implemented on products which are subject to tariff 
quotas (butter and butteroil; and dairy spreads), and 
yet these dairy quotas have remained consistently underfilled.   Japan has previously indicated that 
tariff quotas are not filled because of a lack of 
demand.  However, it seems that importers are so interested in the market for some products that they 
are prepared to pay the over-quota tariff plus an 
additional safeguard duty, even when there are tariff quotas remaining at the lower rate of duty.  As well 
as raising questions about tariff quota administration, 
what is Japan's rationale for repeatedly utilising the agricultural safeguard – which was meant to assist 
countries to protect industry from import surges – on 
tariff quota products, when the TQ volume for these 
products is not being filled? The price-based SSG is applied for each individual 
shipment.  For confidentiality reasons related to the 
commercial activities of private enterprises, Japan 
has refrained from circulating information on import 
prices and on the amount of additional duty imposed 
by this measure.  However, the method of calculation 
is described in Article 7.4 of the Law on Temporary Tariff Measures, which is publicly available. 
The tariff quotas concerned were introduced for 
specific uses, i.e. for products consumed in the 
prefecture of Okinawa and products used on international flights.  These quotas remain underfilled 
because of the decline in demand for reconstituted 
milk as a consequence of increased demand for dairy 
products using fresh milk, and because the utilization 
of butter as a raw material is declining. 
The special safeguard measure in Article 5 of the 
Agreement was introduced for tariffied products 
during the Uruguay Round negotiations as part of a 
package of measures.  It is used according to the criteria set forth in Article 5.4 of the Agreement. 
In 2003, as a result of a rise in demand for butter, in-
quota imports of designated dairy products increased, 
and the SSG was invoked when the total amount of 
in-quota imports plus out-of-quota imports exceeded 
the trigger level.  Thus, there is no relationship 
between the quota in question and the safeguard 
measure.  G/AG/R/39 
 Page 13 
 
Japan     G/AG/N/JPN/94, JPN/95 & JPN/96     Special Safeguard (Tables MA:4 & MA:5) 
Points raised by other Members  Response by Notifying Member 
Follow-up comment by Australia  – Called for greater 
transparency in light of footnote 2 to Article 5 of the 
Agreement. 
Follow-up comment by Argentina – Without 
prejudice to Article 5.9 of the Agreement on 
Agriculture, use of the SSG on imports under tariff 
quotas is not permitted. Japan considered that the answer to these comments 
is included in the initial reply.  Should more detail be 
required, Japan undertook to forward any follow-up 
questions to the capital. 
 
 G/AG/R/39 
Page 14  
 
 
Table DS:1 Notifications 
 
Chile   G/AG/N/CHL/14      Domestic Support (Table DS:1)  
Points raised by other Members  Response by Notifying Member 
United States – How will the programmes listed in 
Chile's recently published Inter-ministerial 
Commission Report on the development of the 
agricultural and forest sector for 2004-2006 affect the levels of domestic support notified in 
G/AG/N/CHL/14? The Agrifood and Forestry Agenda 2004-2006 
involves a revision of the regulatory framework, 
policies, and support instruments applicable to the 
development of the agricultural and forestry sectors in Chile, and suggests areas in which actions need to 
be adjusted or supplemented.  It takes account of the 
current opening up of trade in Chile, and in particular 
the recent conclusion of free trade agreements with 
Chile's main trading partners. 
The Agenda identifies basic areas for sectoral 
development, such as:  improvement in the quality of 
research, development, an d technology transfer;  
stimulation of investment and access to sources of financing;  improvement of productivity;  and 
modernization of the sector's public institutional 
framework.  To that en d, the Agenda proposes 
upgrading of existing assistance programmes and 
creating new instruments, taking into account Chile's WTO commitments and essentially reallocating 
existing resources.  The Agenda does not provide for 
substantial increases in the agricultural sector budget. 
Thus, the levels of domestic support provided by 
Chile will not be substantially affected. 
 
