WORLD TRADE G/AG/N/USA/5
16September 1996
ORGANIZATION(96-3598)
Committee onAgriculture Original: English
NOTIFICATION
Theattached notification concerning newormodified domestic support measures exempt from
reduction (Table DS:2) wasreceived fromthedelegation oftheUnited States on10September 1996.
./.G/AG/N/USA/5
Page2
Table DS:2
DOMESTIC SUPPORT: United States
Notification under Article 18:3oftheAgreement:
Newormodified domestic support measures exempt fromreduction
Title:
Income support forwheat, rice,cotton andfeedgrains (corn, barley, oats,sorghum)
Legislation reference:
TheFederal Agriculture Improvement andReform Actof1996 (the1996 Act)
Description ofmeasures:
DecoupledincomesupportconformingtoAnnex2,paragraph6oftheAgreement.The1996Actremoves
thelinkbetween income support payments andcurrent commodity prices andproduction. Iteliminates
deficiency payments andtheAcreage Reduction Program (ARP). Constraints onindividual farm
decision-making imposed bypastprograms aregreatly reduced oreliminated. Farmers havemuch
greater flexibility inmaking planting decisions andthefreedom toplant anycroponcontract acres
andreceive payments, except forlimitations onfruits andvegetables (insomecases, fruits andvegetables
canbeplanted withnoreduction inpayments oraone-to-one reduction inpayment acres).
The1996Actauthorizesannual“productionflexibilitycontractpayments”whichparticipatingproducers
mayreceive independent offarm prices andproduction. Toreceive payments, farmers whohave
participated inthewheat, feedgrains, rice,andupland cotton programs inanyoneofthepast5years
(1991-1995) mayenterinto7-year production flexibility contracts forthe1996-2002 crops. Theymust
complywithconservationrequirementsandkeepcontractacresinagriculturalorrelateduses(production
isnotrequired, e.g.,vegetative cover).
Aneligible farm’spayment isbased onitspayment quantity foreachcontract cropmultiplied bythe
respective annual payment ratedetermined forthatcrop. Thepayment quantity foragiven contract
commodity isequal to85percent ofthefarm’scontract acreage times itsfixedprogram yield. Aper-unit
payment rate(e.g., perbushel) foreachcontract commodity willbedetermined annually bydividing
thetotalannual contract payment levelforthatcommodity (described under costofmeasure below)
bythetotalofalleligible farms ’payment quantities. Annual payment quantities maybeaffected by
producers exiting theprogram orwithdrawing some acreage, enrolling contract acreage intothe
Conservation Reserve Program (CRP), andbyprevious CRPacreage becoming eligible forpayments.
Thesumofsuchpayments across contract commodities foranindividual farmwould beitsannual
payment, subject topayment limits.
Costofmeasure:
Thetotalproduction flexibility contract payment levels forallcommodities eachfiscal year(October
1-September 30)arefixed at:$5.570 billion in1996, $5.385 billion in1997, $5.800 billion in1998,
$5.603 billion in1999, $5.130 billion in2000, $4.130 billion in2001, and$4.008 billion in2002.
Theshare oftotalannual payments isfixed foreachcommodity forthe7-year period based upon
February 1995 projections ofdeficiency payments.
Period application: 1996-2002
Products toprincipally benefit:
Wheat, rice,upland cotton, andfeedgrains.