G/AG/W/165  
 
24 July 2017  
(17-4072) Page: 1/60 
Committee on Agriculture  Original: English  
 
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 MEETING ON 7 JUNE 20 171 
The present document compiles responses received in writing by the Secretariat to the questions 
raised in document G/AG/W/ 163 as well as follow -up comments made during the Review Process.  
 
Written responses to the following quest ions were not provided before 18 July 2016:  
 
AG-IMS ID  Answer by  Question by  Notification 
Reference  Repeat questi on 
84046  Malaysia  Australia  Article 18.6   
84072  India United States of America  Article 18.6   
84071  India United States of America  Article 18.6   
84113  Turkey  Russian Federation  Article 18.6   
84049  Burundi  European Union  G/AG/N/BDI/9   
84097  Burundi  United States of America  G/AG/N/BDI/9   
84077  Gabon  United States of America  G/AG/N/GAB/7   
84076  Guatemala  United States of America  G/AG/N/GTM/57   
84086, 84087  Zambia  United States of America  G/AG/N/ZMB/10   
84091  Malawi  United States of America  G/AG/N/ MWI/6   
84078  Malawi  United States of America  G/AG/N/MWI/4  70039  
84047  Mali European Union  G/AG/N/MLI/8  83021  
84096  Mali United States of America  G/AG/N/MLI/8  83091  
84092  Togo United States of America  G/AG/N/TGO/8  83094  
 
 
_______________  
 
 
                                                
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.  G/AG/W/165  
 
- 2 - 
 
  TABLE OF CONTENTS  
1   MATTERS RELEVANT TO THE IMPLEMENTATION O F COMMITMENTS: ARTIC LE 
18.6 ................................ ................................ ................................ ................................ . 5 
1.1   Canada's butter export subsidies  ................................ ................................ ...................  5 
1.1.1    Question by Australia (AG -IMS ID 84016)  ................................ ................................ .... 5 
1.2   China's sugar imports  ................................ ................................ ................................ .. 5 
1.2.1    Question by Australia (AG -IMS ID 84036)  ................................ ................................ .... 5 
1.3   European Union's export subsidy commitments  ................................ ...............................  5 
1.3.1    Question by Guatemala (AG -IMS ID 84109)  ................................ ................................ . 5 
1.4   European Union's sugar policies  ................................ ................................ ....................  6 
1.4.1    Question by Australia (AG -IMS ID 84037)  ................................ ................................ .... 6 
1.5   India's pulses policies ................................ ................................ ................................ ... 6 
1.5.1    Question by Canada (AG -IMS ID 84044)  ................................ ................................ ...... 6 
1.6   Indonesia's dairy import system  ................................ ................................ ....................  7 
1.6.1    Question by United States of America (AG -IMS ID 84075)  ................................ .............  7 
1.7   Malaysia's import licensing procedures for sugar  ................................ .............................  7 
1.7.1    Question by Australia (AG -IMS ID 84046)  ................................ ................................ .... 7 
1.8   Mexico's agricultural diesel programme  ................................ ................................ ..........  8 
1.8.1    Question by Ukraine (AG -IMS ID 84050)  ................................ ................................ ..... 8 
1.9   Philippines' rice waiver  ................................ ................................ ................................ . 9 
1.9.1    Question by Australia (AG -IMS ID 84057)  ................................ ................................ .... 9 
1.9.2    Question by Thailand (AG -IMS ID 84015)  ................................ ................................ .... 9 
1.9.3    Question by United States of America (AG -IMS ID 84079)  ................................ ............ 10 
1.10   The Russian Federation's decoupled support  ................................ ................................ 11 
1.10.1    Question by United States of Amer ica (AG -IMS ID 84083)  ................................ .......... 11 
1.11   Switzerland's domestic purchase requirements for meat TRQs  ................................ ........ 11 
1.11.1    Question by United States of America (AG -IMS ID 84104)  ................................ .......... 11 
1.12   Switzerland's reclassification of customs position for seasoned meat  ............................... 11 
1.12.1    Question by European Union (AG -IMS ID 84058)  ................................ ....................... 11 
1.13   Turkey's National  Agriculture Model  ................................ ................................ ............ 12 
1.13.1    Question by European Union (AG -IMS ID 84060)  ................................ ....................... 12 
1.14   U.S. regulations on fluid ultrafiltered milk  ................................ ................................ ....13 
1.14.1    Question by Canada (AG -IMS ID 84061)  ................................ ................................ ...13 
1.14.2    Question by Canada (AG -IMS ID 84062)  ................................ ................................ ...13 
1.14.3    Question by Canada (AG -IMS ID 84063)  ................................ ................................ ...14 
1.15   U.S. Border Adjustment Tax proposal  ................................ ................................ .......... 14 
1.15.1    Question by Ukraine (AG -IMS ID 84054)  ................................ ................................ ...14 
1.16   Brazil's domestic support programmes  ................................ ................................ ........ 15 
1.16.1    Question by United States of America (AG -IMS ID 84073)  ................................ .......... 15 
1.17   Canada's New Milk Ingredient Class  ................................ ................................ ............ 16 G/AG/W/165  
 
- 3 - 
 
  1.17.1    Question by Australia (AG -IMS ID 84012)  ................................ ................................ .16 
1.17.2    Question by New Zealand (AG -IMS ID 84018)  ................................ ........................... 18 
1.17.3    Question by New Zealand (AG -IMS ID 84020)  ................................ ........................... 18 
1.17.4    Question by New Zealand (AG -IMS ID 84021)  ................................ ........................... 18 
1.17.5    Question by New Zealand (AG -IMS ID 84022)  ................................ ........................... 19 
1.17.6    Question by New Zealand (AG -IMS ID 84023)  ................................ ........................... 19 
1.17.7    Question by New Zealand (AG -IMS ID 84025)  ................................ ........................... 19 
1.17.8    Question by New Zealand (AG -IMS ID 84027)  ................................ ........................... 20 
1.17.9    Question by New Zealand (AG -IMS ID 84029)  ................................ ........................... 20 
1.17.10    Question by New Zealand (AG -IMS ID 84030)  ................................ ......................... 21 
1.17.11    Question by New Zealand (AG -IMS ID 84035)  ................................ ......................... 21 
1.17.12    Question by New Zealand (AG -IMS ID 84031 ) ................................ ......................... 22 
1.17.13    Question by New Zealand (AG -IMS ID 84111) and United States of America 
(AG-IMS ID 84107)  ................................ ................................ ................................ ............ 22 
1.18   Canada's wine sale policy  ................................ ................................ .......................... 29 
1.18.1    Question by Australia (AG -IMS ID 84017)  ................................ ................................ .29 
1.18.2    Question by European Union and New Zealand (AG -IMS ID 84106 and 84033)  .............. 30 
1.18.3    Question by Unite d States of America and New Zealand (AG -IMS ID 84105 
and 84112)  ................................ ................................ ................................ ....................... 30 
1.19   Canada's tariff -rate quota for cheese and domestic support  ................................ ........... 31 
1.19.1    Question by United States of America and New Zealand (AG -IMS ID 84108 
and 84110)  ................................ ................................ ................................ ....................... 31 
1.20   India's wheat stocks  ................................ ................................ ................................ ..32 
1.20.1    Question by Australia (AG -IMS ID 84041)  ................................ ................................ .32 
1.20.2    Question by United States of America (AG -IMS ID 84072)  ................................ .......... 32 
1.21   India's support price for Rabi crops  ................................ ................................ ............. 35 
1.21.1    Question by United States of America (AG -IMS ID 84071)  ................................ .......... 35 
1.22   Thailand's import permits for feed wheat  ................................ ................................ .....35 
1.22.1    Question by Australia (AG -IMS ID 84059)  ................................ ................................ .35 
1.22.2    Question by United States of America (AG -IMS ID 84074)  ................................ .......... 36 
1.23   Thailand's rice policies  ................................ ................................ ............................... 36 
1.23.1    Question by United States of America (AG -IMS ID 84103)  ................................ .......... 36 
1.24   U.S. Federal Milk Marketing Order (FMMO)  ................................ ................................ ...37 
1.24.1    Question by Canada (AG -IMS ID 84055)  ................................ ................................ ...37 
1.24.2    Question by Canada (AG -IMS ID 84056)  ................................ ................................ ...38 
1.24.3    Question by Canada (AG -IMS ID 84064)  ................................ ................................ ...38 
1.25   Turkey's IPR programme  ................................ ................................ ........................... 39 
1.25.1    Question by Russian Federation (AG -IMS ID 84113)  ................................ ................... 39 
2   POINTS RAISED IN CON NECTION WITH INDIVID UAL NOTIFICATIONS  ....................  39 
2.1   ADMINISTRATION OF TARIFF AND OTHER QUOTA COMMITMENTS (TABLE MA:1)  ............... 39 
2.1.1    Thailand (G/AG/N/THA/82, G/AG/N/THA/84)  ................................ ............................... 39 G/AG/W/165  
 
- 4 - 
 
  2.2   IMPORTS UNDER TARIFF AND OTH ER QUOTA COMMITMENTS (TABLE MA:2)  ..................... 39 
2.2.1    European Union (G/AG/N/EU/37)  ................................ ................................ ............... 39 
2.2.2    Japan (G/AG/N/JPN/210)  ................................ ................................ .......................... 40 
2.2.3    United States of America (G/AG/N/USA/102/CORR.1)  ................................ .................. 40 
2.3   DOMESTIC SUPPORT COMMITMENTS (TABLE DS:1)  ................................ ........................ 41 
2.3.1    Argentina (G/AG/N/ARG/36)  ................................ ................................ ..................... 41 
2.3.2    Brazil (G/AG/N/BRA/41, G/AG/N/BRA/40, G/AG/N/BRA/32)  ................................ .......... 41 
2.3.3    Burundi (G/AG/N/BDI/9)  ................................ ................................ .......................... 42 
2.3.4    European Union (G/AG/N/EU/34)  ................................ ................................ ............... 43 
2.3.5    Gabon (G/AG/N/GAB/7) ................................ ................................ ............................ 43 
2.3.6    Guatemala (G/AG/N/GTM/57)  ................................ ................................ ................... 44 
2.3.7    Panama (G/AG/N/PAN/41)  ................................ ................................ ........................ 44 
2.3.8    Russian Federation (G/AG/N/RUS/11)  ................................ ................................ ........ 48 
2.3.9    Ukraine (G/AG/N/UKR/18, G/AG/N/UKR/26 and G/AG/N/UKR/26/CORR.1)  ..................... 50 
2.3.10    United States of America (G/AG/N/USA/109) ................................ ............................. 53 
2.3.11    Zambia (G/AG/N/ZMB/10)  ................................ ................................ ...................... 54 
2.4   NEW OR MODIFIED DOMESTIC SUPPORT MEASURES (DS:2)  ................................ ........... 54 
2.4.1    United States of America (G/AG/N/USA/110)  ................................ .............................. 54 
2.5   EXPORT SUBSIDY COMMITMENTS (TABLES ES:1, ES:2 AND ES:3)  ................................ ...55 
2.5.1    European Union (G/AG/N/EU/38)  ................................ ................................ ............... 55 
2.5.2    Malawi (G/AG/N/MWI/6)  ................................ ................................ ........................... 55 
2.5.3    Switzerland (G/AG/N/CHE/79)  ................................ ................................ ................... 56 
3   DEFERRED REPLIES TO QUESTIONS ON NOTIFIC ATIONS  ................................ ..........  56 
3.1   DOMESTIC SUPPORT COMMITMENTS (TABLE DS :1) ................................ ........................ 56 
3.1.1    Malawi (G/AG/N/MWI/4)  ................................ ................................ ........................... 56 
3.1.2    Mali (G/AG/N/MLI/8)  ................................ ................................ ................................ 57 
3.1.3    Togo (G/AG/N/TGO/8)  ................................ ................................ .............................. 57 
4   OVERDUE NOTIFICATION S ................................ ................................ ........................  58 
4.1.1   India ................................ ................................ ................................ ...................... 58 
4.1.2    Nigeria  ................................ ................................ ................................ ................... 58 
4.1.3    Thailand  ................................ ................................ ................................ ................. 59 
4.1.4    Turkey ................................ ................................ ................................ ................... 59 
 
 
 G/AG/W/165  
 
- 5 - 
 
  1  MATTERS RELEVANT TO THE IMPLEMENTATION O F COMMITMENTS: ARTIC LE 18.6  
1.1  Canada's butter export subsidies  
1.1.1   Question by Australia (AG -IMS ID 84016)  
Has Canada provided export subsidies for butter exports after the 21  December  2015 
Ministerial Decision on Export Competition? If so, what were the amounts and to which 
export markets?  
 
