G/AG/W/181  
 
18 July 2018  
(18-4513) Page: 1/93 
Committee on Agriculture    
 
RESPONSES TO POINTS RAISED BY MEMBERS UN DER THE REVIEW PROCE SS 
COMPILATION OF RESPO NSES TO QUESTIONS RA ISED DURING THE COMM ITTEE  
ON AGRICULTURE MEETI NG ON 11 -12 JUNE 20181 
The present document compiles responses received in writing by the Secretariat to the questions 
raised in document G/AG/W/ 178 as well as follow -up comments made during the Review Process.  
 
Written responses to the following questions were not provided before 16 July 2018:  
 
ID Answer by  Question by  Reference  
87079, 87161 
and 87162  India2 Australia, Brazil, Thailand  I. Article 18.6  
87074  India Canada  I. Article 18.6  
87019  Indonesia  United States of America  I. Article 18.6  
87094  Mongolia  Russian Federation  I. Article 18.6  
87041,  87040  Tunisia  United States of America  G/AG/N/TUN/52  
 
_______________  
 
 
 
 
 
 
 
 
 
                                                
1 This document has been prepared under the Secretariat 's own responsibility and is without prejudice 
to the positions of Members or to their rights and obligations under the WTO.  
2 India answered part of the question and will provide a full response at a later stage.  G/AG/W/181  
 
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  TABLE OF CONTENTS  
Contents  
1   MATTERS RELEVANT TO THE IMPLEMENTATION O F COMMITMENTS: ARTIC LE 
18.6 ................................ ................................ ................................ ................................ . 5 
1.1   EU - Amendments to Income Stabilisation Tool  ................................ ...............................  5 
1.1.1    Question by India (AG -IMS ID 87080)  ................................ ................................ .........  5 
1.2   India's sugar policies  ................................ ................................ ................................ .... 6 
1.2.1    Question by Australia, Brazil and Thailand (AG -IMS ID 87079, 87161 and 87162)  ............  6 
1.2.2    Question by European Union (AG -IMS ID 87002)  ................................ ..........................  8 
1.3   India's rice  procurement  ................................ ................................ ...............................  8 
1.3.1    Question by European Union (AG -IMS ID 87078)  ................................ ..........................  8 
1.4   Indonesia's import restrictions on horticultural products  ................................ ...................  9 
1.4.1    Question by United States of America (AG -IMS ID 87020)  ................................ .............  9 
1.5   Moldova's draft regulati on on amendments to Law on Internal Trade  ................................ 10 
1.5.1    Question by Ukraine (AG -IMS ID 87092)  ................................ ................................ ....10 
1.6   Norway's export subsidy for butter  ................................ ................................ ............... 11 
1.6.1    Question by New Zealand (AG -IMS ID 87096)  ................................ ............................. 11 
1.7   Switzerland -Liechtenstein's new support policy for dairy and cereals  ................................ .12 
1.7.1    Question by European U nion (AG -IMS ID 87091 and 87100)  ................................ ......... 12 
1.8   Switzerland's levies on imports of certain agricultural goods  ................................ ............ 13 
1.8.1    Question by European Union (AG -IMS ID 87102)  ................................ ......................... 13 
1.9   U.S. Commodity Credit Corporation funds  ................................ ................................ ......13 
1.9.1    Question by Canada (AG -IMS ID 87104)  ................................ ................................ .....13 
1.10   Brazil's domestic support programmes  ................................ ................................ ........ 14 
1.10.1    Question by United States of America (AG -IMS ID 87014)  ................................ .......... 14 
1.10.2    Question by New Zealand (AG -IMS ID 87062)  ................................ ........................... 15 
1.11   Canada's New Milk Ingredient Class  ................................ ................................ ............ 15 
1.11.1    Question by Australia (AG -IMS ID 87160) and New Zeala nd (AG -IMS ID 87063)  ........... 15 
1.11.2    Question by Australia (AG -IMS ID 87159) and New Zealand (AG -IMS ID 87064)  ........... 16 
1.11.3    Question by New Zealand (AG -IMS ID 87065) and United States of America 
(AG-IMS ID 87015)  ................................ ................................ ................................ ............ 16 
1.12   Canada's wine sale policy  ................................ ................................ .......................... 18 
1.12.1    Question by New Zealand (AG -IMS ID 87066) and United States of America 
(AG-IMS ID 87016)  ................................ ................................ ................................ ............ 18 
1.13   European Union's sugar policies  ................................ ................................ .................. 19 
1.13.1    Question by Australia (AG -IMS ID 87067)  ................................ ................................ .19 
1.14   EU intervention stocks of skim milk power  ................................ ................................ ...20 
1.14.1    Question by New Zealand (AG -IMS ID 87069)  ................................ ........................... 20 
1.15   India's minimum support prices  ................................ ................................ .................. 21 
1.15.1    Question by Australia (AG -IMS ID 87068)  ................................ ................................ .21 G/AG/W/181  
 
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  1.16   India's pulses policies  ................................ ................................ ................................ 22 
1.16.1    Question by Australia (AG -IMS ID 87070)  ................................ ................................ .22 
1.16.2    Question by Australia (AG -IMS ID 87072)  ................................ ................................ .23 
1.16.3    Question by Australia (AG -IMS ID 87075)  ................................ ................................ .24 
1.16.4    Question by Australia (AG -IMS ID 87076)  ................................ ................................ .24 
1.16.5    Question by Australia (AG -IMS ID 8707 7) ................................ ................................ .25 
1.16.6    Question by Canada (AG -IMS ID 87074)  ................................ ................................ ...26 
1.16.7    Question by Canada (AG -IMS ID 87071)  ................................ ................................ ...26 
1.16.8    Question by Canada (AG-IMS ID 87073)  ................................ ................................ ...26 
1.16.9    Question by European Union (AG -IMS ID 87001)  ................................ ....................... 27 
1.16.10    Question by Russian Federation (AG -IMS ID 87087)  ................................ ................. 27 
1.16.11    Question by Ukraine (AG -IMS ID 87088)  ................................ ................................ .27 
1.16.12    Question by United States of America (AG -IMS ID 87017)  ................................ ......... 28 
1.17   Indonesia's dairy import system  ................................ ................................ ................. 31 
1.17.1    Question by New Zealand (AG -IMS ID 87089)  ................................ ........................... 31 
1.17.2    Question by United States of America (AG -IMS ID 87018)  ................................ .......... 32 
1.18   Indonesia's soybean imports  ................................ ................................ ...................... 34 
1.18.1    Question by United States of America (AG -IMS ID 87019)  ................................ .......... 34 
1.19   Korea's rice imports  ................................ ................................ ................................ ..34 
1.19.1    Question by Thailand (AG -IMS ID 87090)  ................................ ................................ .34 
1.20   Mongolia's quota regime for importation  ................................ ................................ ......35 
1.20.1    Question by Russian Federation (AG -IMS ID 87094)  ................................ ................... 35 
1.21   Pakistan's sugar policies  ................................ ................................ ............................ 35 
1.21.1    Question by Australia (AG -IMS ID 87081), Brazil (AG -IMS ID 87163) and 
Thailand (AG -IMS ID 87164)  ................................ ................................ ............................... 35 
1.22   Pakistan's wheat export subsidies  ................................ ................................ ............... 37 
1.22.1    Question by United States of America (AG -IMS ID 87021)  ................................ .......... 37 
1.23   Philippines' rice waiver  ................................ ................................ .............................. 38 
1.23.1    Question by Australia (AG -IMS ID 87082)  ................................ ................................ .38 
1.24   Russian Federation's railway subsidy for exports  ................................ ........................... 38 
1.24.1    Question by Ukraine (AG -IMS ID 87098)  ................................ ................................ ...38 
1.24.2    Question by United States of America (AG -IMS ID 87022)  ................................ .......... 39 
1.25   Suriname's poultry tariffs  ................................ ................................ ........................... 42 
1.25.1    Question by United States of America (AG -IMS ID 87023)  ................................ .......... 42 
1.26   U.S. dairy policies  ................................ ................................ ................................ .....42 
1.26.1    Question by Canada (AG -IMS ID 87105)  ................................ ................................ ...42 
1.26.2    Question by Canada (AG -IMS ID 87106)  ................................ ................................ ...43 
1.27   U.S. support to cotton sector ................................ ................................ ...................... 43 
1.27.1    Question by Brazil (AG -IMS ID 87103) ................................ ................................ ......43 
2   POINTS RAISED IN CON NECTION WITH INDIVID UAL NOTIFICATIONS  ....................  45 
2.1   Administration of tariff and other quota commitments (Table MA:1) ................................ ..45 G/AG/W/181  
 
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  2.1.1    Canada (G/AG/N/CAN/116)  ................................ ................................ ....................... 45 
2.2   Imports under tariff and other quota commitments (Table MA:2)  ................................ .....46 
2.2.1    Canada (G/AG/N/CAN/120)  ................................ ................................ ....................... 46 
2.2.2    Chile (G/AG/N/CHL/46)  ................................ ................................ ............................ 47 
2.2.3    Japan (G/AG/N/JPN/225)  ................................ ................................ .......................... 47 
2.2.4    Russian Federation (G/AG/N/RUS/19)  ................................ ................................ ........ 48 
2.2.5    Chinese Taipei (G/AG/N/TPKM/161)  ................................ ................................ ........... 48 
2.2.6    United States of America (G/AG/N/USA/120)  ................................ .............................. 49 
2.3   Domestic Support commitments (Table DS:1)  ................................ ................................ 50 
2.3.1    Australia (G/AG/N/AUS/99, G/AG/N/AUS/109 ) ................................ ............................ 50 
2.3.2    Brazil (G/AG/N/BRA/48)  ................................ ................................ ........................... 50 
2.3.3    European Union (G/AG/N/EU/34 , G/AG/N/EU/34/Corr.1)  ................................ .............. 53 
2.3.4    European Union (G/AG/N/EU/43)  ................................ ................................ ............... 54 
2.3.5    Guatemala (G/AG/N/GTM/60)  ................................ ................................ ................... 60 
2.3.6    India (G/AG/N/IND/12)  ................................ ................................ ............................ 61 
2.3.7    Lao People's Democratic Republic (G/AG/N/LAO/2)  ................................ ...................... 69 
2.3.8    Mexico (G/AG/N/MEX/36)  ................................ ................................ ......................... 69 
2.3.9    Norway (G/AG/N/NOR/94)  ................................ ................................ ........................ 74 
2.3.10    Philippines (G/AG/N/PHL/48, G/AG/N/PHL/49, G/AG/N/PHL/50, G/AG/N/PHL/51, 
G/AG/N/PHL/52)  ................................ ................................ ................................ ................ 74 
2.3.11    Switzerland (G/AG /N/CHE/84)  ................................ ................................ ................. 78 
2.3.12    Tunisia (G/AG/N/TUN/52)  ................................ ................................ ....................... 81 
2.3.13    United States of America (G/AG/N/USA/121) ................................ ............................. 81 
2.4   Export Subsidy commitments (Tables ES:1, ES:2 and ES:3)  ................................ ............ 87 
2.4.1    Canada (G/AG/N/CAN/118)  ................................ ................................ ....................... 87 
3   DEFERRED REPLIES TO QUESTIONS ON NOTIFIC ATIONS  ................................ ..........  87 
3.1   Egypt (G/AG/N/EGY/3)  ................................ ................................ ................................ 87 
3.2   India (G/AG/N/IND/11)  ................................ ................................ ............................... 89 
4   OVERDUE NOTIFICATION S ................................ ................................ ........................  91 
4.1   Indonesia  ................................ ................................ ................................ .................. 91 
4.2   Pakistan  ................................ ................................ ................................ .................... 91 
4.3   Turkey  ................................ ................................ ................................ ...................... 91 
5   COUNTER NOTIFICATION S ................................ ................................ ........................  91 
5.1   India ................................ ................................ ................................ ......................... 91 
 
 
 G/AG/W/181  
 
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  1  MATTERS RELEVANT TO THE IMPLEMENTATION O F COMMITMENTS:  ARTICLE 18.6  
1.1  EU - Amendments to Income Stabilisation Tool  
1.1.1   Question by India (AG -IMS ID 87080)  
With regard to the EU's Common Agriculture Policy (CAP), major improvements to the 
EU agriculture rules came into force on 1 January 2018 following the adoption by the 
Council of Agriculture Ministers and the European Parliament, of the agriculture and 
rural development part of the so -called Omnibus regulation.  
  
One of the key points mentioned in these amendments relates to the Income 
Stabilisation Tool. Changes are made in the Rural Development Regulation to provide for 
a sector specific income stabilisa tion tool which will give Member Sates the possibility to 
design a tool tailored for a specific sector. While the support linked to the general 
income stabilisation tool will continue to be triggered when the farmer's income drops 
by more than 30% of his/h er average annual income, t he threshold for the new 
sector -specific tool will be 20%. Further, in order to promote the use of insurance by 
farmers, the threshold for drop in production applicable for insurance will be now 20%, 
in place of 30% earlier.  
  
India notes that the EU has notified expenditure on CAP as "enhancing public awareness 
of the Common Agricultural Policy" under Marketing and promotion services category of 
"Measures exempt from the reduction commitment "Green Box"" in its DS:1 supporting 
table in G/AG/N/EU/43 for marketing year 2014 -15.  
  
In order to categorize such an income safety programme under Green box, conditions 
laid down in paragraph 7 of Annex 2 of the AoA should be complied with. In this regard, 
India wants EU to answer the foll owing:  
  
a. Can EU specify or give examples of the sectors for which the new sector -
specific tools will be applicable?  
b. Since the new policy intends to reduce the threshold for drop in income to be 
eligible for support from 30% to 20%, how does EU see the comp liance of this 
measure with paragraph 7 (a) of Annex 2 of the AoA, given that the programme 
has earlier been notified under Green box?  
c. How is this new measure compatible with pa ragraph 7 (c) of Annex 2 of 
the AoA?  
 
Answer by European Union  
 
a. The sectorial I ncome Stabilisation Tool (IST) aims at supporting active farmers as 
defined in Article 9 of Regulation (EU) No 1307/20 13, as applicable in the m ember State 
concerned. According to the legal text, no specific sector is targeted by the IST.  
A sector -specific  IST should only be programmed in cases duly justified by the m ember 
State. The justification should provide sound information: e.g. the unsuitability of the 
general IST for the achievement of the underlying policy goal, the absence or insufficient 
coverag e of alternative instruments for the risks in the area, the predominance of a 
specific farming sector in the area or the sensitiveness of a specific sector to certain 
risks.  
b. The EU does not assert that this new scheme is Green Box, and it will not be notif ied as 
such. Support in any EU m ember States where  scheme meets the 30% threshold will be 
notified under Green Box. Any new schem es which do not respect the 30%  threshold will 
be notified as  Amber Box support. The pre -existing IST for farmers in all sector s is in line 
with Green Box rules.  
c. It is not: see answer to question b.  G/AG/W/181  
 
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  1.2  India's sugar policies  
1.2.1   Question by Australia, Brazil and Thailand (AG -IMS ID 87079, 87161 and 87162)  
Export quota and financial assistance  
 
Australia notes extensive media reports about India's s urging sugar production 
in 2017 -18 and calls for assistance from the Indian sugar industry for government 
intervention to support domestic prices. In response, the Indian Government announced 
a suite of measures since February, which have ha d a dampening effect on the world 
sugar market. On 28 March 2018, India's Department of Food & Public Distribution 
(DFPD) announced in File No. 1(4)/2018 -SP-I a two million tonne (20 Lakh tonnes) 
export quota for all grades of sugar in  2017 -18 under its Mi nimum Indicative Export 
Quotas (MIEQ). India also removed a 20% export duty on sugar in March 2018, 
increased the import tariff on sugar from 50 to 100% in February 2018, and imposed 
reserve stockholding limits on producers of sugar for the months of Febru ary and March 
2018. According to the DFPD announcement, the MIEQ scheme was implemented "[i]n 
view of the inventory levels with the sugar industry and to facilitate achievement of 
financial liquidity". The export quota has been prorated among sugar factori es and 
allocated at Annexure -A to the MIEQ.  
  
a. Can India provide data on the value and volume of exports of sugar under the 
export quota since it was announced on 28 March 2018?  
b. Given the gap between world sugar prices and internal Indian sugar 
prices/cos t of production, are there any export incentives or subsidies provided 
as part of the export quota to make the exports commercially viable?  
c. Can India explain the meaning of paragraph 7 of DFPD File No. 1(4)/2018 -SP-I 
which states that sugar mills failing to undertake the export of sugar allocated 
to them shall be deemed to be violating the directives of the Government 
issued under clause 5 of Sugar (Control) Order, 1966?  
i. What penalties may a sugar mill face if it does not export its allocated quota 
volume ?  
ii. Does paragraph 7 means the export quota is effectively a mandatory 
requirement?  
The announcement of an export quota was followed by an announcement of financial 
assistance to sugar mills for clearing cane dues of farmers by India's Cabinet Committee 
on Economic Affairs (CCEA) on 2 May 2018. This scheme will pay sugar mills Rs. 55 per 
tonne of cane crushed in 2017 -18 and would help clear cane price dues of farmers of 
more than Rs.  19,000 crore (approximately USD  2.8 billion).  
 
Further to the CCEA announc ement, India's DFPD issued a notification for the Scheme 
for Assistance to Sugar Mills in No. 1(5)/2018 -S.P.-I on 9 May 2018. This provided the 
eligibility criteria for the financial assistance, including mills needing to "have fully 
complied with all the orders/directive of the Department of Food and Public Distribution 
(DFPD) to the sugar mills during  2017 -18 sugar season ". 
 
d. Can India explain which orders/directive of the Department of Food and Public 
Distribution (DFPD) to the sugar mills during 2017 -18 sugar season?  
i. Does this include sugar mills meeting the prescribed quantities of sugar 
under the export quota in Annexure -A to the MIEQ?  
e. Recent media reporting indicates that a number of sugar mills will not be 
eligible for the financial assistance, sinc e they did not meet the reserve 
stockholding limits on producers of sugar for the months of February and 
March  2018  G/AG/W/181  
 
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  i. Can India confirm whether a sugar mill needs to have met the reserve 
stockholding limits to be eligible for financial assistance?  
ii. Is India  considering changing the announced eligibility criteria to address 
this issue of reserve stockholding limits?  
f. Can India advise whether financial assistance will be withheld to sugar mills 
not exporting prescribed quantities of sugar at Annexure -A to the MIEQ?  
i. If so, given India does not have any scheduled export subsidy entitlements, 
can India explain the consistency of making financial assistance contingent 
on fulfilling an export quota allocation consistent with India's commitments 
under Article 9 of t he Agreement on Agriculture?  
g. Does India think it is sustainable to continue to addressing domestic 
overproduction in the medium to long term through export quotas and 
incentives?  
h. Is India considering changes to its domestic support programmes for the sug ar 
industry, in particular the "Fair and Remunerative Price" to cane growers, to 
address the overproduction and avoid future cane arrears?  
i. Has India considered more market -oriented forms of domestic support, which 
allow prices signals to reach producers and is more sustainable and effective to 
support the livelihood of farmers and avoid the accumulation of cane arrears in 
order of USD  2.8 billion?  
Deferral of future sugar import duties  
India's Directorate General of Foreign Trade Notification No. 57/2015 -2020 on 28 March 
2018 announced the Duty Free Import Authorisation (DFIA) scheme allowing import 
duties on future sugar imports to be waived until September 2021 for sugar millers that 
export sugar this crushing season (2017/18).  
j. Can India provide data on the value and volume of exports of sugar under the 
DFIA  scheme since it was announced on 28 March 2018?  
k. Given India does not have any scheduled export subsidy entitlements, can 
India e xplain the consistency of allowing future import duties on sugar to be 
waived contingent on exports of sugar this crushing season with India's 
commitments under Article 9 of the Agreement on Agriculture?  
Answer by India  
 
a. and b. Since the scheme came into operation the i nternational prices of sugar have  been 
much lower than the domestic prices. Further, in June 2018 Government has mandated 
a minimum domestic price of Rs 29/kg ex -factory for sale of sugar in the Indian market. 
Consequently, the domestic pric e is almost 20 to 30% higher than the international price 
and therefore it is expected, that in the present circumstances, negligible exports will 
take place under the scheme.  
e.  Please indicate which specific media reports are being referred to.  
g. Government has already decided to allow diversion of B -Heavy molasses for production 
of ethanol for blending with petrol. Government has also announced incentives for 
increasing the ethanol production capacity and up -gradation of the plant for operating 
more number o f working days.  
h. In India cane producers are mostly marginal farmers having very small land holdings. In 
order to protect their interest, Central Government fixes Fair and Remunerative G/AG/W/181  
 
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  Price (FRP) of cane which is the benchmark price to be paid by the sugar  mills against 
purchase of their cane for production of sugar.  
i. Sugar is a critical sector for India as the livelihoods of large numbers of small and 
marginal farmers depend on it. Therefore the sugar and cane policies are reviewed 
continuously keeping in v iew the demand and supply position. The responses to 
remaining sub -parts of the question wi ll be submitted in due course.  
1.2.2   Question by European Union (AG -IMS ID 87002)  
a. Can India indicate the current support price for sugar for sugar cane growers in 
India (e xpressed in raw sugar or white sugar equivalent per metric tonne). If 
prices are different across states, can India please indicate the support in each 
state.  
b. Can India confirm that sugar mills have been obliged to export 2 million tonnes 
of sugar of the s ugar production of this marketing year.  
c. Can India indicate whether the sugar mills or sugar cane producers will be 
compensated for any of the differences between the internal support price and 
the world market sales price for the sugar to be exported.  
Answer by India  
 
a. The Central G overnment has fixed FRP for cane for current sugar season 2 017-18 across 
the country at Rs  255 per quintal linked to a basic recovery of 9.5% subject to a 
premium of Rs  2.68 per quintal for every 0.1% point increase above that le vel. Some of 
the states fix their own advised price s which are generally higher than FRP including 
different taxes.  
b. A quota of 2mn ton nes has been indicated for export by the sugar mills.  
c. No. 
Follow -up: Australia noted its concern  regarding  the global sugar market where prices were at 
10-years low and that India's  over-production of sugar would affect  the stability and predictability  
of the global market.  On India's responses  to its question a and b,  Australia pointed out  the 
discrepancy  between India' s response  which stated t hat "negligible exports will take place under 
the scheme" and India's regulations which require d mandatory  exports of 2 million tonnes  sugar 
this crushing season . Australia  asked if  India would consider  2 milli on tonnes of sugar as 
negligible. Brazil and t he European Union echoed Australia's  doubt.  Brazil also supported 
Australia's  concern on the global sugar market and  looked forward to receiving full response  from 
India to allow assessment of the  impact of India's measures  to the market and their consistency  
with WTO rules. Brazil invited India to discuss  this policy  bilaterally or with other interested 
Members. Guatemala and Thailand echoed the concern .  
 
1.3  India's rice procurement  
1.3.1   Question by European Union (AG -IMS ID 87078)  
According to the data available on the Food Corporation of India 
(http://fci.gov.in/procurements.php?view=89 ) webpage, the minimum price support 
for paddy during the 2016/17 season was at least 1,470 rupees/quintal, i.e. 
14,700  rupees/tonne.  The Indian fixed external reference price for rice in its schedule is 
3,520 rupees/tonne. The currency in which the FERP is fixed is rupee.  
 
According to the FCI web -page 
(http://fci.gov.in/app/webroot/upload/Procurement/Statewise%20Procurement%20o
f%20Rice(KMS%202016 -17 )_44.pdf ) FCI procured 381.06 LMT of rice in the 2016/17 
marketing year, i.e 38.1 million tonnes of rice.  Total production of rice in India during 
the same period, according to the AMIS database 
(http://fci.gov.in/app/webroot/upload/Procurement/Statewise%20Procurement%20o
f%20Rice(KMS%202016 -17)_44.pdf ) was 110.15 million tonnes.  Therefore, in total G/AG/W/181  
 
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  India procured around 34,6% of the rice produced with a procurement price that means 
more than f our times higher than the fixed external reference price in India's schedule 
of concessions.  
 
In light of the above could India validate the figures above and clarify:  
 
a. How does India intend to respect its product -specific de minimis  support limit 
for ric e, in particular in a situation where price gap would be calculated on the 
basis of eligible production and not on the basis of procured production as ruled 
by the Korea  beef case  (DS161)?  
b. How would India define "excessive rate of inflation" as st ipulated in 
Article  18:4 of the  AoA?  
c. When does India intend to submit its outstanding domestic support 
notifications (DS:1) providing all relevant details for the price gap calculations 
as operated by the FCI during the years concerned?  
d. Since the calculation above shows that the product -specific de minimis  
domestic support is above the 10% limit, is India considering triggering an 
interim mechanism for the public stockholding for food security purposes as 
laid down in the Bali Ministerial Decision of 7 December 2013 ? 
Answer by India  
 
India has been using a consistent methodology for calculating market price support in accordan ce 
with the applicable rules. India  does not agree with the inferences drawn in the question and, 
therefore, the questions do not appear to be relevant and are hypothetical.  
 
Any outstanding notifications will be submitted by India in due course.  
 
The excessive inflation referred to in Article 18.4 is not defined in the AoA. Members have 
interpreted it in many ways and have the flexibility to do so.  
 
1.4  Indonesia's import restrictions on horticultural products  
1.4.1   Question by United States of America (AG-IMS ID 87020)  
Indonesia has expanded seasonal restrictions for 2018, including new restrictions on 
apples, oranges, clementines, lemons, and other products.  In the Indonesia – Import 
Licensing Regimes WTO dispute, the WTO Dispute Settlement Body found that 
Indonesia's seasonal restrictions on horticultural products are inconsistent with the 
WTO Agreements and issued a recommendation that Indonesia bring this measure  — 
and 17 others  — into compliance with its WTO  obligations. Indonesia has stated that it  
intends to comply with the WTO recommendations and rulings in the dispute.  
  
a. Will Indonesia commit to not implement seasonal restrictions for horticultural 
product imports for the remainder of 2018?   
b. The US understands that Indonesia's Ministry of Agricul ture held a public 
hearing on 16 May 2018 to discuss possible revisions to its regulatory 
requirements for imports of horticultural products, including the elimination of 
seasonal restrictions. Will the revised measures being considered be in force in 
time to allow apple imports for the months of August -October and lemon 
imports for the months of May -August and November ‑December?  
c. Will Indonesia publish the revised measure for comment by WTO members? 
Does Indonesia intend to notify these revisions to the WTO ?  
d. What other changes is Indonesia recommending to its existing requirements?  G/AG/W/181  
 
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  The US understands that during the first -half of 2018, Indonesia's Ministry of 
Trade  (MOT) issued horticultural product import permits nearly six weeks late.  
e. What was the cause o f this delay?  
f. What measures have MOT taken to ensure that second half of 2018 import 
permits are issued on time?   
g. When will MOT issue these import permits?   
Answer by Indonesia  
 
Indonesia understands that these issues are still being discussed within the context of 
implementation of the DSB’s recommendations. In this regard, Indonesia will comply with those 
recommendations.  
 
Concerning the regulatory requirements for imports of h orticultural products, Indonesia  would like 
to inform the Committee that Minister of Agriculture Regulation No.24/2017 has been replaced 
with the Minister of Agricul ture Regulation No.  24/2018 on Import Recommendation for 
horticultural p roducts. In this re gulation, seasonal restrictions have been revoked. However,  
27 commodities fall within the category of " limited restric tion". Importations of those commodities  
to Indonesia still need import recommendations. Indonesia will notify this revised Regulation to  
the WTO.  
 
Based on information provided by the U .S. delegation, there was delay with respect to the 
issuance of the permit. This is because  prior to the issuance  of such permit, authorities must 
ensure that informatio n provided by the applicants is  compl ete and correct. This certainly needs 
time. I n the second half of 2018, the g overnment will improve the mechanism on which the 
issuance process is taking place, provided the documents of application are correct and complete.   
 
Follow -up: New Zealand looked  forward  to receiving further  details on Indonesia's revisions and 
changes to its  regulations including those that would bring Indonesia into compliance with the 
recommendations from the WTO Dispute Settlement Body. The European Union  highlighted the 
impor tance  of all M embers respect ing the outcome of  dispute settlements .  
1.5  Moldova's draft regulation on amendments to Law on Internal Trade  
1.5.1   Question by Ukraine (AG -IMS ID 87092)  
The Republic of Moldova is considering a draft regulation regarding the amendments  to 
the Law on Internal Trade that would favour domestically produced products and 
restrict imported goods. The draft regulation says: "14) The merchant is obliged to 
purchase and ensure the laying of food products from the short food chain on the shelf, 
in proportion not less than 50% of the linear length of the trading shelf. The list of food 
products that fall under these provisions is approved by the government and is updated 
annually" and "Short food chain – supply chain of food products produced and/o r 
processed in the territor y of the Republic of Moldova".  
a. In this regards could Moldova please provide an update on the implementation 
status of this draft regulation?  
b. Which products could be included in the abovementioned list?  
c. What steps is Moldova ta king to ensure that any regulation affecting imports of 
agricultural products is consistent with its WTO commitments?  
Answer by Moldova, Republic of  
 
The purpose of the above -mentioned act is to create the necessary legal framework for internal 
trade thro ugh the development of a suitable distribution network of commercia l products and 
services and to e nsure its compliance with the conditions of free competition and to balance the G/AG/W/181  
 
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  negotiating power, as well as protection of life, health, safety and economic  interests of 
consumers.  
 
a. The law establishes general principles for the internal trade activities conducted within 
the territ ory of the Republic of Moldova. T he modifications to the law come as a result of 
the internal market study in order to exclude so me discriminatory aspects found 
between the local producers. Moreover, this Law is establishing an interaction 
mechanism between suppl ier and seller of the products i n internal market and will not 
introduce any other measures at th e border against imported  goods which could not  be 
justified by WTO rules. The internal measure complies with WTO principles, does not 
affect the imports, and offers equal treatment to imported and domestic products. 
Moreover, the amendments have been proposed and consulted intern ally with all 
interested stakeholders, including public institutions, private sector, as well as foreign 
investors.  
The draft of the law on modification of the law regulating the internal trade is currently 
in the Parliament. The Draft law No.  97/2018 was examined and adopted by the 
Parliament during its first reading, on 3 May 2018.  
b. Currently, there is no exhaustive l ist. The list will be compiled jointly by the Ministry of 
Economy and I nfrastructure an d the Ministry of Agriculture, Environmen t and Regional 
Development, based on relevant analysis and the appropriate internal studies of the 
market and production capacities, and it will not have an impact on the interests of 
suppliers, as well as consumers. The list will be approved b y the g overn ment only af ter 
the adoption of the law No.  97/2018 by the Parliament. The Republic of Moldova will 
conduct all necessary consultations with interested parties before the adoption of the 
government decision.  
c. The Republic of Moldova is taking all  necessary  steps and procedures  to ensure that its 
national legislation and all  measures are consistent with its  WTO commitments. In this  
regard , the Republic of Moldova  express es its  availability to provide any additional 
clarifications, i f needed, including throug h bilateral dialogue s.  
Follow -up: The European Union expressed interest in the question, in particular relating to the 
minimum  local production as  a requirement for imports.  
 
1.6  Norway 's export subsidy for butter  
1.6.1   Question by New Zealand (AG -IMS ID 87096)  
New Zealand notes that contrary to the MC10 Export Competition Decision, Norway's 
notified export subsidy outlays for butter in 2016 are 1154% of those in the previous 
five years. They are also 250% of outlays in 2015.   
 
a. Footnote 4 of the MC10 Export Compe tition Decision requires that there shall be 
no export subsidies applied to new markets and that product shall not be 
destined for least developed countries. Which markets did the export 
subsidised butter go to in 2015 and 2016?  
b. What steps is Norway takin g to bring its export subsidy outlays for butter back 
within the previous 5 year average required by paragraph 10 of the Decision?  
Answer by Norway  
 
a. Norway used export subsidies for butter for export s to the European Union, Egypt and 
Morocco in 2015 and to the European Union and Morocco in 2016.  
b. Norway accepted at the Ministerial Conference in Nairobi in December 2015 stronger 
export subsidy commitments for butter, thus reducing the subsidized export quantity by 
approximately 80 %, compared to the le vel set in the Uruguay round.  G/AG/W/181  
 
- 12 - 
 
  Norway remains fully committed to the outcome of the Nairobi Ministerial Decision and 
will phase out all export subsidies by the end of 2020 according to its  revised and 
certified schedule of commitments . According to prelimi nary figures, there were no 
subsidized exports  of butter in 2017 . 
Follow -up: Australia, Brazil, New Zealand and the United States raised concern regarding Norway's 
significant increase in butter export subsidies. Norway was asked to fully comply with the Nairobi 
Ministerial Decision including the paragraph 10 which asked Members to seek not to raise their 
export subsidies beyond the average level of the past five years.  New Zealand pointed to other 
more cost -efficient and less trading  distorting policies such as Green Box support  and encouraged 
Norway to consider alternative  policies. Australia invited Norway to explain what domestic reforms 
Norway  had undert aken to avoid the situation in the future when export subsidies would be fully  
eliminated and how Norway intended to deal with over production once export subsid ies would no 
longer  be a policy option. Norway noted that it had complied with the legal commitment which was 
based on Footnote 4  of the Nairobi Decision . As regards  the oth er part of the Decision  which were  
best endeavour s, Norway noted that although it did not fulfil the endeavour for the 
year 2015-2016, the situation would  be different in the last 3 -4 years of the implementation 
period. It explained that during those years  Norway  would be obliged to phase out export 
subsidies  for cheese  which  would potentially  affect  production of butter. This was because Norway 
had a supply management  scheme for milk production which would require it to reduce  the quotas 
for farmers in ord er to comply with the Nairobi Decision . 
 