 
Cyprus     G/AG/N/CYP/14      Domestic Support (Table DS:1)  
Points raised by other Members  Response by Notifying Member 
Amber Box 
Australia – We note that the AMS commitment for 
Cyprus is £C52.2 million in 2002.  What are the 
implications of these AMS commitments for future 
AMS reporting obligations given that Cyprus has joined the European Union? The EC responded that the implications are contained 
in the outcome of negotiations in the context of 
Article XXIV of GATT 1994. 
 
 
European Communities     G/AG/N/EEC/ 49      Domestic Support (Table DS:1) 
Points raised by other Members  Response by Notifying Member 
Green Box 
Marketing and promotion services (Annex 2, 
para. 2(f))  
Australia – Requested clarification concerning the 
measure "protection of geographical indications".   
Whether there was any expenditure for this measure in 2000/01?  
 
 
The measure in question should have been deleted 
from the list of measures indicated.  G/AG/R/39 
 Page 15 
 
European Communities     G/AG/N/EEC/ 49      Domestic Support (Table DS:1) 
Points raised by other Members  Response by Notifying Member 
Infrastructural services (Annex 2, para. 2 (g))  
Argentina – It would appear from the present 
notification that the EC supplies water and electricity 
directly to its producers.  How are such measures 
consistent with para. 2(g) of Annex 2? 
Australia – We note expenditure of €949.1 million in 
2000/01, down from €2,352.8 million.  Could the EC 
provide an explanation for the sharp decrease in expenditure?  Whether the notification reflects the 
necessary correction as indicated by the EC in 
G/AG/R/32, page 25?  
 
As the result of several of Members' questions, the 
EC will need to analyse the data contained under 
"infrastructure services", "structural adjustment assistance provided through investment aids" and 
through "resource re tirement programmes" in further 
detail.  This further analysis will be a matter of priority and the EC hopes to provide the relevant 
answers in writing as soon as possible and in any 
case before the next Committee meeting. 
Structural adjustment a ssistance provided through 
resource retirement programmes (Annex 2, para. 10)  
Australia – In the context of the review of 
notification EEC/38, the EC indicated that 
expenditure was significantly lower in 1999/00 due to 
the expiry of set-asid e programmes and the 
increasing take-up of environmental set-asides in agri-environmental programmes (G/AG/R/32, page 
26).  Why has expenditure increased to €448.8 
million, up from €122 million in the previous year?  
 
See reply above. 
Structural adjustment a ssistance provided through 
investment aids (Annex 2, para. 11)  
Argentina – What objectivel y demonstrated structural 
disadvantages prompted the payments in the 2000/01 
marketing year? 
Australia – Why have payments increased more than 
2.5 times over the previous year to €5,859.7 million?  
How does the "aid for young farmers scheme" meet 
the Annex 2, para. 11 criteria? 
Canada – Reasons for increase in payments?  What is 
the presumably constant "amount required to 
compensate for the structur al disadvantage", i.e. the 
ceiling amount against which the EC compared both the €2,308.7 in 1999/00 and the 5,859.7 million in 
2000/01 in order to ensure compliance with para. 
11(f)? 
New Zealand – Reasons for increase in outlays and 
measures under the programme particularly affected 
by the increase in funding?  Compliance with Annex 
2 criteria?  
 
See reply above. G/AG/R/39 
Page 16  
 
 
European Communities     G/AG/N/EEC/ 49      Domestic Support (Table DS:1) 
Points raised by other Members  Response by Notifying Member 
United States – Justification for notifying the 
"reconstruction and conversion" programme intended 
to upgrade old grape vines for wine production in the 
Green Box rather than the Amber Box.  How does the EC ensure that funds paid for upgrading old grape 
vines are not used for regular upgrading and 
maintenance? 
Follow-up question by Canada  – Shared the US 
concerns and requested a detailed explanation as to 
how this programme meets Annex 2 criteria. The funding is strictly reserved for use in conformity 
with the national programmes.  The use for regular 
upgrading and maintenance is forbidden (Regulation 
1493/99 art 11.3). 
 