Answer by Canada  
 
This information will be included in Canada's 2015 -2016 export subsidy notification which will be 
submitted in due course. In the interests of transparency, Canada can note that it experienced a 
shortage of butter on its domestic market and therefore, did not provide export subsidies for 
butter in the 2015 -2016 dairy year.  
 
Follow -up: Australia, the European Union, New Zealand,  and the Russian Federation noted the 
importance of implementing the Nairobi Ministerial Decision on eliminating export subsidies.  
 
1.2  China's sugar imports  
1.2.1   Question by Australia (AG -IMS ID  84036)  
In China's notifications for imports under tariff quotas for the years 2011 to 2014, the 
tariff quota for sugar is fully utilized. Can China confirm what import regime, including 
the tariff rate, applied to sugar imports in excess of the volume of the tariff quota?  
 
Answer by China  
 
As noted by Australia, China's sugar imports from 2011 to 2014 exceeded the volume of tariff 
quota commitments. The sugar imports beyond the tariff quota commitments were subject to 
automatic import licensing requirement s and the out -of-quota tariff rate of 50%.  
 
Follow -up: Brazil, as  a major sugar exporter to China,  and the European Union flagged interest in 
the question.  
 
1.3  European Union's export subsidy commitments  
1.3.1   Question by Guatemala (AG -IMS ID 84109)  
In relation t o the Export Subsidies Commitment agreed in MC10 Nairobi Ministerial, how 
is the EU  implementation process for those commitments?  
 
Answer by European Union  
 
EU legislation on export subsidies is already and explicitly limited by the EU's international 
commitments, which include the Nairobi outcome (see Article 196(1) of Regulation (EU) 
No 1308/2013). The EU set the last export subsidy rate to zero in July 2013 and no export 
subsidies have been granted to EU exports since then.  
 
In terms of incorporation o f the Nairobi Ministerial Decision on Export Competition into the 
Schedule s of Commitments of the 18 WTO M embers which were entitled to use export subsidies 
prior to Nairobi, including the EU, the scheduling process is ongoing in Geneva. The European 
Union  is actively participating in this process with the view to finalising it as soon as possible and 
well in advance of MC11, as part of a wider process of updating the EU Schedule.  
 G/AG/W/165  
 
- 6 - 
 
  1.4  European Union's sugar policies  
1.4.1   Question by Australia (AG -IMS ID 84037)  
The expiry of the European Union's existing sugar programme, including sugar 
production quotas, and elimination of scheduled export subsidy entitlements for sugar 
on 30 September 2017 is a significant event for the global sugar industry, but one that 
also pres ents potential challenges. What arrangements has the European Union put in 
place to address the risks of production and market volatility after that date? Given that 
sugar production in the European Union will continue to be in receipt of subsidization, 
what arrangements has the European Union put in place to ensure that any EU sugar 
exports will comply with the Nairobi Ministerial Decision on Export Competition?  
 
Answer by European Union  
 
After 30 September 2017 when the production quota system is abolished, EU sugar will not benefit 
from any support measures contingent upon export performance. EU sugar exports will thus 
continue to comply with the Nairobi Ministerial Decision on Export Competition.  
 
Follow -up: Argentina shared Austral ia's interest in the question.  
1.5  India's pulses policies  
1.5.1   Question by Canada (AG -IMS ID 84044)  
The government of India announced in December 2016 a series of measures aimed at 
achieving self -sufficiency in pulse production 
(http://pib.nic.in/newsite/PrintRelease.aspx?relid=155758 ). The measures include:  
 
 an increase in the minimum support price for pulses and an additional bonus to 
promote the cultivation and production of pulses;  
 a scheme under the National Food Security Mission Project where the Government 
of India has set production targets for pulses for 2016 -17, 2017 -18 and 2020 -21; 
 the establishment of 150 "Pulse Seed Hubs" to produce specific quantities of 
improved seed for distribution to farm ers.  
a. Could India indicate if the entire production of pulses is eligible for the 
minimum support prices and the additional bonus?  
b. Could India provide information as to the level of production of pulses for the 
2016 -17 crop against the target production?  
c.  Could India elaborate on the distribution system for the seed developed in 
these hubs and the cost to the producer for the improved seed?  
Answer by India  
 
a. Minimum support prices (MSP) operations are carried out to safeguard the farmers from 
distress sal e in the event of market prices falling below the MSP. The farmers have a 
choice of either selling their production  of notified cr ops to the government a gencies at 
MSP or to sell it to anyone else at market prices. The far mers in India are primarily 
low-income resource poor subsistence farmers. It may be noted that these farmers keep 
the major portion of their produce for self -consumption and seed for the next crop year. 
It is only the marketable surplus quantity offered by the farmers that is procured unde r 
MSP operations. The eligible production is, therefore, the quantity which is actually 
procured.  
b. The estimated level of production of pulses for the 2016 -17 is 22.40 million MT against 
the target of 20.75 million MT.  G/AG/W/165  
 
- 7 - 
 
  c. The g overnment of India has set up 93 'Pulse Seed Hubs' and they are managed by the 
Indian Council of Agricultural Research (ICAR), State Universities and Krishi Vigyan 
Kendras. The 'Pulse Seed Hubs' are aimed at ensuring steady supply of higher grade 
pulse varieties to India's farmers.  
 
Follow -up: Australia, the European Union, and the United States expressed interest in the 
question. Australia and the European Union were particularly interested in the quantity that would 
be considered eligible for procurement. In Australia's view, the en tire production should be 
considered eligible given India offered farmers the choice of selling in the private market or to the 
government under procurement arrangements. Australia also asked India to provide statistics on 
the level of production . Ukraine noted systemic interest in India's buffer stock policies.  
1.6  Indonesia's dairy import system  
1.6.1   Question by United States of America (AG -IMS ID 84075)  
According to industry reports, Indonesia plans to replace its import licensing system on 
skim milk powder (SMP ) with a tariff -rate quota system and has received technical 
assistance from the World Bank to make this policy change. Relatedly, industry reports 
that there has been a trend in Indonesia towards the promotion of greater local content 
rules for dairy prod ucts and a possible increase in Indonesia's applied tariff rate to 
15-20% on imported dairy products. The United States would appreciate it if Indonesia 
would provide an update on its intentions regarding its dairy import system, including 
plans for a new TRQ system as well as applied rate increases and local content rules.  
 
Answer by Indonesia  
 
Indonesia would like to thank the delegation of the United States of America for the interest on the 
issue of Indonesia's dairy import system.  
 
In this regard, Ind onesia would like to inform that currently Indonesia does not  contemplate to 
implement Tariff Rate Quota (TRQ) system on the importation of Skim Milk Products, although it 
should be acknowledged that under Indonesia's  WTO Schedule XXI, Indonesia has the 
TRQ scheme on the importation of the product.  
 
Currently Indonesia does not have any plan to modify its  existing policy on the import licensing of 
dairy products.  
 
Indonesia would also like to extend the information that there won't be any increase as well i n 
Indonesia's applied tariff rate for dairy products. In the case of any tariff adjustment that was  
made, the rate will not be significantly  altered from the existing applied tariff.  
 
Follow -up: The European Union noted interest in details of the minimum local content 
requirement.  
 
1.7  Malaysia's import licensing procedures for sugar  
1.7.1   Question by Australia (AG -IMS ID 84046)  
As Australia has raised previously in the WTO Committee on Import Licensing, Australia 
is concerned about Malaysia's import licensing proce dures for refined sugar. Australia 
understands that the official portal of the Ministry of Domestic Trade, Cooperatives and 
Consumerism commenced a freeze on import licenses for refined sugar on 1 March 2016. 
Does Malaysia intend on notifying its freeze on  issuing import licenses? Is an import 
license also required for raw sugar imports into Malaysia?  
 
Answer by Malaysia  
 
Malaysia undertook to provide a response at a later stage.  
 G/AG/W/165  
 
- 8 - 
 
  1.8  Mexico's agricultural diesel programme  
1.8.1   Question by Ukraine (AG -IMS ID 84050)  
Ukraine attentively followed Mexico's April 2017 Trade Policy Review. The Agricultural 
"Diesel program" sparked particular interest. The scope of the diesel input subsidies in 
the Secretariat's report (paragraph 4.32. of WT/TPR/S/352) indicated only maxim um 
possible quantities of diesel (liters). During the Trade Policy Review Mexico provided 
further information regarding the total monetary values (2005 to 2013) for this subsidy 
programme which was terminated after 2013. Three questions were raised in the 
Committee (AG -IMS ID 47025, AG -IMS ID 61050, AG -IMS ID 62034) relating to the 
then-existing programme: type of programme (investment or input subsidy); applied 
criteria (generally available or limited to low -income, resource -poor). A new format of 
the dies el subsidy programme emerged in 2016. Could Mexico please provide 
information relating to the 2016 "Diesel program":  
 
a. What format changes did Mexico undertake in the 2016 "Diesel program"?  
b. Have policy goals been updated or adjusted in the 2016 "Diesel pr ogram" and if 
so what are these policy goals?  
c. Please provide all relevant criteria, which Mexico applies for the operation of 
the reformatted 2016 "Diesel program"?  
d. Could Mexico update the chart provided in their response to AG -IMS ID 62034 
so that the f ollowing information is provided? Category (hectares) - All 
Agricultural Producers (number) - Diesel Program Beneficiaries (number) - 
Percent of Farm Sales for the Category (%)  
e. Could Mexico please also confirm the character of the Category (land for 
cultivation) noted in the response to Ag -IMS 62034? Is this limited only to land 
owned by a producer, or does the land for cultivation also include rented, 
leased or land not owned by available to the producer?  
Answer by Mexico  
 
As Mexico  indicated to Ukraine i n response to the questions raised in Mexico's recent trade policy 
review, up to 2013 Mexico reported the agricultural diesel subsidy under the Section on special 
and differential treatment in the notification of current total aggregate measurement of supp ort. 
As from 2014, it ceased doing so since the subsidy was discontinued.  
 
It is very important to stress that with effect from 2014 the programme has not been in operation 
and since that time no subsidy has been granted under this concept . 
  
The operating  principles for the programme are currently under study by the government agencies 
involved in its application, namely the Ministry of Agriculture, Livestock, Rural Development, 
Fisheries and Food (SAGARPA), the Ministry of Finance and Public Credit (SHCP) , the Tax 
Administration Service (SAT) and Petróleos Mexicanos (PEMEX).  
 
Once the programme is cleared for implementation and the final principles are set, Mexico will be 
in a position to submit the corresponding notification.  
  
a. The main change being consi dered for incorporation in the agricultural diesel programme 
in relation to the former programme is that henceforth the subsidy would be granted in 
the form of tax relief on the special tax on production and services (IEPS) for fuel 
purchased by the benefi ciaries.  
b. No, the goal remains the same as at the outset of the programme, namely, in 
accordance with the Rural Energy Law, to support the country's rural development 
through measures to boost productivity and competitiveness.  G/AG/W/165  
 
- 9 - 
 
  c. As stated above, the programme  is not yet operational.  
d. As stated above, the programme is not yet operational.  
e. The information provided in the 2011 chart relates to hectares of land actually owned by 
the beneficiary. To be eligible, legal ownership of the property has to be proven.  
Last but not least, Mexico  reiterate s to Ukraine its  willingness to discuss this matter 
bilaterally should there still be any doubts in this regard.  
Follow -up: The United States flagged interest. New Zealand noted its systemic interest in the issue 
since it related to agriculture and fossil fuel  and it was important both to the WTO and more 
broadly.  
1.9  Philippines' rice waiver  
1.9.1   Question by Australia (AG -IMS ID 84057)  
Noting the waiver of the WTO General Council of 24 July 2014 (WT/L/932) which 
granted special treatment for rice of the Philippines up until 30 June 2017, can the 
Philippines confirm that existing quantity restrictions on rice imports will be removed 
by 1 July 2017?  
 