1.7  Switzerland -Liechtenstein's new support policy for dairy and cereals  
1.7.1   Question by European Union (AG -IMS ID 87091 and 87100)  
In document G/AG/W/125/Rev.8/Add.1 Switzerland -Liechtenstein mentions that its 
parliament h as approved "accompanying measures, including new support for dairy and 
cereal products that is not linked to exports, and a simplified authorization procedure 
for inward processing traffic in the basic dairy and cereal products that currently 
benefits fro m export contributions ". 
 
a. Could Switzerland -Liechtenstein explain the functioning of the new support 
measures for dairy and cereal products?  
b. Could Switzerland -Liechtenstein explain the changes made in respect of inward 
processing?  
Answer by Switzerland  
 
In December  2017, the Swiss Parliament approved a package of measure s for implementing 
the Nairobi Decision on Export C ompetition. The package is scheduled to be implemented on 
1 January  2019. It contains the following elements:  
 A revision of the so -called "Chocolate law": the legal basis for the granting of export 
subsidies is abolished;  
 Accompanying measures, namely a simplification of the procedure for approval of the 
inward processing trade and coupled payments for certain staple agricultural products, 
including milk and cereals.  
 
The new payments for cereals and for marketed milk will be distributed directly to agricultural 
producers, according to the production quantity in the case of marketed milk and to the area 
under cultivation in the case of cerea ls. The disbursement of such payments will be independent 
from exports of the processed products. As regards the procedure for approval of the inward 
processing trade, a notification to the subsectors concerned will replace the consultations provided 
for under the current system. This procedural simplification will apply to basic dairy and cereal 
agricultural products which currently qualify for export contributions.  
 G/AG/W/181  
 
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  1.8  Switzerland's levies on imports of certain agricultural goods  
1.8.1   Question by European Union (AG-IMS ID 87102)  
The European Union  understands that Switzerland applies levies on imports of certain 
agricultural goods that are subject to compulsory reserve stock requirements to finance 
these reserve stocks. These fees are applied to imports in additi on to customs duties, 
while they are not applied to the domestically produced products. Could Switzerland 
please explain how this measure complies with Article  III GATT?  
 
Answer by Switzerland  
 
In order to secure the country's supply of vitally important g oods and services during severe 
shortages, Switzerland constitutes reserve stocks of certain goods, including basic foodstuffs and 
animal feed. The costs of managing these stocks are financed through contributions levied at the 
time of marketing or importa tion of the goods in question. The legal bases are set forth in the 
Federal Law on National Economic Supply (Classified Compilation No.  531, 
https://www.admin.ch/opc/fr/ classified -compilation/20141710/index.html ). Depending on the 
nature of the levy, the contributions are considered either as charges equivalent to an internal tax 
or as customs duties. Guarantee fund contributions considered as internal taxes apply to imported 
products and domestic products and are in line with GATT Art. III. Where contributions equivalent 
to customs duties are concerned, Switzerland is currently carrying out reforms to ensure 
compliance with its WTO commitments.  
 
Follow -up: Ukraine recalled that  this issue of national treatment was raised  during Switzerland's  
Trade Policy  Review  (TPR)  in 2013 and expressed interest  in additional  response s. . 
 
1.9  U.S. Commodity Credit Corporation funds  
1.9.1   Question by Canada (AG -IMS ID 87104)  
In the Bipartisan Budget Act of 2018, Congress lifted certain restrictions on the 
Agriculture secretary's authority to use Commodity Credit Corporation (CCC) funds. 
Canada understands that the CCC can borrow up to $30 billion from the Treasury 
Department at any one time to stabilize farm income such as assisting farmers through 
loans, purchases, payments and other operations.  
 
a. Could the US please provide the reasoning for lifting restrictions on the USDA's 
authority to use CCC funds, and name the programs that will be eligi ble for 
these new funds?  
b. Can the US use these funds to purchase domestically produced commodities? If 
so, would the USDA still use its Section 32 funding to purchase and remove the 
surplus of domestically produced agriculture commodities such as cheeses fo r 
domestic food aid purposes?  
Answer by United States of America  
 
a. The Bipartisan Budget Act of 2018 does not include any language explaining the reason 
for no longer including restrictions on CCC powers to use loans, purchases, payments, 
and other operations. No program mes are specifically eligible to receive new funds as a 
result of this change; current farm program mes are authorized under the 2014 Farm Act 
and certain other laws.  
b.  USDA continues to use Section 32 funds to purchase foods used in a  range of USDA 
food and nutrition assistance program mes. Purchases are determined in coordination 
with the Food and Nutrition Service based on needs of those program mes and are made 
at market prices using a competitive bid process.  
Follow -up: Canada asked  the United States, whether all programmes were eligible  since it 
understood that no programmes were named as being eligible for commodity credit access to G/AG/W/181  
 
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  the USD 30 billion . The United States noted that no programme was associated with 
the USD 30 billion . 
 
1.10  Brazil's domestic support programmes  
1.10.1   Question by United States of America (AG -IMS ID 87014)  
a. The United States, along with several other Members, has expressed concern at 
previous meetings of the COA over the potentially trade -distorting effec ts of 
PEP and PEPRO programmes.  
Brazil stated in its response to AG -IMS ID  86031 that, "the information 
requested (destination) by the United States is not available, since there is no 
data for quantities of products shipped to specific destinations under the 
programme. The government requires information regarding proof of outflow of 
the production, but no data is retriev ed regarding final destinations ". 
If Brazil does not collect data on the final destinations of products shipped 
under the PEP and PEPRO progr ammes, how can Brazil say with certainty that 
many of the products shipped under the PEP and PEPRO programmes are not 
exported? How does Brazil verify eligibility of supported commodities for PEP 
and PEPRO?   
b. On 29  December 2017, the Brazilian Ministry of A griculture, Livestock and 
Supply  (MAPA) announced it would hold PEP/PEPRO auctions for rice, with an 
authorized amount of up to $100 million reis. For more details please see: 
http://www.agricultura.gov.br/noticias/governo -fara-leiloes -de-pep-e-pepro -
para-arroz   
i. Please explain how long MAPA is planning to offer PEP/PEPRO support to 
rice.  
ii. In addition to rice, does MAPA have plans to use PEP/PEPRO for other 
agricultural commodities in 2018?  
Answer by Brazil  
 
a. PEP and PEPRO programmes are designed as instruments to complement supply in 
deficient regions through private stocks, therefore  their main objective is to outflow 
commodities from producing regions towar ds undersupplied regions. Products can only 
be supported under the PEP and PEPRO programmes if there is proof of outflow of 
production from areas where the market prices of the product are (or were) below 
minimum prices. Since both PEP and PEPRO are used f or domestic support and are not 
contingent on export or on export performance, Brazil only collects data on the amount 
of support given with a view to providing undersupplied regions. Market prices are used 
to determine the eligible products. If the market  price is markedly below the minimum 
price, and there is availability of budgetary funds, a program me is put in place. 
According to the shape and distribution of production and trade in question, one or more 
of the program mes available is chosen to be put in place. Brazilian authorities allocate 
budget according to the current needs and conditions of each commodity market, not in 
advance. Furthermore, products can only be su pported under the PEP and 
PEPRO  programmes if there is proof of outflow of productio n from areas where the 
market prices of the product are (or were) below minimum prices. In this light, Brazilian 
authorities require documentation proof of the outflow of production from these 
designated areas.  
b.  
i. PEP/PEPRO operations for rice in the 201 7/2018 crop are already finished. The last 
auction for rice was held in May 2018. The total value of support for rice 
in 2017/2018 crop was  R$ 31.056.200, 00 (about USD 9.12 million).  G/AG/W/181  
 
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  ii. At the moment, there is no forecast for new PEP/P EPRO auctions for 
the 2017/2018  crop. 
1.10.2   Question by New Zealand (AG -IMS ID 87062)  
In its answer on 27 May 2017 (AG IMS ID  84073), Brazil indicated that under PEP and 
PEPRO they provide assistance to the 'outflow of products' when prices in a particular 
region are below a legi slated minimum, and that the programmes allow supported 
products to be exported. What measures is Brazil taking to ensure that these 
programmes do not circumvent the elimination of export subsidy commitments?  
 
Answer by Brazil  
 
Products can only be suppor ted under the PEP and PEPRO programmes if there is proof of outflow 
of production from areas where the market prices of the product are (or were) below minimum 
prices. In this light, both programmes are used for domestic support and are not contingent on 
exports or export performance.  
 
Follow -up: Ukraine noted the long history of this issue and requested Brazil to provide the data in 
light of the numerous requests that had been addressed to Brazil in the past. Brazil responded that 
it considered its reply was complete and would be open to discuss with Ukraine bilaterally  if 
needed. Canada flagged increased concern regarding the programme's effects on production and 
trade decisions. New Zealand  appreciated Brazil 's transparency on this issue  and questioned  
whether  the subsidy given was  provide d on the basis of exporting.   
 
1.11  Canada's New Milk Ingredient Class  
1.11.1   Question by Australia (AG -IMS ID 87160) and New Zealand (AG -IMS ID 87063)  
New Zealand notes Canada's respon se at the 86th Comm ittee on Agriculture 
(AG-IMS ID 86030) with respect to trade data, and recalls that Canada's exports of SMP 
increased 73% between 2015 and 2016, and 203% between 2016 and 2017. While 
Canada claims to be a small world producer and exporter of SMP, this dramatic increase 
in Canadian export s is having a material impact on world dairy markets.  
 
New Zealand also appreciates that market conditions play a role in the volume and value 
of exports skim milk powder exports. However, since Class 7 was implemented Canadian 
SMP export prices have cons istently undercut export prices from other major SMP 
exporters by a significant margin. Indeed, in the 12 months since Class  7 was 
introduced, the monthly unit price of Canadian SMP, in US Dollars, has been on average 
20% lower than the unit price for New Zealand exports of SMP (and on average 24% 
lower than the unit price for EU28 (external trade) exports of SMP).  
 
Given the sharp increase in Canadian exports of SMP coupled with the consistently lower 
unit price for exports of SMP, how does Canada explain  this persistent price difference?  
 
Answer by Canada  
 
Canada re -iterates that it is a very small world producer and exporter of skim milk powder. It 
would be difficult to envision Canada having a significant impact on global dairy markets. Canada 's 
export s of skim milk powder also fluctuate in volume and value y ear-over-year. In both 2015 
and 2016, prior to the use of milk class 7, Canada 's export unit value ( USD per tonne) for skim 
milk powder was lower than the United States, New Zealand, and the Europea n Union, while in 
most other years the United States has been lower. The prices under milk class 7 for butterfat, 
protein, and other solids are determined based on world prices.  
 
Follow -up: The European Union regretted the lack of transparency in Canada's replies. Noting the 
influence of milk class 7 to the wo rld market prices for milk product s, the European Union asked 
Canada whether the programme respected WTO  rules. Australia raised interest in the global dairy 
export market and noted it would continue t o monitor the situation closely.  
 G/AG/W/181  
 
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  1.11.2   Question by Australia (AG -IMS ID 87159) and New Zealand (AG -IMS ID 87064)  
In responding to New Zealand and the United States' questions at the 86th Committee on 
Agriculture, Canada avoided answering satisfactorily the question about providing 
monthly volume data, so New Zealand again asks: Please provide monthly volumes of 
milk components (i.e.  butterfat, proteins, and other solids) for which process ors are 
paying Class 7 prices, as well as total utilisation for all classes.  
  
New Zealand notes that while Canada is no longer publishing this information on the 
Canadian Dairy Information Centre website, according to the Dairy Farmers of Canada 
annual r eport for  2016 -2017 (refer https://www.dairyfarmers.ca/news -
centre/document -library/annual -report, page  23), information on milk utilisation and 
sales is available through "dashboards" designed for market analysis.  
  
New Zealand remains very concerned at the apparent lack of transparency in Canada's 
implementation of its new national ingredients strategy, particularly in light of the 
significant trade impact of Class 7 (both in reducing Canadian dairy imports and 
increasing SMP exports).  
 
Answer by Canada  
 
Canada re -iterates that the information was removed from the Canadian Dairy Information Centre 
website as it was inaccurate and not comparable to past data. Canada is currently working towards 
an updated reporting system in order to be as transparent as possible. Canada does not have a 
timeline to share. Canada cannot comment on private information released by the Dairy Farmers 
of Canada to its members. Milk utilization and sales information belongs to the pro vincial milk 
marketing boards.  
 
1.11.3   Question by N ew Zealand (AG -IMS ID 87065)  and United States of America 
(AG-IMS ID 87015)  
a. Related to responses Canada provided to AG -IMS ID 86033, under what 
authority do provinces set milk classes and milk class prices?  
b. Please provide an update on the National Centrali zed Registration System and 
the Provincial Billing Mechanism Certification Program.  In AG -IMS ID  86033, 
Canada states that there is no definitive timeline for their implementation.  Does 
Canada have a target timeline?  Will the National Centralized Registrat ion 
System and the Provincial Billing Mechanism Certification Program provide 
auditing, tracking, and reporting rules/guidelines, and details relating to billing 
ratios?  Will information regarding the National Centralized Registration System 
and the Provin cial Billing Mechanism Certification Program be publicly 
available?  
c. Has Class 6 been revoked in Ontario?  Please provide a copy of the 
documentation or measure revoking Class 6.  
d. Please provide monthly milk component (i.e., butterfat, proteins, other solids ) 
prices and monthly volumes of milk components utilized (for Class 7, and also 
total utilization for all classes.  If this information is still not available, please 
provide an update on when and where this information will become available.  
e. How frequently  does the Canadian Dairy Commission commission studies 
related to the processor margin?  How frequently is the processor margin 
changed?  Are studies related to processor margins publicly available?  
f. Canada states in response to AG -IMS ID 86033: "As of 1 Febr uary 2017, the 
Canadian Dairy Commission no longer purchased skim milk powder under 
either the Canadian Dairy Commission's domestic seasonality or the surplus 
removal program.  The remaining inventory of skim milk powder will be sold on G/AG/W/181  
 
- 17 - 
 
  the domestic market" . How will the Canadian Dairy Commission sell skim milk 
powder on the Canadian market?  
g. According to the Canadian Dairy Commission's 2016 -17 Annual Report, "Since 
1 February 2017, price changes in the industrial milk classes are based on a 
combination of an nual changes in the cost of production and the consumer 
price index.  This formula was already used to determine changes in fluid milk 
prices".  If the Canadian Dairy Commission no longer purchases skim milk 
powder under either the Canadian Dairy Commission' s domestic seasonality or 
the surplus removal program and support prices are not used to set industrial 
milk class prices, what function does support prices for skim milk powder 
serve?  
h. Canada states in response to AG -IMS ID 86033, "Canada's exports of skim  milk 
powder are determined by market conditions".  What specific "market 
conditions" would determine, or affect, Canada's skim milk powder exports, 
and how? From January 2017 through January 2018, the annualized trend of 
Canada's SMP exports increased 52,4 93 MT, an increase of 183%.  What specific 
market conditions caused this increase?  
Answer by Canada  
 
a. Federal authority for the marketing of dairy products is delegated to provincial milk 
marketing boards or provincial agencies for interprovincial and export  trade of dairy 
products pursuant to the Canadian Dairy Commission Act and the Agricultural Products 
Marketing Act. This would also include the power in respect of pricing. Provincial boards 
and agencies are also delegated provincial authority for pricing based on provincial 
legislation and statute. Under the Canadian M ilk Supply Management 
Committee  (CMSMC) and federal -provincial agreements, these entities coordinate the 
exercise of their delegated federal and provincial authorities. Although responsibilit ies 
vary from province to province, boards and agencies generally license producers, 
allocate milk quotas, and establish or negotiate the prices or accounting values charged 
to processors, according to the milk's end use.  
b. The purpose of the National Centr alized Registration System is to register companies in 
order to utilize Class 7. This is necessary in order for auditors to coordinate usage audits, 
as is the case with other milk classes, and to encourage the harmonization of audit 
procedures for dairy pl ants among provinces. The purpose of the Provincial Billing 
Mechanism Certification Program is to be able to review each province 's audit procedures 
and billing mechanisms to ensure a uniform implementation of the national ingredient 
strategy. The National  Centralized Registration System and the Provincial Billing 
Mechanism Certification Program will not be publically available due to commercial 
confidentiality reasons. Some outstanding elements are still being discussed by industry 
stakeholders which preve nts the implementation of the programs.  
c. Canada notes that Ontario has not notified any amendment to milk class 6 through 
Regulation 753: Grades, Standards, Designations, Classes, Packing and Marking of the 
Milk Act of 1990. That being said, Canada underst ands that milk class 7 is being used 
across Canada.  
d. Canada does not have a timeline to provide for the release of any data related to milk 
class prices, utilization and sales from the Government of Canada. Several verifications 
to ensure accuracy of the d ata provided are required. Once completed, information will 
be provided in a more relevant format.  
e. The Canadian Dairy Commission will commission studies on assumed processor margins 
as needed in order to serve its mandate of providing efficient producers of milk and 
cream with the opportunity to obtain a fair return for their labour and investment, and to 
provide consumers of dairy products with a continuous and adequate supply of dairy 
products of high quality. The previous study was completed in 2005. Th e study is not G/AG/W/181  
 
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  publically available for commercial confidentiality reasons, due to the small number of 
processors in the Canadian market.  
f. The Canadian Dairy Commission uses the surplus removal program to sell skim milk 
powder to buyers on the Canadian dom estic market for use in animal feed.  
g. The Canadian Dairy Commission continues to set a support price for skim milk powder as 
the domestic seasonality program mes are  still operational whether or not skim milk 
powder is actually purchased by the CDC.  
h. It is the business decision of a processor or exporter in Canada to either sell skim milk 
powder on the domestic market, or to export it. It is also the business decision of foreign 
importers to select the products they wish to import. International and domestic  supply 
and demand conditions therefore apply.  
Follow -up: New Zealand noted that it continued to raise the issue of Canada's national ingredient 
strategy  because of its dissatisfaction with the quality of Canada's responses and its concern for 
the significant and growing impact of milk class 7 on Canadian exports . New Zealand stated that 
Canada's exports  of skim powder  at 71,861 tonnes in calendar year 2017  were 3 times higher than 
the 23,687 tonnes exported in 2016 . The total expor t of 71,861 tonnes was  more than the sum of  
all skim milk powder  exported by Canada between 2010 and 2015. New Zealand noted that its  
dairy industry  was already  experien cing the negative impact of Canada's dairy  policies on the 
global market  and it continu ed to be disappointed  by Canada's  lack of engagement and 
transparency  on this issue.  
 
1.12  Canada's wine sale policy  
1.12.1   Question by New Zealand (AG -IMS ID 87066)  and United States of America 
(AG-IMS ID 87016)  
Canada has not yet responded to the questions posed by  the United States in AG -IMS 
ID 85012 and AG -IMS ID 86034. As such, the United States repeats its previous 
questions.  
  
a. In AG -IMS ID 84105, Canada states that "The LCBO will consider making wines 
from Vintages Essentials, a sub -category of Vintages compris ing products that 
are continuously available, available to gro cers by moving them to the 
LCBO  Wines category".  
i. Are Ontario and/or Canadian wines that are on the Vintages Essential list 
allowed to be sold in grocery stores?  
ii. Would Ontario and/or Canadian win es that are on the Vintages Essential list 
need to move to the LCBO Wine category (and off of the Vintages Essential 
list) in order to be sold in grocery stores?  
iii. If Ontario and/or Canadian wines are allowed to be sold in grocery stores 
without moving off t he Vintages Essential list to the LBCO Wines category, 
but imported products are not, what is the policy justification?  
b. In the implementation of Ontario Regulation 232/16, how many restricted beer 
and wine authorizations and other beer and wine authorizati ons have been 
distributed to operators of grocery stores in Ontario?  
c. In the implementation of Ontario Regulation 232/16, how many authorizations 
have been distributed for a "wine boutique sales agent" (a single authorization 
that permits the operator of a grocery store to sell, as agent of a winery that 
operates a wine boutique inside the store, wine offered for sale in the 
boutique)?   G/AG/W/181  
 
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  d. What is the rationale for the Liquor Control Board of Ontario (LCBO) product 
call that Canada provided in AG -IMS ID 82002 
(http://www.doingbusinesswithlcbo.com/tro/Forms -
Documents/LettersToTheTrade/Downloads/LCBO%20Wines%20Bag%20in%2
0Box%20Tender.pdf ) specifying different retail price parameters and size 
parameters for imported bag in box wine than for the category of existing 
Ontario bag in box wine?  
e. Would Canada please confirm imported bag in box wine is limited to 4 stock 
keeping uni ts (SKUs) in LCBO stores while Ontario bag in box wine is limited to 
40 SKUs?  If confirmed, please explain the rationale for this split between 
imported and Ontario products.  
Answer by Canada  
 
Given formal processes underway at the WTO and elsewhere, Canad a is of the view that it would 
be inappropriate to further comment on this issue at this time.  
 
Follow -up: New Zealand remained  concerned about this issue and invited Canada to provide 
further information on this matter in light of its impact to a wide ran ge of Members . Australia 
voiced continued  concern regarding Canada's practices at  both federal and provincial levels .  
 
1.13  European Union's sugar policies  
1.13.1   Question by Australia (AG -IMS ID 87067)  
Australia welcomes the withdrawal of EU sugar production quotas in 2017, but notes 
ongoing substantial domestic support provided under the EU Voluntary Coupled Support 
(VCS) and Basic Payments Scheme (BPS).  
 
According to the European Commission, "EU sugar  production to increase significantly 
for 2017/18, https://ec.europa.eu/info/news/eu -sugar -production -increase -
significantly -2017 -18_en ," EU sugar producti on is forecast to rise 23%  to 21 million 
tonnes in 2017/18.  
 
Further, the EC DG AGRI Dashboard: Sugar, 
https://ec.europa.eu/agriculture/dashboards_en , states that sugar imports are 
forecast to  fall from 3.04 million tonnes in 2016/17 to 1.77 million tonnes in 2017/18. 
Sugar exports in the corresponding period however, are forecast to rise from 2.93 
million tonnes in 2016/17 to 4.85 million tonnes in 2017/18.  
  
a. Can the EU explain whether the increased EU sugar production and exports are 
sustainable in the medium to long term, or is the increased production driven 
by current and expected future levels of domestic support?  
b. Given the high levels of domestic support  provided under the VCS and the BPS, 
what steps has the EU put in place to prevent subsidised domestic sugar 
production being exported and having a negative impact on the global sugar 
market?  
c. Given the elimination of export subsidies under the Nairobi Min isterial Decision, 
can the EU provide reassurance its domestic support programmes are not 
circumventing the requirement to eliminate all export subsidies?  
d. Can the EU provide assurance that the domestic support provided to the EU 
sugar industry is not cros s-subsidising EU sugar exports?  
Answer by European Union  
 
a. The EU would recall that the change to EU sugar policy decided in 2008, including the 
abolition of sugar quotas, was partly due to the outcome of the WTO panel brought G/AG/W/181  
 
- 20 - 
 
  against the EU sugar quota sy stem by Australia a long with two other M embers. EU  notes 
with interests that Australia now has concerns about the logical consequence of the 
abolition of EU sugar quotas – i.e. an increase in production.  
The abolition of EU sugar quotas has led to a signi ficant restructuring of the EU sugar 
industry, which has indeed been challenging for many actors (farmers, processors etc .) 
within the EU, but these changes have led to a significant increase in the competiveness 
of the EU sugar production, as seen in the volume of 2017 production. The increase of 
production results from both a certain increase in area sown as well as exceptional yields 
in 2017 due to favourable weather conditions. Thus, the increase of production and 
exports has been driven by two elements , on one hand the new competitive environment 
generated by the end of the production quotas - whereby operators respond to market 
forces, and favourable weather conditions on the other hand. However this development 
cannot be explained by any EU domestic s upport whic h remained unchanged. As the 
EU sugar industry is in a transition to adapt to its new pot -quota environment , it is 
foreseeable that the EU  sugar production will adjust in the future as a response to 
market signals, supply/demand balance, and int ernational market developments.  
b. The Basic Payment Scheme is a decoupled Green Box payment, and has no influence on 
the level of EU sugar production. Voluntary Coupled Support (VCS) may only be granted 
by a m ember State to a sector or type of farming that is undergoing difficulties (e.g. a 
risk of a decline or abandonment of production). Further, it is a 'production limiting 
scheme' in accordance with Blue Box criteria, and also subject to strict budgetary limits. 
It has no negative impact on intra - or extr a-EU trade. It is particularly worth noting that 
the increase in area sown with su gar beet is concentrated in EU m ember States which do 
not apply VCS for sugar. On the contrary, t he area under sugar beet in EU m ember 
States applying VCS decreased in comparison to previous years when the measure was 
not in force. Therefore any increase on EU export capacity is not the result of domestic 
support but the natural consequence of removing the previous production and export 
limitations.  
c. and d. The definition  of "export subsidies" are "subsidies contingent on export 
performance" (Article 1(e) of the Agreement on Agriculture). The panel judgment in 
dispute DS266 on the previous EU sugar scheme was based on the fact the sugar 
produced under the "C quota" indeed was required to be exported, thus creating such an 
export contingency.  
All EU sugar production quotas have now been abolished. There is no export requirement 
of any kind in the current EU sugar regime. There are no subsidies contingent on export 
performanc e. The EU suga r regime fully respects all WTO  obligations on export 
competition.  
Follow -up: Guatemala  as an exporter of sugar e xpress ed interest  in the question. Australia noted 
that the European Union was one of the producers that had  increased significan tly sugar 
production . Australia , in light of the EU statement that its  producers were operating under market 
conditions  asked whether the European Union had  any thoughts of eliminating the in -quota tariff 
along with liberalizing the quota  so as to  allow pr oducers to truly complete under market 
conditions.  
1.14  EU intervention stocks of skim milk power  
1.14.1   Question by New Zealand (AG -IMS ID 87069)  
New Zealand appreciates the efforts by the European Commission to fulfil its legal 
obligations as regards the disposal of  public intervention stocks, as advised in the 
European Union 's response to New Zealand's question at the 86th Committee on 
Agriculture (AG IMS ID 86032). New Zealand notes two recent auctions of the EU 's Skim 
Milk Powder stocks:  
  
 In May in which the Commission sold 41,958 MT at 31% below the purchase price;  
 In April in which the Commission sold 39,066 MT at 38% below the purchase price;  G/AG/W/181  
 
- 21 - 
 
  Based on Eurostat figures, it would appear that the amount sold in April alone exceeds 
the annu al production of Portugal in 2016, while the total in May is greater than 
Denmark 's 2016 production.  
  
a. Have any of the stocks sold at these auctions been exported, and if so how 
much?  
b. What practical steps has the EU taken to avoid the sale of this product 
impacting global markets?  
Answer by European Union  
 
a. The EU legal framework for the disposal of public stocks does not set conditions on the 
final use or destination c hosen by operator s. The sales are  operated through a tendering 
procedure.  
b. The EU has adopted a cautious approach for the disposal of public intervention stocks, 
notably not to disrupt the market recovery taking place during 2017. Once that recovery 
was a reality, in the l ight of an increasing demand for SMP and given that the existence 
of the public stocks was weighing on the market, the release of product from 
intervention has speeded up. The minimum selling prices accepted in the tenders are 
consistent with market realit y, con sidering the age of the stocks.  
Follow -up: New Zealand noted its continued interest  in both the EU disposal of skim  milk powder  
from intervention stock and the EU policies on use of intervention  stock. Ukraine flagged interested 
in EU policy's potential  impact to the global dairy market .  
1.15  India's minimum support prices  
1.15.1   Question by Australia (AG -IMS ID 87068)  
Australia notes that as of 21 May 2018, India had already procured 33 million tonnes of 
wheat under its market price support programme. Thi s is already well in excess of the 
procurement target of 32 million tonnes set by the G overnment of India for the 2018 -19 
Marketing Season, and well beyond the 24 million tonnes of wheat allocated to the 
public distribution system (food aid programme) by t he Food Corporation of India.  
 
a. Given India has now surpassed its targeted procurement, will the Government 
of India discontinue its procurement activities of wheat?  
ii. If not, when will the government suspend further procurement of wheat?  
b. Under India 's min imum support price and procurement scheme for wheat, does 
the Government of India accept all wheat delivered by farmers to 
FCI warehouses?  
c. Given wheat stocks are now well above required  operational needs (as of 
April  2018, stocks were 13 million tonnes of  wheat and Indian stocking norms 
require only 4.4 million tonnes (based on the FCI website)), how does India 
intend to dispose of the excess stocks of wheat?  
Australia further notes that in Ministry of Finance Notificatio n No. 46/2018 -Customs on 
23 May 2018, India raised wheat tariffs from 20 to 30%.  
 
d. Can India explain the domestic circumstances and policy rationale for raising 
tariffs on wheat?  
e. How does India intend to manage the structural surplus of wheat that now 
appears to be present in the Indian m arket?  G/AG/W/181  
 
- 22 - 
 
  f. Does India envisage further tariff increases in the short to medium term to 
address the structural surplus?  
Answer by India  
 
a. b. c. and e. Procurement targets for wheat are set after due diligence. However, 
considering the scale of operations there can be some variations in the procurement. The 
procurement season is ending soon. Farmers in India are primarily low -income, poor 
subsistence far mers. They keep a portion of their produce for their self -consumption, as 
seed for next year 's crop and for sale in local market. Only a portion of marketable 
surplus offered by farmers conforming to prescribed specifications  is procured under MSP 
operatio ns for Central Pool. Disposal of procured food  grains including wheat is a 
continuous process. The procured wheat is disposed through allotment under other 
welfare schemes, Targeted Public Distribution System  (TPDS) and under Open Market 
Sales Scheme (OMSS ) (Domestic). Apart from requirement of food  grains for TPDS, 
allocation is also made under National Food Security Act (NFSA) for schemes under tide 
over category, other welfare schemes like Mid -Day Meal (MDM) and Integrated Child 
Development Scheme (ICDS) . Further, there are schemes requiring allocation of food  
grains, at state level, for welfare institutes/hostels etc. In addition, for meeting any 
procurement shortfall due to lower production in future and to deal with any scarcity of 
food grains, a porti on of the stock procured is also kept as strategic reserve.  
d. and f. The recent increase in applied tariffs, which are well within the WTO bound tariffs, 
is based on the domestic demand and supply situation of wheat in India. The same 
consideration will app ly in future policy decisions.  
Follow -up: Australia, the European Union and the United States expressed concern regarding the 
lack of quantitative  restrictions  on the amount of wheat India purchase d under the market price 
support programme and looked forw ard to related discussions on eligible  production. A s a major 
wheat exporter  Ukraine echoed the concern and encouraged India to adopt actions to ensure  the 
stock procured  under such programme would  not distor t trade and  adversely  affect food security of 
other Members. 
1.16  India's pulses policies  
1.16.1   Question by Australia (AG -IMS ID 87070)  
Quantitative restrictions  
  
In August 2017, India introduced quantitative restrictions on imports of mung beans, 
black lentils, and pigeon peas. As is well known to India , Australia and a number of 
WTO  Members have raised concerns about the WTO -consistency of the quantitative 
restrictions in numerous WTO  Committees, and Australia has raised concerns over the 
course of a series of bilateral representations.  
  
On 12 April 201 8, India's notification to the WTO Committe e on Import Licensing 
Committee  (G/LIC/N/3/IND/17) stated that import restrictions were  "maintained only 
on grounds of protection of human health or safety; animal or plant life or health; 
security and the environ ment." Regrettably, we still have not received a fulsome 
explanation as to the legal basis of India's quantitative restrictions.  
  
a. Can India explicitly state which of the four grounds outlined in India's import 
licensing notification is the basis for main taining quantitative restrictions on a 
range of pulses?  
b. If India is relying on GATT Article XX (General Exceptions) for its quantitative 
restrictions, can India explicitly state which paragraph in Article XX it is relying 
on for its quantitative restricti ons?  G/AG/W/181  
 
- 23 - 
 
  Answer by India 
 
The question refers to India 's notification to the WT O Committee on Import 
Licensing  (G/LIC/N/3/IND/17) and will thus be answered in the relevant committee.  
 