 
 
An extensive discussion of the Table DS:2 
notification EEC/39 took place when this programme 
was notified (see G/AG/R/32, page 41 and 
G/AG/R/33, page 23). 
Regional assistance programmes (Annex 2, para. 13)  
Argentina – What measures  are included in the 
regional assistance programmes? 
 
 
 
Are there no longer compensa tory allowances in less 
favoured areas paid per hectare or per livestock unit? 
 
Are Council Regulations 3763/91, 1600/92, 1601/92, 
2019/93, 2081/93 and 950/97 no longer applied 
and/or were they replaced  by Council Regulation 
1257/99? 
What reasons account fo r the 60% increase of 
expenditures within one year (€2,000 million  in 
1999/2000 as compared to €3,200 million in 2000/01)?  
The regional assistance measures include national 
measures.  At the EU le vel they concern support 
schemes for ultra peripheral regions, such as the 
Greek Islands, Canary Islands and the Island of Madeira. 
Producers in less favoured ar eas are eligible for any 
support scheme, independently of the compensation 
for producing in an area with natural handicaps. 
Any new rural development issue is financed in the 
context of Regulation 1257/99 which applies from 
1 January 2000. Existing measures under previous 
regulatory systems will be progressively phased out. 
The figure for the previous year is approximately 
€2,900 million, giving an increase of 10% rather than 
60%, as stated by Argentina. 
Organic farming  
United States – Clarification sought concerning 
notification of programmes which support the 
conversion of farms to organic farming.  How long 
may producers receive benefits from these 
programmes?  
Organic farming is included in financing for agri-
environmental measures.  The programmes are 
integrated in regional programming.  The support is 
provided to compensate in come foregone and costs 
incurred.  Organic farming has been notified from 1995/96 onwards.  The benefit is paid for the 
conversion to organic farming.  The conversion 
period may vary according to the regional programme decided.  The annual value of support is 
not known in aggregate.  
Support to fruit and vegetable producer organizations  
United States – Clarification sought concerning 
financial aid provided to fruit and vegetable producer 
organizations.  Breakdown requested of how this 
financial aid was used by producer organizations to fund their members.  
Support to producer organisations, the "operational 
fund" is included in the Green Box, expenditure by 
the organisations for withdrawals in the Amber Box.  
The EC does not have information showing the use of funding by producer organisations.  G/AG/R/39 
 Page 17 
 
European Communities     G/AG/N/EEC/ 49      Domestic Support (Table DS:1) 
Points raised by other Members  Response by Notifying Member 
Blue Box  
Australia, Canada, New Zealand – Request for Table 
DS:2 notifications for "p er hectare compensatory 
payments for producers of rice", and for new measures "per hectare payments for grass silage", 
"slaughter premiums" and "beef supplementary 
payments". For rice the EC provided Table DS:2 notification 
G/AG/N/EEC/41.  The other cited measures are part 
of the Agenda 2000 package of measures which were notified in G/AG/N/EEC/17.  
Amber Box 
Argentina – Whereas for the 1999/00 marketing year the EC notified wine subsidies as equivalent 
measures of support and duly indicated the data used 
for calculation, for the 2000/01 marketing year it notified these subsidies as "other product-specific 
support" without including calculation details as 
required in G/AG/2? 
How was this figure calculated? 
 
Is there any subsidy or other measure that facilitates 
the purchase of sugar by wine growers and/or 
producers? The rationale for the change is that in the context of 
the reform of the wine regime, the guide price that 
was previously used for the calculation of the price 
gap, no longer exists. 
 