Answer by Philippines  
 
The Philippine Executive Branch, headed by the President an d represented by its Cabinet's 
Economic Cluster and Committee on Tariff and Related Matters, after making the formal decision 
to allow for the tariffication of the rice QR, coordinates very closely with both Houses of the 
Philippine Congress to pass the ne cessary legislation to tariffy the rice QR by 1 July 2017. 
Fulfillment of this objective in time, however, is entirely dependent on the internal processes of 
Congress even as the Cabinet indicated its wishes for Congress to place a high priority on 
legisla ting the tariffication of the rice QR by  01 July 2017  or at the soonest possible time.  
 
1.9.2   Question by Thailand (AG -IMS ID 84015)  
With regard to decision on waiver relating to special treatment for rice of the Philippine 
(document WT/L/932), Philippine has to  maintain QR rice up to 30 June 2017, and the 
importation of rice into Philippine shall be subjected to ordinary customs duty. In 
March  2017, Philippine has informed to the COA meeting that the rice tarification regime 
was under internal legislation proces s, and may encounter delay.  
 
Thailand seeks clarification as to:  
 
a. Can Philippine confirm the implementation date on rice tarification process?  
b. Please update the current status or details in respect to the implementation.  
c. In case of delay, can Philippine cl arify procedures from 1 July 2017 to the day 
that tarification being applied?  
Answer by Philippines  
 
a. Tariffication of the rice QR will be implemented once the Congress of the Philippines has 
passed the necessary legislation, such legislation  is duly signed  by the President and 
following the routine publication requirements.  
b. As the law has yet to be passed by Congress, no details related  to implementation can at 
present be furnished to the Committee and the WTO.  
c. In case of a delay in the passage, signing and effectivity of the law tariffying the rice QR, 
current conditions on the import of rice to the Philippines subsist, i.e., subsistence of the G/AG/W/165  
 
- 10 - 
 
  rice QR, TRQ tariff rates, country -specific and global TRQ volumes u ntil the passage of 
the appropriate law.  
1.9.3   Question by United States of America (AG -IMS ID 84079)  
The United States understands that rice tariffication is unlikely to occur prior to the 
30 June  2017 deadline for the expiration of the rice waiver, due to a de lay in passing the 
legislation required to remove the quantitative restriction (QR) on rice imports. The 
Philippines has indicated it may extend the tariff concessions that were granted in 
exchange for the rice waiver in the event that the required legisla tion is not passed by 
the June 30 deadline.  
 
a. The United States would appreciate an update on the status of the legislation 
that would remove  the QR on rice.  
b. Does the Philippines plan to extend the tariff concessions if the Philippines 
does not pass the r equired legislation that would remove the QR by 1 July?  
c. The United States would also appreciate an update on the Philippines' actions 
to tariffy rice market access. Does the Philippines plan to follow rules laid out 
in Annex 5 to the WTO Agreement on Agri culture?  
Answer by Philippines  
 
a. Following communication by the Cabinet to the Philippine Congress, specifically the 
House of Representatives, of its decision to allow tariffication of the rice QR with the 
expiry of the rice waiver in the WTO and thus be c ompliant with its commitment and 
obligations, the House of Representatives' Committee on Agriculture and Food, Special 
Committee on Food Security and Special Committee on the WTO and Globalization have 
held two joint hearings as well as briefings from the Executive agencies on various bills 
on the tariffication of the rice QR. Four bills have so far been introduced and in the most 
recent hearing, the Committee leade rship quickly moved to constitute the Technical 
Working Group to evaluate and if possible, co nsolidate the bills for approval by the 
respective Committees for plenary deliberations. After passing the third reading in 
plenary, the adopted consolidated bill is transmitted to the Philippine Senate for its own 
processes for passage. Passage by the Sen ate is followed by adoption procedures of a 
bicameral committee, if deemed necessary. The final version of the bill is then 
transmitted to the President for signature as law.  
b. Following the recommendation of the Philippine Department of Agriculture which wa s 
also affirmed by the Cabinet, the President of the Philippines issued Executive Order 
No. 23, s. 2017, on 27 April 2017 preserving all concessions committed relative to the 
rice waiver so as not to unduly prejudice the interests of concerned trading part ners 
while the necessary legislation to tariff the rice QR is still in process by 1 July 2017. 
Per EO 23, the concessions subsist and are preserved until the enactment of the required 
law by Congress or 2020, whichever comes first. The Cabinet has communic ated to 
Congress its sense of high priority for this legislation and is working to have legislative 
work certified by the President as urgent . 
c. Current conditions persist  until the law tariffying the rice QR takes effect as described 
earlier. The Philippine  Department of Agriculture has consistently briefed and informed 
the Joint Committees deliberating on the rice tariffication bills on the rules as laid out in 
Annex 5 of the Agreement on Agriculture . 
Follow -up: Australia noted that it was still in the proc ess of analy zing executive order 23 and its 
operation . Thailand and the United States looked forward to future updates on the legislation 
related to rice tariffication. The European Union, echoed by Canada,  flagged interest, in particular 
from a systemic point of view the need for all Members to  implement WTO commitme nts within 
the agreed deadlines. Viet Nam registered concern in the issue and looked forward to continuing 
bilateral consultations with the Philippines.    G/AG/W/165  
 
- 11 - 
 
  1.10  The Russian Federation's decoupled support  
1.10.1   Question by United States of America (AG -IMS ID 84083)  
In early 2017, the Russian Federation changed the structure of its subsidy programme 
with the introduction of Program 1320. Please explain if there were any changes made 
to decoupled support un der the structure of the new programme, Program 1320, and 
where details regarding the decoupled support can be found within the new programme 
and how decoupled support is handled under the programme.  
 
Answer by Russian Federation  
 
Changes in regulation sin ce the beginning of 2017 referred to intergovernmental relations at the 
federal and sub -federal levels and didn't affect the terms of domestic support including payments 
under decoupled support.  
 
Follow -up: The European Union noted that the new support pr ogramme may be classified as 
Green  Box and asked whether and when the Russian Federation intended to submit a DS:2 
notification.   
 
1.11  Switzerland's domestic purchase requirements for meat TRQs  
1.11.1   Question by United States of America (AG -IMS ID 84104)  
Switzerland's allocation of some meat tariff -rate quotas is contingent upon local 
purchase. This is particularly true for beef, sheep meat, and offal where 50% of the 
quota is allocated on the basis of a contribution to Swiss production. This provision 
disadvantages companies that principally source product through imports. Switzerland 
has previously stated that this requirement is irrelevant given the high quota fill rate. 
Fill rates, alone, do not indicate whether a measure is consistent with WTO principl es. 
Please explain in detail why Switzerland considers its tariff -rate quota allocation 
system, which appears to include domestic purchase requirement for certain products, 
to be in compliance with its WTO commitments with respect to the Agreement on 
Agric ulture and the General Agreement on Tariffs and Trade 1994.  
 
Answer by Switzerland  
 
With the prise en charge system, tariff quota shares are granted to importers in proportion to the 
quantity of purchased goods produced locally. All the importers that buy  these products from local 
producers are automatically granted the possibility to request a tariff quota share. Therefore, the 
prise en charge system affects solely the distribution among importers but has not limited the 
amount of imports within the tarif f quota. The system does not influence import origin, import 
prices or quality and does in no case constitute, either de jure or de facto, market access 
conditions more restrictive than those applied during the base period: no "prise en charge" applies 
to imports outside access commitments and no product is subject to a ratio for imports versus 
domestic purchases which would pre -empt the possibility of full absorption by the domestic market 
of the total tariff quota for that product. The "prise en charge" s ystem has therefore no 
trade -restrictive effect beyond the restriction inherent in any tariff quota. There is thus no 
infringement of WTO market access rights of other Members to Switzerland.  
 
Follow -up: Argentina and the European Union shared the U.S. con cern on the domestic purchase 
requirement which may be incompatible with the GATT. Canada, as a major beef exporter, also 
signalled its interest in Switzerland's TRQ administration.  
 
1.12  Switzerland's reclassification of customs position for seasoned meat  
1.12.1   Question by European Union (AG -IMS ID 84058)  
Switzerland amended its customs tariff act in July 2016 to reclassify seasoned meat 
from chapter 16 to chapter 02, thus substantially increasing the out of quota tariff for 
imports of such products from CHF 638/100 kg to over CHF 2000/100kg. Switzerland 
has been claiming that this measure is justified under Article XX(d) GATT to stop duty G/AG/W/165  
 
- 12 - 
 
  circumvention. The EU considers that Article XX(d) GATT cannot be used to justify the 
measure.  
 
a. Could Switzerland explain how thi s measure is in compliance with its 
obligations under Article II:1 (a) and Article II (b) of the GATT 1994 which 
requires it to accor d to the commerce of other WTO M embers treatment no less 
favourable than that provided in its Schedule?  
b. Does Switzerland en visage any compensatory process or measures?  
Answer by Switzerland  
 
The reclassification of seasoned meat by Switzerland is in compliance with its obligations under 
Article II:1(a) and Article II:1(b) of the GATT 1994. Switzerland is not according less fav ourable 
treatment to the commerce of other WTO M embers than provided for in its Schedule, nor is it 
subjecting imported goods to customs duties in excess of the duties provided for in i ts Schedule.  
 
Even if a WTO violation were to be found, which is not th e case here, the Swiss reclassification is 
justifiable under Article XX(d) of the GATT 1994. The measure is necessary to secure compliance 
with the Swiss customs tariff legislation. The measure was taken to remedy the existence of 
customs duty circumventio n. 
 
Taking into account the WTO consistency of the Swiss reclassification, Switzerland is of the view 
that no compensatory process or measures are required.  
 
Follow -up: Argentina and the United State flagged interest in the issue.  
1.13  Turkey's National Agriculture Model  
1.13.1   Question by European Union (AG -IMS ID 84060)  
The Turkish Prime Minister announced in November 2016 a "National Agriculture Model" 
which will mainly concern a new allocation system for agricultural support from 2017 
onwards. The European U nion understands that this will mainly focus on region -based 
support for production with the aim of reinforcing Turkish agriculture, in particular the 
production of products of strategic importance to Turkey.  
 
Could Turkey provide further details about thi s model, in particular on the following 
aspects:  
 
a. Does Turkey intend to increase its Amber Box support?  
b. If yes, which sectors would be most affected?  
c. Will Turkey increase input subsidies to agriculture, such as fertilizer and fuel 
subsidies?  
d. How would Turk ey expect the new policy to affect its agricultural trade 
balance?  
Answer by Turkey  
 
Turkey would like to state that the "National Agriculture Model" mainly aims to establish a 
sustainable agriculture model in terms of food security and food safety to crea te a better future for 
next generations. The model its elf has various components for e nsuring price stability of 
agriculture p roducts and farm income levels, by way of protecting farmlands, environment and  
sustainable production . Therefore the model has a wide vision  for farmers, consumers and 
administration beyond trade concerns.  
 
To respond  to particular question s from  the E uropean Union, Turkey would like to stat e that the 
new model  does not intend to increase Amber Box support . Few subsidies will be gi ven as before. G/AG/W/165  
 
- 13 - 
 
  However the methodology will be changed gradually in line with WTO rules and limitations. In this  
sense, the model aims at establishing a more effective system  of domestic support and it is not 
expected to create any trade  effect.  
 