1.16.2   Question by Australia (AG -IMS ID 87072)  
India introduced a new quantitativ e restriction on yellow peas in Notification 
No. 4/2015 -2020 of 25 April 2018 for a period of three months. Subsequent ly, India 
later clarified on 16  May 2018 in Trade Notice No.10 /2018 -19 that all peas under 
HS Code  071310 are covered by the new quantitat ive restriction.  
 
a. Can India explain the domestic policy rationale for needing to introduce the 
new quantitative restriction?  
b. Can India explain why there was not advance warning about the imposition of 
the QR, and why there was a delay in issuing the Noti fication and applying the 
QR retrospectively from 1 April 2018?  
c. Can India explain why its initial notification on 25 April explicitly only 
mentioned "yellow peas" in both the policy condition and the effect of the 
notification, but then subsequently applied the QR to all peas?  
i. What domestic circumstances changed betwe en 25 April to 16 May to 
warrant such a retrospective policy change?  
ii. Did India consider the impact on traders from such an unexpected change to 
the scope of coverage and uncertainty it creates in global market?  
Answer by India 
 
a. and c.  
i. and ii. While this issue should be discussed with the relevant Committee, India would 
like to say that India is the largest producer as well as consumer of pulses. The 
decision for imposition of quota was based on the domestic demand and supply 
situation of pulses  in India. It is aimed at alleviating the distress caused to small and 
marginal farmers by the influx of cheap imported pulses and the consequent impact 
on their food and livelihood security. The objective of Indian agricultural policy is to 
balance the in terests of consumers and producers. Government of India is already 
concerned with the sensitive issue of farmers'  suicides. It was noticed that mere 
increase in import tariffs of pulses was  not sufficient in case of certain pulses. The 
whole sale price ind ex (WPI) for pulses in the country has come down from 205.2 
(December 2016) to 134.2 (December 2017) and further declined to 120.8 
(April  2018) showing a sharp decline during this period. This reflects the fact that the 
current prices of pulses in domestic  markets are below the prices of the 
corresponding period of the previous year, indicating that the measures taken have 
been in the overall interests of both consumers and prod ucers, as intended. 
Therefore, g overnment imposed quantitative restrictions on p ulses such as Tur 
(pigeon pea), Moong (beans of species of Vigna radiate) and Urad (beans of the 
species of Vigna mungo) and dry peas in order to protect our small and marginal 
farmers.  
b. The measure had to be imposed quickly, given the circumstances.  
c. Under ITC, there is single HS code (i.e. 07131000) allocated for all varieties of peas. For 
administrative convenience and avoiding confusion in the implementation of the 
QR notification, all varieties of peas have been brought under the Quantitative 
Restriction  notification.  G/AG/W/181  
 
- 24 - 
 
  1.16.3   Question by Australia (AG -IMS ID 87075)  
Quantitative restrictions  
  
Despite reassuring WTO Members that the Quantitative Restrictions  (QR) introduced in 
August  2017 were only 'temporary', India renewed the quantitative restriction on mung 
beans and black lentils on 4 May 2018 in the Government of India's Directorate General 
of Foreign Trade Notification No.  6/2015 -2020. Australia notes that not only was the QR 
renewed, its scope was broadened and it was made more restrictive.  
  
a. Can India exp lain the domestic circumstances that have warranted the renewal 
of the quantitative restriction?  
b. Can India explain why it expanded the scope of the QR to cover additional tariff 
lines (HS  0713.90.10 and HS  0713.90.90? Does India believe these tariff lines 
also cover mung beans and black lentils?  
c. Can India explain why it has now restricted the quantit y to 1.5  lakh MT each for 
both mung beans and black lentil, when the previous QR allowed the import of 
a combined 3  lakh MT of mung beans and black lentil?  
d. Can India confirm whether the quantitative restriction on pigeon peas for 2 
lakh MT remains in forc e and has been renewed for fiscal year 2018 -19?  
Answer by India  
 
a. Same as response to Part (a) of question 87072.  
b. QR on import of tur (pigeon pea) issued on 5 August 2017 has been applicable for all 
varieties (whole, spilt etc). Whereas, QR on impor t of mung and urad issued on 
21 August 2017 was applicable only for whole variety excluding spilt and other variety of 
these pulses. To maintain uniformity in line with pigeon pea, QR on urad and moong has 
also been extended on split and other variety in additi on to whole variety vide 
Notification No. 6/2015 -2020 dated 4 May 2018 for administrative convenience. 
HS-07139010 (split) and HS -07139090 (other) cover both mung and black lentils (urad).  
c. Earlier both Moong and Urad had same HS code. However, now there a re separate HS 
codes for both pulses. For better utilization of QR, the combined quota of 3 lakh MT has 
been bifurcated to 1.5 lakh MT each for urad ( black lentil) and mung vide notification 
dated 4  May 2018 so as to prevent any adverse fallout of cheap i mports of any one 
particular pulse into the coun try, leading to distress for India's  small and marginal 
farmers.  
d. Yes. Quantitative restriction on pigeon peas for 2 lakh MT remains in force and has been 
renewed for fiscal year 2018 -19. However, the situatio n is under constant review.  
1.16.4   Question by Australia (AG -IMS ID 87076)  
Quantitative restrictions  
  
Australia notes that India issued modalities for import of pigeon peas, mung beans and 
black lentils for fiscal year 2018 -19 in Directorate General of Foreign Trade Notice No. 
6/2018 -19, published on 11 May 2018. While Australia appreciates India responding to 
Australia's requests for information about how the quantitative restrictions (QRs) would 
be administered, we are concerned about the highly restrictive na ture of the 
requirements.  
  
a. Can India explain why applicants needed to have refining/processing capacity 
and had to provide a self -declaration of that capacity either on a monthly or 
annual basis to be eligible to apply for access to the QR?  G/AG/W/181  
 
- 25 - 
 
  b. Can India ex plain why the relevant information for applications was only 
published on 11  May, a full 41 days after the Indian Fiscal year commenced on 
April 1, noting that the Bali Decision on Tariff Quota administration requires 
members to publish relevant informatio n 90 days in advance of the opening of 
the quota period.  
c. Can India explain why applicants were only provided one day notice before the 
opening of the quota period, noting that the Bali Decision on Tariff Quota 
Administration requires minimum advance notic e of the opening of applications 
of 90 days.  
d. Can India explain why applicants only had 14 days to apply for an allocation of 
the QR (12-25 May)?  
e. Can India explain why successful applicants need to complete their imports by 
31 August  2018, given the QRs a re for fiscal year 2018 -19?  
Answer by India  
 
The quota was allotted for millers only to ensure that actual user condition is implemented.  The 
policy actions mentioned in the question were taken to avoid depression of prices due to supplies 
from imports an d domestic harvest coming together. India does not believe that the Bali decision 
on TRQ Administration is relevant in respect  of QRs maintained on temporary  basis.  
 
1.16.5   Question by Australia (AG -IMS ID 87077)  
Export incentive - MEIS  
  
India's Department of Commerce announced a 7% incentive on 'Bengal -gram' pulse 
exports under HS  0713.20.00 under the Merchandise Exports from India Scheme (MEIS) 
in Public Notice  66/2015 -2020 of 21 March 2018.  
  
a. Can India provide an explanation of how its  Merchandise Exports from India 
Scheme (MEIS) operates, particularly in the context of agricultural products 
like pulses?  
b. Can India explain why it has needed to introduce an export incentive for 
Bengal -gram pulse exports?  
c. Can India provide data on the vo lume of exports of Bengal -Gram which have 
been subsidised under the MEIS since 21 March 2018?  
d. Can India provide data on the value of the subsidy offered to Bengal -Gram 
exports under the MEIS since 21 March 2018?  
e. Given India does not have any scheduled export subsidy entitlements, Can 
India explain the consistency of the export incentive for "Bengal -gram" with 
India's commitments under Article 9 of the Agreement on Agriculture?  
Answer by India  
 
a. b. and e. Informati on regarding MEIS scheme can be accessed at http://dgft.gov.in . The 
objective of this scheme is to offset infrastructural inefficiencies and associated costs. As 
per Article 9 (d -e) of AoA, India is entitled to provide su bsidies to offset infrastructural 
inefficiencies related to marketing and transportation, handling, upgrading etc.  
c. and d. Since, the scheme has recently been rolled out, there have been negligible 
exports of this product.  
Follow -up: Australia  was disappo inted with India's  responses and flagged serious concern about 
India's ongoing use of quantitative  restrictions  (QR) given there was no legal basis for QR in G/AG/W/181  
 
- 26 - 
 
  the AoA. Australia stated that it had voiced  its concern  in numerous WTO C ommitte es and was 
confused by the response given by India at the I mport Licensing committee where India attempted  
to explain the WTO-consistency  of QR . The United States  register ed suppo rt for Australia's 
question. Canada sought India's confirmation regarding whethe r the QR on peas had been notified 
to the Committee on I mport Licensing  and the Market Access Committee. India confirmed the 
submission of the notification. The European Union underlined its concern regarding  the 
implications for trade and traders by India 's pulses policies and was  not fully convinced  that those 
policies were in the long term interest of pulse producers including  those in India.   
 
1.16.6   Question by Canada (AG -IMS ID 87074)  
Canada notes that between December 2016 and May 2018, the Food Corporation of 
India  (FCI) has posted on its website multiple contract notes for the sale of pulses 
(urad, moong, tar, masoor, channa) through e -auctions.  
  
Could India please elaborate if the re were succes sful bidders in each of these e -auctions 
and could India advise if these pulses were exported or released onto the domestic 
market? How does the FCI take into account commercial considerations so that these 
volumes of pulses do not disrupt co mmercial markets?  
 
Answer by India 
 
India undertook to provide a response at a later stage.  
 
1.16.7   Question by Canada (AG -IMS ID 87071)  
India's Ministry of Commerce and Industry announced a quantitative restriction on 
25 April  2018, of 100,000 MT peas.  
(http://dgft.gov.in/Exim/2000/NOT/NOT18/04%20eng.pdf )  
  
a. Could India please elaborate on the circumstances behind the imposition of the 
quantitative restriction on peas?  
b. Could India please indica te to which WTO committee it has notified this new 
quantitative restriction?  
Answer by India  
 
a. Same as response to Part (a) of question AG-IMS ID 87072.  
b. As part of the biannual notification on QR, India is in the process of consolidating the 
QR related information as per the prescribed WTO document and has notified the 
consolidated QR notification and import licensing notification to the Committee on Market 
Access and the Committee on I mport Licensing, respectively.  
1.16.8   Question by Canada (AG -IMS ID 87073)  
The government of India is reported to have announced a 7% export incentive for 
Bengal Gram (chana) under the Merchandise Export from India Scheme (MEIS) for a 
period of three months until 20 June 2018. Under this MEIS for pulses, 7% of the 
realized Free O n Board  (FOB) value of covered exports is covered by a MEIS duty credit 
scrip. Could India please clarify how this export related incentive is consistent with its 
export subsidy commitments?  
 
Answer by India 
 
The objective of this scheme is to offset infrastructural inefficiencies and associated costs. As per 
Article 9 (d -e) of AoA, India is entitled to provide subsidies related to marketing and 
transportation, handling, upgrading etc.  
 G/AG/W/181  
 
- 27 - 
 
  Follow -up: In light of India's reference Article 9 (d -e) of the AoA , Australia invited India to explain 
how the 7% export incentive  would  be associated with  cost of marketing and transport charges.  
 
1.16.9   Question by European Union (AG -IMS ID 87001)  
Press reports suggest that India in tends to offer an export incentive for chickpeas in the 
form of a "Merchandise Export from India Scheme" which implies "duty credit scrip" at 
7% of realized FOB value of covered exports.  
 
How would India see this initiative complying with paragraphs 1 and  10 of the Nairobi 
Ministerial Decision on Export Competition which state, respectively, that Members 
should exercise utmost restraint with regard to any recourse to all forms of export 
subsidies and that Members should seek not to raise their export subsi dies beyond the 
average level of the past five years on a product basis.  
 
Answer by India  
 
The objective of MEIS is to offset infrastructural inefficiencies and a ssociated costs. As per 
Article  9 (d-e) of AoA, India is entitled to provide subsidies to offs et infrastructural inefficiencies 
related to marketing and transportation, handling, upgrading etc.  
 
Follow -up: Given India's reference to Article 9.4 of the AoA , the European Union  requested India's  
notification on subsidized quantities.  
 
1.16.10   Question by Russian Federation (AG -IMS ID 87087)  
In November 2017 the government of India increased the import tariffs on yellow peas 
up to 50%. In addition to this measure on 25 April 2018 India introduced a restriction 
on import of yellow peas. According to this new  restriction the allowed amount of import 
of yellow peas to the territory of India shall be 100 000 MT from 1 April to 30 June 2018. 
Could India clarify the following issues:  
  
a. What is the rationale behind the introduction of this quota?  
b. On what basis the amount of quota was calculated?  
c. How this measure is consistent with Article XI:1 of the GATT and Article 4.2 of 
the Agreement on Agriculture?  
d. How this measure is justified under the WTO rules?  
e. Could India provide the amount of yellow p eas im ported from 1 April to 
25 April  2018?  
Answer by India  
 
a. to d. Same as response to Part (a) of question 87072.  
The imposition of QRs has been done as part of temporary measures to deal with the 
domestic demand and supply situation.  
e. The data is not yet available.  
1.16.11   Question by Ukraine (AG -IMS ID 87088)  
According to the Notification № 04/2015 -2020 dated 25 April 2018 the government of 
India introduced an amendment in import policy of peas under Chapter 7 of the 
ITC (HS)  2017. As a resul t, import policy of yellow peas under Exim Code 0713 1000 is 
revised from "free" to "restricted" from 1 April to 30 June stipulating the total quantity 
of yellow pea importation during the period at one lakh MT which is subject to license. 
This import poli cy was introduced in addition to a 50% tariff to p ea imports arranged in 
November  2017.  G/AG/W/181  
 
- 28 - 
 
   
a. Could India please explain what was the reason to impose the additional 
restrictions?  
b. Please clarify how such quantitative restrictions are consistent with XI.1, XIX  
of GATT 1994, Article 4.2 of the Agreement on Agriculture, and Articles 1, 3 and 
5 of the Agreement on Import Licensing Procedures?  
c. Could India give specific clarification regarding scope of product covered as 
only yellow peas are mentioned, but green sp lit peas al so fall under the 
designated HS  code 07131000? Are green split peas excluded from the 
restrictions?  
d. Does India plan further restrictions in this sphere?  
Answer by India  
 
a.  and b. Same as response to Part (a) of question 87072.  
The imposition of  QRs has been done as part of the temporary measure to cater to the 
pressing domestic demand and supply situations.  
c. The g overnment vide Trade N otice No.10/2018 - 19 dated 16 May 2018 has clarified that 
the Import Policy of item under Exim Code 07131000 - Peas ( pisum  sativum ), which 
includes all Peas (Yellow peas, Green peas, Dun peas and Kaspa peas), has been 
restricted, and the measure is not restricted to only "Yellow Peas", but to all items 
classified under Exim Code 07131000.  
d. There is no information on  this aspect as of now.  
Follow -up: Ukraine expressed concern that India's policies  disrupted  trade and domestic 
production . Ukraine noted that while it understood the challeng se faced by India of balancing  the 
need of domestic  producers and consumers , it considered that  India should ensure that  the 
policies were fair and transparent  to its trading partners.   
 
1.16.12   Question by United States of America (AG -IMS ID 87017)  
a. The United States notes that India has undertaken a number of trade distorting 
policies in rel ation to various pulses over the past year.  This has included a 
significant increase in the support prices, multiple increases in tariff rates, the 
introduction of quantitative import restrictions, lifting of an export ban, the 
introduction of export subsi dies, and import -limiting licensing arrangements.  
i. In addition to the quantitative restrictions on certain pulses introduced 
in  2017 as noted in the U.S. question AG -IMS ID 86037, the Indian Ministry 
and Commerce and Industry published Notification No. 04/ 2015 -2020 on 
25 April 2018.  This measure introduced a quantitative restriction on the 
import of peas to no more than 100,000  metric tonnes between 1 April 2018 
and 30  June 2018.   
Please explain the basis for the introduction of this measure and how it 
comp lies with India's WTO commitments.  
ii. Reportedly on 22 March 2018, India introduced a 7% (of the FOB value of 
the product) export subsidy on chickpeas under the Merchandise Exports 
from India Scheme (MEIS) for a three month period.  
Please explain the basis fo r the introduction of this measure and how it 
complies with India's WTO commitments.  G/AG/W/181  
 
- 29 - 
 
  b. The United States resubmits AG -IMS ID 86037: The United States understands 
that in August 2017, the Ministry of Commerce and Industry notified 
quantitative restrictions  (QRs) on imports of pigeon peas (HS  Code 07136000, 
HS Code 07139010 and HS  Code 07139090) and established an Indian fiscal 
year (April - March) annual import quota of 200,000 MT.  Further, later that 
month, the Ministry of Commerce and Industry notified QRs  on imports of black 
matpae/mung beans (HS  code 07133100) and established an Indian fiscal year 
(April - March) annual import quota of 300,000 MT.  
i. Are these QRs still in place?  
ii. Please explain how such QRs are consistent with India's WTO commitments.  
iii. Does In dia have further plans to institute more QRs on imports of 
agricultural products? If so, for which products?  
c. The United States resubmits AG -IMS ID 86108, which remains unanswered and 
is now also relevant to India's most recent notification G/AG/N/IND/12 as  
well:  
i. It is noted in G/AG/N/IND/11 and G/AG/N/IND/12 that India notified 
market price support for the Tur, Moong, Urad, Gram, and Lentil pulses for 
all years notified with the exception of 2011/12 and 2015/16; however, 
India announced a Minimum Support P rice for each commodity for each of 
the years notified, including 2011/12 and 2015/16.  
 Please confirm whether India procured any of these commodities in 
2011/12 and  2015/16.   
 Please also confirm whether India would have procured the commodities 
in those ye ars if market prices had fallen below the administered 
(announced) Minimum Support Prices.  
 If India did not procure these commodities in 2011/12 or 2015/16, 
please explain how the programme was implemented differently 
in 2012/13 through 2014/15, when market price support was also 
notif ied, as compared to 2011/12 and  2015/16 when no market price 
support was notified.  Please include citations to any government 
decrees, regulations, or other communications that explain this 
difference.  
ii. It is noted in G/AG /N/IND/11 that India aggregated gram, arhar, urad, 
moong, and lentils as "pulses" in Supporting Table DS:5 as a single market 
price support measure.  However, it is also noted that India announced 
distinct Minimum Support Prices (applied administered prices ) for each of 
the separate pulses  and are disaggregated in India's AGST.  For example, in 
2012/13, India announced the following distinct Minimum Support 
Prices : Tur: INR  38,500/tonne; Moong:  INR 44,000/tonne; Urad: INR: 
43,000/tonne; Gram: INR 28,000/tonne ; and Lentil: 
INR 28,000/tonne.  However, the Minimum Support Price /applied 
administered price notified is approximately INR  36,900/tonne (converted 
to INR  using the notified exchange rate for 2012/13).  
 Please explain the reason for aggregating these pulses  despite 
announcing distinct applied administered prices for each.  
 Please provide market price support calculations for each commodity 
that separately receives a distinct announced applied administered price 
for each year covered by G/AG/N/IND/11 and G/AG/ N/IND/12.  
d. The United States resubmits AG -IMS ID 86109:  
The United States resubmits question AG -IMS ID 85021 for response:  G/AG/W/181  
 
- 30 - 
 
  i. "In G/AG/N/IND/11, India notifies market price supports for several 
commodities; however, the list of commodities for each year diffe rs. Further, 
certain commodities have been aggregated into larger categories compared 
to previous notifications and India's AGST.  
 Please explain the basis for aggregating these commodities despite 
separate applied administered prices being announced.  
 For e ach year covered by this notification, please provide a list of all 
announced minimum support prices (e.g., applied administered prices) 
for each commodity announced, whether procurement occurred or not.  
ii. The United States notes that India used the same methodology to calculate 
market price support as in its previous notifications, including the use of 
procurement as eligible production. As noted in previous questions (AG -IMS 
ID 75062) to India in this Committee, this differs from India's AGST where 
total  production of a given commodity was used as eligible production. In 
response to AG -IMS ID 65061, India explains its reason for why it considers 
procurement to be the appropriate measure of eligible production, but did 
not confirm that India doesn't place any preset limit on the amount of 
production that may be procured from farmers. While India notes in 
response to AG -IMS ID 75062 that India procures marketable surplus and, it 
did not clarify any pre -established limit.  
i. Please confirm that India doesn't pla ce any preset limit on the 
amount of production that may be procured from farmers.  
ii. Please clarify the basis for changing the notification 
methodology related to eligible production between India's AGST 
and subsequent notifications, including any specific c hanges to 
Indian policy that contributed to this change.  
e. The United States resubmits AG -IMS ID 86110:  
The United States again resubmits AG -IMS ID 84071 (and AG -IMS ID 85029) as 
no written response has been provided: "In response to AG -IMS ID 83009, 
India states that 'the government does not procure in all states, and hence 
entire production is not covered.' Please provide the details of the specific 
legislation, regulations or other measures that limit the eligibility of 
procurement of eligible product fro m all states."  
Answer by India  
 
a.  
i. Same as response to Part (a) of question AG-IMS ID  87072.  
ii. The objective of MEIS is to offset infrastructural inef ficiencies and associated costs, 
as per Article 9 (d -e) of AoA.  
b.  
i. The quantitative restriction imposed on these items is still in place but is under 
regular review.  
ii. and iii. The measure is a temporary one and the situation is being constantly 
reviewed.  
c.  
i. India did not procure these crops at the admini stered price during 2011 -12 
and 2015-16. MSP is intended to provide minimum remunerative prices to the 
farmers so that they do not have to resort to distress sales. Only a portion of the G/AG/W/181  
 
- 31 - 
 
  marketable surplus offered by the farmers, and meeting prescribed specifications, is 
procured under MSP operations.  
ii. and d . i. India is consistently notifying product specific support for pulses at 
aggregate level since 1995 -96. Pulses are a major source of protein and form an 
integral part of the Indian diet. Tur, urad, moong, gram, lentils are different varieties 
of pulses and therefore, it is reasonable to calculate product specific support for 
aggregated pulses. The minimum support price for each of the commodities under 
the scheme can be accessed at http://agricoop.nic.in/ . Only a porti on of marketable 
surplus offered by the farmers and meeting prescribed specifications is procured 
under MSP operations. The eligible production is, therefore, the quantity which is 
actually procured at administered price.  
d.  
ii.  
i. MSP (administered price) is fixed to protect farmers from distress sale of their 
crops and to prevent their exploitation. MSP operations are carried out only in 
the event of market prices falling below the administered prices subject to 
availability as per prescribed specification s, budgetary allocations and 
applicable targets. Farmers are free to sell their produce in open market at 
prevailing rates or administrative prices whichever is remunerative and 
convenient.  
ii. India would like to point out that the term "production eligi ble to receive the 
applied administered price " has not been defined under the AoA. Neither does 
the AoA mandate any specific methodology for determining what constitutes 
"production eligible to receive the applied administered price ".  
e. Procurement is done by the g overnment and its agencies from states after an 
assessment of marketable surplus and other factors in consultation with the state 
governments. Necessary government instructions are issued accordingly.  
Follow -up: Canada noted interest in questions raised by Ukraine , the Russian Federation and the 
United States  and noted that India appeared to use measures that looked like export subsidies  to 
export the pulses  collected from  the domestic market which was subject to the significant use 
of QR. 
 
1.17  Indonesia's dairy import system  
1.17.1   Question by New Zealand (AG -IMS ID 87089)  
New Zealand refers to the questions asked by the United States at the 86th Committee 
on Agriculture (AG -IMS ID 86046) and at the Committee on Impo rt Licensing, and 
registers New  Zealand's own similar concerns. New Zealand is particularly interested in 
understanding the link between the requirements in Articles 23 and 30 that importers 
are obligated to establish partnerships with local farmers, farm groups, or co -operatives 
to utilise and/or promote fresh milk, provide production facilities, production, and/or 
funding or financing, and Article 34.3 which states that these partnership agreements 
shall be considered by the Director General of Livestock and Animal Health when issuing 
impor t recommendations.  
 
Answer by Indonesia  
 
As stipulated in the Minister of Agri culture’s Regulation No.26/2017,  Indonesia’s responses are as 
follows:  
 
As it has been stated by the Indo nesian Delegation in the last Co A meeting, the Regulation does 
not aim at regulating foreign trade activities, including the importation of milk from foreign G/AG/W/181  
 
- 32 - 
 
  suppliers. Importation of milk to Indonesia is  still allowed provided it meets requirements 
regulated by the Minister of Trade Reg ulation No.59/2016.  
 
On the issue of partnership, all national players are required to have partnership, regardless they 
import milk from foreign suppliers or utilizing milk from domestic suppliers . 
 
Partnership agreement is one of factors to be considere d by the Director General of Livestock and 
Animal Health in issuing import recommendation s.  
 
Follow -up: New Zealand encouraged Indonesia to share more detailed information on the 
partnership requirements and provide further clarity on the  behavioural  changes among st 
industries that Indonesia was intending to achieve through this regulation  and any enforcement  
mechanisms that  would be used.  
 
1.17.2   Question by United States of America (AG -IMS ID 87018)  
In July 2017, Indonesia's Ministry of Agriculture (MOA) i ssued 
Regulation  26/PERMENTAN/PK.450/7/2017 ("MOA 26/2017") concerning Milk Supply 
and Circulation.  
  
a. In the United States meeting with Indonesian delegates to the Import 
Licensing Committee in April 2018, Indonesian delegates reported that MOA 
26/2017 wa s notified to the WTO as an SPS measure.  
i. Can Indonesia provide the exact WTO notification for MOA 26/2017?  
ii. If Indonesia has not notified the WTO of MOA 26/2017, can Indonesia 
explain why it has not notified to date and when it intends to notify?  
iii. If Indone sia has not notified MOA 26/2017 to the WTO, can it commit to 
notify immediately, allow trading partners the opportunity to comment, and 
take such comments into consideration prior to enforcing MOA 26/2017?  
b. The United States would like to emphasize the imp ortance of transparency due 
to the lack of information available surrounding Indonesia's enforcement plans 
for the measure.  
i. Can Indonesia please provide an update on enforcement of this measure and 
will Indonesia enforce this measure in the issuance of 20 19 import permits?  
ii. Does Indonesia plan to publish its enforcement plans, including quantifiable 
levels of partnership businesses must comply with to avoid administrative 
sanctions as outlined in Article 44, allowing a reasonable period of time prior 
to enf orcement for trading partners to raise questions with Indonesia, if 
necessary?  
c. In its response to AG -IMS ID 86046, Indonesia stated, "It is the interests of the 
Government of Indonesia to ensure that the high quality of milk is available for 
consumers at all time. For that purpose, the provision of high quality of milk for 
consumers will be fulfilled from domestic productions as well as from 
importation."  Did Indonesia consider alternative methods for ensuring the 
quality and availability of milk for its c onsumers prior to developing 
MOA  26/2017?  
d. In its response to AG -IMS ID 86046, Indonesia states, "The Minister of 
Agriculture's Regulation No.26/2017 does not regulate the importation of milk. 
The importations of powder milk are still allowed as long as the y meet 
requirements stipulated in the current regulation (Minister Trade regulation 
[No. 59/2016])."  If Indonesia has clarified that processed dairy products like 
milk powder are not sub ject to the requirements of MOA  26/2017, why are 
importers of processe d dairy products nevertheless being asked to submit G/AG/W/181  
 
- 33 - 
 
  partnership proposals and conduct milk promotion activities, as outlined in the 
measure?   
e. The United States appreciates Indonesia's response to AG -IMS ID 86046 
regarding whether MOA 26/2017 will regulate foreign trade, stating "The 
Minister of Agriculture's Regulation does not aim at regulating foreign trade 
activities, including the importation of milk from foreign suppliers."  However, 
U.S. dairy exporters have reported incidences of import requirements p laced on 
importers of United States dairy products in Indonesia apparently related to the 
enforcement of MOA 26/217, such as providing the Ministry of Agriculture with 
video and photos of milk promotion events,.  As such, although the measure 
may not "aim a t regulating foreign trade activities" , the United States is 
concerned that it is, in fact, doing so.   
The United States understands that Indonesia is considering additional 
measures affecting dairy imports including (1) MOA draft regulation on the 
Import and Export of Food Products of Animal Origin; (2) MOA draft regulation 
on Registration and Certification of Animal Products; and (3) Ministry of 
Industry (MOI) draft regulation on Dairy Partnerships.  The United States 
understands that these measures were s till in draft form and that Indonesia 
was further considering them.  The United States has yet to receive a response 
on the comments it submitted to the WTO notification on MOA draft regulation 
on the Import and Export of food Products of Animal 
Origin  (G/S PS/N/IDN/121).   
f. Please provide an update on the status of the three measures provided as 
examples in this question.  
g. Please inform the United States whether we can expect to receive a response to 
our comments submitted to the WTO notification.  
Answer by Indonesia  
 
With regards to the  U.S. statement concerning Indonesia's notification of SPS measures to WTO, 
Indonesia wishes to make clarification  that the measures refer red to were draft regulations of 
Agricultural Minister on  Import and Export of Food Prod ucts of Animal Origin.   
 
a. Indonesia has not notified MOA 26/2017 .  
b.  
i. Since the regulation was issued on 19 July 2017, the government  has taken 
necessary steps to disseminate  guidance of partnership to  all stakeholders including 
business  and small cattle o wners . To date t here are two proposals of  partnership that 
have been reviewed  by a team comprising of officials from different agencies and 
universities.  
ii. There is no numerical benchmark for  investment in the partnership.  
c. It has  always been the interes t of the g overnment of Indonesia to achieve such 
objectives. The partnership between  the business  and small cattle owners has in fact  
been implemented for more than 30  years prior to t he issuance of the regulation last 
year but with less satisfactory outco mes in term of improving productivity of the cattle 
and qual ity of milk. True current  partnership produces more  effective and more focus. 
The g overnment hopes it will affect positively the quality and availability of  milk and the 
prosperity of small cattle  owners.  
d. and e. On the provisions of videos and photos of milk promotion events, Indonesia would 
like to state that they are required as the evidence that the partnership is well 
implemented.  G/AG/W/181  
 
- 34 - 
 
  e. to g. Concerning the three draft regulations mention ed by the U S particularly on  "Import 
and Export of Food Products of Animal Origin ", relevant authorities  in Jakarta are still 
analysing th e comment submitted by the US  through document G/SPS/N/IDN/21 and 
will give feedbacks once the analysis is concluded.  
Indonesia  would also like to inform  the Committee that the three draft regulations 
mentioned by the US  are still being dis cussed by relevant authorities  in Jakarta.  
Follow -up: The European Union flagged continued concern that it had previously expressed at the 
Impo rt Licensing Committee  regarding the impact  of Indonesia's measures to  the dairy markets . 
Switzerland and Ukraine supported EU's concern.   
1.18  Indonesia's soybean imports  
1.18.1   Question by United States of America (AG -IMS ID 87019)  
a. The Indonesian Ministry of Agriculture is actively considering a draft regulation 
that would restrict imports except when domestic supply is deemed 
insufficient, require that all imports be conducted by a state -owned enterprise, 
and prohibit imports one mo nth prior to and after the domestic harvest period. 
In response to AG -IMS ID  86048, Indonesia stated "this issue is still in a very 
preliminary discussion in Jakarta and will not mean to restrict trade. In this 
respect, at this juncture [the Indonesian] de legation is not in a better position 
to give complete response to the questions posed by the US  delegation".  
Please provide an update on the status of this draft regulation.  
b. The United States also understands that Indonesia is considering raising tariffs 
on soybeans from its current applied rate and instituting a genetically 
engineered labelling requirement on bulk soybeans.  
Please provide an update on these potential changes as well.  
c. What steps is Indonesia taking to ensure that any regulation impacting i mports 
of soybeans is consistent with its WTO commitments?  
Answer by Indonesia  
 
Currently the draft regulation is still under careful consideration by the relevant authorities i n 
Jakarta. Consistency with WTO rules  is one of the main considerations in this process.  
 
1.19  Korea's rice imports  
1.19.1   Question by Thailand (AG -IMS ID 87090)  
Could the Republic of Korea please provide an update on its efforts to resolve issues 
regarding the rectification and modification of Korea's Schedule for rice products and its 
ongo ing consultations held with concerned Members.  
 
Answer by Korea, Republic of  
 
In January 2015, Korean government implemented tariffication measure on the rice products. 
Since then, Korea has held bilateral consultations with the members concerned including  Thailand 
and exchanged views through capital -based agencies.  
 
Follow -up: Thailand considered  that the issue had important systemic implications for certification 
and implementation of  schedule of commitments and look ed forward  to work ing with the Republic  
of Korea and other Members to resolve  the issue at the earliest time. The United States supported 
the question. Australia flagged continued  concerned about Korea's TRQ administrative 
arrangement for rice resulted from the t ariffication  process . Australia noted that  five 
WTO Members  had lodged objection to Korea's notification  four years ago  and explained that its  G/AG/W/181  
 
- 35 - 
 
  concern  related  to the extension agreement that required  the Republic of Korea to  increase its 
minimum market access for rice to 490,700 tonnes w ith at least 30% minimum market access for 
table rice. Australia asked what actions the Republic of Korea was taking to resolve this long -
standing issue. The Republic of Korea noted that the discussion s on this issue were mostly on a 
bilateral basis.  
 