 
 
Budgetary outlays were used  for the notification of 
support in the wine sector. 
No such support exists. 
Canada – Request for corrigendum of EEC/38 to 
notify subsidies for private storage of pigmeat that 
were provided in parts of 1998/99 and 1999/00.  The 
EC acknowledged previously that this support was 
not included in the notification (G/AG/R/32, page 27). The EC included pigmeat support in the current 
notification in the Amber Box and will provide 
corrigenda for the previous years. 
United States – In March 2001, the EC announced 
that the French Ministry  of Agriculture offered 
support to French producers of beef due to hardships incurred since the second finding of BSE and foot-
and-mouth disease.  In February 2001, the French 
Ministry of Agriculture announced US$137 million in direct payments to beef  farmers, US$65.5 million 
to consolidate loans, US $27.4 million to recent 
investors, US$13.7 million to the veal industry and US$58.8 million to territorial farming contracts 
specializing in grass ranching.  Are these 
programmes included in th e notification?  How are 
programme allocations determined, and what is 
required of farmers to receive economic benefits?  
How much has been paid each year?  Is this programme currently in use? 
Follow-up question by Canada – Requested 
clarification as to how the price gap was calculated. Support in the beef sector is covered by a price gap 
calculation. 
 
 
 
  
 
  
 
  
 
  
The price gap between the external reference price 
fixed in the Uruguay Round and the institutional (intervention) price for the year referred to in the 
notification is multiplied by the total production.  
This provides the amount of total support for the beef 
sector. G/AG/R/39 
Page 18  
 
 
European Communities     G/AG/N/EEC/ 49      Domestic Support (Table DS:1) 
Points raised by other Members  Response by Notifying Member 
United States – Justification for the non-product-
specific de minimis  claim with respect to "common 
wheat, maize, barley, rye, triticale, and grain 
sorghum" (ST/DS:4)? The €8.4 million support notified is paid irrespective 
of the type of cereal produced and therefore cannot 
be broken down by  specific cereal. 
United States – Justification of the de minimis  claim 
in ST/DS:4 for "Potatoes for processing to starch" 
despite claiming €184.3 million of product-specific 
AMS for this product (48% of the production value).  Explanation sought for the negative equivalent 
measurement of support (EMS) of  €183.6 million. 
Follow-up question by the United States  – Reiterated 
its request for an explanation of the methodology 
used to calculate the negative support in ST/DS:8. The sum of the negative EMS in ST/DS:8 of €183.6 
million and the non-exempt direct payments of 
€184.3 million gives a small support of €700,000 or 
0.2% of the production value.  This is under 5% and therefore the pr oduct-specific de minimis  rule applies. 
 
There is an institutional price that is lower than the 
external reference price.  The price gap multiplied by 
the production quota gives a negative AMS.  This 
negative support is compensated by direct payments 
and a small positive AMS for this product is reported. 
United States – Clarification sought for support for the processing of citrus fruit, lemons, peaches, plums, 
pears, figs, tomatoes, and potatoes (ST/DS:4).  Whether these are paym ents to producers or 
processors, and are made under EU regulations or 
member State regulations?  For each of the listed products, how are the processing subsidies 
calculated? 
 
 
 
Follow-up question by the United States  – Requested 
information as to what third country markets and 
prices as well as what methodology are used for the 
calculations. The support notified for citrus fruits and lemons 
concerns payments to producer organisations that 
deliver raw material to processors. For the other products an EMS was notified based on a support 
price for producers.  The s upport is guaranteed to the 
producers of the raw mate rial.  The payments are 
made under EU regulations.  The support is 
calculated on the basis of the difference between the 
Community minimum price to producers and the 
average price of raw materials in the main competing 
third countries. 
 
The EC undertook to provide a reply. 
 
Follow-up comment by Australia – Welcomed the 
inclusion of product-specific production values in the 
notification which facilitates the analysis of EC' programmes. The EC said that improvements have been made to 
report such data on a product-specific basis but there 
are still some sectors, for example fruit and vegetables, where only aggregate data are available. 
 