Follow -up: Canada and the United States noted concern regarding the difficulty to monitor 
Turkey's agriculture policies due to lack of notifications. Ukraine and the Russian Federation 
flagged interest in the subject.  
1.14  U.S. regulations on fluid ultrafiltered milk  
1.14.1   Question by Canada (AG -IMS ID 84061)  
In the Federal Register in 2005 (70 FR 60751), the U.S. Food and Drug Administration 
(FDA), proposed to amend its regulations (cheese standards of identity) to provide for 
the use of fluid ultrafiltered (UF ) milk in the manufacture of standardized cheeses and 
related cheese products. It also tentatively concluded that UF milk must be declared as 
"ultrafiltered milk" in the ingredient statement of the finished cheese. In 2007, it sought 
public comments again through the Federal Register on the declaration provision of the 
previous proposal (72 FR 70251). Canada notes that according to the latest version of 
the U.S. Federal regulation Title 21: Food and Drugs, the cheese standards for 
standardized cheeses have not been updated to include a reference to UF milk.  
 
a. Could the United States describe why the FDA has not implemented any 
changes to cheese standards of identity to include UF milk used in the 
production of standardized cheese?  
b. Is the United States still planning, or required, to allow for further 
consultations with the public on this issue?  
Answer by United States of America  
 
The United States notes that these questions are outside of the scope of the Committee on 
Agriculture a nd suggests that these questions are more appropriate to be raised in the 
TBT Committee to be addressed by appropriate experts.  
 
1.14.2   Question by Canada (AG -IMS ID 84062)  
A report by the United States International Trade Commission (Investigation number 
332-453 –May 2004) states that the "FDA indicated that milk that has been ultrafiltered 
"as an integral part of the cheese making process" is acceptable in the production of 
standardized cheeses. This allows cheese manufacturers that conduct the ultrafiltration 
process on -site during the cheese manufacturing process to use ultrafiltered milk. 
However, the FDA has exercised enforcement discretion with respect to cheddar and 
mozzarella plants that procure ultrafiltered milk produced outside their own cheese 
making p lants. In 2001, the General Accounting Office (GAO) reported that the majority 
of the ultrafiltered milk transported from ultrafiltration facilities was destined for use in 
the cheese making operations of related companies." The FDA later explains in the 
Federal Register in 2007 (70 FR 60751) that the 'alternate make procedure' allows for 
manufacturers to appropriately process the basic ingredient, milk, during the cheese 
making process. This would include ultrafiltration.  
 
a. Could the United States confirm if it has ever enforced the rules of not allowing 
the use of UF milk when a cheddar and/or mozzarella plant procures this 
UF milk outside of their own plant?  
b. Could the United States please explain why, according to the U.S. International 
Trade Commission report, "related companies" (which would include using UF 
milk outside of the original cheese making plant) have been allowed to use UF 
milk in cheese making, but non -related companies have not?  G/AG/W/165  
 
- 14 - 
 
  c. Could the United States explain how UF milk created by a che ese making plant 
through the cheese making process is different from UF milk produced off -site, 
such as an imported product?  
d. Could a U.S. cheese plant import UF milk to be used in the production of 
cheddar or mozzarella cheese and still meet the U.S. stan dards of identity? 
What about other cheeses?  
Answer by United States of America  
 
The United States notes that these questions are outside of the scope of the Committee on 
Agriculture and suggests that these questions are more appr opriate to be raised in t he 
TBT Committee to be addressed by appropriate experts.  
 
1.14.3   Question by Canada (AG -IMS ID 84063)  
In regards to the issue of treating UF milk produced in -plant differently than UF milk 
produced off -site, a letter sent on 4 May 2017 to Commissioner Ostroff (Ac ting 
Commissioner of the FDA), Vicky Hartzler (Member of Congress) includes the following: 
"FDA rules on the use of UF milk for cheese making are inconsistent and confusing to 
the domestic dairy industry and stifle product flexibility and innovation. Exist ing rules 
have separate labelling requirements for UF milk produced at a plant (product can be 
labelled as "milk") and UF milk produced off -site (product must be labelled as 
"ultrafiltered milk")".  
 
a. Could the United States please provide a copy of the FDA  labelling requirements 
as described in the above mentioned letter?  
b. Could the United States explain why there is a separate labelling requirement 
for UF milk produced at a cheese plant and for UF milk produced off -site?  
Answer by United States of America  
 
The United States notes that these questions are outside of the scope of the Committee on 
Agriculture and suggests that these questions are more appropriate to be raised in the TBT 
Committee to be addressed by appropriate experts.  
 
Follow -up: Canada and the European Union underlined the significance of this issue to the 
agriculture market and noted that they would forward the question to the TBT Committee.   
1.15  U.S. Border Adjustment Tax proposal  
1.15.1   Question by Ukraine (AG -IMS ID 84054)  
According to  numerous media reports the United States is seriously considering 
introducing a Border Adjustment Tax (BAT) in the near future. It appears that a new 
policy scheme would create financial (tax) benefits for U.S. product exports and 
financial (tax) disadvan tages for imports into the United States. Could the United States 
please provide information on this significant policy proposal and in particular:  
 
a. Do current draft proposals for new border tax policies cover agricultural 
products?  
b. What review and appro val process is necessary for final adoption and 
implementation of a new border tax policy, specifically will Congressional 
approval be required as part of that process?  
c. Does the U.S. delegation consider that a new border tax policy favoring 
domestic expor ts and disfavoring foreign imports is fully compatible with 
WTO  rules?  G/AG/W/165  
 
- 15 - 
 
  Answer by United States of America  
 
There are no specific legislative proposals on  this issue at this time, and the United States  cannot 
speculate as to the content of any legislation that might be introduced.  
 
1.16  Brazil's domestic support programmes  
1.16.1   Question by United States of America (AG -IMS ID 84073)  
In April 2017, Brazil announced the reactivation of Prêmio para Escoamento do Produto 
(PEP) and Prêmio de Equalização pago ao Produtor (P EPRO) support for the state of 
Mato Grosso for up to R$500 million (USD 166 million) for corn. The United States 
understands that Mato Grosso is the largest agriculture -producing state in Brazil. Brazil 
is the third -largest producer and second -largest expo rter of corn globally. Further, Mato 
Grosso typically exports over one -half of that state's production to overseas markets, 
according to Brazilian government statistics. The state is estimated to have record corn 
production this year of 24.9 million tonnes  with nearly all of it produced in the second 
crop, according to the Brazilian government's Companhia Nacional de Abastecimento 
(CONAB)  
(source: 
http://www.conab.gov.br/conteudos.php?a=1252&amp;t=2&amp;Pagina_objcmsconte
udos=3#A_objcmsconteuds ) 
 
The United States notes that Mato Grosso has been also been a major exporter in years 
that PEP and PEPRO  have been available. For instance, in 2013, a year in which PEP and 
PEPRO was used to support corn production, the state exported almost all of its corn 
crop. In 2013, Brazilian government data from CONAB and Ministério da Agricultura, 
Pecuária e Abasteci mento (MAPA) show that corn production in the state of Mato Grosso 
was 18 million tonnes, of which 6.7 million tonnes received premium subsidies under 
the PEPRO programme (source: 
http://www.conab.gov.br/conteudos.php?a=1252&amp;t=2&amp;Pagina_objcmsconte
udos=3#A_objcmsconteudos ; and http://www.agricultura.gov.br/assuntos/politica -
agricola/arquivos -de-estatisticas/ano -civil-apoio -2003 -2016 -janeiro -2017.pdf/view  . 
Also in 2013, Brazilian government data from the Ministério do Desenvolvimento, 
Indústr ia e Comércio Exterior (MDIC) shows 15.7  million tonnes of Mato Grosso corn 
was exported from Brazil (source: http://aliceweb.mdic.gov.br  ). In 2013, Brazil's own 
data suggests a significant volume of exported c orn from Mato Grosso may have 
received support under the PEPRO program me. In addition to publically available data 
from CONAB, MAPA, and MDIC related to prior uses of PEP and PEPRO  funds, recent 
media reports regarding PEP and PEPRO payments to support whe at exports from Rio 
Grande do Sul also raise serious concerns about the trade -distorting effects of these 
program mes.  
  
a. Given numerous press reports indicating that corn and wheat producers are 
again benefiting from PEP and PEPRO support, can Brazil expla in why the 
programmes are again being used, as announced by the Brazilian government 
and confirmed by Brazilian press reports?  
b. The United States notes that the CONAB announcement states that in order for 
a producer to participate in PEPRO, they must produ ce a proof of sale, which 
may include an export registration and/or export declaration (source: 
http://www.conab.gov.br/conteudos.php?a=1173&amp;t=2 ; see 9.6.5: 
required documents ). For commodities that received PEP/PEPRO support 
between 2003 and 2016, please provide information related to those required 
proofs sale (e.g., the percent of the commodity under the program me that was 
deemed eligible for p ayment based primarily or solely on export 
registration/declaration). Can Brazil explain how it is ensuring that PEP and 
PEPRO benefits are not supporting the export of corn from Mato Grosso and 
wheat from Rio Grande do Sul?  G/AG/W/165  
 
- 16 - 
 
  c. If information is not readily available for all years, please provide export data 
for wheat, corn, and rice for each year since 2010 and indicate when other 
information will be made available for the review of this Committee.  
Answer by Brazil  
 
a. Both program mes are being used because they are domestic support program mes to 
carry out the PGPM (Policy of Guaranteed Minimum Prices) and the market prices of the 
products mentioned are (or were) below the minimum prices.  
b. As already explained, both program mes allow exports, but they are not contingent on 
exports.  
c. The information requested (destination) is not available at the moment. The figures of 
exports are presented below for the years 2010 -2016, (values in thousand tonnes): 
Wheat (HS1001): 1,324.1; 2,350.5; 2,404.9; 1,188.3; 277.0; 1,77 8.9; 713.3 ; 
Corn (HS1005): 10,818.9; 9,486.9; 19,801.9; 26,624.9; 20,654.6; 28,924.0; 21,873.3 ; 
Rice (HS1006): 430.5; 1,350.9; 1,152.7; 918.1; 929.9; 961.5; 697.9 . 
Follow -up: The United States continued to request PEP and PEPRO destination data.  The Unite d 
States noted that t his information was  required by the government of Brazil from participants that 
used PEP and PEPRO  programmes to export grain . Given the impact on the international market 
from PEP and PEPRO exported wheat and corn,  the United States request ed Brazil to provide  the 
required  information as soon as possible . The European Union noted that PEP and PEPRO 
supported wheat and maize exports. Ukraine expressed increased concern since Brazil's April 2017 
action had included corn sales in PEP and  PEPRO. Canada flagged interest in these two 
programmes given their impact on wheat.  
1.17  Canada's New Milk Ingredient Class  
1.17.1   Question by Australia (AG -IMS ID 84012)  
At the 83rd Committee on Agriculture meeting, in response to Australia's question 
(AG-IMS ID 83103), Canada advised all provinces (except Newfoundland and Labrador) 
were in the process of implementing the new milk class, Class 7, effective as of 
1 February 2017.  
  
a. Can Canada provide an update on this process and confirm which provinces are 
now able  to utilise Class 7?  
b. What volume of milk has been supplied so far under Milk Class 7 and under 
Ontario Class 6? Australia's main concern is with the displacement of product 
onto other markets and the resultant effect on prices.  
c. Have there been any impact s on trade since the announcement of the new milk 
classes and National Ingredients Strategy?  
d. Can Canada provide details of imports of milk protein concentrate (MPC) and 
ultrafiltered milk for each month over the last 12 months? How do these 
compare with t he preceding 12 months?  
e. Can Canada provide details of the volumes of skim milk powder (SMP) exports 
for each month over the last 12 months? How do these compare with the 
preceding 12 months?  
In response to Australia's question (AG -IMS ID 83103) at the 83rd Committee on 
Agriculture, Canada advised that the Special Milk Class Program notice concerning the 
adoption of milk class 7 by the Canadian Milk Supply Management Committee, circulated 
by the Canadian Dairy Commission on 17 February 2017, would not be r eleased publicly.  
  G/AG/W/165  
 