1.20  Mongolia's quota regime for importation  
1.20.1   Question by Russian Federation (AG -IMS ID 87094)  
Follow up to question AG -IMS ID 86001. The Russian Federation would like to repeat its 
question originally posed at the Committee on Agriculture in February 2018 which ha s 
not been answered yet: In 2013 Mongolia established a quota regime for importation of 
certain agricultural products, including wheat flour and milk. Moreover, in late 2016 the 
Ministry of Food, Agriculture and Light Industry of Mongolia established an im port 
prohibition on wheat flour which is still in force. Please explain how Mongolia 's import 
restrictions, both quotas and import prohibitions, are consistent with Article XI of the 
GATT 1994 and Article 4.2 of the Agreement on Agriculture.  
 
Answer by Mongolia 
 
Mongolia would like to inform the Committee that Mongolia is currently working on this matter. 
Mongolia takes into account the discussions, which took place during the bilateral meeting with the 
Russian Federation held on  25 April 2018 in Ulaanbaatar. Mongolia is in the process of establishing 
a working group, which consists of relevant authorities and aims to provide an adequate response 
to the concern of the Russian Federation. Mongolia  will also inform the Committee accordingly. 
Mong olia wishes to express the willingness to continue the bilateral discussions with the delegation 
of the Russian Federation.  
 
Follow -up: The Russian Federation confirmed that it was in the process of bilateral consultation 
with Mongolia and looked forward to prompt resolution of this issue.  
 
1.21  Pakistan's sugar policies  
1.21.1   Question by Australia (AG -IMS ID 87081) , Brazil (AG -IMS ID 87163) and 
Thailand (AG -IMS ID 87164)  
Further to Australia's previous questions to Pakistan on sugar during the February  2018 
meetin g (AG-IMS ID  86007), Australia has reviewed Pakistan's previous answers and 
further analysed Pakistan's sugar freight support, and has a number of follow -up 
questions.  
  
Based on Pakistan Government circulars, "a cash freight support of Rs  10.7/kg may be 
given to the sugar millers on export of sugar subject to the condition that the said 
amount of freight support will be given on a sliding scale between  the international price 
of USD  376/MT (as on 08.09.2017) a nd USD  499/MT (the international sugar price 
which equals the cost of production as calculated by the  MoIP)".  
  
a. Why has Pakistan based its freight support for sugar on a sliding scale between 
the international price and the cost of sugar production in Pakistan?  
b. Why does the subsidy amount provided f or freight appear to vary in accordance 
with the international price for sugar?  
c. Can Pakistan confirm that the freight support is designed to bridge the gap 
between the world price and the cost of production in Pakistan?  
d. If this is not the case, can Pakistan please clarify how the freight support is 
calculated?  G/AG/W/181  
 
- 36 - 
 
  Australia notes that Pakistan has previously justified the sugar export subsidies 
as freight support under Article 9.4 of the Agreement on Agriculture (AoA) and 
the application of Article 9.4 was extended under the Nairobi Decision. While 
Australia does not dispute the extension of the application of Article 9.4 under 
the Nairobi Decision, the export subsidies need to meet the requirements of 
Article 9.1 (d) and (e) .  
e. Can Pakistan explain how the cash freight support of up to RS 10.7/kg 
(determined on a sliding scaling) is linked to the cost of marketing exports of 
agricultural products, the costs of international transport and freight, and 
internal transport and fre ight charges as outlined in Article 9.1 (d) and (e)?  
f. Can Pakistan explain how subsidies which vary due to changes in the 
international sugar price can be categorised as freight support under Article 9.1 
(d) and (e)?  
In Pakistan's reply to Australia's pre vious question, it stated that the freight 
support will be stopped after the 2017/18 crushing season, but Australia notes 
that forecasts predict an ongoing structural surplus of sugar in Pakistan in 
future years. Australia also notes there has been media r eports in March 2018 
that Pakistan's Cabinet agreed to amend its domestic sugar subsidy 
programme.  
g. Can Pakistan confirm media reports that reforms are planned to its domestic 
sugar subsidy programme? If so, can Pakistan provide more details?  
h. In the absen ce of domestic reforms that remove the incentive to overproduce 
and eliminate the structural sugar surplus, how does Pakistan intend to dispose 
of the surpluses in the future without export subsidies?  
Australia understands that at least over half of the t wo million tonnes of 
Pakistani sugar eligible for freight support has been exported.  
i. Can Pakistan confirm the volume of sugar that has been exported with freight 
support, and provide a dollar amount of how much freight support has been 
provided to date?  
j. Can Pakistan confirm the date when the freight support shall official cease?  
 
Answer by Pakistan  
 
a. As already replied to previous questions from the delegation of Australia on the issue, 
Pakistan provides the freight support to sugar producers on a limited  quantity, not to 
promote the export of sugar but in order to address the grievances of poor sugar cane 
farmers, to enable sugar millers to clear outstanding dues of cane farmers. It is worth 
mentioning that about 90% of cane farmers in Pakistan are subsis tence farmers, having 
land holding less than 5 Acres. The sliding sale is basically a barometer to ensure a 
certain cut of limit of the freight support, in addition to the quantitative and time limit, 
and to ensure that this freight support does not distor t the overall market, in 
circumstances, when international prices of sugar tend to increase. This freight support 
was available till the crushing season of 2017 -18. 
b.  Same as e xplained in reply to question  (a) above.  
c. The freight support provided by Pakista n is not meant to promote the export of sugar . 
Its sole purpose is rather to facilitate the payment of outstanding dues of poor farmers.  
d. The freight support is calculated in accordance with the provisions of Article 9.4 read 
with 9.1 (d) & (e) of Agreemen t of Agriculture (AoA).  G/AG/W/181  
 
- 37 - 
 
  e.  Same as explained in reply to question (d) above.  
f. Pakistan has no domestic sugar subsidy programme. However, Pakistan is only providing 
freight support to sugar producers with the sole purpose to enable payment, to poor 
sugar cane growers. Further, Federal g overnment has expressed its commitments not to 
provide any kind of export subsidy to sugar and to further reform this sector. However, 
elections are s cheduled to be held on 25 July 2018. The reform process wi ll depend on 
the ne wly elected g overnment.  
g. Same as explained in reply to question (f) above.  
h. Same as explained in reply to question (f) above.  
i. The relevant information is being collected and would be shared, as and when available  
j. This freight support was available till the crushing season of 2017 -18. 
Follow -up: Australia voiced  concern  regarding  the global sugar market in view of the changing 
dynamic of global sugar industry w ith increasing sugar production and  the 10-year low sugar 
prices . Australia noted that Pakistan' s response to domestic over -production of sugar would not 
help to  restore the stability and  predictability of the global market . Australia c ontinue d to seek 
clarifications on the relationship  between the operation of the sliding  scale in Pakistan and sugar 's 
domestic and export prices. Brazil share d the concern voice d by Australia and looked forward t o 
receiving further  details  about the policy's  compatibility  with WTO rules, specifically Pakistan's  
claim that it was covered by Article 9.4 of the AoA. Guatemala as a producer  and exporter of sugar 
expressed interest in this topic .  
1.22  Pakistan's wheat export subsidies  
1.22.1   Question by United States of America (AG -IMS ID 87021)  
The United States understands the government of Pa kistan (GOP) has authorized an 
export subsidy of up to USD  159 per metric tonne to facilitate exports of up to 
2.0 million metric tonnes of wheat that will be in effect through 30 June 2018. The 
United States calculates the result in pub lic expenditures wi ll be up to USD  320 million if 
the full amount is exported at the full subsidy. Further, the United States notes that 
Pakistan's domestic wheat prices are significantly higher than prevailing international 
prices.  
 
a. Please provide an update to this Committ ee on the quantity of wheat exports 
that have been exported under this scheme.  
b. Noting that Pakistan has not notified any export subsidies in its most recent 
export subsidy notifications (which covers only up through 2006/07), please 
explain the reason Pak istan has apparently increased its use of export 
subsidies despite the standstill and phase -out commitments undertaken by all 
WTO Members in Nairobi.  
c. Please provide the legislation and/or cabinet decision for making this export 
subsidy available.  
Answer by Pakistan  
 
a. The total quantity of wheat exported so far is 1.625 million ton nes.  
b. Government of Pakistan is providing freight support (inland and sea route) to the wheat 
exporters for the purpose of stock clearance to ensure that subsistence farmers are not 
discouraged and to overcome the challenges posed by climatic change stresses on food 
security. It is a temporary/time bound measure i.e up  to 30 June  2018. The support 
provided is in full compliance of Article 9.4 read with 9.1 (d) & (e) of Agreement o f 
Agriculture (AoA).  G/AG/W/181  
 
- 38 - 
 
  c. The request has been made to the concerned authorities and the copy of notification will 
be made available in course of time.  
Follow -up: The United States registered concern. It  noted that the applied administer prices for  
wheat in Pakistan were significantly higher than intentional prices  and government  stocks had  
reached a record high level. The European Union agree d with the U.S. views.  The European Union 
underlined the need  for Pakistan to notify  the subsidized quantities . Canada  as a significant  wheat 
exporter registered concern  with the effect of Pakistan's subsidy on international market , 
particularly given i t was claimed under Article 9.4.  Australia shared the concern  and raised  some 
follow -up question s as follows "Can P akistan confirm  how muc h of the authorized  2 million metric 
tonnes of wheat has been exported  up until today. Is Pakistan  considering extending the 
application of export subsidies  if less than 2 million tonnes are  exported under  the existing  
programme ? Further, given Pakistan has not scheduled export subsidy  commitments, can Pakistan  
explain  how the subsidies are  consistent with  Article 9.4 of the AoA and Nairobi  Decision . Lastly, 
Can Pakistan explain how the value of export subsidy  was determined and what costs are being 
covered? ". 
1.23  Philippines' rice waiver  
1.23.1   Question by Australia (AG -IMS ID 87082)  
Australia thanks the Philippines for its response to its questions at the 
February  2018  CoA regarding the 30 June 2017 rice tariffication deadline provided by 
the WTO General Council's waiver decision of 24 July 2014 (WT/L/932). Australia seeks 
an update on the Philippines' tariffication efforts to date.  
 
Answer by Philippines  
 
With respect to the status of the rice tariffication, the Phili ppines would like to inform 
WTO Members that the country has yet to complete the tariffication legislation process in the 
Philippine Congress. While passage of a rice tariffication law has been a priority, further delays 
could not be avoided due to other pressing priority legislation i nitiatives of the President and the 
limited resources of the legislative and executive branches of the Philippine government.  
 
The Philippines  would however like to reassure Members that the Philippines will continue to work 
hard and further enhance its be st efforts, within the limits of its resources, so that a rice 
tariffication law can be enacted at soonest possible time -- hopefully this can be done within this 
year. 
 
Follow -up: Australia and the European Union registered their continue d concern  on this  issue and 
looked forward to the Philippines  to finaliz ing the process as quickly  as possible.  
 
1.24  Russian Federation's railway subsidy for exports  
1.24.1   Question by Ukraine (AG -IMS ID 87098)  
In response to the a number of concerns expressed by some interested Mem bers at the 
85th and 86th CoA meetings regarding the Russian Federation's grain transportation 
subsidies implementing according to the Government Resolution No.1595, the Russian 
Federation stated that these measures are not export subsidies.  
 
a. Please inform how these measures will be notified to the WTO? In case of 
attributing them to domestic support as the Russian Federation answered to 
some Members' question at the 86th CoA meeting, please, specify how will the 
information be presented in a Table DS :1 notification?  
b. Could the Russian Federation please provide the relevant data regarding the 
amount of shipped grain particularly wheat, barley and corn, and their final 
destination (to which ports)?  
c. Does the Russian Federation have intentions to continu e such policy in future?  G/AG/W/181  
 
- 39 - 
 
  Answer by Russian Federation  
 
See response below to question AG-IMS ID 87022 . 
1.24.2   Question by United States of America (AG -IMS ID 87022)  
On Decree No. 1595 for internal transportation and freight subsidy shipments for grains, 
the United States notes from recent news sources that the Russian government 
increased quotas for subsidized rail shipments of grain from Omsk and Novosibirsk 
regions under resolution No. 502 of 25 April 2018.  
  
a. Can the Russian Federation please provide an upd ate on the revised levels of 
quantity and outlaid amounts?  How much has been used through the present 
day?  
b. What percentage of grain covered by this transportation subsidy has been 
exported?  
c. Can the Russian Federation please explain how the Russia n Federati on 
monitors the international grains market to determine the trade distorting 
effects of this measure and whether it is displacing or impeding the exports of 
other Members?  
d. Is the Russian Federation planning to use this transportation and freight 
subsidy s ubsidy for the 2018/19 marketing year?  
e. Can the Russian Federation please explain how the existing subsidy policy is 
influencing the planting decisions of Russian grain farmers for the 2018/19 
marketing year?  
The Russian Federation has issued Decree No. 110 4 granting internal 
transportation and freight subsidies to compensate for part of the costs of 
transporting various food and agricultural products (including grain) by 
land.  The United S tates notes that the Decree No.  1104 lists one Mongolian and 
two Russ ian border crossings towards the People's Republic of China with 
destinations to Dalian Port (the largest multi -purpose port in Northeast China 
serving the seaports North Asia, East Asia and the Pacific Rim) and Sichuan 
Province (Central China), and from t here to anywhere in the world. In addition, 
under the established regulations the Russian Export Center was named as the 
agent of the Government of the Russian Federation for granting these 
subsidies.  
f. Can the Russian Federation please confirm that these tr ansportation subsidies 
are being offered to facilitate delivery to border crossings and/or export ports, 
whether in the People's Republic of China or elsewhere?  
g. What is the value of the amount that has been outlaid?   
h. Please provide more details on the imp lementation of Decree No. 1104, 
including any specific requirements that must be met to receive the subsidy.  
i. Can the Russian Federation please explain its theory, if any, for why Decree 
1104 is consistent with the Nairobi Decision and with the Russia n Fede ration 's 
WTO accession commitment not to maintain any export subsidies?  
Answer by Russian Federation  
 
a. This subsidy is calculated based on the amount of losses (leaving revenues of the 
carrier) from carriage of grain under the feed -in (reduced) tariff, which means that the 
amount of state support is linked to the volume of transported grain. In this regard the 
total quantity of transportation by railway transport on the specified route at the present G/AG/W/181  
 
- 40 - 
 
  moment is about 212, 000 ton nes and granted state support amounts to 246 million 
rubles accordingly. Reference information: In order to adjust the grain limits i n the 
specified regions (according to Decree № 1595) the Russian Federation government 
issued Decree no. 502 (April 25, 2018). In the Novosibirsk region limits increased to 
200,000 ton nes and Omsk Region up to 250, 000 ton nes.  
b. Granting this state support i s aimed at reducing costs for shippers in the process of 
carriage of grain by railway transport, leading to the increase of the relevant routes of 
customer deliveries within the Russian Federation, and it is not linked to foreign trade 
operations in any wa y. In this regard, there is no aim to identify the grain that goes  
further for export. However, the Russian Federation  assure s Members  that on the stage 
of development of this state support mechanism the Russian Federation took into 
consideration its commi tments not to grant export su bsidies, based on the financing  
linked (directly or indirectly) with the agriculture export.  
c. Decree № 1595 is a domestic instrument, the implementation of which is due to the 
objective grounds, namely the territory of the coun try and the uneven distribution 
(centralization) of population (demand). Therefore, the application of this measure does 
not aim at changing trade conditions on the international grain market.  
d. According to Decree № 1595 this subsidy is provided for 2017/2 018. The possibility of 
the extension the duration of this support will be considered depending on the results of 
its efficiency and domestic market conditions.  
e. Grain farmers are not specified by Decree № 1595 as the recipients and (or) direct 
beneficiari es of this subsidy and that is mainly a systematic measure for the domestic 
agricultural market. Therefore, the implementation of this Decree does not have any 
substantial effect on the agricultural production. Firstly, the Far East includes areas of 
rapid development, within which a number of major infrastructure projects are 
implemented, including the transportation systems of rail and road cargo transportation. 
Furthermore, throughout areas of rapid development a processing infrastructure is being 
create d, including the food industry, which provides deep processing of agricultural 
products (raw materials) realized both in the regions of the Far East and in the central 
part of the country. Thus, subsidizing the cargo transportation of agricultural products  in 
this direction is a part of the systemic measures related to the development of the Far 
East territory as a strategically prioritized region for Russian economic development. 
Secondly, Russian Export Center is chosen as an agent because it is the key i nstitution 
that provides logistics support on the territory of the Russian Federation, which includes 
the implementation of: basic consultations on the choice of the optimal scheme of 
delivery of the goods to the end user; preliminary calculation of the co sts of delivery; 
consulting on the filling of shipping documents; assistance in picking a new (optimal) 
routes that meet the needs of specific shippers.  
f. No, the Russian Federation  does not confirm this information. Meanwhile, Members 
should pay attention that the objectives of this state support are defined by Decree 
1104.  
g. 49.3 million roubles (about USD  820 000) from the Federal Budget were outlaid for the 
purpose of Decree № 1104 in 2017.  
h. In accordance with Decree № 1104 part of the costs related to th e transport of 
agricultural products (food) with the use of inland transport is compensated, contributing 
to the freight flows reduction on roadways of federal and regional level, through the use 
of rail and road transportation no less than third environme ntal class. For the receipt of 
this subsidy, organization should file the package of documents that certificate legal 
status, financial sustainability, implementation of transportation in accordance with the 
established forms. Reference information: In Par ticular:  
 a statement on establishing an agreement in free form (hereinafter referred to as 
"Statement ");  
 G/AG/W/181  
 
- 41 - 
 
   an extract from the Unified State Register of Legal Entities (Unified State Register 
of Sole Proprietors);  
 
 a certificate signed by the head of the Russian organization or a sole proprietor (an 
authorized person with the submission of documents confirming the authority of 
that person), confirming the compliance of the Russian organization with the 
conditions sti pulated in paragraph 4 of these Rules;  
 
 a certificate of the tax authority confirming the absence from the Russian 
organization as of the date not earlier than 15 calendar days before the day of 
submission to the Center of the documents specified in this clause of the unfulfilled 
obligation to pay taxes, fees, insurance fees, penalties, fines and interest due 
payment in accordance with the legislation of the Russian Federation on taxes and 
fees;  
 
 Calculation of the subsidy amount in accordance with Append ix No. 3;  
 
 the following documents certified by the head and chief accountant (if any) of the 
Russian sole proprietor (an authorized person with the submission of documents 
confirming the authorities of that person) confirming incurred costs of the Russia n 
organization and their compliance with the purposes specified in paragraph 1 of 
this Regulation: the contract signed between the Russian organization and the 
carrier delivering services of goods transportation the certificate of the executed 
works (the r endered services) or other documents confirming realization of 
transportation of production; account for the payment of work (services) 
associated with the implementation of the carrier transportation of products; 
payment order for payment of works (servic es) related to the transportation of 
products;  
 
 documents confirming the carrier's performance activity for the goods 
transportation, submitted to the carrier who performed part of the transportation, 
including: an extract from the Unified State Register of Legal Entities stating the 
date of registration, confirming the carriage of goods as a  primary activity for at 
least three  years, certified by the head or chief accountant of the Russian 
organization or by a sole proprietor (an authorized person submitt ing documents 
confirming the authority of that person) or by the tax authority; a notarized copy 
of the supply agreement concluded between the Russian organization and the 
carrier who has performed part of the transportation by road; a copy of the vehicle 
passport used for goods transportation, indicating the ecological class, certified by 
the head of the carrier (an authorized person with the submission of documents 
confirming the authority of that person); copies of documents confirming the 
presence or ownership of at least ten  units of large -capacity trucks (copies of 
certificates of registration of vehicles and (or) lease contracts certified by the head 
of the carrier (authorized person with a submission of documents confirming the 
authorities of this person); copies of documents confirming membership in the 
Union of Transport Workers of Russia, or the non -profit organization Russian 
Automobile Union, or the Russian Association of Freight Forwarders and Logistics 
Organizations, or the Association of Int ernational Road Carriers, or in self -
regulatory organizations of road carriers that meet the requirements established 
by the Federal Law" About self -regulatory organizations ";  
 
 other certified documents confirming compliance of the Russian organization w ith 
the conditions provided for in Paragraph 4 of these Rules.  
i. While drafting Decree № 1104 the Russian Federation  took into consideration the Nairobi 
Decision on export competition which  does not allow direct export support based on the 
financing, linked  (directly or indirectly) with the agriculture export.  
Follow -up: The European Union and the United States raised concern regarding the  Russian 
Federation's  significant  increase s in wheat production and its potential  impact on international 
markets. Canad a and Australia registered interest in the issue.  G/AG/W/181  
 
- 42 - 
 
  1.25  Suriname's poultry tariffs  
1.25.1   Question by United States of America (AG -IMS ID 87023)  
Suriname appears to have begun applying a 40% tariff on imports of poultry products in 
September 2017. This duty is twice o f the rate of Suriname's 20% bound rate for poultry 
products. Recent press reporting in Suriname has quoted Trade Minister Tsang as 
stating that rates will rise to 100% on these imports.  
  
a. Please provide a reason for increasing tariffs on poultry imports from 20% to 
40%.  
b. Please explain how a 40% tariff for poultry imports is in compliance with 
Suriname's bound rate of 20 %.  
c. Please explain if and when Suriname plans to raise its tariffs on poultry to 
100% as suggested in the press.  
d. Please explain if and when Suriname plans to initiate Article  XXVIII 
negotiations to adjust its bound rate.  
e. Will Suriname consider refraining from applying rates above its bound rate until 
the Article XXVIII process has concluded?  
Answer by Suriname  
 
The Republic of Suriname has reserved the right under article XXVIII of GATT for the modification 
of its tariff conce ssions in order to adhere to its  regional commitment. Suriname's tariffs must be 
in conformity with the level of the Common External Tariff ( CET) of the Caribbean 
Community  (CARICOM). This has already been notified by Suriname to the WTO Secretariat.  
 
1.26  U.S. dairy policies  
1.26.1   Question by Canada (AG -IMS ID 87105)  
In the draft version of the 2018 Farm Bill in the House of Representatives, the United 
States planned to modif y the formula to calculate the Federal Milk Marketing Order 
(FMMO) Class 1 skim milk price per hundredweight.  
  
a. Whether or not this modification is finalized and approved within a new Farm 
Bill, Canada is of the understanding that these types of FMMO modi fications 
typically go through a formal rulemaking process and producer referendum. 
Could the U.S. explain why a formal rulemaking process and producer 
referendum did not take place for this amendment?  
b. Without prejudice to whether or not this Class 1 modi fication is finalized and 
approved within a new Farm Bill, could the US please answer the following 
questions on the purpose and expected impact of such a modification:  
i. What is the purpose for the modification of the Class 1 skim milk price?  
ii. What is the e xpected impact on producer revenues for this modification?  
iii. iWhat is the expected impact on exports of end use products under Class 1?  
iv. What about other milk classes?  
Answer by United States of America  
 
a. The legislative process to enact the next farm bill is currently ongoing, and it is not 
known what will be included in any final bill.  G/AG/W/181  
 
- 43 - 
 
  b. The legislative process to enact the next farm bill is currently ongoing, and it is not 
known what will be included in any final bill.  
Follow -up: Canada noted its interest in following closely the development of the 2018 Farm Bill . 
Australia as a major dairy producer and exporter  raised concern about the changes to the 
U.S. dairy policies, in  particular  the possible changes to U.S. farm bill  and whether they would be 
consistent with WTO rules.  
1.26.2   Question by Canada (AG -IMS ID 87106)  
According to a news article by the Ohio Farm Bureau, (available online here: 
https://ofbf.org/2018/05/07/farm -bureau -offer -dairy -revenue -protection -insurance/ ), 
the American Farm Bureau, in cooperation with American Farm Bureau Insurance 
Services, has developed a new risk management insurance product for dairy farmers 
called "Dairy Revenue Protection" insurance. It was approved by the Agriculture 
Department's Federal Crop Insurance Corporation, and will provide dairy farmers the 
opportunity to manage risk by focusing on revenue from milk sales. It will possibly be 
availabl e to dairy farmers in late summer 2018.  
 
a. Could the US please explain if this is a private sector insurance programme, or 
if the operation of the insurance will require government funding?  
b. If the latter, will payments made under this insurance programme be  reported 
as product specific aggregate measures of support in the U.S. domestic support 
notification for the respective year?  
Answer by United States of America  
 
a. Dairy Revenue Protection, like many other products available through the Federal crop 
insura nce system, is a privately developed insurance product that will be made available 
for sale to producers by crop insurance companies partnered with the Federal crop 
insurance program me. It will be funded in the same manner as other crop insurance 
products.   
b. New insurance products are regularly introduced into the Federal crop insurance system, 
and expenditures associated with them have been reported in the same way as they are 
for other crop or livestock insurance products. The United States  does not antici pate any 
change to this process.  
Follow -up: Canada looked forward to the notification of this new insurance scheme . 
 
1.27  U.S. support to cotton sector  
1.27.1   Question by Brazil (AG -IMS ID 87103)  
On 9 February 2018, the United States President signed into law the Bipartisan Budget 
Act of 2018 (H.R. 1892), which, among other provisions, amended the Agricultural Act 
of 2014 by including seed cotton as a "covered commodity", eligible to the "Price Los s 
Coverage (PLC)" and "Agriculture Risk Coverage" (ARC) programmes.  
 
a. Previously to the 2014 Farm Bill, the target price for upland cotton under the 
"Counter ‑Cyclical Payments" (CCP) programme was of 71.25 cents/lb. Please 
confirm Brazil's understanding th at the target p rice for cotton plume under 
the PLC and ARC  programmes, as defined by the H.R. 1892 Bill approved on 
February 2018, will be 88.08  cents/lb – calculated by multiplying the current 
target price for seed cotton (36.7  cents/lb) by 2.4, in accord ance with the 
methodology established by the H.R. 1892 Bill, which means the new reference 
price will be higher than under the previous programme.  
b. Please indicate how much has been paid to upland cotton producers under the 
Marketing Loan Program for uplan d cotton since 2015.  G/AG/W/181  
 
- 44 - 
 
  c. Please indicate how much has been paid to upland cotton producers under the 
Crop Insurance Program (CIP) for upland cotton since 2015.  
d. Please indicate how much has been paid to upland cotton producers under 
other domestic support pro grammes for upland cotton since 2015.  
e. Please indicate how much the United States government expects to spend on 
ARC/PLC programme payments to (upland) cotton producers in the next four 
years.  
f. Does the United States expect to maintain in the upcoming Farm  Bill both the 
Marketing Loan Program and the ARC/PLC program mes for upland cotton?  
g. Does the United States collect data on the final destinations of products 
shipped under its domestic support programmes, in particular those currently 
provided to upland c otton?  
h. If not, how can the United States ensure that many of the products shipped 
under such program mes are not exported? How does the United States verify 
the eligibility of supported commodities for them?  
Answer by United States of America  
 
a. H.R. 1892, known as the Bipartisan Budget Act of 2018 (the "2018 Act "), was enacted 
into law on 9 February 2018. The 2018 Act designates seed cotton as a covered 
commodity for the purposes of Section 1111(6) of the Agricultural Act of 2014, effecting 
effective beginning with the 2018 crop year. The 2018 Act defines seed cotton as 
"…unginned upland cotton that includes both lint and seed. " The 2018 Act establishes a 
reference price for seed cotton of $0.367 per pound. There is no relationship between 
the ref erence price established for seed cotton in the 2018 Act and the target price for 
upland cotton used for the repealed counter -cyclical payment (CCP) program me. The 
target price for upland cotton and the reference price for seed cotton are not 
comparable.  
b. The United States notified program me expenditures under  the Marketing Loan Program 
for 2015/2016 in G/AG/N/USA/121. Future expenditures under this program me will be 
notified in future annual notifications.  
c. The United States notified programme  expenditures  under  the Crop Insurance Program 
for 2015/2016 in G/AG/N/USA/121. Future expenditures under this programme  will be 
notified in future annual notifications.  
d. The United States notified programme  expenditures for 2015/2016 in G/AG/N/USA/121. 
Future expendit ures under this programme  will be notified in future annual notifications.  
e. The United States does not make payments to producers of specific commodities under 
the ARC/PLC programme .  
f. The legislative process to enact the next farm bill is currently ongoing , and it is not 
known what will be included in any final bill.  
g. The United States does not collect such data, because programme  eligibility is not based 
on the shipment destination or export of an agricultural product.  
h. See previous response to question g ) above.  
Follow -up: Brazil, noting cotton was a sensitive  product to the country,  stressed its concern with 
the possibility of increased U.S. support to cotton , which was  already significant  in its view.  The 
European Union and the C -4 signalled interest  from a systemic point of view and noted that this 
question related to  an important  aspect  of WTO rules.  G/AG/W/181  
 
- 45 - 
 
  2  POINTS RAISED IN CON NECTION WITH INDIVID UAL NOTIFICATIONS  
2.1  Administration of tariff and other quota commitments (Table MA :1) 
2.1.1   Canada (G/AG/N/CAN/116)  
AG-IMS ID 87107: Question by New Zealand - Country -specific allocation  
New Zealand has previously asked Canada in the Committee on Agriculture about its 
intention to reallocate 800 MT of the WTO cheese TRQ to the EU on implementation of 
the Canada -EU Comprehensi ve Economic and Trade Agreement (CETA). Canada 
submitted its MA:1 notification (G/AG/N/CAN/116) in March 2018.  
  
a. Why has Canada chosen to allocate part of a WTO MFN quota to the EU instead 
of establishing a new and separate quota like Canada and the EU ha ve for other 
products?  
b. What is the legal basis for this allocation of MFN quota to a specific Member?  
c. How is this allocation consistent with GATT Article I and XIII?  
Answer by Canada  
 
a. The transfer of 800,000 kilograms of Canada 's 20,411,866 kilograms WTO TRQ for 
cheese to the European Union was done in accordance with GATT Article XIII: 2 to 
maintain the relative shares of supply due to new EU member State accessions (13 new 
member States since 2004). Canada 's WTO TRQ for cheese applies to all imports of 
cheese from all WTO Members and is therefore consistent with GATT Article I.  
b. and c. See answer in a ).  
AG-IMS ID 87108: Question by Norway - Country -specific allocation  
As a component in the CETA between Canada and the European U nion, Canada has 
increased the EU portion of the WTO quota for cheese by 800 tonnes, and consequently 
reduced the non EU  portion by 800 tonnes. In addition to the information given in the 
MA:1 notification from Canada, Norway would like to pose the followi ng questions:  
  
a. When did the amended distribution of the import quota enter into force?  
b. Is the increase of 800 tonnes consistent with historic imports from members 
entering the European Union from 2004 onwards?  
c. If not, how does this increase of 800 ton nes comply with the provisions 
of GATT, Article  XXIV:5(b)?  
Answer by Canada  
 
a. The transfer of 800,000 kilograms of under Canada 's 20,411,866 kilograms WTO TRQ for 
cheese to the European Union was finalized as of December 31st, 2017. This process 
was facilitated  in consultation with allocation holders under the WTO cheese TRQ. The 
transfer was done to maintain the relative shares of su pply due to new European Union 
member State accessions. 13 new m ember States have joined the European Union 
since 2004.  
b. and c . See answer in a .  
AG-IMS ID 87109: Question by Switzerland - Country -specific allocation  
Switzerland thanks Canada for its response at the 83rd regular Committee on 
Agriculture regarding the reallocation of its cheese tariff -rate quota. In the meantime, 
we took note of the submission MA:1 of 14 March 2018 announced by Canada in its last G/AG/W/181  
 
- 46 - 
 
  response. According to this notification, market access for cheese available to non -EU 
WTO Members is reduced to a quota share of 30.1%. This represents a reduction by 800 
tonnes per year or by 11.5% of the previously notified quota share. Switzerland is 
concerned that the reallocation of the quota share results in reduced market access for 
non-EU WTO Members. Therefore,  Switzerland asks Canada to reply the following 
questio ns:  
 
a. How is this reallocation consistent with Canada's WTO obligations, specifically 
with GATT Article I and XIII?   
b. How does Canada ensure that the mar ket access rights of non -EU 
WTO  Members for cheese are preserved?  
Answer by Canada  
 
a. The transfer of 800 ,000 kilograms of Canada 's 20,411,866 kilograms WTO TRQ for 
cheese to the European Union was not a reallocation of the quota. It was a transfer of 
quota done to maintain the relative shares of supply due to new EU member State 
accessions (13 new m ember Sta tes since 2004). In accordance with GATT Article XIII:2, 
transfers of quota to maintain the relative shares for quota holders does not require 
consultations. Canada 's WTO TRQ for cheese applies to all imports of cheese from all 
WTO Members and is therefore  consistent with GATT Article I.  
b. Canada continues to maintain the market access rights of non -EU WTO Members through 
the administration of the non -EU portion of its WTO TRQ for cheese.  
Follow -up: New Zealand remained unconvinced whether  allocating  part of the WTO MFN quota  to a 
subset of WTO Membership would  be consistent with the fundamental MFN obligations in the WTO. 
New Zealand  noted that it  was supportive of CETA and efforts to liberalize trade and  its concern 
was not with the agreement and wh at access was offered under it but rather what Canada  had 
done unilaterally to the access of other WTO Members under  a WTO  quota.  New Zealand  noted 
that Canada  had not consulted with relevant parties in advance of reallocation  the quota and the 
action of c hanging the quota arrangements did not appear to be in line with WTO rules . Norway 
asked Canada to update the Committee on quantity of imports of cheese from the 13 new 
members states of the European Union in each of the three  years 2014 -2016.  
2.2  Imports und er tariff and other quota commitments (Table MA:2)  
2.2.1   Canada (G/AG/N/CAN/120)  
AG-IMS ID 87083: Question by Australia - Tariff quota fill  
Australia welcomes Canada's notification concerning imports under tar iff quotas 
(Table  MA:2) for marketing year 2015/2016,  quota ye ar 2015/2016, and calendar 
year 2016.  
  
a. Could Canada explain the reasons for the underfills [below 65%] in its notified 
tariff quotas, particularly for dairy products, wheat and barley?  
i. Could Canada explain whether the underfill is due to market circumstances, 
the existence of SPS measures for the product, or restrictive tariff quota 
administration; and  
ii. Provide the relevant details for each product.  
b. Could Canada explain what it is doing to increase utilisation of underfilled tariff 
quotas, as per the objective of the review of the Bali Decision on TRQ 
Administration?  G/AG/W/181  
 
- 47 - 
 
  Answer by Canada  
 
a. The g overnment of Canada closely monitors tariff rate quota fill rates. Global Affairs 
Canada administer s these TRQs and monitors fill rates based on information provided by 
the Canada Border Services Agency. It is Canada 's assessment that observed fill rates 
for dairy products, wheat and barley TRQ are due to market conditions.  
i. See answer in a ).  
ii. For dairy products, the variation in the TRQ is due to market conditions. For 
barley, the historical variation in the TRQ is due to market dynamics such as 
competitive domestic prices, yearly growing conditions, and supply and demand. 
For wheat, the historic al low fill has been due to market conditions (competitive 
domestic prices and market surpluses).  
b. Canada's current administration of this tariff rate quota as outlined in Canada 
Table  MA:1 notifications of 14 March 2018 (G/AG/N/CAN/116) is consistent with  its 
WTO obligations. TRQ administration include s a number of mechanisms designed to 
maximize TRQ fill, including the return and reallocation policy and the under -utilization 
penalty, as well as the potential of opening up the TRQ to first -come -first-serve d where 
TRQ fill remains consistently low. Further information on the administration of this TRQ 
as well as Notices to Importers can be found on Global Affair Canada/Affaires mondiales 
Canada site:  
http://www.international.gc.ca/controls -controles/prod/index.aspx?lang=eng .  
Follow -up: Australia and the European Union stressed the importance of understanding reasons for 
TRQ underfill and noted their interest in all relevant questions.  
2.2.2   Chile (G/AG/N/CHL/46)  
AG-IMS ID 87110: Question by Thailand - Transparency issues  
Could Chile please provide explanations to why under Table MA:2, there were no 
importation of Sugar (HS Code: 1701.99.10, 1701.99.20 and 1701.99.90).  
 