 
Hungary     G/AG/N/HUN/33      Domestic Support (Table DS:1) 
Points raised by other Members  Response by Notifying Member 
Green Box 
New Zealand – Clarification sought as to how the 12 
new Green Box programmes meet the relevant 
criteria of Annex 2. Took note of the request and, if appropriate, will 
notify as soon as possible.   G/AG/R/39 
 Page 19 
 
Hungary     G/AG/N/HUN/33      Domestic Support (Table DS:1) 
Points raised by other Members  Response by Notifying Member 
Amber Box 
Australia – Australia and other Members raised 
concerns at the June 2002 meeting regarding 
Hungary's adjustment of its total AMS commitment level as provided in its Schedule on the basis of 
excessive inflation.  Hungary has continued this 
approach of adjusting its scheduled commitment for 
excessive inflation.  Could the EC explain whether it 
intends to continue Hungary's practice of adjusting its scheduled AMS commitment for "excessive 
inflation"?  We note that Hungary's actual AMS 
expenditure in 2000 exceeded its AMS commitment by more than three times.  Does the EC anticipate 
that Hungary will continue to receive high levels of 
AMS support? 
New Zealand – New Zealand considers that 
scheduled commitment levels cannot be altered and 
the adjustment for the influe nce of excessive rates of 
inflation should only be on the level of domestic 
support provided. The EC responded that all questions relating to AMS 
commitments will be addressed in the context of the 
negotiations under Article XXIV of the GATT 1994. 
 
 
 
Japan     G/AG/N/JPN/98     Domestic Support (Table DS:1) 
Points raised by other Members  Response by Notifying Member 
Amber Box 
Canada – Japan has altered the external reference 
price for sugar cane from 82.8 to 29.2 thousand 
Yen/tonne in Supporting Table DS:5.  Reasons for 
this change, as the external reference price is to remain fixed at the amount used in the AGST tables? Before 1999, the applied administered price for sugar 
cane was presented on the basis of refined sugar, 
while the external refere nce price was presented on 
the basis of refined sugar by converting the c.i.f. price of raw sugar.  In October 2000, Japan 
introduced legislative amendments and the applied 
administered price based on refined sugar is no longer used.  Instead, Ja pan uses both the applied 
administered price and the external reference price 
based on raw sugar. 
The c.i.f. price of raw sugar of 29.2 thousand 
Yen/tonne presented in the notification is equivalent 
to the price of refined sugar of 82.8 thousand 
Yen/tonne.  In other words, there is no substantial 
problem – it is merely a matter of method of calculation. 
 
 G/AG/R/39 
Page 20  
 
 
United States     G/AG/N/USA/51     Domestic Support (Table DS:1)  
Points raised by other Members  Response by Notifying Member 
Green Box 
Canada – Request for Table DS:2 notifications for 
"Integrated activities" and "Initiative for Future Agricultural and Food Systems" under General 
services, and the "Pasture Recovery Program" under Payments for relief from natural disasters. The United States is planning to submit Table DS:2 
notifications for each of th e programmes cited.  Two 
of the programmes – Integrated Activities and 
Initiative for Future Agricultural and Food Systems – are grant programmes authorized under the 
Agricultural Research, Extension, and Education 
Reform Act of 1998.  However, no funds were expended on either programme until 2001.  They are 
described in the U.S. Budget Appendix for FY 2003 
and later. 
The Pasture Recovery Program was authorized to 
cover a percentage of the cost of reseeding pastures 
damaged by drought.  The United States notified $18 million in 2000 and another $24 million in 2001 for 
this programme. 
State programs for agriculture (Annex 2, para. 2)  
European Communities – Reasons for considerable 
increase of expenditure?  Information requested 
regarding specific programmes contained under this 
heading for which spending  increased significantly.  
 