- 17 - 
 
  f. Have any details of the National Ingredient Strategy and associated measures 
been published, in a manner to enable all interested parties to become 
acquainted with them, given their clear potential impact on trade?  
Answer by Canada  
 
a. Canada understands that milk class 7 is being used across Canada excluding 
Newfoundland and Labrador, although not all implementing regulatory processes have 
been completed yet.  
b. The information on milk utilization and sales in Canada for all milk classes i n Canada is 
continually updated. Therefore, please refer to the Canadian Dairy Information Centre 
website: http://www.dairyinfo.gc.ca/inde x_e.php?s1=dff -fcil&amp;s2=msp -
lpl&amp;s3=mps -vlv&amp;menupos=1.1.7 . Data for the utilization and sales in Canada 
of milk class 6 was included in the totals for milk class 4(m) prior to February 2017. 
Canada understands that milk class 6 will be revoked up on full implementation of milk 
class 7 in Ontario. Canada has no further updates on this issue. Canada does not collect 
information on the portion of sales and utilization of each milk class that is exported 
(except milk class 5(d), which is contingent on export).  
c. The National Ingredient Strategy, which includes milk class 7, is an agreement between 
dairy producers and processors. Any changes in Canadian dairy trade patterns can be 
attributed to individual business decisions by dairy importers and exporter s. The usage 
of milk class 7 under the National Ingredient Strategy is not contingent on export. Goods 
produced under milk class 7, or any milk class other than milk class 5(d), can be sold by 
any eligible processor on the domestic or export markets, and d o not require export 
permits. Therefore, it is the business decision of the processor to either sell these 
products on the domestic market, or to export them. Importers of dairy products and 
ingredients also continue to make business decisions on whether t o import these 
products, or source them domestically.  
d. Canada's imports of products of milk protein concentrates (i.e., products of natural milk 
constituents of HS 0404.90) from April 2016 until the end of March 2017 (the latest 
month of data available as of 30 May 2017) were 4.9 million kilograms. From April 2015 
to March 2016, imports were 4.4 million kilograms. Canada's imports of milk protein 
concentrates on a monthly basis can be retrieved on the Canadian International 
Merchandise Trade Database on the  Statistics Canada website: 
http://www.statcan.gc.ca/eng/trade/data  Canada's imports of ultrafiltered milk 
(i.e., 'other' -HS 0404.90.10.90 and 0404.90.20.90) from April 2016 to March 2017 
were 4.9 mi llion kilograms. From April 2015 to March 2016 imports were 4.4 million 
kilograms.  
e. Canada's exports of skim milk powder (HS 0402.10) from April 2016 to the end of 
March  2017 (the latest month of data available as of May 30, 2017), were 30.7 million 
kilogr ams. From April 2015 to March 2016, exports were 14.3 million kilograms. Canada 
notes that its exports of skim milk powder fluctuate from month to month. Canada's 
exports of skim milk powder on a monthly basis can be retrieved on the Canadian 
International  Merchandise Trade Database on the Statistics Canada website: 
http://www.statcan.gc.ca/eng/trade/data .  
f. While some elements of the National Ingredient Strategy have been adopted and are 
being implemented by provincial milk marketing boards, other elements continue to be 
under discussion. A document is not available with the full and final details of the 
National Ingredient Strategy. However, Canada notes that some provinces such as Nova 
Scotia, New Brunswick, Prince Edward Island, and Saskatchewan have publically notified 
Orders from milk marketing boards on new milk pricing through their respective Royal 
Gazette processes. The British Columbia Milk Marketing Board has also issued amended 
Orders on new milk pricing. All of this information is available online.  G/AG/W/165  
 
- 18 - 
 
  1.17.2   Question by New Zealand (AG -IMS ID 84018)  
At the 83rd Committee on Agriculture meeting in response t o a question from Australia 
(AG-IMS ID 83103) Canada advised that the provinces were still going through the 
regulatory processes necessary to implement Class 7.  
  
a. Can Canada provide an update on this process and confirm which provinces 
have concluded the  necessary steps to implement the new milk class?  
b. While provinces go through the regulatory process are they able to utilise 
Class  7, with the corresponding monthly pricing?  
Answer by Canada  
 
Canada understands that milk class 7, with the corresponding m onthly pricing, is being used 
across Canada excluding Newfoundland and Labrador, although not all implementing regulatory 
processes have been completed yet. Canada notes that some provinces such as Nova Scotia, New 
Brunswick, Prince Edward Island, and Sask atchewan have publically notified Orders from milk 
marketing boards on new milk pricing through their respective Royal Gazette processes. The 
British Columbia Milk Marketing Board has also issued amended Orders on new milk pricing. All of 
this information is available online.  
 
1.17.3   Question by New Zealand (AG -IMS ID 84020)  
New Zealand understands that a number of provincial milk marketing boards have, 
pursuant to provincial and federal legislation, issued orders or directives as part of the 
implementation of the national milk Class 7. A number of these regulatory instruments  
state that eligibility for Class 7 is determined in accordance with "the specific rules 
described in the administrative measures of the Harmonized Billing Mechanism" and the 
"National Audit Standards". As these rules are incorporated by reference into, an d are 
essential for the interpretation of, these regulatory instruments, can Canada please 
make available copies of the document(s) which establish the:  
 
a. Harmonized Billing Mechanism; and  
b. National Audit Standards.  
Answer by Canada  
 
While some elements o f the National Ingredient Strategy have been adopted and are being 
implemented by provincial milk marketing boards, other elements continue to be under discussion. 
A document is not available with the full and final details of the National Ingredient Strat egy. 
Canada also notes that the "National A udit Standards " is not a public document.  
 
1.17.4   Question by New Zealand (AG -IMS ID 84021)  
Following New Zealand's question at the 83rd Committee on Agriculture meeting 
(AG-IMS ID 83002) New Zealand understands Class 4( m) will be revoked on full 
implementation of the national ingredient strategy and Class 6 will be revoked on full 
implementation of milk class 7 in Ontario. Can Canada provide an update on whether full 
implementation of Class 7 has occurred (or is expected  to occur) and when Class 4(m) 
and Ontario Class 6 will be revoked?  
 
Answer by Canada  
 
Canada understands that milk class 7 is being used across Canada excluding Newfoundland and 
Labrador, although not all implementing regulatory processes have been completed yet. Canada 
cannot provide a timeline for when milk class 4(m) and Ontario milk class 6 will be revoked.  
 G/AG/W/165  
 
- 19 - 
 
  1.17.5   Question by New Zealand (AG -IMS ID 84022)  
In response to New Zealand's question at the 83rd Committee on Agriculture about the 
calculation o f Class 7 prices (Question AG -IMS 83002(b)), Canada stated that "prices 
under milk class 7 for butterfat, protein and other solids are determined based on world 
prices and will be calculated on a monthly basis". Can Canada please provide further 
detail on this calculation, specifically:  
  
a. Which source or sources of data are used to determine the "world price" for the 
purposes of these calculations?  
b. Can Canada confirm that the "world price" used for calculating the Class 7 price 
for protein and the Class 7  price for other solids is the lowest skim milk price in 
(i) the United States, (ii) the European Union, or (iii) Oceania, in the previous 
month?  
c. Can Canada confirm that a "processor margin" is deducted from the "lowest 
world price" to determine the price  that Canadian milk processors pay for 
Class  7 milk?  
d. If so, what is the value of the "processor margin", and how is this calculated?  
Answer by Canada  
 
The prices under milk class 7 for butterfat, protein and other solids are determined based on world 
prices, and the prices for skim milk powder in the United States, the European Union and Oceania 
are included in the definition of world prices. A processor margin is also deducted in the calculation 
of milk class 7.  
 
1.17.6   Question by New Zealand (AG -IMS ID 84023)  
In response to New Zealand's question at the 83rd Committee on Agriculture, Canada 
stated that the Record of Decisions made by the Milk Pool Coordinating Committee and 
the Canada Milk Supply Management Committee will not be made publically available. If 
the Record of Decisions will not be made publically available what assurance can Canada 
provide Members that the new ingredient class 7 is consistent with Canada's 
WTO  obligations?  
 
Answer by Canada  
 
As mentioned previously, the P5 Supervisory Body/Western Milk Pool Coordinating Committee and 
the Canada Milk Supply Management Committee are not public fora. Canada is not in the position 
to provide any Records of Decision made by these bodies.  
 
1.17.7   Question by New Zealand (AG -IMS ID 84025)  
At the 83rd Committee o n Agriculture the United States asked a question 
(AG-IMS ID 83039) about the rules for Class 7 eligibility of whole milk powder. Canada 
responded that the rules were still under discussion amongst industry stakeholders and 
availability of the information w as yet to be determined. Can Canada please provide an 
update on:  
 
a. When and how the rules will be established?  
b. Where this information will be made public?  
Answer by Canada  
 
a. Canada cannot provide timelines for when and how the rules will be established, as they 
are still being negotiated between dairy producers and processors.  G/AG/W/165  
 
- 20 - 
 
  b. Canada cannot confirm where, or if, this information will be made public.  
1.17.8   Question by New Zealand ( AG-IMS ID 84027)  
At the 83rd Committee on Agriculture the United States asked (AG -IMS ID 83039): 
Paragraph 13 of the Alberta directive states "Transactions between companies involving 
Class 7 ingredients in liquid form (e.g., skim milk, MPC, MPI) are concl uded at the 
domestic market price; the Class 7 price applies upon final utilization under 
HBM parameters, with the exception of:  
  
 In the case of registered food/further processors liquid milk ingredients can be 
bought at the class 7 price for purchase of  1,000 liters and less (totes) per 
transaction, up to 10,000 liters per month;  
 In the case of exports, liquid milk ingredients may be billed at class 7.  
 Canada's response to the question was that discussions were not yet concluded.  
a. Can Canada please pro vide an update on whether industry discussions on the 
future parameters for transactions between milk buyers involving class  7 
ingredients in liquid form have since concluded?  
b. If discussions have concluded, can Canada please advise the outcome?  
Answer by  Canada  
 
Canada has no update to provide on this issue, which is still under discussion.  
 
1.17.9   Question by New Zealand (AG -IMS ID 84029)  
New Zealand understands that if a dairy processor uses more Class 7 ingredients than 
specified in the Harmonized Billing Ratio for a particular end -product, the processor will 
be required to pay an upwards price adjustment equal to the difference between t he 
Class 7 price and the price of the milk component class which the ingredient would 
otherwise be billed at.  
  
a. How is the "Harmonized Billing Ratio" determined for each dairy product for 
each of the end -products to which Class 7 pricing applies?  
b. Is ther e a maximum volume of imported dairy ingredients that can be used 
pursuant to the Harmonized Billing Ratio for a particular product?  
c. If the combination of Canadian Class 7 dairy ingredients and imported dairy 
ingredients in an end -product collectively exc eed the Harmonized Billing Ratio 
for that product; will the processor be subject to a price adjustment from 
Class  7 to the higher class milk component price?  
Answer by Canada  
 
a. This information is not available publically. Some elements of the National Ing redient 
Strategy continue to be under discussion. Billing ratios, as well as auditing procedures, 
are intended to protect producers' income from cannibalization of other milk classes as a 
result of milk class 7, and to ensure fair and uniform pricing condi tions.  
b. The harmonized billing ratios do not stipulate a maximum of imported dairy ingredients 
which can be used by a processor to be eligible to be billed at milk class 7. Billing ratios 
are calculated and applied on the total milk protein from all source s, domestic or 
imported.  
c. The harmonized billing ratios determine the quantity of milk protein components eligible 
to be billed at milk class 7, and the quantity to be billed at the product's end –use class G/AG/W/165  
 