Answer by Chile  
 
The applied out -of-quota tariff is 0%, which explains the lack of its use.  
 
2.2.3   Japan (G/AG/N/JPN/225)  
AG-IMS ID 87111: Question by Australia - Tariff quota fill  
Australia welcomes Japan's notification concerning imports under tariff quotas 
(Tab le MA:2) for the fiscal year from 01 -04-2016 to 31 -03-2017.  
 
a. Could Japan explain the reasons for the underfills [below 65%] in its notified 
tariff quotas, particularly for dairy products and barley?  
i. Could Japan explain whether the underfill is due to mar ket circumstances, 
the existence of SPS measures for the product, or restrictive tariff quota 
administration; and  
ii. Provide the relevant details for each product.  
b. Could Japan explain what it is doing to increase utilisation of underfilled tariff 
quotas, as  per the objective of the review of the Bali Decision on TRQ 
Administration?  G/AG/W/181  
 
- 48 - 
 
  Answer by Japan  
 
a. Low fill rates in tariff quota of some TRQ pro ducts are  mainly due to a decrease in 
domestic demand. Regarding barley, the reason of its low fill rate is that the quantity 
imported from Australia under the Japan -Australia Economic Partnership Agreement is 
excluded fr om the notification, which is  mentioned in n ote 7 of the notification.  
b. Japan has already made an  effort to increase the rate. Japan has  already implemented a 
scheme of reallocation such as providing several opportunities of application per year.  
2.2.4   Russian Federation (G/AG/N/RUS/19)  
AG-IMS ID 87085: Question by Australia - Tariff quota fill  
Australia welcomes the Russian Federation's notification concerning imports under tariff 
quotas (Table MA:2) for calendar year 2017.  
 
a. Could the Russian Federation explain the re asons for the underfills 
(below  65%)  in its notified tariff quotas, particularly for beef and whey?  
i. Could the Russian Federation explain whether the underfill is due to market 
circumstances, the existence of SPS measures for the product, or restrictive 
tariff quota administration; and  
ii. Provide the relevant details for each product.  
b. Could the Russian Federation explain what it is doing to increase utilisation of 
underfilled tariff quotas, as per the objective of the review of the Bali Decision 
on TRQ  Administration?  
Answer by Russian Federa tion 
 
a. As for beef, there is a tendency of changing consumer preferences in the 
Russia n Federation; as a  result the domestic consumption of beef is decreasing. As for 
whey and modified whey, there were no requests for issuing licenses under this TRQ. 
Theref ore, the reason of low fill rate for these TRQs is mainly market circumstances.  
b. It should be noted that the Russian Federation applies a mechanism of reallocation of 
unused quantities of country -specific TRQs to all WTO Members in accordance with 
paragrap h 364 of the Working Party Report on the Accession of the Russian Federation 
to the WTO.  
2.2.5   Chinese Taipei (G/AG/N/TPKM/161)  
AG-IMS ID 87084: Question by Australia - Tariff quota fill  
Australia welcomes the notification of the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu concerning imports under tariff quotas (Table MA:2) for 
calendar year 2017.  
  
a. Could the Separate Customs Territory of Taiwan, Penghu, Kinmen and Mats u 
explain the reasons for the underfills (below 65%)  in its notified tariff quotas, 
particularly for pineapples and mangoes?  
i. Could the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu 
explain whether the underfill is due to market circumstan ces, the existence 
of SPS measures for the product, or restrictive tariff quota administration; 
and  
ii. Provide the relevant details for each product.  G/AG/W/181  
 
- 49 - 
 
  b. Could the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu 
explain what it is  doing to increa se utilisation of underfilled tariff quotas, as per 
the objective of the review of the Bali Decision on TRQ Administration?  
Answer by Chinese Taipei  
 
a. The underfill of tariff quotas is due to mainly the market mechanism and sometimes the 
requirement of SPS measures. As for pineapples and mangoes, it is because the 
products of potential importers do not meet Chinese Taipei's  quarantine requirements.  
b. The T RQ mechanism is operated based on Chinese Taipei's  commitments of WTO 
accession. All the administration procedures for the TRQ products are in accordance with 
the principles of transparency, predictability, equity and based on market mechanism. 
Chinese Tai pei is  committed to implemen ting TRQs in accordance with its  acces sion 
commitments and WTO rules.  
2.2.6   United States of America (G/AG/N/USA/120)  
AG-IMS ID 87086: Question by Australia - Tariff quota fill  
Australia welcomes the United States of America's notifi cation concerning imports under 
tariff quotas (Table MA:2) for calendar year 2015.  
 
a. Could the United States explain the reasons for the underfills [below 65%] in 
its notified tariff quotas, particularly for dairy products and cotton?  
i. Could the United Sta tes explain whether the underfill is due to market 
circumstances, the existence of SPS measures for the product, or restrictive 
tariff quota administration; and  
ii. Provide the relevant details for each product.  
b. Could the United States explain what it is doi ng to increase utilisation of 
underfilled tariff quotas, as per the objective of the review of the Bali Decision 
on TRQ Administration?  
Answer by United States of America  
 
a. The fill rates of U.S. TRQs in any particular year are affected by a variety of market 
factors, including price trends, exchange rates, supply and demand.  
i. As noted in the response to (a) the fill rates of U.S. TRQs in any particular year are 
affected b y a variety of market factors, including price trends, exchange rates, 
supply and demand.  
ii. See responses above.  
b. The United States manages its licensed TRQs in a manner that promotes the full 
utilization, including through globalization and by administ ering a surrender and 
reallocat ion process for unused portions . Additional information is published under the 
"Program Notices " section of the Foreign Agricultural Service 's web site, including the 
amounts available for Reallocation, by Commodity and Count ry.  
Follow -up: Switzerland noted interest  in the question , particularly the reason for underfill on 
cheese .  
 G/AG/W/181  
 
- 50 - 
 
  2.3  Domestic Support commitments (Table D S:1) 
2.3.1   Australia (G/AG/N/AUS/99, G/AG/N/AUS/109)  
AG-IMS ID 87112: Question by India - Transparency issues (including Table DS:2)  
In its domestic support notifications for the year 2013/14 and 2014/15, Australia has 
notified "Develop market opportunities for a range of agricultural products" under the 
Marketing and Promotion services head of the Green Box measures.  
a. Can Australia ela borate as to how it develops such opportunities and for what 
type of products? The operation of the system may kindly be elaborated.  
b. Kindly provide the detailed expenditure on various components of the schemes 
for the year 2013/14 and 2014/15.  
Answer by Australia  
 
Australia welcomes the questions from India in relation to an entry under Marketing and Promotion 
services within the Green Box. The 'Develop market opportunities for a range of agricultural 
products ' entry covers a range of measures administered by the Western Australian (WA) state 
government. The WA Department of Primary Industries and Regional Development works to 
identify and develop international market opportunities for agrifood businesses and attract 
investment into the State. The WA measure s covered in the spending in the 2013 -14 and 2014 -15 
domestic support notifications included:  
 the InvestWest Agribusiness Alliance which is aimed at fostering relationships to 
coordinate investment in WA;  
 the "Buy West Eat Best " voluntary labelling and m arketing campaign, to promote 
Western Australian produce;  
 Support to establish the WA Jujube Growers Association Inc.;  
 Hosting the state 's premier agribusiness development conference;  
 Marketing of new apple varieties; and  
 Maintenance of an online expor t services portal to help agribusinesses identify and  
develop export opportunities.  
2.3.2   Brazil (G/AG/N/BRA/48)  
AG-IMS ID 87120: Question by Thailand - Transparency issues (including Table DS:2)  
Under Brazil's notification for Domestic support for year 2015/20 16, Thailand notes that 
Production Credit and Debt Rescheduling Programmes appears in both table DS:2 and 
DS:9. Could Brazil please clarify the differences between the said programmes in 
Supporting Table DS:2 and DS:9?  
 
Answer by Brazil  
 
In Supporting  Table DS:2, the programmes are oriented to family farmers (PRONAF and 
PROCERA), whilst the programmes in Supporting  Table DS:9 are directed to non -family farmers.  
 
AG-IMS ID 87025: Question by United States of America - Transparency issues 
(including Table DS:2)  
Brazil has notified a significant increase in outlays for extension and advisory services – 
an increase of more than 400%  – largely as the result of increases in the measures 
"extension services on agricultural production" and "support for projects o f agricultural 
development." Please explain the reason for the significant increase in outlays due to 
each measure, including whether there was any change in the implementation of the 
measure that would require a DS:2  notification.  
 G/AG/W/181  
 
- 51 - 
 
  Answer by Brazil  
 
Brazilian budgetary outlays are regulated through PPA ("Pluriannual plan"), a long term budget 
instrument with a view to organize and regulate budget expenditure. The current PPA was initiated 
in 2016 and will remain valid until 2019. It has established new gov ernmental actions under the 
same programmes, which has led to the reallocation of budget resources between federal 
programmes and caused the increase in outlays for extension and advisory services. There were 
no DS:2 notifications for this subject because the programmes have not changed, there was only a 
new budget plan and allocation of new resources.  
AG-IMS ID 87113: Question by Canada - General services: extension and advisory 
services  
a. In Supporting Table DS:1, Canada notes that the expenditures for supp ort for 
projects of agricultural development notified under extension and advisory 
services has increased substantially in 2015/16 going from USD 7.1 million in 
2014/15 to USD 126.7 million in 2015/16.  
i. Could Brazil please provide details on this significa nt increase in spending 
including the types of projects that benefit from this funding?  
ii. Could Brazil please explain what sort of agricultural development is 
targeted?  
iii. Could Brazil please outline the criteria, conditions or rules required to 
receive the s upport?  
b. In Supporting Table DS:1, Canada notes that the expenditures for extension 
services on agriculture production notified under extension and advisory 
services has increased substantially in 2015/16, going from USD 4.5 million in 
2014/15 to USD  107.8  million in  2015/16.  
i. Could Brazil please provide details on this significant increase in spending 
including the types of projects that benefit from this funding?  
ii. Could Brazil please explain what sorts of services are provided?  
iii. Could Brazil please outlin e the criteria, conditions or rules required to 
receive these types of services (i.e. support)?  
Answer by Brazil  
 
a.  
i. Brazilian budgetary outlays are regulated through PPA ("Pluriannual plan"), a long 
term budget instrument with a view to organize and regulate budget expenditure. 
The current PPA was initiated in 2016 and will remain valid until 2019. It has 
established ne w governmental actions under the same programmes, which has led to 
the reallocation of budget resources between federal programmes and caused the 
increase in outlays for extension and advisory services.  
ii. Each one of the projects mentioned above has its  own target. Projects that benefit 
from this funding are regulated by the Ministry of Agriculture, the Ministry of Social 
Development and the National Institute for Colonization and Agrarian Reform. They 
are related to the support of : 
 cooperativism and rur al associations,  
 development of organic agriculture;   
 development of husbandry productive chains;  
 support for s mall and medium rural producers;   
 procurement and development of management of IT projects to small farmers;   G/AG/W/181  
 
- 52 - 
 
   technical assistance and extension  projects to indigenous peoples, family 
farmers, settled farmers, "quilombolas" ;  
 transfer of technologies for the sustainability of perennial crops in the cocoa 
producing regions ;  
 consolidation of productive units financed by the land fund and agrarian r eform ;  
 international cooperation for the diffusion of agro -energy ;  
 development of the agro -energy potential of the cocoa producing regions ;  
 development of rural associations and cooperativism;  
 structuring of productive units and community investments to  combat rur al 
poverty;   
 promotion of agroecology socio -biodiversity and organic  production for family 
farmers;  
 generation and adaptation of technologies for the sustainabil ity of perennial 
crops in cocoa -producing regions;  
 systematization and management of  the agricultural defense;  
 systematization and management of the development of coffee cultivation ;  
 systematization and management of the development plan of the cacao 
producing regions.  
iii. Each one of the projects mentioned above has specific conditio ns, rules and criteria. 
Brazil is available to share bilaterally more detailed information regarding specific 
programmes of interest to Canada.  
b.  
i. Brazilian budgetary outlays are regulated through PPA ("Pluriannual plan"), a long 
term budget instrument with a view to organize and regulate budget expenditure. 
The current PPA was initiated in 2016 and will remain valid until 2019. It has 
established ne w governmental actions under the same programmes, which has led to 
the reallocation of budget resources between federal programmes and caused the 
increase in outlays for extension and advisory services. The projects supported are 
from the Ministry of Agric ulture, Ministry of Social Development, the National 
Institute for Colonization and Agrarian Reform, the Brazilian Enterprise for 
Agricultural Research and the National Supply Company. They include training of 
producers, promotion of technologies, promotio n of agro -industrialization, promotion 
of the agricultural sector, promotion of rural productive activities, drafting and 
monitoring of agricultural policy, organization and training of small farmers and 
technical assistance.  
ii. Services include training  of producers, promotion of technologies, promotion of agro -
industrialization, promotion of the agricultural sector, promotion of rural productive 
activities, drafting and monitoring of agricultural policy, organization and training of 
small farmers and te chnical assistance.  
iii. Each one of the projects mentioned above has specific conditions, rules and criteria. 
Brazil is available to share bilaterally more detailed information regarding specific 
projects of interest to Canada.  
AG-IMS ID 87115: Question by Canada - Other product -specific AMS/EMS  
 
a. In Supporting Table DS:4 Canada notes that that the support for wheat has 
increased significantly from zero in 2014/2015 to USD 54.4 million in 2015/16. 
Could Brazil please provide details on the conditions that led to this significant 
increase in product -specific support for wheat?  
b. In Supporting Table DS:4, Canada notes that Brazil has not reported any 
support for maize in 2015/16, however, the support for maize in 2013/14 and 
2014/15 represented USD 196.2 milli on and USD 68.1 million respectively. 
Could Brazil please elaborate on the reasons why there is no product -specific 
support for maize in 2015/16?  G/AG/W/181  
 
- 53 - 
 
  Answer by Brazil  
 
a. In 2014/2015, no support was provided for wheat because the market price was above 
the esta blished minimum price. In 2015/2016, support has been provided for wheat 
because the market price was inferior to the established minimum price.  
b. Product -specific support is provided when market price is below the established 
minimum price. This was the ca se for maize crops in 2013 /2014 and 2014/2015. No 
product -specific support is provided when market price is above the established 
minimum price, which was th e case in 2015/2016 maize crop.  
AG-IMS ID 87119: Question by European Union - Non-product -specific AMS 
The European Union notes a sharp increase in reported Non -Product -Specific AMS in the 
form of Insurance Programmes between 2014/2015 and 2015/2016 (from 
approximately 56 million USD in  2014/2015 to a pproximately 437 million  USD 
in 2015/2016). Could Bra zil explain the reasons behind the increased support in the 
form of I nsurance Programmes in  2015/2016?  
 
Answer by Brazil  
 
In 2014/2015, the amount spent under PSR (grant to the insurance premium or fee) was low 
because there have been budgetary restraints;  and PROAGRO (official credit fund for insurance) 
did not require additional funds because there was no deficit (i.e., the amounts paid by the 
producers as premium covered for all the claim payments e xpenses). In 2015/2016, 
PROAGRO  increased because additional funds were necessary to pay all claims and the budget was 
released for the PSR programme . In addition, there have been weather problems in this period.  
AG-IMS ID 87026: Question by United States of America - Non-product -specifi c AMS  
Brazil has notified a substantial increase of more than 650% in outlays for the measure 
"insurance programmes."  The United States notes that for 2015/16, Brazil now includes 
the Agricultural Livestock Guarantee Program (PROAGRO) under this line, in a ddition to 
the programme of Support to Rural Insurance Premiums (PSR).  
  
a. Please explain the reason for the significant increase in outlays for the measure 
"insurance programmes"?  
b. Please provide the level of outlays associated  with each programme  (PROAGRO 
and PSR) for 2015/16.  
Answer by Brazil  
 
a. PSR is a grant to the insurance premium or fee. PROAGRO is an official credit fund for 
insurance. Since its use is linked to the indemnities, total expenditures are variable. 
Insurance programmes are used pursuant to  the insurance necessities of producers. It is 
important to highlight that Brazil experienced a severe drought during the notification 
period. During the 2014/2015 crop, expenditures with PSR were low due to budgetary 
contingencies. Furthermore no extra re sources were allocated to PROAGRO because 
there was no deficit in the programme, since the premiums payed by the producer 
financed the support. However, for the 2015/2016 crop, there was a need for extra 
resources to PROAGRO related to indemnity payments a nd budget resources were 
assigned to PSR.  
b. PROAGRO USD 323,200,066.46 PSR USD 114,224,463.45 . 
2.3.3   European Union (G/AG/N/ EU/34 , G/AG/N/EU/34/Corr.1)  
AG-IMS ID 87027: Question by United States of America - Transparency issues 
(including Table DS:2)  
The EU  has submitted a corrigendum for 2013/14 Supporting Table DS:1. Notably, 
outlays for infrastructural services increased from EUR  1,943.9 million to G/AG/W/181  
 
- 54 - 
 
  EUR 2,929.9  million and outlays for environmental programme s increased from 
EUR 6,515.5  million to EUR 7,882.3 million. Please explain the reasons for the increased 
expenditures of approximately EUR 1 billion on each of the measures.  
 
Answer by European Union  
 
The changes in overall Green Box support as reported in G/AG/N/EU/34/Co rr.1 are a reduction of 
nearly EUR  3.7 billion.  
 
The correction is due to an er ror in the reporting by one EU m ember State following the change 
from the 2007 -2013 programming period to 2014 -2020 under the Multi -annual Financial 
Frameworks for those periods, and the related changes to Rural  Development legislation. This 
member State, Germany, unfortunately misreported its Green Box spending in its original 
notification to the Commission for the budget year 2015 (marketing year 2014/15). The correction 
in the EU notifi cation G/AG/N/EU/34 reflects this.  
 
2.3.4   European Union (G/AG/N/EU/43)  
AG-IMS ID 87099: Question by Australia - Transparency issues (including Table DS:2)  
Australia notes the significant historical AMS support provided by the EU on skimmed 
milk powder. In its recent domestic support notification (G/AG/N/EU/43), the EU 
product -specific AMS spending of EUR  1.476 billion in marketing year 2014/2015. 
Australia notes recent auctions of the EU's skim milk powder stocks: in May, in which 
the Commission sold 41,958 MT at 31% below the purchase price; and in April, in which 
the Commission sold 39,066 MT at 38% below the purchase price.  
  
a. Have any of these stocks sold at these auctions been exported, and if so, how 
much?  
b. Could the EU explain what steps the EU has taken to avoid the sale of this 
product impacting markets?  
c. Over what timeframe does the EU intend to dispose of its remaining stocks of 
skimmed milk powder?  
d. Does the EU envisage an ongoing structural surplus in skimmed milk powder, 
and if so, what reforms has the EU considered to address this issue?  
Answer by European Union  
 
a. The figure for the April te nder is not correct: in fact 24, 066 tonnes o f SMP were sold 
(rather than 39, 066 t onnes  mentioned in the question).  
The EU legal framework for the disposal of public stocks does not set conditions on the 
final use or destination chosen by operators.  
b. The EU has adopted a cautious approach for the disposal of public intervention stocks, 
notably not to disrupt the market recovery taking place during 2017. Once that  recovery 
was a reality, in the light of an increasing demand for SMP and given that the existence 
of the public stocks was weighing on the market, the release of product from 
intervention has speeded up. The minimum selling prices accepted in the tenders are 
consistent with market reality, considering the age of the stocks.  
c. There is no preconceived timeframe for the disposal of the stocks. It will depend on 
market developments and the interest shown by operators in future tenders.  
d. Milk production has expa nded in recent months as a reaction to increased prices at the 
end of 2017. SMP production has also increased in the same period. However, no 
structural surplus of SMP is anticipated.  G/AG/W/181  
 
- 55 - 
 
  The EU has set to zero the ceiling for buying in of SMP into public inte rvention in 2018 to 
avoid stockpiling of public stocks when market conditions do not point to such a need.  
Follow -up: With regards to the European Union's " cautious approach for the disposal of public 
intervention stocks"  as mentioned in its response to part b of the question, Australia asked if this 
"cautious approach" was reflected in any legislation or policy and whether  the approach took into 
consideration  impacts on the EU's  domestic market as well as  on global market s. The European 
Union responded that the way it handled the sales of the stocks was not reflected in a regulation. 
It noted that it was aware of the sensitivity of the issue not only for foreign farmers but also its 
own farmers and therefore it managed the  stock in a cautious way so as  to ensure the disposal of 
the stock would not  disturb the market.  
AG-IMS ID 87125: Question by New Zealand - Trans parency issues (including 
Table  DS:2)  
New Zealand notes an overall increase from MY 2013/2 014 to MY 2014/2015 i n the 
EU's current total AMS spending, as well as a decrease over this period in spending on 
measures classified under "Green Box". Could the EU explain how this respective 
increase and decrease in spending is consistent with its overarching commitment to 
pursue a greener spending profile  under  CAP 2014 -2020?  
 
Answer by European Union  
 
The "greening" of CAP can be seen through many objectives/l enses. It may refer  to the 
WTO Green Box but it may also refer to requirements imposed on farmers aimed at combati ng or 
mitigating climate change or environmental standards.  
 
The change in AMS notification is entirely linked to the increase in notified market price support. 
This increase results solely from increases in total production of common wheat, SMP and butter , 
which is the basis of the calculation of AMS for market price support. It is not linked to any change 
in support policy or support prices.  
AG-IMS ID 87101: Question by Australia - Public stockholding for food security purposes  
Australia welcomes the Eur opean Union's Domestic Support Notification for marketing 
year 2014/15 (G/AG/N/EU/43). Australia notes that the European Union has included 
EUR 11.9 million under Public Stockholding for Food Security Purposes in Supporting 
Table DS:1.  
 
a. Paragraph 3, Annex 2 of the AoA states, "The volume and accumulation of such 
stocks shall correspond to pre -determined targets related solely to food 
security." For each of the periods covered by the notification, could the EU 
provide:  
i. the pre -determined targets, when these were established, and under which 
legislation or programmes; and  
ii. an explanation of how these targets are in compliance with the requirement 
of a sole focus on food security.  
b. The Agreement on Agriculture Paragraph 3, Annex 2 further st ates, "Food 
purchases by government shall be made at current prices and sales from food 
security stocks shall be made at no less than the current domestic market price 
for the product and quality in question." Could the EU provide:  
i. a breakdown of commodit ies covered by the notified spending, including 
values and volumes;  
ii. the prices and volumes of the commodities when they were purchased and 
sold; and  
iii. confirmation of the food purchases were made at current prices and sales 
were made at no less than current domestic market prices?  G/AG/W/181  
 
- 56 - 
 
  Answer by European Union  
 
a.  
i. The expenditure notified under these programme is fully financed by EU member 
States, and is n ot linked to EU intervention schemes for agricultural produ cts. They 
are part of these EU m ember States policy for security stocks and part of their 
security policy.  
ii. These stocks are not part of EU support policy for agricultural products or agricultu ral 
markets.  
b. These products are bough t in at market price by the EU m ember States concerned and 
any release to the market is done at market prices. The EU will revert to this iss ue after 
consultation with the m ember States concerned.  
AG-IMS ID 87031: Que stion by United States of America - Public stockholding for food 
security purposes  
In 2014/15, the EU notified EUR  11.9 million in spending on public stockholding for food 
security purposes, representing an EUR  11 million increase from 2013/14 levels. The EU 
also notified increased market price support for skimmed milk powder in 2014/15, 
reaching EUR  1,476.4  million.  The United States notes that the EU, in recent years, has 
increased its intervention stocks for skimmed milk powder, which are currently at 
around 375,000  tonnes.  
 
a. Please explain the reason for the EUR  11 million increase in public stockholding 
for food security spending.  
b. Please explain the relationship, if any, between the increased levels of support 
beginning in 2014/15 and the increase in go vernment stocks of skimmed milk 
powder to current levels.  
Answer by European Union  
 
a. The expenditure no tified under these programme s are  fully financed by EU member 
States, and is not linked to EU intervention schemes for agricultural products. They are 
part of these EU m ember States policy for security stocks and part of their security 
policy.  
b. There is no relationship.  
AG-IMS ID 87165: Question by Australia - Direct payments: structural adjustment 
assistance provided through investment aids  
Australia notes that in Supporting Table DS:1 (i) of (G/AG/N/EU/43), the European 
Union has notified EURO 5.5 billion of spending under Structural Adjustment Assistance 
provided through Investment Aids. Paragraph 11, Annex 2 of the AoA states that 
eligibil ity for structural adjustment programmes shall be determined by reference to 
clearly defined criteria in government programmes designed to assist the financial or 
physical restructuring of a producer's operations in response to objectively 
demonstrated str uctural disadvantages.  
 
For each of the measures covered by the notified spending, could the European Union 
please:  
 
a. provide the names of each programme and the spending under each 
programme;  
b. outline the structural disadvantages European farmers are facing and the 
defined criteria to address these disadvantages; and  G/AG/W/181  
 
- 57 - 
 
  c. confirm the notified spending is limited to the amount required to compensate 
for the structural disadvantages outlined (as per p aragraph 11(f) of Annex 2).  
Answer by European Union  
 
a. The biggest share of these expenditures relate s to the implementation  of Rural 
development programmes. Information on the EU Rural Development programmes 
2014-2020 can be found on this web -site:  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files_en  
More detailed information about all the 118 Rural Development programme can be found 
here:  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/be_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/bg_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/cz_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/dk_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/de_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/ee_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/ country -files/ie_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/el_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/es_en   
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/fr_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/hr_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/it_en  
https://ec.europ a.eu/agriculture/rural -development -2014-2020/country -files/cy_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/lv_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/lt_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/lu_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/ country -files/hu_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/mt_en   
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/nl_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/nl_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/at_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/pl_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/pt_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/ country -files/ro_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/si_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/sk_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/fi_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/se_en  
https://ec.europa.eu/agriculture/rural -development -2014-2020/country -files/uk_en   
 
Further, part of the nati onal wine envelopes can be spent  on investments in 
restructuring, according to paragrap hs 46 and 50 of Regulation (EU) No 1308/2013.  
Part of the support granted through producer organiz ations in the fruit and vegetables 
sector can be granted through investments according to Articles 32 to Article 39 of 
Regulation (EU) No 1308/2013 (and in p articular Article 33).  
Finally, the cotton restructuring programmes are also notif ied under this heading 
(Article  66 of Regulation (EU) No 1307/2013). This programme ended by the 2016 
calendar year.  
Compiling data on execution and money spend per programm e requires further detailed 
analysis, which will follow as soon it as available.  
b. Each rural development programme under which this expenditure is made describes in 
detail the criteria under which support is given. The EU  therefore ask s Australia to refer 
to the websites referred to under question (a) for further details.  G/AG/W/181  
 
- 58 - 
 
  c. Member States are obliged to respect Green Box criteria when establishing Rural 
Development programmes.  
AG-IMS ID 87126: Question by New Zealand - Article 6.5 (Blue Box)  
 
a. In its most recent notification, the EU reports a total of EUR 2,878 billion in 
payments under Article 6.5 of the Agreement on Agriculture. The Agreement 
allows for such payments that are "production limiting" in nature. What steps 
has the EU taken to ensu re production in supported commodities is limited?  
b. Under Article 68 of Regulation 73/2009, EUR 1,089 billion is provided to 
livestock headage. For member States implementing this programme, what 
proportion of livestock in relevant regions are eligible to receive this support? 
Has the number of supp orted animals increased in any m ember State in the 
current Multiannual Financial Framework (MFF), compared to the previous one?  
Answer by European Union  
 
a. The provisions that ensured the production -limiting natur e of the support were the 
following:  
As regards Article 68 (specific support) of Regulation 73/2009, for the objectives  and 
activities notified under Blue B ox: 
 The EU m ember States could decide to grant specific support under Article 68 of 
Regulation 73/20 09 (voluntary basis);  
 The support could only be granted to a limited number of objectives and activities, 
with defined associated conditions to be respected;  
 Only a limited part of the national financial envelope for direct payments could be 
dedicated to t his support (3.5% increased to 6.5% for claim year 2014);  
 Some specific and strict conditions were applicable to one of these objectives (i.e. 
the objective to address specific disadvantages in vulnerable or sensitive areas or 
affecting vulnerable types o f farming):  
 The support was aimed at addressing specific disadvantages experienced by 
farmers in some sectors in economically vulnerable or environmentally sensitive 
areas, or for economically vulnerable types of farming.  
 It concerned a limited (closed) l ist of sectors: dairy, beef and veal, sheep meat 
and goat meat, rice;  
 The support could only be granted to the extent necessary to create incentive to 
maintain the current levels of production.  
 