The information on state expenditures is provided by 
the Bureau of Census and is based on total state-level 
expenditures for agriculture, less the total of funds received by state government s from the Federal level 
for agriculture, less an estimate of agricultural taxes 
collected by the states a nd actual reported revenues 
collected by states from di rect sale of agricultural 
products or services, such as the sale of crops or dairy 
products from agricultural experiment station farms, agricultural fairs and shows, and government 
operated agriculturally related laboratory testing 
facilities.  Information on specific programmes funded by these expenditures is not available. 
Crop Disaster Payments (Annex 2, para. 8)  
European Communities – Reasons for decrease in 
Crop Disaster Payments for 2001 (page 47).  What is 
the estimated impact of the condition for 2001 that 
the sum of the disaster payment, the net crop 
insurance indemnity and th e value of the crop may 
not exceed 95% of the value of the crop without the 
loss?  How did the US ensure for the year 2000 that 
the sum of the disaster payment, the net crop insurance indemnity and the value of the crop did not 
exceed 100% of the value wi thout the crop loss?  Can 
the US inform about the specific disasters in 2000 and 2001 that led to the high level of expenditure?  
Reasons for decrease  - Under the 2003 Crop Disaster 
Program that governed crop disaster payments for 
crop years 2001 and 2002, producers had a choice of 
receiving payments for losses  during either the 2001 
crop year or the 2002 crop year, but not both.  Because the legislation esta blishing these payments 
was not passed until 2003, complete payment data 
under the Program are not yet available.  In fact, a correction for 2001 may be necessary, although we 
do not expect the final data to be significantly 
different from what was notified. 
Estimated impact of payment limit in 2001  – Data are 
not yet available.  G/AG/R/39 
 Page 21 
 
United States     G/AG/N/USA/51     Domestic Support (Table DS:1)  
Points raised by other Members  Response by Notifying Member 
Crop Disaster Payments (Annex 2, para. 8)  
European Communities (cont'd) 
 Method for assuring payment limit in 2000  – The 
disaster payment, the indemnity payment, and the 
value of the crop were summed and a determination 
made that they did not together exceed 95% of the 
value of expected production (acres multiplied by historical yield).  If the to tal exceeded that level, the 
disaster payment was reduce d so that the sum of the 
three would not exceed the 95% limit. 
Specific disasters  – All disaster payments were for 
weather-related disasters: drought, flood, hail, 
hurricane, etc. 
Emergency Feed Program (Annex 2, para. 8)  
European Communities – Reasons for increase of 
spending to compensate livestock producers for feed 
crop disasters (page 48)?  Does this support include 
commodities?  
 
Follow-up question by the EC – Sought information 
as to whether there are any supports provided in-kind.  
A severe drought in the western United States had led to a determination of feed crop disasters for this period.  Payments were made to livestock producers 
for feed losses suffered , including poor grazing 
conditions and reduced hay availability.  
Undertook to provide a response. 
Amber Box 
Current Total AMS  
Japan – Although the Total AMS has decreased since 
1999, the AMS in 2000 and 2001 was still higher 
than the level in 1998 or before.  In line with this 
trend, the product-specific AMS for many products has been decreasing since 1999.  However, the 
product-specific AMS for co tton, rice and soybeans 
has increased.  What ar e the reasons for these 
increases?  
The level of the AMS for soybeans in 2001 was three 
times compared to that in  1998.  Even though the 
international prices of soybeans were depressed from 
1998 to 2001, the export volume increased by around 
40% during the same period.  Was this due to the effect of the low international prices of soybeans 
being mitigated by the high level of domestic support 
on the product? Many of the programmes included in the AMS 
calculation are price-based.  When US prices are 
lower than target prices, the programmes are 
activated.  During the 1999-2001 time period, US 
prices for cotton, rice and soybeans were lower so programme payments were correspondingly higher. 
Although there are a numbe r of factors impacting 
planting decisions – including prices, expectation of 
future prices, relative prices among commodities, 
weather conditions, and other agronomic factors – in 
fact, US soybean production has been remarkably s t a bl e  o ve r t he  l a s t  fi ve  y e a r s .   F rom  19 98  t o 2 0 02 ,  
soybean area harvested only varied by 3% and yield 
only varied by 8%. 
In 1997, the US exported 26.2 million tonnes of 
soybeans.  Because of a world financial crisis and 
increased exports out of  South America, these 
exports dropped to 20.3 million tonnes in 1998.  In 
2001, the United States exported almost 29 million tonnes of soybeans, an increase of 42.9% over the 
depressed 1998 numbers, but an increase of only 
10.7% from 1997 levels.  Many factors contributed to the increase seen in US expo rts in 2001.  The strength 
in the world economy has pushed world consumption 
of soybean meal up on the average of 5% annually.  
As a result, global trade of  soybeans will reach nearly 
60 million tonnes this year.  However, the US market 
share of this growing market continues to decline.  In 1997, the US exported ne arly 60% of the world's 
soybeans.  This share dropped to slightly over 50% in 
2001, and is forecast to reach only 41% this year. G/AG/R/39 
Page 22  
 