- 21 - 
 
  (for example, milk class 3 in cheese making). The ratios apply to milk protein 
components used in the manufacture of dairy products, regardless if they are domestic 
or imported.  
1.17.10   Question by New Zealand (AG -IMS ID 84030)  
The following questions are based o n the Agricultural Industry Market Information 
System (AIMIS) Milk Component Utilization and Sales database on the Government of 
Canada website. http://www.dai ryinfo.gc.ca/index_e.php?s1=dff -fcil&amp;s2=msp -
lpl&amp;s3=mps -vlv   
 
a. Can Canada confirm that over 180 million litres of milk (24% of total Canadian 
milk production) was supplied under Milk Class 7 in March alone?  
b. Does Canada expect purchases under Class 7 to account for a similar high share 
of liquid milk, proteins and other solids for the remaining months of 2017?  
c. How will skim milk purchased under Class 7 be disposed of if there is 
insufficient domestic markets to accommodate it given a large portion o f this 
milk is currently disposed of as animal feed?  
d. What steps is Canada taking to ensure that no discounted skim milk enters the 
world markets in excess of Canada's WTO export subsidy commitment levels?  
Answer by Canada  
 
a. The information on milk utiliza tion and sales in Canada for all milk classes is available on 
the Canadian Dairy Information Centre website: 
http://www.dairyinfo.gc.ca/index _e.php?s1=dff -fcil&amp;s2=msp -lpl&amp;s3=mps -
vlv&amp;menupos=1.1.7 . 
b. Canada cannot forecast the use of class 7 for the remaining months of 2017.  
c. Processors report their use of milk to provincial milk marketing boards, which then bill 
processors accordingly . The use of milk and milk components by processors is billed on a 
retroactive basis. It is a business decision of a processor to use, and report the use, of 
milk class 7.  
d. Canada's export subsidies are reported under milk class 5(d). Canada is abiding by its 
WTO export subsidy commitment levels.  
1.17.11   Question by New Zealand (AG -IMS ID 84035)  
At the 83rd Committee on Agriculture the New Zealand asked Canada to confirm whether 
a permit will be required for dairy processors to export product under Class 7 or for 
products that incorporate Class 7 priced milk? Canada responded, stating "Goods 
produced under these classes, or any milk class other than milk class 5(d), can be sold 
by any eligible processor on the domestic or export markets. As such, they do not 
requir e export permits, nor are they contingent upon export". (AG -IMS ID 83039)  
  
a. Based on the above, would it be correct to assume that Canadian dairy 
processors will be able to export all Class 7 milk and products containing 
Class  7 to the EU, taking advantag e of the expanded access into the EU market 
contained within CETA which upon entry into force fully liberalizes dairy tariffs, 
with the exception of those products that receive an export subsidy?  
b. What measures will the Canadian government undertake to ens ure that it does 
not inadvertently export dairy products that have received an export subsidy to 
the European Union?  G/AG/W/165  
 
- 22 - 
 
  Answer by Canada  
 
a. The eligibility for processors to be billed under class 7 is not contingent upon export. 
Therefore, it is the business d ecision of a processor to either sell these products on the 
domestic market, or to export them.  
b. Canada's export subsidies will continue to be reported under milk class 5(d).  
1.17.12   Question by New Zealand (AG -IMS ID 84031)  
Statistics Canada reports that exports of SMP were over 4,000 MT for March 2017. Could 
Canada explain:  
  
a. Why were exports for March at record levels while milk allocated to Milk 
Class  5(D) Export Subsidy Commitment Class, had dropped by 89% in 
March  2017 compared to March 2016? Please explain the decrease and how it 
might relate to the SMP increase.  
b. Does Canada expect exports of SMP for the 2017 Calendar year to exceed 4,000 
MT a month for the remainder of the year based on increases since Class 7 was 
implemented?  
Answer by Canada  
 
a. The Canadian Dairy Commission has issued less 5(d) permits between the March 2016 
and March 2017 period, while exports outside of milk class 5(d) have increased.  
b. Canada cannot make any assumptions on goods produced and exporte d under milk 
class 7, or any milk class other than milk class 5(d), as they can be sold by any eligible 
processor on the domestic or export markets, and do not require export permits. 
Therefore, it is the business decision of the processor to either sell t hese products on the 
domes tic market, or to export them.  
1.17.13   Question by New Zealand (AG -IMS ID 84111) and United States of America 
(AG-IMS ID 84107)  
a. Canada states in AG -IMS ID 83039 that "While some elements [of the 
agreement in principle]  have been adopted and are being implemented by 
provincial milk marketing boards, other elements continue to be under 
discussion."  
i. What specific elements of the agreement in principle are still under 
discussion at this time?  
ii. What specific elements of the agreement in princ iple have been adopted and 
implemented at this point in time? Please provide a copy of all implementing 
measures or guidance.  
b. Canada states in AG -IMS ID 83039 that "The rules for whole milk powder are 
subject to discussions amongst industry stakeholders. When and where this 
information will be made public is to be determined."  
i. What roles do the Canadian Dairy Commission (CDC), t he CMSMC, and/or 
the provincial milk marketing boards have in determining the rules for 
Class  7 eligibility of whole milk powder?  
ii. Are these rules established yet? If yes, where are they made publically 
available?  
iii. If these rules are not yet established, wh en and how will these rules be 
established and where will they be made publically available?  G/AG/W/165  
 
- 23 - 
 
  c. Is Canada able to confirm that the "Class 7 Formula" on this publically available 
website ( http://ww w.themilkweed.com/Feature -052017.pdf ) is the formula 
used to set monthly Class 7 prices?  
d. Canada states in AG -IMS ID 83039 that "The prices for butterfat, protein and 
other solids are determined based on world prices on a monthly basis".  
i. Please provide and  explain the exact formula or methodology that is used to 
set the monthly Class 7 prices for butterfat, protein, and other solids.  
ii. Is this formula or methodology the same for each of the three components?  
iii. Where is this formula or methodology publically a vailable?  
iv. What is the CDC's source for "world prices"?  
v. Is a manufacturing cost allowance used to calculate the Class 7 prices for 
butterfat, protein, and other solids? If yes, please provide and explain the 
exact formula or methodology that is used to se t the manufacturing cost 
allowance. Where is this formula or methodology publically available?  
e. Are manufacturing cost allowances used to calculate the prices for butterfat, 
protein, and other solids for Classes 1 -4 and Class 5? If yes, please provide and 
explain the exact formula or methodology that is used to set the manufacturing 
cost allowances. Is this formula or methodology the same for Classes 1 -4 and 
Class 5? Is this formula or methodology the same for each of the three 
components? Where are these f ormulas or methodologies publically available?  
f. Dairy Farmers of Prince Edward Island Board Order 2017 -02, para. 3, states 
that component prices for Class 7 are "Established by the CMSMC ". 
Saskatchewan Order No.  28/17, para. 2(f), states that "Commission prices 
established for classes 1(b)ii, 4(m), 5(a), 5(b), 5(c), 5(d), and 7". Which entity 
establishes the prices? Is it different for different provinces? Are Class 7 prices 
established b y the CMSMC, the CDC, or some other "Commission"?  
g. What Canadian milk class prices are currently based on world prices?  
i. Are Classes 5(a), 5(b), 5(c), and 5(d) prices, based on world prices?  
ii. Are the formulas or methodologies used to set these classes' pri ces the 
same as the formula or methodology used to set Class 7's prices? If not, 
please also provide and explain the exact formula or methodology used.  
h. Canada states in AG -IMS ID 83039 that "The provincial milk marketing boards 
are currently in the proces s of implementing milk class 7 through their 
respective regulatory processes. Some of these processes are currently 
available publically on provincial government websites". The United States has 
identified the BC Milk Marketing Board Notice to Industry dat ed 1 February 
2017 and the Alberta Milk Directive No. 23017 -100 dated 31 January 2017, 
which were available on provincial milk marketing board websites, but appear 
to have been removed. The United States has also identified Dairy Farmers of 
Prince Edward I sland Board Orders DFPEI 2017 -02, DFPEI 2017 -04, DFPEI 
2017 -05, DFPEI 2017 -06; Nova Scotia Reg. 12/2017, 13/2017; and 
Saskatchewan Order No. 28/17.  
i. The United States understands Class 7 became effective 1 February 2017. 
Which provincial milk marketing boa rds have finished "the process of 
implementing milk class 7 through their respective regulatory processes" at 
this time?  G/AG/W/165  
 
- 24 - 
 
  ii. Please provide each province's notice, directive, or other document 
implementing Class 7 or a link to a website where such document ca n be 
found.  
iii. Canada states in AG -IMS ID 83039 that administrative procedures for Class 
7 "will be made available through provincial milk marketing boards and the 
Canadian Dairy Commission once it is complete and in effect." Since Class 7 
appears to be impl emented in all provinces, please explain where the CDC 
has made this information publically available.  
i. In Appendix B of Directive No. 2017 -100, Milk Pricing Methodology from 
Alberta Milk, published on 31 January 2017, Alberta Milk describes a proposed 
Centralized National Registration System. In Appendix C of the same Directive, 
Alberta Milk describes the establishment of a Provincial Billing Mechanisms 
Certification Program by the CDC.  
i. Has the CDC finished developing the National Registration System and/ or 
the Provincial Billing Mechanisms Certification Program?  
ii. Is the CDC administering the National Registration System and/or the 
Provincial Billing Mechanisms Certification Program at this time and if so, 
where can information about the system be found?  
iii. If the CDC has not completed developing or implementing the National 
Registration System and/or the Provincial Billing Mechanisms Certification 
Program, when does the CDC anticipate doing so?  
j. Schedule 4.1 of the BC Milk Marketing Board Notice to Industry dated 
1 February 2017, sets out Within -Class End -Use Price Adjustments. For 
example, Class 2(a) has an adjusted price of "70% of Protein priced at Class 
2(a) price and 30% of protein priced at Class 7 Price." The Notice also provides 
that "Billing ratios a re calculated and applied on the total milk protein 
contained in the vat from all sources – fresh milk, domestic milk protein 
ingredients, and imported milk protein ingredients."  
i. Can any of the fresh milk in a processor's vat be imported fresh milk or mus t 
all of the fresh milk in a vat be solely domestic fresh milk?  
ii. Does the presence of imported fresh milk or imported milk protein 
ingredients in the vat affect whether and to what extent domestic milk 
protein ingredients are priced at Class 7 price?  
iii. Does  the presence of imported fresh milk or imported milk protein 
ingredients in the vat incur a charge when the provincial milk marketing 
board bills processors?  
k. The Special Milk Class Permit Program notice, published by the CDC on 
17 February 2017, footnote  1 states that "Eligibility of liquid [for Class 7] is 
subject to specific rules."  
i. Please provide a copy of these rules or a website where these rules are 
publically available.  
ii. If a copy is not available, please explain the content of these rules and any  
requirements, terms, or conditions these rules set out.  
l. How is the total volume of Canada's production quota for industrial milk 
established?  G/AG/W/165  
 
- 25 - 
 
  i. Please provide the statute, law, agreement, or other document setting out 
how the total volume of Canada's prod uction quota for industrial milk is 
established, or a link to a website where such document may be found.  
ii. Has production quota for industrial milk increased in the last ten years, and 
if so, by how much?  
iii. Over the last ten years, how much of the productio n quota each year is 
attributable to planned exports?  
m. Canada states in AG -IMS ID 83039 that "The use of milk and milk components 
by processors is billed on a retroactive basis, therefore there is no such thing 
as unused components. Processors can use milk  class 7 ingredients for 
processing other dairy products or sell them on the marketplace."  
i. Are the only two options available to processors: 1) to process Class 7 
ingredients into other dairy products, and 2) sell them on the marketplace?  
ii. Are processors a llowed to store Class 7 ingredients or simply dispose of 
Class 7 ingredients? If so, what milk class price is applicable for such end 
uses?  
n. Dairy Farmers of Prince Edward Island Board Order DFPEI 2017 -04 para. 6 
specifies: Class 7 Prices apply to: (a) mil k components utilized in products 
classified in class 7 that are sold as finished products; (b) milk components 
utilized in products sold as ingredients for use in the manufacture of non -dairy 
food products; (c) milk components utilized in the manufacture of animal feed; 
and (d) milk components utilized as ingredients in dairy products classified in 
other classes by the Canadian Harmonized Milk Classification System, on a skim 
milk equivalent basis and within the limits imposed by HBR. Is the above the 
case in all provinces?  
o. Canada states in AG -IMS ID 83039 that "Milk class 4(m) will be revoked once 
milk Class 7 is implemented by all provinces". The CDC has not published class 
4(m) prices on http://www.milkingredients.ca/  for time periods after 1 
February 2017.  
i. Has Class 4(m) been revoked in all provinces?  
ii. If not, what is the status of Class 4(m) in each province?  
iii. Dairy Farmers of Prince Edward Island Board Order DFPEI  2017 -06 para. 22 
describes Class 4(m). Does this mean Class 4(m) is not revoked in Prince 
Edward Island?  
iv. Saskatchewan Order No. 28/17 para. 1(s) describes Class 4(m). Does this 
mean Class 4(m) is not revoked in Saskatchewan?  
p. Canada states in AG -IMS ID 8 3039 that "Canada understands that milk class 6 
will be revoked upon full implementation of milk class 7 in Ontario." Is Ontario 
milk class 6 revoked at this time? 17. Canada states in AGIMS 83039 in regards 
to Class 7 that "A full list of the eligible pro ducts will be posted on the Canadian 
Dairy Commission website".  
i. Is this list available? If so, where?  
ii. Is this list identical to the list included in Dairy Farmers of Prince Edward 
Island Board Order DFPEI 2017 -06, Nova Scotia Reg. 12/2017, and 
Saskatchew an Order No. 28/17 (below)?  G/AG/W/165  
 