As regards ewe and goat premiums and suckler cow premiums:  
 Some individual ceilings per farmer were in place (sum of premium rights fixed on 
historical basis). The ewe and goat as well as suckler cow premiums could only be 
granted to farmers within the limits of these individual ceilings;  
 A ceiling (number of animal s) was also set -up at m ember States' level for each of 
these two categories of premiums (i.e. e we and goat; suckler cow). The m ember 
States had the obligation to ensure that the sum of the premium rights on their 
territory for each category does not exceed  the national ceiling set -up for that 
category  
 Strict eligibility conditions were applicable (identification and registration of 
animals…);  
 A fixed unit amount per animal was set -up; 
 The sum of the amounts claimed for the premiums in the sheepmeat and 
goatmeat sector on one side and in the beef and veal sector on the o ther side 
could not exceed the m ember State's financial ceilings set -up by the Commission.  
 
b. The objective of Article 68 support was to address specific disadvantages in vulnerable 
or sens itive areas or affecting vulnerable types of farming covered the following animal 
sectors: dairy, beef and veal, sheep meat and goat meat.  Obtaining this data will require 
further analysis: the EU will revert as soon as possib le once it is available.  Article 68 G/AG/W/181  
 
- 59 - 
 
  specific support does not exist anymore. Instead,  since claim year 2015, the EU m ember 
States have the possibility to implement the voluntary coupled support (VCS) scheme on 
a voluntary basis.  
Although there are some similarities between the framewo rks of these two schemes, it is 
difficult to make a comparison of the number of animals supported under Article 68 and 
under VCS. In particular, the measures designed by the m ember States under the 
VCS scheme, and their related eligibility criteria, unit a mount and financial ceilings are 
not the same as under the previous Article 68 specific support. Therefore, a comparison 
between the numbers of supported animals under these two schemes would give an 
inaccurate picture.  
AG-IMS ID 87122: Question by Canada  - Livestock payments made on a fixed number of 
head  
Under Supporting Table DS:3, Canada notes that the measure payments in virtue of 
Article 68 of regulation 73/2009, in Livestock payments made on a fixed number of 
head, has increased significantly from E UR 801 million in 2013/14 to EUR 1.1 billion in 
2014/15, which represents an increase of 36%. Could the European Union please 
provide details on the conditions that led to this significant increase in expenditures?  
 
Answer by European Union  
 
The main reas on for the increase in Article 68 expenditure for budget year 2015 came from a 
better execution of the overall envelope for t his measure. In prior years EU m ember States had 
not fully used the financial envelope allocated for these measures.  
 
Follow -up: Australia noted concern regarding the production limiting nature of the Article 68 
programme . Australia found it difficult to understand why the EU increased Article 68 expenditure  
regardless the financial envelope allocated for the measure in prior years had not been fully used 
and asked the EU to provide further clarification . In light that no response was given regarding the 
number of livestock in New Zealand's  question AG-IMS ID 87126 , Australia asked whether the EU 
increased financial envelope to suppo rt greater coverage of livestock or for the same amount of 
livestock. The EU responded that Article 68 measure had been  implemented over 4 years and the 
supported numb er of animals had always been the same.  The member S tates however  did not 
manage in the f irst years to fully implement the available amount  of money  to cover the available 
number of animals which had been foreseen . In response to Australia's  second  question, th e EU 
noted that the problem was not counting the number of livestock but  rather  associating  the 
number of livestock with each programme and each region  as it was not easy to obtain that data 
from the Eurostat database .  
AG-IMS ID 87123: Question by Canada - Market price support  
Under Supporting Table DS:4, Canada notes that support fo r skim milk powder has 
increased by EUR  341.5 million, which represents an increase of 30% from 2013/14. 
Could the European Union please provide details on the conditions that led to this 
significant increase in expenditures?  
 
Answer by European Union  
 
The reason is that total EU production of SMP increased, which is th e basis for the calculation 
for AMS for market price support. The support price was unchanged (and the external reference 
price is fixed).  
AG-IMS ID 87127: Question by New Zealand - Market price support  
With regard to the EU's market price support for beef, the applied administered price 
increased from EUR 1560.00/tonne (relative to external reference price of 
EUR 1729.80/tonne) in MY 2012/2013 and MY 2013/2014 to EUR 2224.00/tonne 
(external  reference price remained the same) for MY 2014/2015. Could the EU explain 
this increase in applied administered price for beef?  
 
Answer by European Union  
 
The change to the reference threshold price for beef was decided in the 2013 CAP reform.  G/AG/W/181  
 
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  AG-IMS ID  87030: Question by United States of America - Market price support  
In 2014/15, the EU notified a beef applied administered price of EUR 2,224 per tonne 
with an eligible production of zero.  This compares to a much lower applied administered 
price in 2013/1 4 of EUR  1,560 per tonne and an eligible production of nearly 7.5 million 
tonnes.  
  
Please explain the reason for the increase in the applied administered price with the 
simultaneous decrease in eligible production.  
 
Answer by European Union  
 
The change to  the reference price for beef was decided in the 2013 CAP reform.  
 
Under the previous Regulation (EC) No 1234/2007 in Article 14 (1), the EU must open intervention 
if the average market price was below 1560  EUR/t for the type of beef meat eligible for 
intervention buying.  
 
In the 2013 CAP reform this was changed. There is no longer an automatic obligation for EU to buy 
beef meat into intervention. Regulation (EU) No 1308/2013, Article 13 (1)( c) provides that if the 
market prices falls below 85% of the re ference threshold price then the EU may open a tender to 
buy beef meat for the types of meat that qualifies for intervention. As a consequence of this 
change of op legal framework and based on the outcome of the panel in Korea/beef there is no 
"eligible" b eef meat production during 2014/15 marketing y ear for the purposes of the 
AMS calculation.  
 
No buying -in of beef meat has taken place since 2002 and the current market price is significantly 
higher than the support price level.  
 
2.3.5   Guatemala (G/AG/N/GTM/60)  
AG-IMS ID 87128: Question by Canada - General services: infrastructural services  
In Supporting Table DS:1, Canada notes that support for the development of alternative 
agriculture in Infrastructure Services has been reported with expenditures that totalled  
$6.9 million. Guatemala has not reported any expenditure in Infrastructure Services in 
its notifications for 2015 and 2016. Could Guatemala please indicate the eligibility 
criteria, and the types of projects that have been funded?  
 
Answer by Guatemala  
 
Guatemala has not reported any expenditure in Infrastructure Services in its notifications for 2015 
and 2016 , because  it was a new project for 2017.  
 
Regarding eligilibty criteria, in the municipalities of Ixchiguán and Tajumulco (department of 
San Marcos) , a number of serious incidents occurred that disturbed the constitutional order and 
state security, affecting families, endangering lives and posing a threat to general human 
development and food security. To avoid a worsening of the situation, it was dee med necessary to 
take all appropriate measures as a matter of urgency. In response to public demand and in order 
to diversify their productive crops, the project to improve water management for sustainable 
production was implemented.  
AG-IMS ID 87129: Quest ion by Canada - Input subsidies available to low -income or 
resource -poor producers  
In Supporting Table DS:2, Canada notes that the expenditures for (b) Agricultural input 
subsidies to low income or resource poor producers have increased significantly, from 
$12.5 million in 2016 to $32.5 million in 2017. Could Guatemala please provide the  
conditions that led to this significant increase in expenditures?  
 G/AG/W/181  
 
- 61 - 
 
  Answer by Guatemala  
 
The increase was due to a rise in the number of users. In 2016, a total of 475,600 individuals were 
catered for, while in 2017 provision was made for the delivery of coupons to 1,085,000 individuals. 
This was because in 2016 the financial resource was disbursed during the third four -month period, 
whereas in 2017 it was scheduled for the first four -month period . In addition the budget allocated 
for the purpose was incre ased.  
 
2.3.6   India (G/AG/N/IND/12)  
AG-IMS ID 87140: Question by European Union - Trans parency issues (including 
Table  DS:2)  
In previous notification India has indicated payment for disaster relief and 
environmental payments. No amounts are included in this notif ication for either 2014 or 
2015. Has India terminated these programmes or have they been included under other 
programmes in this notification?  
 
Answer by India 
 
There is no such scheme specific to "disaster relief and environmental payments " now. India 's 
notifications are based on  actual expenditure and under this head ing there was no expenditure.  
 
Follow -up: Australia was not convinced that India did not incur any expenditure  under disaster 
relief and environmental payments, in light of the massive flood s took place  in India in 2014 . 
Australia noted that this raised questions about whether India's notification was correctly  made . 
AG-IMS ID 87158: Question by New Zealand - Transparency issues (including Table 
DS:2)  
New Zealand notes that market price suppo rt makes up a significant proportion of 
India's total support to farmers. Compared to other income support programmes, 
market price support is difficult to target and the benefits often make their way into the 
hands of larger players, or other parts of the  agricultural supply chain. Has India 
considered alternative policy measures to support small farmers?  
 
Answer by India  
 
Government of  India is supporting farmers th rough minimum support price as well as by providing 
input subsidies to agriculture. Beside  this, government implement various programmes for farmer 
welfare under the Green B ox as well as insurance programmes. The Indian government, from time 
to time, announces various programmes for the welfare of low income or resource poor farmers. 
However it  needs to be borne in mind that India has  nearly 200 mil lion farmers and 99.29% of 
those  are low income or resource poor farmers, which makes it very difficult to devise new policy 
measures.  
AG-IMS ID 87137: Question by Canada - General services: inspectio n services  
In Supporting Table DS:1, Canada notes that India's spending in inspection services 
decreased from USD 2.55 million to zero in 2014 -2015 and 2015 -2016. Could India 
please explain the policy change that has resulted in outlays being reduced to ze ro in 
that category?  
 
Answer by India 
 
India's notifications are based on  actual expenditure and under this head ing there was no 
expenditure.  
AG-IMS ID 87116: Question by Australia - Public stockholding for food security purposes  
Australia notes that in Supporting Table DS:1 of G/AG/N/IND/12, India has notified 
spending on public stockholding for food security purpos es of USD 17.17 billion 
in 2014 -15 and USD  15.64  billion in 2015 -16.  
  G/AG/W/181  
 
- 62 - 
 
  a. Paragraph 3, Annex 2 of the AoA states, "The volume and accumulation of such 
stocks shall correspond to pre -determined targets related solely to food 
security." For each of the periods covered by the notification, could India 
provide:  
i. the pre -determined targets, when these were established, and under which 
legislation or p rogrammes; and  
ii. an explanation of how these targets are in compliance with the requirement 
of a sole focus on food security.  
b. Paragraph 3, Annex 2 of the AoA further states, "Food purchases by 
government shall be made at current prices and sales from food security stocks 
shall be made at no less than the current domestic market price for the product 
and quality in question." For each of the periods covered by the notification, 
could India provide:  
i. a breakdown of commodities covered by the notified spending , including 
values and volumes;  
ii.  the prices and volumes of the commodities when they were purchased and 
sold; and  
iii. confirmation the food purchases were made at current prices and sales were 
made at no less than current domestic market prices?  
c. As outlined  in footnote 5 of Annex 2 of the AoA, can India confirm whether any 
aspects of the notified spending covers foodstuffs that were acquired and 
released at administered prices, requiring the market price support to be 
notified as AMS?  
Answer by India  
 
MSP ( administered price) is fixed to protect farmers from distress sale of their crops and to 
prevent their exploitation. MSP operations are carried out only in the event of market prices falling 
below the administered prices subject to availability as per pres cribed specifications, budgetary 
allocations and applicable targets. Farmers are free to sell their produce in open market at 
prevailing rates or administrative prices whichever is remunerative and convenient.  
 
The quantity of wheat and rice procured duri ng the last s everal years can be accessed at 
http://fci.gov.in/ . 
AG-IMS ID 87136: Question by Canada - Public stockholding for food security purposes  
In Supporting Table DS:1 Canada notes that the support for public stockholding for food 
security purposes has increased by 14% in 2014 -15 to USD 17,175 million from 
USD 14,792 million in  2013 -2014.  
  
a. Could India please provide details on the conditions that led to this significant 
increase in expenditures?  
b. Could India provide a list of products by volume and value acquired under 
public stockholding ‎for food security purposes in 2014 -2015 and 2015 -2016?  
Answer by India  
 
a. India's notifications are based on  actual expenditure. The food subsidy fluctuates due to 
fluctuations in the expenditure on procurement, storage and distribution under various 
welfare schemes.  
b. Information can be accessed at http://fci.gov.in/ . G/AG/W/181  
 
- 63 - 
 
  Follow -up: Canada sought India's response regarding the actual reasons that led to the fluctuation 
of the expense.  
AG-IMS ID 87156: Question by Japan - Public stockholding for food security purposes  
Annex 2, paragraph 3 in the Agreement on Agriculture stipulates tha t "the volume and 
accumulation of such stocks shall correspond to predetermined targets related solely to 
food security."  
  
a. Please indicate the predetermined targets of the notified years （the marketing 
years 2014 -2015 to 2015 -2016）. 
b. If those targets were published before the procurement in each year, where 
could we find the publication?  
Answer by India  
 
a. and b . Before the beginning of each marketing season, the g overnment of India holds a 
consultative meeting with the Food Cor poration of India (FCI), State governments and 
others to make an assessment of availability of wheat and paddy/rice for procurement at 
Minimum Support Price (MSP) based on the prospects of production and market 
situation. B ased on this, g overnment of India decides targets for procuremen t of wheat 
and paddy/rice for the ensuing marketing season. The relevant information can be 
accessed at http://dfpd.nic.in . 
Follow -up: Australia and the European Union noted that India did not appear to have  responded to 
questions  about the arrangement details for public stock holding programmes  in AG-IMS ID 87116 
and requested India to provide further details. Supported by Canada, the European Union noted 
that India made  reference to the general website of Food Corporation of India (FCI) and asked if 
India could point to the  exact  webpage where the figures could be found directly. The Euro pean 
Union also raised a follow -up question in relation to India's statement that ov er 90% of its farmers 
were small and vulnerable farmers. It asked India to indicate the size of agricultural  production 
from farmers that were not small and vulnerable, in particular  figures of rice and wheat production 
from those farmers.  
AG-IMS ID 87117 : Question by Australia - Input subsidies available to low -income or 
resource -poor producers  
Australia notes that in Supporting Table DS:2 of G/AG/N/IND/12, India has notified 
spending on agricultural input subsidies of USD 24.84 billion in 2014 -15 and 
USD 23.55  billion in 2015 -16 to low income or resource poor producers under Special 
and Differential Treatment "Development Programmes." Paragraph 2, Article 6 of the 
AoA states, "… input subsidies generally available to low -income or resource -poor 
producer i n developing country Members shall be exempt from domestic support 
reduction commitments…"  
  
a. Can India please provide a breakdown of the types of input subsidies covered 
by the notified spending, including values and volumes?  
b. Can India indicate whether t heir input subsidy programmes solely benefit low 
income or resource poor producers?  
i. If so, can India provide details of the eligibility criteria for the programmes 
to ensure the input subsidies are provided solely to low income or resource 
poor producers?   
ii. Can India indicate how the programmes are structured to avoid their 
benefits flowing to other agricultural producers?  G/AG/W/181  
 
- 64 - 
 
  Answer by India 
a.  
Table - Breakdown of Input subsidies  (in USD million)  
Year Fertiliser  Electricity  Irrigation  Total  
2014-15 12278  7959 4599 24836  
2015-16 11691  8374 3488 23553  
b. 99.29% of Indian farmers are low -income or resource -poor. Therefore, it is correct to 
say that benefit of input subsidies is flowing mostly to low income or resource poor 
farmers. India's agricultural input subsidies are consistent with Article 6.2 of the AoA. 
India further notes that there is no obligation under Article 6.2 of the AoA which 
mandates that input subsidies be available solely to low income or resource poor 
farmers.   
AG-IMS ID 87028: Question by United States of America - Input subsidies avail able to 
low-income or resource -poor producers  
The footnote for Supporting Table DS:2 states "as per t he agricultural census 
for 2010 -2011, 99.297% of farm holdings are of low -income or resource poor farmers" 
noting that India's reported average land holdin g size is on the decline as outlined in 
response to AG -IMS ID 75021.  The United States resu bmits AG -IMS ID 85019 and 
AG-IMS ID 86111  in hopes for a more direct response to the United States' inquiry into 
how the decline in farm size has occurred despite th e large increases not only in 
production, but also surplus production – leading to India's status as a major 
agricultural exporter.  
  
a. Noting responses to AG -IMS IDs 86111/85019: India's notification now notes 
that 99.297% of farmers are low -income or r esource poor. In response to 
AG-IMS ID 75021, India stated the prevailing trend is for the average size of 
farms, by landholding, to decrease in each Census, and that 99% of farms have 
inadequate resources to generate enough income to maintain a minimum 
stand ard of living. Concurrently, India has increased agricultural production 
and exports, and marketed surplus of major commodities. India is now one of 
the world's largest agricultural producers and exporters of a number of major 
and minor commodities.  
i. How do es India explain this?  Please provide additional information beyond 
that provided in previous CoA responses to help Members understand this 
dichotomy.  
ii. Please include statistical information with regards to the size, ownership 
structure, and per farm output  of those farms that do not have inadequate 
resources to generate enough income to maintain a minimum standard of 
living of the farms that contribute to the sizeable marketed surplus.   
b. Please explain what mechanisms exist in India's domestic support measur es to 
ensure that the programmes benefit low -income or resource -poor farmers only.  
c. Does India have any statistical information or other relevant information it can 
share with Members to better understand the level of input subsidies provided 
to producers by size of operation and income level?  
Answer by India  
 
a. As per agriculture census 2010 -11, the average size holding in India is 1.15 hectare and 
almost all the farmers are low income or resource poor. However, these farmers are 
efficiently deploying family labour and engage in intensive multi cropping for their  
survival.  G/AG/W/181  
 
- 65 - 
 
  b. 99.29% of Indian farmers are low -income or resource -poor. Therefore, it is correct to 
say that benefit of input subsidies is flowing mostly to low income or resource poor 
farmers. India's agricultural input subsidies are consistent with Article  6.2 of the AoA. 
India further notes that there is no obligation under Article 6.2 of the AoA which 
mandates that input subsidies be available solely to low income or resource poor 
farmers.  India does not maintain this type of data.  
Follow -up: The United States raised questions  about the completeness  of India's  responses to its 
questions  and asked India to provide more details.  
AG-IMS ID 87155: Question by Japan - Constituent data and methodology (AGST)  
With respect to the currency to express AMS, wh ile Indian Rupee was used in the AGST, 
India has changed it to U.S. Dollar since the notification of 95/96. India has explained 
this modification as "to provide comparable estimates." Japan would like India to 
submit the notification in India Rupee as an o riginal statistic in pursuant to its AGST, in 
addition to the submitted one in US Dollar as comparable estimates.  
Answer by India  
 
India notifies its domestic support to the WTO in US dollars. The AoA does  not place a binding 
obligation on India  to notify in a particular currency. It only requires taking into account the 
constituent data and methodology as in Part IV of a Member's Schedule, which India has  done. In 
order to provide comparable estimates, India has been notifyi ng its domestic support in 
U.S. dollars since 1995 -1996. India has followed a consistent approach in currency used while 
notifying its domestic support notifications.  
AG-IMS ID 87114: Question by Australia - Market price support  
Australia thanks India for its Domestic Support Notificatio ns fo r marketing 
years  2014 -15 and  2015 -16 (G/AG/N/IND/12). Further to Australia's question from 
February 2018 ( AG-IMS ID 86014), India has again calculated a combined market price 
support for pulses. Australia is disappointed by India's previous response to this 
question.  
  
a. Australia notes that India maintains separate and distinct Minimum Support 
Prices  (MSPs) for G ram, Arhar, Urad, Moong and Lentils. Can India explain in 
more detail why it has combined these products into one category "Pulses" for 
the purposes of calculating Market price Support?  
Australia noted that the actual Minimum Support Price (MSP) for India n pulse products 
in 2014 -15 was as follows:  
  
  MSP 2014/15  
(INR/quintal)  MSP 2014/15  
(INR/tonne)  USD/Tonne* 
ARHAR  4,350  43,500  711.42  
MOONG  4,600  46,000  752.32  
URAD  4,350  43,500  711.42  
GRAM  3,175  31,750  519.27  
MASUR  2,950  29,500  482.47  
* Converted at 2014 -15 exchange rate 1  USD = 61.144  INRs, as per G/AG/N/IND/12 . 
  
b. In supporting table DS:5, India lists the administered price for "pulses" as 
639.52  USD/tonne in 2014 -15. Could India explain in more detail how it 
calculated this figure and why it has not simply used the specific MSP contained 
in the table above, given this is how the support is administer in India?  
c. Australia notes that market price support for pulses is absent from the 2015 -16 
period in Supporting Table DS:5. The Government of India did however provide 
minimum support prices for pulses in 2015/16 as per the below. Given India G/AG/W/181  
 
- 66 - 
 
  did offer minimum suppor t prices for pulse products in 2015 -16, could India 
please provide the calculated market price support for pulses in 2015 -16 as per 
the requirements in paragraph 8, Annex 3 of the Agreement on Agriculture?  
  MSP 2015/16  
(INR/quintal)  
ARHAR  4,625  
MOONG  4,850  
URAD  4,625  
GRAM  3,500  
MASUR  3,400  
 
Answer by India 
 
India has been consistently notifying product specific support for pulses at aggregate level since 
1995-96. Pulses are a major source of protein and form an integral part of the Indian diet. Tur, 
urad, moong, gram, lentils are different varieties of pulses  and therefore, it is reasonable to 
calculate product specific support for aggregated pulses. The ERP is calculated based on simple 
average of external reference price of various pulses given in AGST and used to calculate product 
specific support for pulse s (including lentils). Similarly, the applied administered price is simple 
average of minimum support price for gram, arhar, urad, moong and lentils. Based on these 
components product specific support is calculated. Given the fact that government agencies did 
not procure at administered price during 2015 -16, therefore, product specific support to pulses 
was zero.  
 
Follow -up: Australia  noted that in its view India should not have aggregated the administered price 
for different varieties of pulses based on the justification  that it had consistently been doing so 
since 1995 -96 and pulses products were an integral part of the Indian diet. Australia pointed out 
that both external reference prices  and minimum support prices were available for each of these 
products. In relation to eligible production, Australia noted that  not only the amount procured but 
also the effect of the procurement on planting decisions should be considered  when determining 
the amount and therefore  India's methodology was not appropriate under the AoA.  Australia  made 
reference  to an Indian publication  "Incentivizing pulses production through minimum support 
prices (MSP) and related policies" from a Ministry of Finance documen t for 2016. The document 
stated that "The MSP turns out to be a focal point for this bargaining, a sort of benchmark for 
traders in their dealing with small farmers … higher pulses MSPs will have a beneficial effect for 
small farmers, as their bargaining p ower with respect to traders might go up… And this might be 
true even if the MSPs were unaccompanied by effective procurement" . Australia  noted that the 
publication made it  clear that it was  not only the procurement that provided benefit to farmers  but 
also the existence  of the minimum support price itself. The European Union and the United States 
supported Australia's views . 
AG-IMS ID 87139: Question by Canada - Market price support: Eligible production  
a. In Supporting Tables DS:4 and DS:5 Canada notes th at India has reported a 
product -specific AMS of USD 92.25 million in  2014 -15 for pulses but 
in 2015 -16, support for pulses is zero.  
i. Could India please indicate whether any v olume of pulses was procured 
in 2015 -16? 
ii. If so, could India indicate the quantity procured in million tonnes, including 
domestic and imported, and whether such procurements were done with a 
minimum price support?  
iii. Canada notes that the Department of Consumer Affairs published on its 
website 
(https://consumeraffairs.nic.in/WriteReadData/userfiles/file/Procurement
_of_Pulses_08Sep2017.pdf ) that, as of 08.09.2017, 50,422.53 MT of Kharif 
Pulses (KMS 2015 -16) were procured domestically for the Buffer Stock G/AG/W/181  
 
- 67 - 
 
  under Price Stabilization Fund. Could India please indicate when this 
procurement of Kharif Pulses (KMS 2015 -16) will be notified?  
b. In Supporting Table DS:5 for 2014 -15, Canada notes that Ind ia has reported a 
Total Market Price Support for pulses.  
i. Could India please confirm that the Minimum Support Prices (MSPs) on 
Gram, Urad, Moong, Lentil and Arhar set at the federal level are available to 
all Indian States that would like to procure these pulse varieties?  
ii. Could India please indicate if there is a pre -set limit or other conditions on 
the amount of production that could be procured from farmers using the 
MSPs? If so, what are the pre -set limits or conditions on the volume of 
production that could be procured?  
Answer by India  
 
a. For the year 2015 -16, government did not procure pulses at the administered price. We 
will submit response to part (iii) of the question in due course.  
b. MSP (administered price) is fixed to protect farmers from distress sale of their crops and 
to prevent their exploitation. MSP operations can be carried out only in the event of 
market prices falling below the administered prices subject to availability as per 
prescribed specifications, budgetary allocations and applicable targets. Farmers are free 
to sell their produce in open market at prevailing rates or administrative prices 
whichever is remunerative and convenient.  
Follow -up: In relation to part b of i ts question, Canada asked India to  confirm whether the  prices 
for various  pulses types set at the federal level were available  to all Indian  states that would  like to 
procure these pulse varieties and whether a preset limit or other conditions were established on 
the amount of production that could be procured  using MSP. The European Union supported 
Canada's follow -up question.   
AG-IMS ID 87138: Question by Cana da - De minimis  
In Supporting Table DS:4 for 2014 -15 and 2015 -16, Canada notes that India does not 
include product -specific value of production data. The inclusion of value of production 
data greatly improves the transparency of Supporting Table DS:4. Coul d India please 
provide the value of production for all products report ed in Supporting Table DS:4 
for 2014 -15 and 2015 -16?  
 
Answer by India 
Value of production (Million USD) 
Products  2014 -15 2015 -16 
Rice 37,041 34,701 
Wheat  21,098 22,292 
Coarse cereals  9,555 8,154 
pulses  11,930 -  
Cotton  11,565 8,740 
Groundnut  4,849 -  
Sunflower  225 168 
Mustard Seed  3,556 -  
Value of Production  380,450 371,834 
 
AG-IMS ID 87141: Question by European Union - De minimis  
India states that the AMS for the products listed in this table is below de minimis . Can 
India provide written information to the WTO members for all the products listed in this 
table on the value of production for 2014 and 2015 respectively?  
 G/AG/W/181  
 
- 68 - 
 
  Answer by India 
Value of production (Million USD) 
Products  2014 -15 2015 -16 
Rice 37,041 34,701 
Wheat  21,098 22,292 
Coarse cereals  9,555 8,154 
pulses  11,930  
Cotton  11,565 8,740 
Groundnut  4,849  
Sunflower  225 168 
Mustard Seed  3,556  
Value of Production  380,450 371,834 
 
AG-IMS ID 87157: Question by Japan - De minimis  
Could India provide the statistics of VOP of each product in order to make sure the value 
of support is under de minimis  threshold?  
 
Answer by India 
Value of production (Million USD) 
Products  2014 -15 2015 -16 
Rice 37,041 34,701 
Wheat  21,098 22,292 
Coarse cereals  9,555 8,154 
pulses  11,930  
Cotton  11,565 8,740 
Groundnut  4,849  
Sunflower  225 168 
Mustard Seed  3,556  
Value of Production  380,450 371,834 
 
AG-IMS ID 87142: Question by European Union - Classification of measures  
In a note to Supporting Table 4 for marketing years 2014 -2015 and 2015 -2016, India 
states that the Non -Product -Specific AMS listed in the Table (Insurance Premium 
Subsidy) is an input subsidy and that it "also qu alifies under Article 6.2 of the AoA".  
  
a. Could India explain why the Insurance Premium Subsidy is listed in Supporting 
Tables DS:4 and DS:9 if it qualifies under Article 6.2 of the Agreement on 
Agriculture?  
b. Could India explain in what way the Insurance Pr emium Subsidy qualifies as an 
input subsidy under article 6.2 of the Agreement on Agriculture?  
Answer by India  
 
a. and b. The agricultural sector is exposed to a variety of risks including climate and 
weather risks, natural catastrophes, pest and diseases, which cause highly variable 
production outcomes. Production risks are exacerbated by price risks, credit risks, 
technolo gical risks and institutional risks. Farmers use crop insurance as an input in 
agriculture sectors for risk management purposes. Therefore, Insurance subsidy is an 
input subsidy for agriculture sector and it qualifies to be categorised under Article  6.2 
and as well as Non -Product specific support.   
AG-IMS ID 87029: Question by United States of America - Classification of measures  
The footnote for this table in reference to non -product -specific AMS states "Insurance 
Premium Subsidy. It is an input subsidy an d also qualifies under Article 6.2 of the AoA."  
 
Please explain the reason for the footnote qualifying crop insurance premium subsidies 
as exempt under Article 6.2 support when they ar e being notified as 
non-product -specific AMS in ST/DS:9.  G/AG/W/181  
 
- 69 - 
 
   
Answer by India 
 
The agricultural sector is exposed to a variety of risks including climate and weather risks, natural 
catastrophes, pest and diseases, which cause highly variable production outcomes. Production 
risks are exacerbated by price risks, credit risks, te chnological risks and institutional risks. Farmers 
use crop insurance as an input in agriculture sectors for risk management purposes. Therefore, 
Insurance subsidy is an input subsidy  for agriculture sector and it qualifies to be categorised under 
Article 6.2 as well a s non -Product specific support.  
 
2.3.7   Lao People's Democratic Republic (G/AG/N/LAO/2)  
AG-IMS ID 87032: Question by United States of America - Market price support: Eligible 
production  
The United States would like to thank Laos for its first domest ic support notification to 
the CoA: Laos' notification for FY2016. The United States looks forward to future 
notifications to learn more about Laos' domestic support measures.  
 
In Supporting Table DS:5, the eligible production quantity notified for rice i s 
36,157  tonnes; however, Laos' AGST tables (WT/ACC/SPEC/LAO/1/Rev.1) report an 
eligible production for rice of just under 1.5 MMT between 2001 -2003.  
 
a. Please explain how Laos determined the notified quantity of eligible production 
in its first domestic su pport notification. b. Does this notified value differ in 
terms of definition from the values reported for 2001 -2003? If so, please 
explain what changes have been implemented with regards to Laos' market 
price support for rice that permit for such a change . 
b. Please provide any additional information regarding any limitations placed on 
the quantity of production that is eligible to receive the applied administered 
price.  
Answer by Lao People's Democratic Republic  
 
a. In supporting Table DS: 5, Lao PDR determined  the notified quantity of  eligible 
production of 36,157 t onnes based on the actual subsidized amount of the rice 
production instead of the total amount of rice production to be eligible .  
This notified value differs in terms of definition from the values r eported for 2001 -2003 
because the amount 1.5 million t onnes mentioned in Laos ' AGST tables 
(WT/ACC/SPEC/LAO/1/Rev.1) was the total amount of rice production to be eligible, 
which was different from the amount to be subsidized. Nevertheless, the applied 
administered price was lower than the external reference price; as a result, the total 
market price support was "NIL".  
b. The quantity of production that is eligible to receive the applied administered price is 
varied from provinces to provinces as necessary. For example, some provinces have 
capacity to produce would be eligible to get s ome subsidized amounts. The objective of 
the measure was to have stockpiling for food security purpose given the fact that this is 
very small amount (36,157 tonnes) compared to the total amount of  rice production 
(4.14 million t onnes) in 2016. Lao PDR  believes that this would not distort the market 
price. Lao PDR respects the obligation on the Agreement on Agriculture of WTO and 
strictly follows the "de minimis " level of  support allowed.  
2.3.8   Mexico (G/AG/N/MEX/36)  
AG-IMS ID 87154: Question by Canada - Transpare ncy issues (including Table DS:2)  
a. Canada notes that Mexico's Current Total AMS for 2016 has decreased 
significantly, falling from 1.8 billion pesos in 2015 to 174.5 million pesos G/AG/W/181  
 
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  in 2016. Notably, Canada notes that in Supporting Table DS:4, the product -
specific support for maize has decreased from 1,023.16 million pesos in 2015 to 
462.19 million pesos in 2016, mainly because of a decrease under other 
product -specific budgetary outlays.  
i. Could Mexico please provide more details on the conditions that led to this 
significant decrease of the total AMS?  
ii. Could Mexico please indicate which program me(s) has been impacted by this 
significant decrease of the total AMS? Are there programmes that have been 
removed or that are now included in other budgetary outlays?  
b. In Supporting Table DS:9, Canada notes that Mexico does not report any 
support for Production Restructuring Programme for 2016 and the support for 
this programme was at 228.8 million pesos in 2015, 319.1 million pesos 
in 2014, and 391.2 million pesos in 2013.  
i. Could Mexico please provide more details on the conditions that led to this 
removal?  
ii. Could Mexico confirm whether these expenditures have been moved to 
another programme? If so, could Mexico indicate which one(s)?  
Answer by Mexico  
 
a.  
i. Within th e general trend observed from 2006 to 2016, the year 2015 represented an 
exception in terms of the amount of support provided to maize production. This is 
because, in that year extra resources were granted for the payment of debts from 
previous fiscal year s under support schemes for maize based on the concepts of 
target income, contract farming and price coverage. The extra resources made it 
possible to cover delays stretching back to 2013 in the payment of support to 
producers. Consequently, in 2015, the a mount of support provided for maize 
exceeded 10% of the production value, thereby exceeding the de minimis  amount 
which, pursuant to Article 6.4(b) of the Agreement on Agriculture, Mexico is not 
required to include in the calculation of its current total A MS. Between 2006 and 
2016, 2015 was the only occasion on which support to Mexican maize exceeded the 
de minimis  level. In that year, maize represented 57% of the total AMS notified by 
Mexico. Had the delayed payments not been covered, it is unlikely that t he support 
for maize would have exceeded the de minimis  level, whereupon the total AMS would 
have amounted to only 787.1 million 1991 pesos. The same reasoning applies to 
support for wheat, sorghum and soya. As in the case of maize, in 2015 extra 
resources  were assigned to cover debts relating to those products, which led to the 
de minimis  level being exceeded. In short, the 2016 decrease is rather a 
consequence of the levels of support achieved in 2015 involving the payment of 
debts from previous years. In  any event, no changes were made either to the 
support schemes or to the coverage of the target population.   
ii. In 2016, as mentioned in the previous paragraph, the contract farming, target 
income and price coverage schemes reverted to their long -term lev els as the result, 
not of a budgetary reduction, but of extra resources no longer being channelled into 
the payment of debts. Within the Programme of Marketing Support (target income, 
price coverage and contract farming), which encompasses practically all of the amber 
box support measures that Mexico notifies to the WTO, until 2016 none of its 
components had been eliminated and no movements had taken place within the 
programme structure. In the case of other support components, the main change in 
2016 was t he elimination of the Production Restructuring scheme (see question b)).  G/AG/W/181  
 
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  b.  
i. This component disappeared as a result of the programme and budgetary 
reorganization process implemented by SAGARPA in 2016, the basic aim of which 
was to eliminate duplication an d facilitate operational coordination between the 
different types of support the Ministry provides to agricultural producers. In the case 
of support measures for the reconversion component, in 2016 they were reassigned 
to the agricultural production compon ent of the Agriculture Promotion Programme, in 
the interests of generating synergies with the granting of support for soil reclamation 
through the use of organic fertilizers and for productivity enhancement through the 
acquisition of different technologica l packages for maize, beans and coffee.  
ii. The reconversion component has been relocated within the agricultural production 
component of the Agriculture Promotion Programme. At this point in time, Mexico 
does not have the disaggregated information require d to determine which proportion 
of the budget intended for the agricultural production component corresponds to the 
reconversion measures.  
AG-IMS ID 87153: Question by Thailand - Investment subsidies generally available to 
agriculture  
Could Mexico please provide details regarding the implementation of Agriculture 
Insurance Programme in Supporting Table DS:2 under heading "Investment Subsidies"?  
 