 
United States     G/AG/N/USA/51     Domestic Support (Table DS:1)  
Points raised by other Members  Response by Notifying Member 
Support for sugar  
European Communities – The applied administered 
price for sugar is the announ ced loan rate of 18 cts 
minus 1 ct penalty in case of forfeiture to the 
government (footnote 2 of ST/DS:5).  What are the 
quantities that were actually forfeited?  
Follow-up comment by the EC – Considered that the 
quantity indicated in the reply constitutes a very small proportion of production.    
In 2000, 25,560.70 tonnes (56,351,673 pounds) were forfeited (from the FSA web-based loan forfeitures report, 14 June 2004). 
 
 Took note of the comment. 
Support for tobacco  
European Communities – Whether the "Phase II 
funds for tobacco" are in cluded in the current 
notification? 
Follow-up question by the EC – Sought clarification 
as to whether there is now a decision regarding 
inclusion of these payments in the notification.  
Phase II funds for tobacco are not included in the 
2000 and 2001 notifications. 
 
Undertook to provide a response. 
Crop and revenue insurance (non-product-specific 
AMS)  
European Communities – The EC understands that 
the notified amount for crop and revenue insurance is 
the amount of indemnities to producers minus the 
producer paid premiums (see G/AG/R/34, page 33 in relation to notification G/AG/N/USA/43).  The data 
in the USDA Budget Summary 2003 (page 42, 2001 
actual) is $3,279 million for indemnities and $1,079 million for producer paid premiums.  This would lead 
to an amount to be notified of $2,200 million in 2001.  
Reasons for the difference between data in the USDA Budget Summary 2003 and notified data? 
 
Whether any government guarantees were provided to the insurance companie s operating the different 
schemes or to companies reinsuring the liabilities?  
 
The source of the differen ce is that the Budget 
Summary is based on the fiscal year, while the Risk 
Management Agency data are based on the crop year.  
Premiums may be collected and indemnities paid for more than one crop year during any one fiscal year. 
 
  
 
  
 
Insurance companies providing policies through the US crop and revenue insurance programs share risk 
with the government through the Standard 
Reinsurance Agreement.  No particular level of gain 
or limit of loss is guaranteed to participating 
companies; instead, companies enter the policies they sell into one of three government-administered risk 
pools, each with a different level of shared risk, 
generally based upon the perceived risk level of the policy.  Depending upon the level of indemnities paid 
out in any given year, companies will share both 
gains and losses on policies at the preset shared levels in each pool.  The values in volved vary considerably 
from year to year.  G/AG/R/39 
 Page 23 
 
United States     G/AG/N/USA/51     Domestic Support (Table DS:1)  
Points raised by other Members  Response by Notifying Member 
Crop market loss assistan ce payments (non-product-
specific AMS)  
Australia - Australia and a number of other Members 
have previously expressed their concerns in this 
Committee that the United States has notified crop market loss assistance payments under the non-
product-specific de minimis  category.  We have 
argued that given the payments are provided to producers of a few specific crops and that they do not 
meet the definition of non-product-specific support 
set out in Article 1 of the Agreement, they should instead be notified under the product-specific AMS 
category. 
Whether the United States plans to continue to notify 
the replacement programme for these payments 
(which ERS has identified as the counter-cyclical 
payments) in the 2002 Farm Bill as non-product-
specific de minimis  support?  Level of counter-
cyclical payments in the first year of the 2002 Farm Bill?  
 