- 26 - 
 
  Class 7 - Eligible components, products and ingredients: (a) skim milk components in 
liquid and dry form, in any concentration, derived by any process, including MPC and 
MPI(1); (b) skim -milk powder; (c) whole milk powder(2); ( d) edible casein and edible 
caseinate powders(3); (e) yogurt powders, sour cream powders, and partly -skimmed 
milk powder and blended milk powders with a maximum fat content of 4%; and (f) 
rennet casein (dry or curd) used in the manufacture of non -standardi zed final products 
in the processed cheese category(4).  
 
q. In Directive No. 2017 -100, Milk Pricing Methodology from Alberta Milk, 
published on 31 January 2017, Alberta Milk included "Dairy Product Billing 
Ratios" which provide a breakdown by each sub -class (e.g., 1(a), 1(b), etc.) of 
the percentage of the protein price that will be billed at the end -use class price 
and the percentage that can be billed at "ingredient class" price. For example, 
under class 3(b), it appears that 83% of domestic protein derived  from fluid 
milk would be billed at class 3(b) prices, and no more than 17% of domestic 
protein derived from Class 7 eligible components, products and ingredients 
would be billed at the discounted "ingredient class"/Class 7 price.  
i. Is this interpretation o f the Dairy Product Billing Ratios correct?  
ii. In reference to the example above, could processors get "ingredient 
class"/Class 7 prices for 17% of domestic protein ingredients if some or all 
of the other protein was derived from imported fluid milk or impor ted 
protein ingredients?  
iii. Does use of imported fluid milk or imported protein ingredients incur a 
charge when the provincial milk marketing board bills processors?  
r. The United States notes that Canada's exports of skim milk powder (040210) 
have noticeably grown since the implementation of the new class program mes. 
Since the introduction of modified Class 4(m) in May 2016, average monthly 
exports of skim milk powder from Canada have more than doubled in terms of 
volume. According to publically available stat istics provided by Statistics 
Canada, skim milk powder exports in the months of February and March of 
2017 were 2,206 and 4,323 MTs respectively. In March 2017, Canada exported 
its highest level of skim milk powder in years, almost 300% greater than 
March  2016.  
i. Please confirm that these statistics are correct.  
ii. How does Canada explain this abrupt increase in exports?  
s. The United States asked in AG -IMS ID 83039 for clarification on transactions 
between companies involving Class 7 in liquid form. Canada resp onded that 
"industry discussions on the future parameters for transactions between milk 
buyers involving class 7 ingredients in liquid form are not yet concluded".  
i. Have industry discussions concluded?  
ii. ii. Are the CDC, CMSMC, and/or provincial milk marketi ng boards involved in 
this discussion or potentially in implementation of any procedures involving 
transactions of Class 7 ingredients in liquid form?  
iii. Can Canada provide a response to the U.S. question: Does this mean that a 
registered food/further proces sor would be limited to buying 10,000 liters 
per month of liquid milk ingredients at Class 7 price, but there would not be 
a limit on how much Class 7 liquid milk ingredients a processor could 
purchase if the products were being exported? If so, what is th e policy 
justification?  G/AG/W/165  
 
- 27 - 
 
  t. Nova Scotia Reg. 12/2017 para. 3 refers to a "Harmonized Billing Mechanism". 
Please provide a copy of the Harmonized Billing Mechanism or a link to a 
website where it can be found.  
u. Nova Scotia Reg. 13/2017 para. 2 refers to "the N ational Ingredients Strategy 
adopted by the Canadian Milk Supply Management Committee and the 
P5 Supervisory Body". Please provide a copy of the National Ingredients 
Strategy or a link to a website where it can be found.  
v. In Dairy Farmers of Prince Edward Island Board Order DFPEI 2017 -04 Paras. 1 
and 2(f) refer to "a harmonized billing mechanism" Para 2(l) refers to "Milk 
Utilization Standards" Para. 5 refers to "Harmonized billing ratios" and a "Milk 
Utilization Reporting Manual" Please provide copies of a ll of the above or a link 
to a website where they can be found.  
w. Dairy Farmers of Prince Edward Island Board Order DFPEI 2017 -05 para. 3 
refers to "DFPEI Price Determination Order" and "DFPEI Price Application 
Order". Please provide copied of both or a lin k to a website where they can be 
found.  
x. Canada states in AG -IMS ID 83039 that "There are no limits on the amount of 
butter or skim milk powder that can be purchased through the Domestic 
Seasonality Program".  
i. Given that there are no limits on the amount o f butter or skim milk powder 
that can be purchased, all butter and skim milk powder production should 
be considered eligible for the purposes of the market price support 
calculation in supporting table DS:5. When will Canada revise its market 
price support  calculations to reflect the full amount of production that is 
eligible to receive the applied administered price?  
Answer by Canada  
 
a. Some elements of the National Ingredient Strategy continue to be under discussion. 
Certain elements still under discussion include milk class 7 complete auditing, tracking, 
and reporting rules/guidelines, and further details relating to billing ratios. A d ocument is 
not available with the full and final details of the National Ingredient Strategy. Canada 
notes that some provinces such as Nova Scotia, New Brunswick, Prince Edward Island, 
and Saskatchewan have publically notified Orders from milk marketing bo ards on new 
milk pricing through their respective Royal Gazette processes. The British Columbia Milk 
Marketing Board has also issued amended Orders on new milk pricing. All of this 
information is available online.  
b. Jurisdiction for the rules under the Nati onal Ingredient Strategy will depend on the 
nature of the rules, which are still under discussion amongst industry stakeholders. 
Canada cannot provide timelines for when and how the rules will be established, as they 
are still being negotiated between dair y producers and processors.  
c. Canada is not in a position to comment on unofficial documents released by a private 
entity.  
d. The prices under milk class 7 for butterfat, protein, and other solids are determined 
based on world prices, and the prices for skim milk powder in the United States, the 
European Union and Oceania are included in the definition of world prices. A processor 
margin is also deducted in the calculation of milk class 7.  
e. Canadian Dairy Commission support prices for butter and skim milk powd er include a 
processor margin. The methodology to calculate the component prices of 5(a), 5(b) and 
5(c) is available on the Canadian Dairy Commission website: 
http://www.milkingredients.ca/ index -eng.php?id=119   G/AG/W/165  
 
- 28 - 
 
  f. The provincial milk marketing boards set milk prices. The Canadian Dairy Commission 
acts as an administrator to calculate, and report certain prices such as for milk class 5 
(a), (b), (c), and milk class 7.  
g. Yes, Milk classes 5 (a), ( b), (c) and (d) are based on world prices. The methodology to 
calculate the component prices of 5(a), 5(b) and 5(c) is available on the Canadian Dairy 
Commission website: http://www.milking redients.ca/index -eng.php?id=119 . The prices 
for milk class 5(d) are determined on a contract by contract basis between permit 
holders and the Canadian Dairy Commission. Each milk class price is calculated 
differently. The prices under milk class 7 for but terfat, protein, and other solids are 
determined based on world prices. A processor margin is also deducted in the calculation 
of milk class 7.  
h.  
i. and ii. Canada understands that milk class 7 is being used across Canada excluding 
Newfoundland and Labrador, although not all implementing regulatory processes 
have been completed yet. Canada notes that some provinces such as Nova Scotia, 
New Brunswick, Prince Edward Island, and Saskatchewan have publically notified 
Orders from milk marketing boards on new milk p ricing through their respective 
Royal Gazette processes. The British Columbia Milk Marketing Board has also issued 
amended Orders on new milk pricing. All of this information is available online.  
iii. This information is not publically available. Some elements  of the National Ingredient 
Strategy continue to be under discussion. A document is not available with the full 
and final details of the National Ingredient Strategy.  
i. The Canadian Dairy Commission is currently working towards developing the National 
Regis tration System. There is no definitive timeline for its implementation.  
j. The eligibility for a processor to be billed at milk class 7 prices is not determined by the 
source, either imported or domestic, of dairy ingredients. There is no charge by the 
provincial milk marketing boards to processors for imported fresh milk, or imported milk 
protein ingredients.  
k. This information is not publically available. Some elements of the National Ingredient 
Strategy continue to be under discussion. A document is not ava ilable with the full and 
final details of the National Ingredient Strategy.  
l. The Dairy Products Marketing Regulations, made pursuant to the Canadian Dairy 
Commission Act, provide federal jurisdiction over the marketing of industrial milk and 
dairy products  in interprovincial and export trade, and the basis for the necessary co -
ordination and dovetailing of federal and provincial powers. For links to these 
agreements, please see the Canadian Dairy Commission website: http://www.cdc -
ccl.gc.ca/CDC/index -eng.php?id=3804  The CDC makes a recommendation to the 
Canadian Milk Supply Management Committee (CMSMC) on the national quota level to 
supply the market. The CMSMC then directs how this quota is shared among provinces. 
Each province allocates the quota to its producers according to its own policies, and in 
accordance with pooling agreements.  
i. Information on the total quota for industrial and fluid milk by month can be found on 
the Canadian Dairy C ommission website: http://www.cdc -ccl.gc.ca/CDC/index -
eng.php?id=4421   
ii. The volume and value of Canada's planned exports under milk class 5(d) are 
available in Canada's export subsidy (ES:1)  notifications. The national quota level is 
established based on butterfat requirements for domestic consumption, and any 
planned exports under milk class 5(d).  G/AG/W/165  
 
- 29 - 
 
  m.  
i. Canada understands that these are the main uses for milk class 7.  
ii. There are no rules prevent ing the storage or disposal of ingredients produced using 
milk class 7. The use of milk and milk components by processors is billed on a 
retroactive basis. It is a business decision of a processor to use, and report the use, 
of milk class 7.  
n. Canada is not  in a position to confirm this information. Some provinces are still in the 
process of implementing milk class 7 through their respective regulatory processes.  
o. Milk class 4(m) will be revoked once milk class 7 is implemented by all provinces. 
Canada has n o further updates on this issue.  
p. Some elements of the National Ingredient Strategy continue to be under discussion. 
Canada is not in a position to confirm this information. Canada understands that milk 
class 6 will be revoked upon full implementation of m ilk class 7 in Ontario. Canada has 
no further updates on this issue.  
q. Billing ratios apply to milk protein components used in the manufacture of dairy 
products, regardless if they are domestic or imported. There is no charge by the 
provincial milk marketing boards to processors for imported fresh milk, or imported milk 
prote in ingredients.  
r. These statistics are correct. Canada notes that its monthly exports of skim milk powder 
do fluctuate, and reached 4,244 MT in July 2016. Therefore, Canada does not see this as 
an abrupt increase in exports.  
s. Industry discussions have not c oncluded on all the details of the National Ingredient 
Strategy.  
t. u., and v. This information is not available publically. Some elements of the National 
Ingredient Strategy continue to be under discussion. A document is not available with 
the full and fina l details of the National Ingredient Strategy.  
w. These Orders are contained in the Prince Edward Island Royal Gazette notice 
Vol CXLIII -no 6 available on the Government of PEI website: 
https://www.pr inceedwardisland.ca/en/home .  
x.  
i. As noted in footnotes to Supporting Table DS:5 in Canada's latest DS:1 notification 
(G/AG/N/CAN/113), the total butter and skim milk powder production is accounted in 
the eligible production calculation.  
Follow -up: Australia noted interest in elements of the N ational Ingredient Strategy and asked 
Canada to provide further information at its earliest convenience given the Strategy's potential 
effect on international trade . New Zealand was disappointed with the lack of  information on some 
of the most basic issues  such as implementation timelines . New Zealand requested Canada to 
provide complete responses to all its questions, particularly those ones which were not fully 
responded such as AG -IMS ID 84022 and 84018. The E uropean Union expressed concern 
regarding the possible use of the new milk class to export surplus skim milk powder and substitute 
imports which may be incompatible with WTO rules. Mexico registered concern s.  
1.18  Canada's wine sale policy  
1.18.1   Question by Australi a (AG -IMS ID 84017)  
Australia understands that imported wine landing in British Columbia must go through 
the BC Liquor Distribution Branch (BCLDB) and is subject to a range of mark -ups, fees G/AG/W/165  
 