Answer by Mexico  
 
The Agricultural Insurance Programme is handled by AGROASEMEX, S.A., a domestic insurance 
institution  with legal status and its own capital, which, in line with its social objective, develops 
and operates tools for the management of agricultural risk, as well as associated promotion 
services, technical advice and training. The purpose of the progra mme is to contribute to the 
development of insurance and comprehensive risk management in the agricultural sector by 
reducing the cost of the premiums or fees that are paid by agricultural producers and State 
governments to the insurance company, and also to support the operational and administrative 
capacity of private insurance funds and social organizations. The target population for the case of 
agricultural insurance comprises agricultural crop producers who sign up and pay the premiums or 
fees for one or more of the following types of risk coverage:  
a. Climatic: drought, excess moisture, frost, low temperatures, flooding, hail, fire, hurricane, 
cyclone, tornado, waterspout, strong wind, heatwave, ground unfit for harvesting, snow.  
b. Germination -related: impossible to plant, non -germination, blockage.  
c. Biological: pests and predators, diseases.  
d. Risks associated with fluctuations in market prices for produce.  
 
The following types of insurance are eligible for the subsidy:  
1) Agricultural insurance – expected ha rvest: provides 100% protection for the yield at the 
agreed selling price stipulated in the insurance policy or certificate.  
2) Agricultural insurance – investment: protects investments actually made in respect of the 
crop, from ground preparation through to harvesting.  
3) Agricultural insurance – guaranteed production: covers the planned yield and, in the 
event of the materialization of a covered risk, indemnifies the failed yield at production 
cost or at the agreed selling price stipulated in the insurance poli cy or certificate.  
4) Agricultural insurance – plant: protects the value of the plant against any damage it may 
suffer as a result of the materialization of one or more of the risks specified on the title 
page of the insurance policy or certificate.  
5) Assured p roduction insurance: protects the production or the potential production value of 
a crop.  
6) Investment insurance with adjustment to yield: protects the value of the direct 
investments that are needed in order to introduce and produce a crop.  G/AG/W/181  
 
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  7) Investment insur ance with adjustment for direct damage: protects the value of direct 
investments associated with the crop without including those associated with harvesting 
work; it operates on the basis of direct, physical and obvious damage which affects the 
capacity to  produce the crop.  
8) Income insurance: protects the producer's target income in the event that the observed 
income is lower owing to the materialization of climatic, biological or price -fluctuation 
risks.  
 
The amount of the subsidy granted is shown in the fo llowing table:  
 
Region of 
the 
country  Municipalities located in the states of  Percentage 
subsidy 
applicable to 
basic crops  Maximum 
level of 
subsidy per 
hectare 
(pesos)  
1 CAMPECHE,  CHIAPAS,  GUERRERO,OAXACA,  QUIN
TANA  ROO, TABASCO,VERACRUZ  Y YUCATÁN  60% 1,275.00  
2 AGUASCALIENTES,  CIUDAD  DE MÉXICO,GUANAJU
ATO, HIDALGO,  MÉXICO,MICHOACÁN,  MORELOS,  
PUEBLA,QUERÉTARO,  SAN LUIS POTOSÍ,TLAXCAL
A Y ZACATECAS  45% 750.00  
3 CHIHUAHUA,  COAHUILA,  COLIMA,DURANGO,  JALI
SCO, NAYARIT,  NUEVOLEÓN  Y TAMAULIPAS  40% 650.00  
4 BAJA CALIFORNIA,  BAJA CALIFORNIA  SURSINALO
A Y SONORA  35% 850.00  
 
For the purposes of these rules, basic crops are considered to be the following: cotton, rice, 
safflower, barley, beans, chickpeas, maize, sorghum, soya and wheat.  
 
In the case of insurance  for livestock activities, the types available and maximum subsidy amounts 
are as follows: insurances with 45% subsidy of the cost of the premium or fee.  
 
1) Insurance against high mortality rates or insurance against high mortality rates with 
limited coverag e: protects against the risk of animals dying from disease or accidentally, 
or as a result of compulsory slaughter necessitated by a sudden and unforeseeable event 
which abruptly causes the production unit to experience higher than normal mortality 
rates o ver a maximum period of 30  calendar days, as agreed upon in the insurance 
conditions, where the event in question has a single cause. With this type of insurance, 
the subsidy shall apply, in the case of bovine animals, to the functions of milking, 
fattenin g, reproduction, dual purpose and labour; in the case of goats, to the functions of 
milking, fattening and reproduction; and in the case of pigs and sheep, to the functions 
of fattening and reproduction.  
 
2) Insurance for death caused by exotic diseases, with  limited coverage: covers the basic 
risk of animal death due to disease, in the case of diseases not native to the country and 
which, upon their outbreak, are declared exotic by the competent federal animal health 
authority. This scheme does not include th e depopulation of sick or healthy animals 
exposed to the outbreak.  
 
3) Insurance for death due to preventive slaughter to guard against exotic diseases, with 
limited coverage: covers the basic risk of death due to the preventive slaughter of 
animals in respon se to diseases that are not native to the country and which, upon their 
outbreak, are declared exotic by the competent federal animal health authority.  
 
Insurances with a subsidy of up to 30% of the cost of the premium or fee:  
 
1) Insurance provided under promotion programmes: provides combined protection against 
the basic risks of death due to disease, accidental death and death due to compulsory 
slaughter. For the subsidy to apply, any such insurance must have a period of validity of 
one year and payment of the premium or fee must be effected within the context of an 
exhibition.  G/AG/W/181  
 
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  2) Avian influenza insurance, with limited coverage: provides combined protection against 
the basic risks of death due to the disease and to the preventive slaughter measures 
ordered by the competent animal health authority in respect of the animals covered by 
this insurance.  
3) Insurance against Newcastle disease, with limited coverage: provides combined 
protection against the basic risks of death due to the disease and to the preventive  
slaughter measures ordered by the competent animal health authority in respect of the 
animals covered by this insurance.  
4) Insurance against avian salmonellosis, with limited coverage: provides combined 
protection against the basic risks of death due to the  disease and to the preventive 
slaughter measures ordered by the competent animal health authority in respect of the 
animals covered by this insurance.  
5) Insurance against Aujeszky's disease, with limited coverage: provides combined 
protection against the ba sic risks of death due to the disease and to the preventive 
slaughter measures ordered by the competent animal health authority in respect of the 
animals covered by this insurance.  
6) Insurance against Classical Swine Fever, with limited coverage: provides co mbined 
protection against the basic risks of death due to the disease and to the preventive 
slaughter measures ordered by the competent animal health authority in respect of the 
animals covered by this insurance.  
7) Insurance against Bovine Tuberculosis, with  limited coverage: provides combined 
protection against the basic risks of death due to the disease and to the preventive 
slaughter measures ordered by the competent animal health authority in respect of the 
animals covered by this insurance.  
8) Adjustment in surance provided under promotion programmes: provides combined 
protection against the basic risks of death due to disease, accidental death and death 
due to the compulsory slaughter of animals in a new location in which they are due to 
perform their zootec hnical function.  
9) Transportation insurance: provides combined protection against the basic risks of death 
due to disease, accidental death and death due to compulsory slaughter during the 
transportation of animals from their place of origin to their final d estination, including 
embarkation and disembarkation operations. Additionally, coverage may be obtained 
against the risk of total robbery with violence and/or loss or robbery following a 
transportation accident.  
10) Insurance against basic transportation risks : protects solely against the basic risk of 
accidental death as the direct result of a transportation accident. Additionally, coverage 
may be obtained against the risk of total robbery with violence and/or loss or robbery 
following a transportation acciden t. 
11) Insurance for shows and exhibitions: provides combined protection against the basic 
risks of death due to disease, accidental death and death due to the compulsory 
slaughter of animals while they are being kept at exhibitions, auctions, fairs and 
compet itions.  
12) Insurance for quarantine stations: provides combined protection against the basic risks 
of death due to disease, accidental death and death due to the compulsory slaughter of 
animals while they are being kept at quarantine stations.  
13) On-site insuran ce: provides combined protection against the basic risks of death due to 
disease, accidental death and death due to the compulsory slaughter of animals at the 
place in which they are performing their zootechnical function.  
14) (14) Genetic improvement insuranc e package: insurances that include the protection 
afforded by transportation, adjustment and on -site insurances and provide combined 
protection against the basic risks of death due to disease, accidental death and death 
due to compulsory slaughter.  
15) Adjustm ent insurance: provides combined protection against the basic risks of death due 
to disease, accidental death and death due to the compulsory slaughter of animals in a 
new location in which they are due to perform their zootechnical function.  G/AG/W/181  
 
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  16) Aquaculture i nsurance: provides protection against the basic risk of weather events 
resulting in the death or escape of crustaceans or fish being kept in a production unit for 
commercial purposes.  
17) Apiculture insurance: protects against the basic risks of the death of b ees or their 
abandonment of the hive as the result of accidents or weather events. In order for the 
subsidy to apply, any such insurance must have an annual validity and payment of the 
premium or fee must be effected within the context of an exhibition.  
 
Insurances with a subsidy of up to 20% of the cost of the premium or fee:  
 
1) Insurance against accidents involving poultry, with limited coverage: provides protection 
against the basic risk of accidental death of commercial poultry. In order for the subsidy 
to apply, any such insurance must have an annual validity and payment of the premium 
or fee must be effected within the context of an exhibition. With this type of insurance, 
the subsidy will apply for poultry in the zootechnical functions of fattening, par enting, 
breeding and laying.  
2) Insurance against accident involving pigs, with limited coverage: provides protection 
against the basic risk of accidental death of pigs. In order for the subsidy to apply, any 
such insurance must have an annual validity and payment of the premium or fee must be 
effected within the context of an exhibition. With this type of insurance, the subsidy will 
apply for pigs being used for fattening and breeding.  
 
2.3.9   Norway (G/AG/N/NOR/94)  
AG-IMS ID 87152: Question by European Union - Market price support: Eligible 
production  
In light of the question asked by Canada during the 86th meeting of the Committee on 
Agriculture (AG -IMS ID 86098), has Norway considered to include also wheat not 
fulfilling the criteria for human consumption in it s eligible production when calculating 
market price support for wheat?  
 
Answer by Norway  
 
At the CoA meeting in February 2018 Norway answered a question from Canada related to market 
price support for wheat. Taking into account this answer, Norway would l ike to underline that 
wheat not fulfilling the criteria for human consumption is indeed included in the calculation of 
market price support for wheat, but is subject to a lower price than wheat for human consumption. 
The variation in market price support f or wheat from one year to the next is thus a result of 
variations in both the total amount of eligible production and the applied administrative price, 
based on the portion of wheat for human consumption and animal feed respectively.  
 
2.3.10   Philippines (G/AG/N/ PHL/48, G/AG/N/PHL/49, G/AG/N/PHL/50, 
G/AG/N/PHL/51, G/AG/N/PHL/52)  
AG-IMS ID 87033: Question by United States of America - Transparency issues 
(including Table DS:2)  
a. The United States would like to thank the Philippines for the level of detail 
provided regarding the large number of measures notified.  It appears from the 
"supporting table to Supporting Table DS:1" that there are a number of 
research measures and extension and advisory service measures that are 
newly notified by the Philippines for 2011.  Additionally, a number of other 
measures are no longer notified.  Further, substantial changes in outlays have 
occurred – for example, outlays for extension and advisory service measures 
nearly doubled from 2010 levels.  
Noting the large number of changes wit h regards to measures exempt from 
reduction commitments, please indicate if there was a major change in policy 
between 2010 and  2011 regarding these types of measures.  If so, please 
describe and indicate whether the Philippines will be providing a DS:2 
notification.  If not, please explain.  G/AG/W/181  
 
- 75 - 
 
  b. The United States notes what appears to be a number of measures with the 
same name in "supporting table to Supporting Table DS:1": for example, 
"Coordination of agricultural research" and "development of fisheries and 
aquatic resources".  
Please explain why there are multiple measures with the same name.  
c. The United States notes there are several measures listed in "supporting table 
to Supporting Table DS:1" that possibly indicate funding is provided by a 
foreign or private entity rather than the Philippine national or sub -national 
government.  For example, the "Japan Increased Food Production Program."  
Please confirm no support notified is provided via funding from a foreign or 
private entity.  
d. With regard to "Japan Increased Food Production Program" , please provide 
additional details with regard to how this measure is implemented and confirm 
whether assistance is provided in the form of farm inputs such as fertilizers.  
Answer by Philippines  
 
a. While there appears to be large num ber of changes on the measures exempt from 
reduction commitments between the notification per iods 2006 -2010 and 2011 -2015 ( the 
latter period being the subject of today 's review)  these changes are mainly attributable 
to the different levels of detail of the  reporting of Supporting Table (ST) DS:1. Hence, 
there were no significant changes to report on under the format DS:2 notification.  
b. On the question on why there are multiple measures wi th the same name in the 
Philippine 's ST DS:1 notification for 2011 -2015, the Philippine Department of Agriculture 
had several attached bureaus and agencies that conducted research activities.  
c. and d . The U .S. questions under items  (c) and (d) pertain to domestic support 
expenditures involving official development assistance (ODA) for enhancing food 
production and agricultural development especially for disadvantaged rural communities 
and disaster -prone areas.  
It should also be n oted that an expenditure item ( whether from ODA or private source ) 
would have to be notified to WTO as long as it is included in the annual budget of the 
government.  
Given that the programme involves another WTO country Member, the Philippines would 
be happy to elaborate its reply at the bilatera l level.  
AG-IMS ID 87034: Question by United States of America - Input subsidies available to 
low-income or resource -poor producers  
Regarding AG -IMS ID 70047, the United States understands the Philippines response to 
indicate that the provision of input subsidies for seeds a nd fertilizers, as notified 
for 2010, was terminated except for the purposes of assisting farmers in times of 
natural disasters, and limited circumstances.  However, the United States notes that 
outlays under  "input subsidies generally available to low -income resource -poor 
producers" is nearly five times larger in 2015 than in  2010.  Further the description of 
the measure appears to be unchanged as well.   
 
a. Please explain the reason for the large in crease in outlays for these input 
subsidies.  
b. Please provide an update on how these measures are implanted, taking note of 
the Philippines response to AG -IMS ID 70047.  G/AG/W/181  
 
- 76 - 
 
  c. Please provide a breakdown of expenditures for each year (2011 -15) for each 
type of input  subsidy (e.g., fertilizer, planting materials, seed, and animal 
stocks.  
Answer by Philippines  
 
The sharp increase in input subsidies from P3.2 billion in 2010 to P5.5 billion in 2015 was mainly 
attributable to the continued assistance to areas which were heavily devastated by the 
super -typhoons Yolanda, Glenda, and Ruby in 2013 -2014. The support program mes were geared 
towards the upliftment of the well -being of small farmers and fishers especially those who were 
victims of those natural calamities.  
AG-IMS ID 87035: Question by United States of America - Market price support  
 
a. The Philippines guarantees farmers a sale price of "Palay" (paddy) rice. 
However, the Philippines notes in a footnote that for its table it has converted 
paddy rice into milled rice ter ms. The Agreement on Agriculture, Annex 3 
paragraph 7 states "The AMS shall be calculated as close as practicable to the 
point of first sale of the basic agricultural product concerned" . What is the 
basis for reporting support on a milled rice basis rather  than paddy 
rice (palay)?  
b. Are there any limitations either in quantity or budgetary outlays that limit the 
quantity of the covered commodities that may be procured at the applied 
administered price in any given year?  
Answer by Philippines  
 
a. On the calculat ion based on the point of first sale of basic agricultural product, the 
Philippines ' calculated market price support (MPS) for rice in 2011 -2015 used the fixed 
external reference price (FERP) of rice that is inscribed in the country 's supporting table 
to the domestic support commitments in the Uruguay Round (G/AG/AGST/PHL). It was 
therefore logical and necessary for the applied administered price (AAP) of paddy to be 
converted into its equivalent price in rice to ensure equivalent stage of processing was 
used for comparing the FERP and AAP for accurately determining their price 
difference/gap.  
While the Philippines may consider calculating its MPS in paddy form, the Philippines  
does not see additional value in d oing so as this would result in same calculation 
outcome from the one that is based on rice form since the FERP would just then be 
adjusted and reduced to 0.6 5% of its value to ensure equivalent stage of processing of 
the AAP, which was in paddy form.  
b. On the quantity or budgetary limitation o f government procurements of rice/paddy: 
There is indeed predetermined annual limitation through the annual legislation of the 
budget for the rice/paddy buffer stocking of the National Food Authority (NFA).  
The NFA buffer stocking involves purchases of rice/paddy from both the international 
and domestic markets to ensure adequate supply of rice for the food security of the poor 
in rural and urban areas and those under food emergencies. This programme seeks to  
ensure that NFA has, in its stock inventory, at least 15 days of the national consumption 
in any given day, except in the lean season (Jul to Sep) where the inventory should be 
sufficient for 30 days.  
In the Philippines'  ST/DS:5 notifications  for 2011 -2014 (G/AG/N/PHL/48 -51), the 
NFA average annual domestic procurement of rice was measly 1.2% of the annual total 
production of rice.   G/AG/W/181  
 
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  AG-IMS ID 87151: Question by European Union - Market price support: Eligible 
production  
Concerning G/AG/N/PHL/48,  
 
a. Could th e Philippines kindly explain more in detail the eligibility criteria for the 
buying -in for both rice and maize?  
b. Could the Philippines kindly explain more in details why it has not used total 
production of rice and maize in Supporting Table DS:5 – following  the 
judgement in the Korea beef case?  
Answer by Philippines  
 
a. On the 'eligibility criteria ' for procurements of rice and maize by NFA, the Philippines is 
not aware of the relevance of this question, nor if this pertains to any particular 
requirement under the AMS calculations under the Agreement on Agriculture.  
b. Response to Australia, EU and US ' questions 'Eligible production ': The Philippines did not 
assess the suggested 'total production ' quantities in calculating its market price support 
(MPS) programmes  in rice and maize because the jurisprudence arising from the 'Korea 
Beef Case ' (WT/DS161/12 WT/DS169/12) strongly suggests that 'eligible production ' can 
also be interpreted or qualified in a variety of ways defending on the design and 
implementation of a  MPS programme.  
Because the jurisprudence is less straightforward, it should not come as a surprise that 
Members calculate the ir MPS programmes differently,  most developing countries account 
only 'procured ' or 'purchased ' quantity as their eligible produc tion while others assess 
'total production '. Another case is the practice of a big developed country of accounting 
only the remaining total marketable production in milk after deducting its farmers ' own 
consumption of the product for their own dairy processing i.e. cheese. Moreover, another 
Member calculates  its MPS based on Annex 4 of the AOA, instead of Annex 3 of that 
Agreement.  
The jurisprudence is not only less straightforward, it is also not encompassing to cover 
all kin ds/designs of MPS programmes, for instance, the MPS -related public stockholding 
programmes for food security purposes of developing country Members under footnotes 
5-6 of para graph  3 of Annex 2 of the Agreement of Agriculture.  
In view of the foregoing, PHL believes that it would be more prudent for Members  to wait 
for rulings on the ongoing Panel proceedings on the dispute case involving 
MPS programmes of a developing country Member (DS511) as this can provide 
additional clarity  on the jurisprudence about calculations of all kinds of MPS programmes 
including the appropriate interpretations of 'eligible production ' in certain situations.  
AG-IMS ID 87118: Question by Australia - Market price support: Eligible production  
Australia  thanks the Philippines for its Domestic Support notifications from calendar 
years 2011 -15 (G/AG/N/PHL/48 - 52). Australia notes that the Philippines has only 
included stock procured in its calculation for Market Price Support in Supporting Table 
DS:5 of i ts notification.  
 
a. Could the Philippines please explain why it has not calculated market price 
support based on the requirements under Paragraph 8, Annex 3 of the AoA, so 
as to calculate market price support on the entire quantity of production 
eligible to  receive the administered price?  
b. Does the Philippines set quantitative limits on the amount of stock that it 
procures at the administered price?  
c. Are any such quantitative limits published and notified to producers prior to the 
planting season?  G/AG/W/181  
 
- 78 - 
 
  Answer by  Philippines  
 
a. Response to Australia, EU and US ' questions 'Eligible production ': The Philippines did not 
assess the suggested 'total production ' quantities in calculating its market price 
support  (MPS) programmes in rice and maize because the jurisprudence  arising from the 
'Korea Beef Case ' (WT/DS161/12 WT/DS169/12) strongly suggests that 'eligible 
production ' can also be interpreted or qualified in a variety of ways defending on the 
design and implementation of a MPS programme.  
Because the jurisprudence i s less straightforward, it should not come as a surprise that 
Members calculate their MPS progr ammes differently, most developing countries account 
only 'procured ' or 'purchased ' quantity as their eligible production while others assess 
'total production '. Another case is the practice of a big developed country of accounting 
only the remaining total marketable production in milk after deducting its farmers ' own 
consumption of the product for their own dairy processing i.e. cheese. Moreover, another 
Member c alculate s its MPS based on Annex 4 of the AOA, instead of Annex 3 of that 
Agreement.  
The jurisprudence is not only less straightforward, it is not also encompassing to cover 
all kinds/designs of MPS programmes , for instance, the MPS -related public stockho lding 
programmes for food security purposes of developing country Members under footnotes 
5-6 of para 3 of Annex 2 of the Agreement of Agriculture.  
In view of the foregoing, PHL believes that it would be more prudent for Members to  wait 
for rulings on the  ongoing Panel proceedings on the dispute case involving MPS 
programmes of a developing country Member (DS511) as this can provide additional 
clarity on the jurisprudence about calculations of all kinds of MPS programmes including 
the appropriate interpret ations of 'eligible production ' in certain situations.  
b. and c . See the response to the  similar question from  the US in item 'e' of AG -IMS 
ID 87035.  
Follow -up: Australia was encouraged to hear in the Philippine's  response that there was a  
legislation  limiting the amount  of production  that had been purchased  and sought the reference to 
that legislation. The United States noted its readiness to meet bilaterally with the Philippines  if 
needed.  
2.3.11   Switzerland (G/AG/N/CHE/84)  
AG-IMS ID 87038: Question by United Sta tes of America - Direct payments: decoupled 
income support  
Switzerland provided 307 million CHF in decoupled income support including under the 
category "supplement to market earning."   
 
a. Please explain the requirements for a producer to receive a supplement to 
market earning.   
b. Is this supplement based on the price received for a particular commodity?  
Answer by Switzerland  
 
a. The payments notified under decoupled income support contain transitional payments 
and general direct payments. The latter are payments only applied in Liechtenstein. They 
are paid to farmers of recognized agricultural farms if they have an appropriate pension 
scheme and a risk provisioning (Agricultural Law of Liechtenstein, article 6 and 36 (only 
in German): https://www.gesetze.li/konso/2009042000 ). The transitional payment was 
introduced in 2014 to help farmers adapt to the new agricultural policy by compensating 
partially the farms that saw their payments decrease due to t he change in politics. The 
transitional payment constitutes a temporary help to these farmers and decreases with 
every year.  G/AG/W/181  
 
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  b. No. 
AG-IMS ID 87036: Question by United States of America - Direct payments: structural 
adjustment assistance provided through investment aids  
In Switzerland's notification under the category "structural adjustment assistance 
provided through investment aids," 34 million CHF is provided as assistance to improve 
livestock breeding.  Swiss breed associations discriminate against non -Swiss genetics by 
charging much higher fees for registering foreign bulls than for registering Swiss bulls.   
 
a. Please explain precisely what these funds are used for and if funds are 
provided to the SwissGenetics organization and to Swiss breed associations ?  
b. Please explain the support given by the Swiss government to these Swiss breed 
associations.  
Answer by Switzerland  
 
a. Federal funding is aimed at improving basic conditions in relation to animal breeding 
with relevant stud books for pure breeds. Federal promotion of breeding programmes 
should ensure independent animal breeding on farms with the aim of meeting the 
specific  demand among consumers within Switzerland. Funding is made available only to 
recognised breeding associations. Swiss genetics  is not a recognised breeding association 
and receives no federal funding.  
b.  
- Funding for classical breeding activities :  
Funding for classical breeding activities (keeping a stud book and performance testing) is 
available in equal measure for all breeds of animals, i.e. regardless of any degree of 
endangerment of the breed or the independence of the breeding programme. The aim of 
federal funding for breeding programmes involving purebred farm animals is to enable 
the associations that have official recognition to offer their services to breeders of farm 
animals at the most attractive rates possible. Funding is also made available for  classical 
breeding activities involving Swiss breeds that are endangered. This ensures that 
suitable animals are produced, a stud book is kept and performance tests are held for 
endangered Swiss breeds.  
- Funding for valuable genetic material from Swiss -bred examples of Swiss breeds :  
Conservation measures complement classical animal breeding activities. By ratifying the 
Convention on Biodiversity, Switzerland has undertaken to protect existing biodiversity 
and consequently to protect Swiss breeds. Apart from the standard funding for animal 
breeding activities that is available to all recognised breeding associations in 
Switzerland, recognised organisations also have the possibility of applying for financial 
support for the conservation of Swiss breeds, un der the terms of the Ordinance on 
animal breeding. On the basis of this Ordinance, funding may be provided, on 
application, to recognised breeding organisations and other recognised organisations for 
fixed-term projects aimed at conserving Swiss breeds or reintroducing breeds that have 
died out.  
AG-IMS ID 87037: Question by United States of America - Direct payments: payments 
under regional assistance programmes  
Under "regional assistance program mes," 107 million CHF was provided for farming on 
sloping lan d, 140 million for maintaining open spaces, 101 million for mountain 
pasturing, and 160 million for farming in difficult conditions.  Please explain what 
constitutes "difficult conditions" and if Switzerland plans to help farms move away from 
producing unde r difficult conditions.  
 G/AG/W/181  
 
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  Answer by Switzerland  
 
Farming in difficult conditions means farming in mountainous and marginal areas. These areas 
have climatic and geographical disadvantages compared with favourable  regions in the plain area, 
including high alt itude levels and high levels of slope. It 's part of Switzerland 's agricultural and 
rural development policy to maintain farming in such areas.  
 
AG-IMS ID 87039: Question by United States of A merica - Other product -
specific  AMS/EMS  
a. Supporting table DS:4 indicates that Switzerland provides product -specific 
support for milk and milk products equal to 26% of the value of 
production.  What steps is Switzerland taking to reduce the dependence of milk 
producers on government support?  
b. In Switzerland's 2013 DS:1 notification, support to pork producers equated to 
56% of the value of production.  Support for bovine meat was 66% of the value 
of production.  For the 2014 notification, pork and beef are listed under the 
de minimis . Please confi rm that support to pork and beef producers dropped 
from above 50% to below 5% of the VOP and explain what factors let to this 
decrease.  
c. In G/AG/N/CHE/72 for 2013, Switzerland notified market price supports for 13 
product categories in Supporting Table DS:5 . However, in G/AG/N/CHE/84 for 
2014, Switzerland notified only one market price support (for tobacco) under 
Supporting Table DS:5; while four other products have budgetary outlays 
notified under the measure market price support in Supporting Table DS:7.  
i. Please explain the reason for this change between notifications.  
ii. Please explain why the market price supports for milk and milk products, 
bovine meat, eggs, and wool are notified as budgetary outlays . 
Answer by Switzerland  
 
a. Milk is an important product for Swiss agriculture. The government support in place is 
important to compensate partially the high production costs for milk producers linked to 
the particular geographic climatic and structural conditions of dairy farming in 
Switzerland. For the near future , there are no changes planned to these payment 
schemes.  
b. and c. T he DS:1 notification for the year 2014 represents the payments under the 
current agricultural policy in force since 2014. The notified amounts are the budgetary 
outlays for the different pro ducts granted under this agricultural policy.  
Switzerland 's AMS calculation is carried out in compliance with Annex 3 of the 
Agreement on Agriculture. The market price support and budgetary outlays notified by 
Switzerland represent the new payment structu re impleme nted by the Agricultural 
Policy  2014-2017. In particular, the market price support under Supporting Table DS:5 
for the year 2014 has been calculated based on paragraph 8 of Annex 3 of the 
Agreement on Agriculture.  
In accordance with paragraph 13  of Annex 3 to the Agreement on Agriculture, the value 
of these payments is measured using government budgetary outlays provided for in the 
new A gricultural Policy since 2014.  G/AG/W/181  
 
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  2.3.12   Tunisia (G/AG/N/TUN/52)  
AG-IMS ID 87041: Question by United States of America - Market price support: Eligible 
production  
It is the United States understanding that Tunisia produced 840,000 MT of durum, 
150,000 MT of common wheat, 390,000 MT of barley and over 900,000 MT of milk in 
2016.  
 
a. Please explain the reasons for using eligib le production of 5,300 MT for durum, 
500 MT for common wheat, 1,100 MT of barley and 865,000 MT of milk in 2016.  
b. Please provide any regulations, laws, or other implementing legislation that 
shows that a limit is placed on the quantity of production of each  of these 
commodities that can receive the announced applied administered price.  
Answer by Tunisia  
 
Tunisia undertook to provide a response at a later stage.  
 
AG-IMS ID 87040: Question by United States of America - Excessive rates of inflation  
For the reporting period of 2016, Tunisia has adjusted the fixed external reference 
prices for durum wheat, common wheat, barley and milk to take account of inflation and 
exchange rate movements. The same was done for products notified for 2014 in 
G/AG/N/T UN/47, at which time, in response to AG -IMS ID 62036, Tunisia stated that it 
considered the rate of inflation between 1998 -2014 to be excessive, which justifies an 
adjustment of the FERP. In the U.S. view, as stated previously, a Member cannot 
unilaterally  determine that it has excessive rates of inflation and then make adjustments 
as reflected in their notifications.  
 
a. Please provide additional information, including data that substantiates 
Tunisia's claims that its rates of inflation are "excessive," noti ng that Tunisia's 
inflation rates are well within the range of most other Members' rates.  
b. To help Members take into consideration Tunisia's claims regarding inflation, 
please provide information and data that shows all calculations regarding 
inflation in T unisia's most recent notification  (G/AG/N/TUN/52).  
c. Will Tunisia consider submitting a revised notification and for future 
notifications that show unadjusted information as well, so that Members have a 
transparent understanding of Tunisia's domestic policie s, as well as their 
notification methodology.  
Answer by Tunisia  
 
Tunisia undertook to provide a response at a later stage.  
 