The US is currently collect ing the data on counter-
cyclical payments for the 2002/03 notification.  A 
preliminary estimate of total counter-cyclical payments made in the 2002/03 marketing year is less 
than $2 billion.  Given that these payments are 
delinked from production – that is, the payments are disbursed to farmers regardless of what type of crop 
they have planted in a given year, or even if they 
have planted no crop at all – these payments cannot be linked with a specific crop. 
 
Non-product-specific AMS  
New Zealand – New Zealand notes the decrease in 
AMS spending between the 2000 and 2001 marketing 
years.  However, New Zealand remains concerned with the level of spending on subsidies, and we note 
that spending on non-product-specific support 
remains near the US$7 billion level.  Reasons why 
non-product-specific support continues to remain at 
this high level, which is almost seven times greater than that in the 1986-88 base period?  Reasons why 
market loss assistance paymen ts are considered to be 
"non-product-specific" given its relationship to prices received by specific crops? 
Follow-up comment by Canada, Argentina, EC  – 
Shared other Members' concerns regarding the 
classification of market lo ss assistance payments as 
non-product-specific given that they are paid to 
producers of particular crops.  Also, questioned the classification of crop disaster payments as Green Box 
given that the programme does not meet the 
averaging period criteria set out in Annex 2 of the Agreement. 
Follow-up comment by New Zealand – Given the 
relationship of market loss assistance payments to 
prices received by specific crops, New Zealand 
considered that this support should be calculated for 
each product.  
For a list of all the components of non-product-
specific support, the US refers to its domestic support 
notifications.  The Market Loss Assistance Payments were not connected to any t ype of current production, 
and therefore could not be tied to any particular crop.  
Farmers received these paym ents based on historical 
production patterns, not what they grew in a given 
year.  Therefore they we re included in the non-
product-specific category. 
 
 
Took note of the concerns with respect to the 
classification issues.  In the spirit of cooperation and 
transparency, the US will continue to work closely with Members to ensure that there is an 
understanding of how the US programmes operate 
and what the basis for their classification is. 
 
 G/AG/R/39 
Page 24  
 
 
Table DS:2 Notifications 
 
Slovak Republic     G/AG/N/SVK/43    Ne w or Modified Domestic Support (Table DS:2)  
Points raised by other Members  Response by Notifying Member 
New Zealand – Compliance of the new Green Box 
programme "Structural adjustment assistance 
provided through investment aids – Reconstruction 
and modernization" with the criteria in para. 11, 
Annex 2, in particular paras. 11(b) and (e) thereof? 
 
 
 
Compliance of the new Green Box programme 
"Regional assistance programmes – Worse natural 
conditions" with the criteria set out in para. 13, Annex 2? The measures under the title "Reconstruction and 
modernization" are aimed at  the re-establishment and 
revival of neglected soil and production buildings.  
The reason why particular crops are specified in the 
Decree is that respective soil or facilities are mostly damaged and thus they need financial support for 
restoration of farming areas or mentioned buildings.  
However, the volume of production is not limited. 
The measure "Worse natural conditions" meets the 
criteria of less favourable regions from the point of 
view of mountainous character, difficult access or lower soil quality.  The purpose of granting support is 
to maintain farming in less favourable conditions of 
all kinds.  While cows, sheep and goats do not 
represent a condition, they are mentioned in the 
respective Decree as they are usually bred in such regions. 
 
 
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