2.3.13   United States of America (G/AG/N/USA/121)  
AG-IMS ID 87148: Question by Canada - Transparency issues (including Table DS:2)  
a. In Suppor ting Table DS:1, (a) General services, Canada notes that state 
governments provided $2.7 billion for State programmes for agriculture for "…a 
number of generally available services." This is an 8.5% increase from 2014. 
Could the U.S. please describe how it  ensures that state governments' use of 
these funds meet the policy criteria of general services, paragraph 2, Annex 2 
of the Agreement on Agriculture?  
b. In Supporting Table DS: 4, as reported in the notification for 2014, Canada 
notes a discrepancy in the total Value of Produ ction (VoP) figures in the 
U.S. notification for  2015. The total VoP is reported as USD 372,714.642 million G/AG/W/181  
 
- 82 - 
 
  but the sum of all product -specific VoP totals USD 504,469.82 million. Could the 
US please explain this discrepancy?  
c. Canada wou ld like to reiterate question AG -IMS ID 85058 to the U.S. at the 85th 
meeting of the CoA about a discrepancy in the total Value of Production (VoP) 
figures. The total VoP is reported as USD 405,646.295 million but the sum of all 
product -specific VoP totals  USD 550,264.95 million. Could the U.S. please 
explain this discrepancy?  
d. Canada notes that county -based Agriculture Risk Coverage (ARC) and Price 
Loss Coverage (PLC) programmes are reported under Supporting Table DS:6 
and Supporting Table DS:9. Canada is of the understanding that the 2014 Farm 
Bill allowed farmers the opportunity to update their base yields and reallocate 
their base acres. Landowners had a one -time opportunity to update their 
current payment yields established under the 2008 Farm Bill to 9 0% of their 
2008 -2012 average yields. Canada is also of the understanding that the Farm 
Bill does not allow the total base acreage to be increased, however, it allows 
the landowners to re -allocate the proportion of their acreage on the basis of 
their produ cts (e.g. corn and soybeans), and maximize an anticipatory payment 
based on those specific products. Therefore, Canada is of the understanding 
that the payments under ARC and PLC programmes can be allocated on the 
basis of a re -allocation of products acrea ge, and thus, payment would be 
different depending how the products are re -allocated by the landowners.  
i. Could the US please explain why ARC and PLC program mes are reported 
under both Supporting Table DS:6 and Supporting Table DS:9?  
ii. Could the US please in dicate the proportion of landowners (producers) that 
have re -allocated their acreage following the 2014 Farm Bill?  
iii. Could the US please indicate the total value of support (payments) for the re
‑allocated acreages following the 2014 Farm Bill and provide a breakdown of 
these payments by commodity?  
Answer by United States of America  
 
a. State governments report program me expenditures through the U.S. Census of 
Governments. For purposes of notifying to the WTO, USDA has confirmed with the 
Census Bureau that all expenditures on agriculture are for development, improvement, 
promotion, and conservation of natural resources fo r agricultural purposes; and the 
regulation and inspection of agricultural products and establishments. Reported 
programme s include support and promotion of agricultural associations, fairs, livestock 
and poultry shows, and the like; agricultural boards an d advisory commissions; provision 
of agricultural extension services; agricultural experiment stations and other research 
activities; promotion of improved methods to store, pack, label, and market farm 
products; promotion of the sale or consumption of agr icultural goods; regulation of the 
quality, safety, and handling of agricultural products, such as inspection, licensing, and 
standardization; protection of crops and stocks from predatory animals and other natural 
hazards.  
b. The discrepancy between the sum  of all product -specific values of support and the total 
value of production notified in Supporting Table DS:4 is due to aggregate categories of 
notified support, such as livestock, where commodity -specific payment data is not 
available as noted in footnot e 3. As a result, there are instances where the 
product -specific value of production data is used twice - once for payments available at 
the commodity -specific level and then again where only aggregate data is available.  
c. See response to preceding question .  G/AG/W/181  
 
- 83 - 
 
  d.  
i. The bulk of ARC -CO and PLC payments are made on historical base acres with fixed 
base and yields that are determined on historical production parameters and remain 
in place for the life of the 2014 Farm Bill. Producers are not required to plant the 
historically produced commodity or any commodity to receive payments. As a result, 
those payments are reported as non -product specific on Supporting Table DS:9. 
ARC-IC payments are based on the combined revenues for covered commodities 
produced on the farm  and are also therefore reported as non -product specific on 
Supporting Table DS:9. ARC and PLC payments on generic base acres under 
provisions of the 2014 Farm Bill are made on current plantings of covered 
commodities on those acres and thus are reported a s product specific on Supporting 
Table DS:6.  
ii. Data are not available on the proportion of landowners (producers) who have 
reallocated acreage.  
iii. Data are not available on the value of support to reallocated historical base acres.  
Follow -up: Canada  sought U.S. clarification  regarding whether the data was not available because  
the United States did not collect it. The United States  confirmed Canada's assumption.  
AG-IMS ID 87124: Question by Australia - Domestic food aid  
Australia notes that in Suppor ting table DS:1 in G/AG/N/USA/121,  the United States 
has notified USD 104.7 billion in domestic food aid for marketing year 2015. Australia 
notes that the US  domestic food aid spending has steadily increased since 2008 -09 at 
the time of the Global Financia l Crisis (GFC), and has been consistently over 
USD 100 billion since 2011. Although the GFC is now over, US spending on food aid has 
not decreased. In 2000, the United States  notified that its spending on domestic food aid 
was USD 32.34 billion; in 2009, i t was USD 78.80 b illion; and in 2014, it was 
USD 102.84  billion.  
 
a. Can the United States  explain the background for the steady increase in 
domestic food aid spending that has remained above USD 100 billion in recent 
years?  
b. Has the United States  been reviewing domestic food aid programmes with a 
view to ensuring the support is still required at such high levels?  
c. Paragraph 4, Annex 2 of the AoA declares that "food purchases by the 
government shall be made at current market pr ices and the financing and 
administration of the aid shall be transparent". To that end, could the United 
States please explain:  
i. what processes are in place to ensure that food purchases are at market 
prices;  
ii. whether it procures food from international s ources, or only from domestic 
sources; and  
iii. what proportion of the food aid is in the form of direct provision of food 
versus the provision of means to buy food?  
Answer by United States of America  
 
a. U.S. domestic food aid is provided through multiple progr amme s; expenditures vary 
from year to year, depending on participation levels, food prices, and for discretionary 
programme s, appropriated spending levels.  Participation levels and overall expenditures 
have been falling across most programme s since the pea k expenditure levels of 2013 
(USD 109.591 billion).  Spending on the Child Nutrition programme s has increased G/AG/W/181  
 
- 84 - 
 
  largely as a result of steady participation levels coupled with higher food prices. 
Spending on the Supplemental Nutrition Assistance Program has f allen more slowly than 
decreasing participation levels would suggest because of rising food prices.  
b. Temporary increased eligibility and enhanced assistance levels associated with the 
economic recession beginning in 2008 expired in 2013. As noted above, participation 
rates continue to fall for most programme s as the economy recovers. Eligibility and 
assistance levels are adjusted annually based on inflation. Broader changes in domestic 
food aid programme s are considered, along with all farm bill programme s, as part of the 
regular farm bill process.  
c. The vast majority of domestic food aid is provided in the form of electronic debit cards 
for purchases at commercial retail outlets rather than the direct provision of food. 
Purchases with the electronic debit cards are limited to food items for use at home as 
well as seeds and plants to produce foods for use at home.  Participants can use the 
electronic debit cards at places such as supermarkets, grocery stores, and farmers 
markets.  Purchases may include both domestic and/or imported products.  
The majority of food products acquired by USDA support the National Sch ool Lunch 
Program.  Purchases for all programme s are determined in coordination with the Food 
and Nutrition Service and are made at current market prices though a transparent, 
competitive bid process.  All purchased food products are used in domestic nutriti on 
assistance programme s governed by clear and transparent eligibility criteria related to 
nutritional and/or financial need.   
 
Follow -up: Australia sought  details about the  proportion  of food ai d provided  in the form of direct 
provision of food versus means to buy food.   
AG-IMS ID 87147: Question by Canada - Domestic food aid  
a. In Supporting Table DS:1, Canada notes that the expenditures for the Child 
Nutrition Programs under (c) Domestic food aid increase by $1.5 billion. Could 
the U.S. please provide de tails on the conditions that led to this significant 
increase in expenditures?  
b. Canada also notes that according to the Agriculture Marketing Service (AMS) 
website, purchases for USDA Feeding Programs (Section 32) are aimed at 
supporting "American agricult ure by providing an outlet for surplus products 
and encouraging consumption of domestically -produced foods". Specific 
commodities are targeted by USDA for specific purchase initiatives. For 
examples, USDA announced, on 2 April 2015 its plan to purchase pou ltry 
products for the National School Lunch programme and other Federal food 
nutritional assistance programme s 
(https://www.ams.usda.gov/sites/default/files/media/4 -2-
15%20poultry.pdf ), and on 30  April  2015, USDA announced plans to purchase 
fresh apples an d processed apple products for surplus removal 
(https://www.ams.usda.gov/selling -food/purchase -announcements ).  
Could the US please expand on the criteria considered by USDA when specific 
products are targeted for purchase initiatives, and if so, what are the criteria 
for selecting specific sectors (products)? Are there any specific commercial 
criteria considered, if so, which one(s)?  
Answer by United States of America  
 
a. The increase in Child Nutrition Program expenditures resulted primarily from an increas e 
in the reimbursement rate for school lunches and breakfasts due to an increase in the 
Consumer Price Index for food away from home used to determine those rates.  
b. Purchases under Section 32 provide food products from approved vendors to schools, 
food ban ks, and households through USDA's food and nutrition assistance programme s. 
AMS issues solicitations and makes purchases of over 200 different foods on an ongoing G/AG/W/181  
 
- 85 - 
 
  basis, tailored to school menu plans and the needs of food banks and low -income 
households se rved by USDA nutrition programme s. The Food and Nutrition Service  (FNS) 
generates orders for food purchases from qualified recipients for various foods and 
coordinates with AMS on the purchase planning and scheduling. The products are 
purchased at market prices using a competitive bid process. AMS monitors markets to 
determine when market conditions will provide the best value for commodities purchased 
for domestic nutrition assistance programme s.  
AG-IMS ID 87121: Question by Australia - Market price support  
Australia welcomes the United States of America's Domestic Supp ort Notification for 
marketing year 2015 (G/AG/N/USA/121). Australia notes that sugar is the only product 
for which market price support is provided (as per Supporting Table DS:5), and the 
product -specific AMS for sugar is nearly 60%, which is considerably  higher than other 
agricultural products notified by the United States. This figure is notably higher than the 
approximately 51% product -specific AMS notified in marketing year 1995, meaning the 
US has actually gone backwards in terms of possible reforms t o the US sugar industry. 
The US's administered price is higher and the eligible production has increased in the 
last 20 years.  
  
Australia also notes recent media reporting that as part of the Farm Bill debate in 
Congress, North Carolina Congresswoman Vir ginia Foxx claimed she had the votes to 
pass an amendment that would eliminate production limits, repeal a sugar -to-ethanol 
programme, and give the US Administration greater flexibility to lower tariffs on 
imported sugar. The reporting also mentions a 2017  analysis by the American Enterprise 
Institute that estimates that consumers and users may spend up to USD 4 billion 
annually in extra costs due to higher commodity expenses 
(https://www.bloomberg.com/news/articles/2018 -05-15/sugar -policy -revamp -may-
be-gop-s-price -of-passing -u-s-farm -bill).  
  
Given the sustained high levels of protectionism and domestic support over the last 20  
years and the current costs on consumers and users, will the United States use the 2018 
Farm Bill process to engage in genuine reform to the US sugar sector?  
 
Answer by United States of America  
 
The legislative process to enact the next farm bill is currently ongoing, and it is not known what 
will be included in any final bill.  
AG-IMS ID 87146: Question by European Union - Other product -specific AMS/EMS  
According to the figures presented in Suppo rting Table DS:4, there has also been a sharp 
increase in product specific support for soybeans between 2014 and 2015 (from 
approximately 146 million USD to approximately 1 392 million USD). This increase 
seems to be caused by a large rise in crop insuranc e premium subsidies for soybeans. 
Could the United States kindly explain the reasons behind the large increase in product 
specific support for Soybeans in 2015?  
 
Answer by United States of America  
 
There was a decimal error in the reporting of crop insuran ce premiums for 2014 that created the 
apparent increase. The United States will submit a corrigendum.  
AG-IMS ID 87150: Question by Canada - Non-product -specific AMS  
In Supporting Table DS:9, Canada notes that the non -product specific budgetary outlays 
for price Loss Coverage (PLC) have increased signific antly from USD  773.8  million 
in 2014 to USD  1.9 billion in 2015, which represent a 151% increase.  
 
a. Could the US please provide details on the conditions that led to this significant 
increase in expenditure s?  
b. Could the US please provide a breakdown of the value of the support by 
commodity?  G/AG/W/181  
 
- 86 - 
 
  Answer by United States of America  
 
a. Payments under the PLC programmeme  are made according to provisions of the 2014 
Farm Bill and are based on the difference between the marketing year average price and 
the statutory reference price for historically produced commodities. Marketing year 
average prices were lower than the refe rence price for more historically produced 
commodities in 2015 compared to 2014, leading to larger payments on historical base 
acres for those commodities.  
b. Payments under the PLC programme are made on historical base acres, not on current 
production and d o not require production of specific commodities or any commodity. 
While payment rates are calculated for each historically produced commodity according 
to the provisions of the 2014 Farm Bill, payments cannot be associated with any 
particular commodity be cause producers need not plant the historically produced 
commodity to receive payments.  
AG-IMS ID 87145: Question by European Union - Non-product -specific AMS  
The European Union notes a substantially increased support in the form of county -based 
Agricultu re Risk Coverage (ARC -CO) and Price Loss Coverage (PLC) in 2015 as compared 
to 2014 in Supporting Table DS:9. Could the United States kindly explain the reasons 
behind the increased support in the form of Agriculture Risk Coverage (ARC -CO) and 
Price Loss C overage (PLC) in  2015?  
 
Answer by United States of America  
 
Payments under ARC -CO programme  are made according to provisions of the 2014 Farm Bill and 
are based on the difference between the actual average county revenue for historically produced 
commoditi es and the county revenue guarantee. Actual average county revenue in 2015 was lower 
relative to the county guarantee for more historically produced commodities than was the case 
in 2014, leading to larger payments on historical base for those commodities.  Payments under the 
PLC programme  are made according to provisions of the 2014 Farm Bill and are based on the 
difference between the marketing year average price and the statutory reference price for 
historically produced commodities. Marketing year averag e prices were lower that the reference 
price for more historically produced commodities in 2015 compared to 2014, leading to larger 
payments on historical base acres for those commodities.  
AG-IMS ID 87149: Question by Canada - De minimis  
In Supporting Table DS:4, Canada notes that the use of the de minimis  exemption 
increased 36% from the previous year (USD 9.8 billion to USD 13.3 billion). This 
increase includes significant growth in support for particular products, including: beef 
cattle  (86 % increase from 2014); chick peas (950 % increase from 2014); dry peas 
(60 % increase from 2014); rye (58 % increase from 2014); soybeans (854 % increase 
from 2014); strawberries (3492 % increase from 2 014). In addition, the U.S. 
non-product specific AMS increased by 48% from 2014 (USD  5.5 billion to 
USD 8.2 billion). Could the US please provide details on the conditions that led to these 
significant increases?  
 
Answer by United States of America  
 
Increases for beef cattle are primarily the result of increased payments for livestock losses due to 
weather events; for chick peas, an increase in the quantity of product under loan raised the 
interest subsidy; for dry peas, an increase in the quantity of product under loan raised the interest 
subsidy and an  increase in insured acres raised the crop insurance premium subsidy; for rye, an 
increase in insured acres raised the crop insurance premium subsidy; for soybeans, there was a 
decimal error in the reporting of crop insurance premiums for 2014 that created  the apparent 
increase that will be corrected in a corrigendum; for strawberries, an increase in insured acres 
raised crop insurance premium subsidies; for non -product specific support, an increase in outlays 
under notified program mes.  
 G/AG/W/181  
 
- 87 - 
 
  2.4  Export Subsidy com mitments (Tables ES:1, ES:2 and ES:3) 
2.4.1   Canada (G/AG/N/CAN/118)  
AG-IMS ID 87143: Question by New Zealand - Transparency issues  
Canada submitted its ES:1 notification (G/AG/N/CAN/118) in March 2018. In the table 
"Export Subsidies: Budgetary Outlays and Quantity Reduction Commitments" and 
accompanying footnote  4, Canada states that: "Canada's Uruguay Round export subsidy 
commitment for dairy products are reported on a dairy year basis which runs from 
1 August to 31 July.  
  
Under the Nairobi Ministerial D ecision on Export Competition (WT/MIN/(15)45 and 
WT/L/908), the new export subsidy volume limits took effect from 1 January 2016. 
Therefore there is an overlap between the dairy year and the calendar year so that a 
portion of Canada's 2015 -2016 dairy year fell under the Uruguay Round commitment 
(from 1 August 2015 to 31 December 2015), and a portion under the new Nairobi 
commitment (from 1 January 2016 to 31 July 2016). Canada calculated a Partial Nairobi 
cap to cover the first 7 months of the 2016 calendar  year."  
  
a. How has Canada calculated its "Partial Nairobi cap" for the 7 months of 
the 2016 calendar year?  
b. Can Canada please explain how the outlays (i.e. value of subsidised exports) 
and quantity are calculated?  
Answer by Canada  
 
a. As described in the seco nd paragraph of footnote 4 under Canada 's 2015 -2016 Export 
Subsidy notification (G/AG/N/CAN/118), to calculate the export subsidy limit for 
1 January 2016 to 31 July 2016, which is a partial dairy year, Canada first determined 
the percentage proportion of the Uruguay Round export subsidy volume commitment 
that was actually used from 1 August to 31 December 2015. Based on this information, 
Canada applied the leftover percentage proportion to the new dairy year volume cap 
making this the new cap which would b e in effect for the partial dairy year. = {1 - (% of 
UR export subsidy volume commitment used)} * Nairobi Cap Canada also notes that all 
of Canada's subsidized dairy exports for the 2015 -2016 dairy year are under the partial 
Nairobi commitment levels.  
b. The outlays ($ value) and volume (in tonnes) amounts of Canada 's subsidized exports 
are provided by the Canadian Dairy Commission and represent the amount of actual 
subsidized exports provided under milk class 5(d). Outlays, in particular, are calculated 
based on the price and the export permits (quantity) for subsidized dairy products issued 
by the Canadian Dairy Commission. The Uruguay Round outlay commitments did not 
change as a result of the Nairobi Decision on export subsidies in respect of products 
cover ed by footnote 4 of the Nairobi Decision until their elimination. The annual 
commitment levels on a quantity basis were calculated based on the criteria of the 
average of quantity levels of the 2003 -2005 base period as per footnote 4 of the Nairobi 
Decisio n on export subsidies.  
3  DEFERRED REPLIES TO QUESTIONS ON NOTIFIC ATIONS  
3.1  Egypt (G/AG/N/EGY/3)  
AG-IMS ID 87097: Question by Australia - Transparency issues (including Table DS:2)  
Australia notes that Egypt has not provided any responses to questions posed to it at the 
86th Committee on Agriculture. Australia therefore restates question  ID86017.  
  
Australia thanks Egypt for its DS:1 notification contained in G/AG/N/EGY/3 covering the 
years  2005/2006 to 2016/17. Australia asks the following questions:  
  G/AG/W/181  
 
- 88 - 
 
  a. Does E gypt incur any Green Box expenditure other than the Pest Control 
Subsidy, for instance for Agricultural research, for training services, or for 
disaster relief?  
b. Australia notes that Egypt has not notified any market price support 
programme s in its notific ation. However in Egypt 's Trade Policy Review, the 
Secretariat report  (WT/TPR/S/367) notes that the General Authority for Supply 
Commodities  (GASC) "buys a share of the wheat crop at administered prices so 
as to guarantee a revenue to farmers and orient pl anting decisions, as well as 
to build up public stocks of basic foodstuff to be processed and sold to the 
general population at subsidized prices. The State fixes the guaranteed price 
and purchases the crop from farmers before the planting date, so that th e 
farmer can make a decision on whether or not to produce wheat ". Table 4.8 of 
the Secretariat report shows that Egypt 's GASC procured between 1.8 and 5.3 
million tonnes of wheat over the period covered by Egypt 's notification. 
Australia asks that Egypt:  
i. Explain why it has not notified this programme as market price support in its 
Table DS:1 notification?  
ii. Update its notification in G/AG/N/EGY/3 to incorporate the support 
provided through this market price support programme, and to update 
Egypt 's calculation of its current Total Aggregate Measurement of Support.  
Answer by Egypt  
 
a. Currently, Egypt is  taking stock of all the trade related meas ures in the area of 
agriculture including domestic support to assess them, prepare the necessary 
notificati ons, and submit them in the Committee on Agriculture. However, taking stock 
of those measures is no easy task given the lack of availability of an integrated 
information database in the relevant authorities.  
b.  
i. As for wheat production, Egypt provides no market price support for wheat, and the 
price declared by the government for the marketing of wheat is related to the cost of 
production per feddan, without any reference or relation to international prices, 
noting that the declared price was below the int ernational prices in 2007, 2008, 
2009, 2012, 2014 as well as 2017. It should also be highlighted that Egypt is the 
world 's largest wheat importer. Wheat imports for the 2017/18 marketing year 
(July/June) are estimated at 12 million tonnes.  
ii. The General  Authority for Supply Commodities ( GASC ) buys local wheat from the 
farmers according to the following conditions:  
 The supplied wheat is from the latest crop not that of previous years.  
 The wheat is free of pests, sand and stones.  
 The wheat meets the re quirements of the relevant Egyptian standards.  
AG-IMS ID 87095: Question by Australia - General services: pest and disease control  
Australia notes that Egypt has not provided any responses to questions posed to it at the 
86th Committee on Agriculture. Aust ralia therefore restates question AG-IMS ID 86012.  
 
Egypt lists a Pest Control Subsidy as a measure exempt from the reduction commitment 
– "Green Box ". Could Egypt provide further detail on the eligibility criteria to receive 
such subsidy; how the subsidy level per producer is calculated; and how payments under 
this subsidy are made to producers?  
 G/AG/W/181  
 
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  Answer by Egypt  
 
This Pest control support is directed for pest control of the cotton crop; subsidies are calculated as 
a fixed amount per acre for all cotton producers who are small farmers. Pest control payment is 
provided in cash to farmers at the end of each season.  
 
Follow -up: Australia noted that since  Egypt gave pest control subsid ies at a fixed rate per acre, 
even crops that were pest free could get subsidy and would like to follow up on how the subsidy 
was tied with actual pest control.  
AG-IMS ID 87093: Question by Australia - Investment subsidies ge nerally available to 
agriculture  
Australia notes that Egypt has not provided any responses to questions posed to it at the 
86th Committee on Agriculture. Australia therefore restates question AG-IMS ID ID86011  
  
Australia notes that Egypt has notified inve stment subsidies under Supporting Table 
DS:2 (measures exempt from the reduction commitment ) "Development Programmes ". 
Could Egypt please provide details on the eligibility criteria for producers to access this 
subsidy, the amount of subsidy on offer to individual producers, and any further 
information regarding how the subsidy is allocated and delivered to producers?  
 
Answer by Egypt  
 
Egypt's investm ent subsidies under Supporting T able DS:2 relate to investments in the various 
agricultural crops as well as acquiring modern techniques related to production, pest control and 
post- harvest treatments. Such subsidies take t he form of concessional loans at interest rates 
lower than those available in the market. Low-income producers eligible for such loans are 
producers with a holding of one Feddan  (acre) or less. It should be noted that the rent value per 
acre is about L.E. 8000 per annum, which implies that the monthly income of the farmer is 
L.E.666, which is less than USD 38 per month.  
 
Follow -up: Australia noted its concern regarding Egypt's  consideration that it had not provided  
market  price support even though a price r elated to the cost of production had been declared  by 
the government for marketing  of wheat. Australia indicated interest in learnin g how Egypt set the 
prices . Noting Egypt had declared that the prices were below international prices across a number 
of years covered by notifications Australia stressed that it was the reference prices that should be 
taken into account rather than international prices when measurin g market price support at the 
WTO. In connection to Egypt's responses to questions raised at the 86th Committee meeting, t he 
European Union  encourage d Egypt  to submit the notifications soon  and give priority to latest 
years. The European Union indicated in terest regarding questions  asked by NZL and Canada .  
 
3.2  India (G/AG/N/IND/11)  
AG-IMS ID 87131: Question by Canada - Transparency issues (including Table DS:2)  
Canada would like to reiterate its question (AMS AG -IMS ID 85089) raised during the 
85th Committee on Agriculture for India's previous notification (G/AG/N/IND/11) on the 
addition of an "Insurance Premium Subsidy" under India's non -product -specific. Could 
India please indicate when question AG -IMS ID 85089 will be answered?  
 
Canada notes the addition o f an "Insurance Premium Subsidy " under India 's non -
product -specific AMS. Canada asked questions on India 's proposed crop insurance 
scheme at the Committee on Agriculture meeting in June 9, 2016 (AG -IMS ID 79051). In 
their response, India provided a web link which it claimed provided the details on the 
programme. However, Canada was unable to find the requeste d information.  
 
a. Could India please list the crops or other products covered under this new 
programme?  
b. Could India indicate if producers under this new crop insurance scheme will be 
able to choose the level of coverage?  G/AG/W/181  
 
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  c. What are the eligibility criteria to receive a payment under this programme? "  
Answer by India 
 
a. The Maximum Premium payable by the farmers is 2% for all Kharif Food and Oilseeds 
crops, 1.5% for Rabi Food and Oilseeds crops and 5% for Annual 
Commercial/Horticultural Crops. The difference be tween premium and the rate of 
Insurance charges payable by farmers is shared equally by the Centre and State.  
b. and c. The Scheme is implemented on an 'Area Approach basis '. The unit of insurance is 
Village/Village Panchayat level for major crops and for ot her crops it may be a unit of 
size above the level of Village/Village Panchayat. The Loss assessment for crop losses 
due to non -preventable natural risks is on an area based approach. In case, majority of 
insured crops of a notified area are prevented from  sowing/planting due to adverse 
weather conditions that will be eligible for indemnity claims upto maximum of 25% of 
the sum -insured. However, losses due to localised perils (Hailstorm, landslide and 
inundation) and post -harvest losses due to specified perils, (cyclone/cyclonic rain and 
unseasonal rains) is assessed at the affected insured field of the individual insured 
farmer.  
AG-IMS ID 87132: Question by Canada - Article 6.2 (Special and Different ial Treatment / 
Development Programmes)  
Canada would like to reiterate its question (AG -IMS ID 85098) raised during the 85th 
Committee on Agriculture for India's previous notification (G/AG/N/IND/11) regarding 
several measures previously notified under Sup porting Table DS:2, (Special and 
Differential Treatment) that are no longer included in India's previous DS:1 notification 
(G/AG/N/IND/11) and also not included in India's most recent DS:1 notification 
(G/AG/N/IND/12). Could India please indicate when ques tion AG -IMS ID 85098 will be 
answered?  
 
Answer by India 
 
The nature and constituents of schemes change over time as according to the domestic 
agricultural requirements. Currently, there is no scheme which qualifies specifically under "Special 
and Differen tial Treatment "except input subsidy.  
AG-IMS ID 87130: Question by Canada - Constituent data and methodology (AGST)  
Canada would like to reiterate its question (AG -IMS ID 86095) raised during the 
86th Committee on Agriculture for India's previous notifica tion (G/AG/N/IND/11) on the 
methodology used to establish the applied administered price and the fixed external 
reference price for pulses in India's  DS:1 notification and the methodology used in its 
agriculture supporting tables (AGST) relating to commitm ents on agricultural products 
in Part IV of its Schedule. Could India please indicate when it will provide an answer to 
question AG -IMS ID 86095?  
 
Answer by India 
 
India has been consistently notifying product specific support for pulses at aggregate leve l 
since 1995-1996. Pulses are a major source of protein and form an integral part of the Indian diet. 
Tur, urad, moong, gram, lentils are different varieties of pulses and therefore, it is reasonable to 
calculate product specific support for aggregated pul ses. The ERP is calculated based on simple 
average of external reference price of various pulses given in AGST and used to calculate product 
specific support for pulses (including lentils). Similarly, the applied administered price is simple 
average of min imum support price for gram, arhar, urad, moong and lentils.  
 G/AG/W/181  
 
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  4  OVERDUE NOTIFICATION S 
4.1  Indonesia  
AG-IMS ID 8713 3: Question by European Union  
Follow -up question to AG -IMS ID 86082  
  
Could Indonesia please indicate a possible timeline for when it intends to submit its 
DS:1 notifications covering the years after 2011 ?  
 
Answer by Indonesia  
 
Relevant authorities in Jakarta are working hard and are still in the process of collecting and 
calculating all data necessary for DS:1 notification. Indonesia  will try its  best to complete this 
process that will allow Indonesia to submit DS:1 notification later this year.  
 
4.2  Pakistan  
AG-IMS ID 87042: Questio n by United States of America  
The United States notes that Pakistan has not submitted an export subsidy notification 
(Table  ES:1) or response to the export competition questionnaire for any year following 
marketing year 2006/07. Please indicate when Members can expect to receive 
Pakistan's overdue notification.  
 
Answer by Pakistan  
 
Pakistan is in the process of preparin g all the pending notifications, which will be submitted in 
course of time.  
 
4.3  Turkey  
AG-IMS ID 8713 4: Question by European Union  
Could Turkey please inform Members on the expected timeline for forwarding the 
missing notifications (Domestic Support and ES: 1)? 
 
Answer by Turkey  
 
These notifications are still bei ng examined and prepared by Turkey's authorities. As Members 
know, last year Turkey  made a small  package of notifications and Turkey hopes to follow up in due 
course with new notifications. As its authorities are currently working on the preparation, Turkey is  
unfortunately not in a position to give a strict timeline . 
 
5  COUNTER NOTIFICATION S3 
5.1  India  
AG-IMS ID 87024: Question by United States of America  
Please provide to Members the name, citation, and publication location, for all Indian 
legal instruments related to market price support for wheat and rice for a ny period 
from  2010 to the present. Please include both those issued by the national government 
and th ose issued by sub -national units of government.  
 
                                                
3 The details of discussions on this agenda  item can be referred to in Section 2.3.7 of the Summary 
Report of the Committee meeting (G/AG/R/88).  G/AG/W/181  
 
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  Inclusion of State Level Bonuses in Applied Administered Price  
 
a. State -level bonuses for rice and wheat appear to have been provided by certain 
Indian states, including bonuses provided by Chhattisgarh, Karna taka, Kerala, 
Madhya Pradesh, Rajasthan, Tamil Nadu, and Uttar Pradesh, for the years 
covered by this counter notification.  
i. Please indicate whether any bonuses or incentives were provided for rice or 
wheat by any other sub -federal government during any year from 2010 to 
the present.  
ii. Noting India's previous responses to the Committee, please explain and 
clarify India's rational e for not notifying these bonuses.  
Eligible Production  
 
b. In both its first notification (G/AG/N/IND/1) and in its domestic support 
commitments (G/AG/AGST/IND), India identified as eligible production all rice 
and wheat produced in India. India, however, no longer does so, and instead 
notifies only quantities actually purchased by the GoI.  
i. Please explain the specific basis for switching from total production to 
procured quantity.  
ii. Please provide to Members the name and location of all measures, laws or 
regula tions regarding market price support measures during the issuance of  
G/AG/AGST/IND, G/AG/N/IND/1, G/AG/N/IND/11, and G/AG/N/IND/12.   
Rice Conversions  
 
c. Paragraph 7 of Annex 3 states: "The AMS shall be calculated as close as 
practicable to the point of first  sale of the basic agricultural product 
concerned." Please explain India's rational for notifying support on a milled 
rice basis rather than a paddy rice basis  
Currency  
 
d. In response to various questions  asked by Members, including 
AG-IMS ID 76018, India ha s repeatedly stated the basis for notifying in U.S. 
dollars is that it provides a comparable estimate for all of its notifications 
since  G/AG/N/IND/1 for MY 1995/96.  
Noting India's previous incomplete responses to the Committee, please 
specifically explai n the basis for switching from Indian rupees to U.S. dollars in 
G/AG/N/IND/1 given that Members' notified support levels are calculated for 
the primary purpose of comparison against their commitments, which in India's 
case are calculated in Indian rupees a s referenced in its Agricultural Supporting 
Tables (G/AG/AGST/IND).  
Value of Production  
 
e. Could India please provide a detailed explanation of the calculation 
methodology for the VoP figures for wheat and rice provided in India's 
response to AG -IMS ID 75061 ? In particular, please explain why the VoPs 
figures provided by India in its response to AG ‑IMS ID 75061 differ from the 
figures put out by India's National Account of Statistics.  
f. Will India provide value of production data in future domestic support 
notifications to ensure transparency and to be consistent with other Member 
(both developed and developing) notifications that include this data as a best 
practice to easily determine w hether support is within the de minimis  limit.  G/AG/W/181  
 
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  Answer by India  
 
The available information of this nature referred to in the question can be accessed from relevant 
websites, including:  http://agricoop.nic.in/ . 
 
a. b. d. and f. India's  statement on the counter notification may be referred to.  
c. India has followed the methodology given in its AGST and therefore, calculated product 
specific for rice rather than paddy.  
e. India has  verified data for VOP. As per National Accou nts Statistics 2016, data provid ed 
by India for VOP is correct.  
 
 
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