- 30 - 
 
  and taxes (particularly the BCLDB "mark -up" of 123%) whereas BC w ineries are 
permitted to "direct deliver" wine to customers (individuals, private stores, restaurants, 
etc.) and are therefore exempt from the mark -up applied to imports. This raises 
questions about whether the regulations are consistent with Canada's obli gations under 
Article III:1 of the GATT 1994. If BC products are exempt from the mark -up but 
imported products are not, what are the policy considerations or goals behind this 
exemption?  
 
Answer by Canada  
 
All wine that is sold through the BC Liquor Distri bution Branch (BCLDB), including from 
B.C. wineries, is subject to a wholesale mark -up of 89% with graduated mark -up for cost portion 
above $11.75/L. Current BC LDB wholesale mark -up schedule: http://www.bcldb.com/files/Mark -
up.pdf .  
 
1.18.2   Question by European U nion and New Zealand (AG -IMS ID 84106 and 84033)  
The European Union would like to co -sponsor the following question from New Zealand 
to Canada:  
 
New Zealand remains concerned about the diversity and complexity of Canada's 
provincial wine sale regulations, including those of Ontario, Quebec and British 
Columbia, which differentiate imported wines from domestic wines. In light of the 
diversity and complexity of Canada's provincial wine sale regulations, and since the 
Canadian Importation of Intoxicating Liquo rs Act gives Canada's provinces responsibility 
for wine importation, distribution and sales of alcohol: a. What steps does the Federal 
Government take to ensure provincial regulations are non -discriminatory, consistent 
with Canada's WTO obligations? b. Pro vide the Committee the results of any 
assessments of the impact of provincial regulations on imported wines as opposed to 
domestic wines undertaken by the Federal Government?  
 
Answer by Canada  
 
a. The Importation of Intoxicating Liquors Act gives provinces authority to regulate 
importation of alcoholic beverages into their jurisdictions. Canada's Constitution 
Act, 1867, sets out the division of legislative powers and responsibilities between the 
federal and provincial governments. Responsibility for enacting  laws and regulations 
regarding the sale and distribution of alcoholic beverage is the sole responsibility of the 
provinces and territories. The g overnment of Canada works closely with all provinces and 
territories to help ensure consistency of liquor dist ribution policies with Canada's 
international trade obligations. This includes engaging with provinces and territories at 
all levels through the regulatory development and implementation process. It also 
includes conveying trading partner concerns related to the issues that have been raised. 
Canada also facilitates meetings on this subject involving foreign governments and 
industry associations in an effort to increase transparency and understanding of 
provincial liquor distribution policies.  
b. Such assessme nt is currently not available.  
1.18.3   Question by United States of America and New Zealand (AG -IMS ID 84105 
and 84112)  
In AG -IMS ID 83041, Canada notes that it is consulting with Ontario on the question of 
whether imported and domestic Vintages products are allo wed to be sold through 
grocery store channels.  
 
a. Does Canada have an update on this question?  
b. If domestic products are allowed but imported products are not, what is the 
justification?  G/AG/W/165  
 
- 31 - 
 
  In AG -IMS ID 83041, Canada references the Quebec Act Respecting the Société des 
alcools du Québec, Division III. Division III, paragraph (3) states that: "The holder of a 
small -scale production permit…may also sell and deliver the alcoholic beverages he 
makes to the holder of a grocery permit issued under the Act respectin g liquor permits, 
if the beverages meet the following conditions…", but the Quebec Act Respecting the 
Société des alcools du Québec, Division III does not provide any information about the 
mark -ups that small -scale producers selling to grocery stores would  or would not have 
to pay.  
 
c. Can the United States assume that Quebec small -scale producers are able to 
bypass the liquor board mark -ups since they appear to be able to bypass liquor 
boards?  
Answer by Canada  
 
a. and b.  The LCBO will consider making wines fro m Vintages Essentials, a sub -category of 
Vintages comprising products that are continuously available, available to grocers by 
moving them to the LCBO Wines category. Interested suppliers are encouraged to 
contact the LCBO Wines category team directly.  
c. Quebec small -scale producers that sell products wholesale to grocery stores are required 
to assume sole responsibility for the sale and delivery of the products to the grocery 
stores (i.e. they are not permitted to use a third -party agent or distributor). Gi ven this 
limitation and the extra expenses related to distribution of the product, sales by Quebec 
small -scale producers to grocery stores have been negligible.  
Follow -up: Australia noted that Canada did not respond to its question on the distinction betw een 
imported wine  and BC local wine. Australia requested Canada to justify why imported wine must 
go through the BCLDB and face a range of mark -up fees and ta xes, whereas  local BC wineries  
were permitted to directly deliver wine to customers and  were there fore exempt from BCLDB 
mark-ups. New Zealand supported Australia's question. New Zealand emphasized its concern on 
the protectionist measures that were introduced by various provincial authorities  in Canada and  
questioned  how they could be consistent with Canada's WTO obligations. Given the measure's 
effect on trade, Argentina, the European Union and the United States shared interest in this issue. 
Argentina expressed particular interest in the question raised by New Zealand and the European 
Union.   
 
1.19  Canad a's tariff -rate quota for cheese and domestic support  
1.19.1   Question by United States of America and New Zealand (AG -IMS ID 84108 
and 84110)  
Can Canada provide an update on the implementation of the Canada -EU Comprehensive 
Economic and Trade Agreement (CETA) reg arding the reallocation of 800 MT of the 
WTO  cheese TRQ to the EU and an update on the allocation of the $350 million in 
domestic support that was announced in anticipation of CETA?  
 
Answer  by Canada  
 
Canada will continue to administer this quota under the Export and Import Permits Act and in 
conformity with its WTO obligations. Canada will, as it has done in the past, notify WTO Members 
of these changes through the normal WTO channels once they become applicable. On 
10 November 2016, the Federal Governm ent announced two program mes worth $350 million for 
Canada's dairy sector to adjust to increased EU cheese imports under CETA. Of this, $250 million 
over five years, available through the Dairy Farm Investment Program, will assist farmers to 
modernize thei r operations and to improve productivity. The remaining $100 million, allocated 
over four years in a Dairy Processing Investment Fund, will assist processors to improve efficiency 
and productivity. The objectives of these program mes are to make strategic i nvestments in the 
dairy sector, helping it become more efficient, productive and competitive, within a strong supply 
management system.  
 G/AG/W/165  
 
- 32 - 
 
  Follow -up: New Zealand and the United States looked forward to Canada's WTO notifications and 
future updates on this issue, particularly related to how Canada could meet its WTO commitments.  
 
1.20  India's wheat stocks  
1.20.1   Question by Australia (AG -IMS ID 84041)  
According to the Food Corporation of India, state wise procurement of wheat in India 
has already surpassed 28 million tonnes as of 16 May 2017, compared with the 
procurement of 22.9 million tonnes over the entire 2016 -2017 season. Given that 
allotments made to implemen t the National Food Security Act and other food security 
related programmes only total 24.2 million tonnes of wheat for the 2017 -18 year, and 
media reporting suggests that buffer stocks are returning to mandated buffer stock 
norms, can India answer the fol lowing questions:  
a. Has the Indian government placed any limits on the amount of wheat that will 
be procured in 2017 -18?  
b. If not, how will the Indian government dispose of this supplementary wheat? 
Will this wheat be classified as operational stocks or food  security reserves?  
c. How will the Indian government ensure that stocks held for food security 
purposes are not sold on world markets?  
In 2016 -2017, the Food Corporation of India sold 4.5 million tonnes of wheat procured 
for food security purposes to priva te traders under the Open Market Sales 
System  (OMSS). Can India provide the following information:  
d. The price that wheat is sold for under the OMSS  
e. How that price compares to the cost paid by FCI?  
f. How the price of wheat sold under the OMSS compares to do mestic Indian 
prices for wheat sold on the private market?  
g. Does India place any end -use restrictions on wheat purchased under the 
OMSS?  
h. Does India place any restrictions on private traders which purchase wheat 
under the OMSS from exporting that wheat?  
i. Does India intend to offer wheat for auction under the OMSS in 2017 -18?  
j. Have any sales of wheat been made under the OMSS to date in the 2017 -18 
Marketing Year, and what quantity of wheat has been sold?  
Answer by India 
 
Estimated procurement targets are de cided in consultation with State Governments. The Open 
Market Sale Scheme which imposes end user restrictions, is used to sell stocks for meeting 
domestic requirements only. The sale of wheat under OMSS(D) is made through open auction. 
No stocks of wheat h ave been sold under OMSS(D) during the year 2017 -2018.  As end use 
restrictions in terms of utilizing stocks disposed through OMSS for domestic purposes are imposed, 
it is not, therefore possible to divert stocks sold under OMSS to export markets.   
 
1.20.2   Question by United States of America (AG -IMS ID 84072)  
The United States would like to reiterate the questions in AG -IMS ID 83042, India did 
not provide a response, which itself was a repeat of AG -IMS ID 74048. The United States 
also notes that in AG -IMS I D 83106, Australia has shown a graph (available in G/AG/W/165  
 
- 33 - 
 
  G/AG/W/160) that the world price for wheat has steadily declined since mid -2014 to 
USD 146 per metric tonne and also that for the same period Food Corporation of India 
(FCI) procurement prices were well ab ove world pri ces, steadily increasing to 
USD 320 per metric tonne. With this additional information in reference, the United 
States repeats its question, AG -IMS ID 83042.  
 
In the question, the United States details the estimated handling and transport cost s of 
the wheat India exported from government -held stocks procured under its market price 
support program me in 2013. India responded that because the tender process was on -
going, other details of the cost cannot be provided because of commercial considerat ion. 
Now that the tender process is complete, please confirm the accuracy of the 
U.S. calculations.  
 
Furthermore, while question AG -IMS ID 74048 concerned wheat exported in 2013, India 
indicated in response to a question from Australia in the Working Party  on State Trading 
Enterprises (G/STR/Q1/IND/11) that in 2014/15 an additional 3.2 million tonnes of 
wheat were exported from government stocks.  
 
a. Please provide the information related to those exports, including any subsidy 
afforded.  
The United States has  calculated the cost to the government of India of exported wheat 
as follows, using information provided by India and applying it to a delivery from Karnal, 
Haryana, to Kandla port as an example. The United States has also used the following 
information de rived from "Report of the Comptroller and Auditor General of India on 
Storage Management and Movement of Food Grains in Food Corporation of India, Report 
No 7 of 2013". The report states that:  
 
"Statutory charges include mandi charges (Market fee, Dami/Ar hatia 
Commission, Rural Development Cess, Auction fee), purchase/trade tax and 
gunny costs. Statutory charges (except gunny cost) are levied by the State 
Governments as a fixed percentage of the MSP. Non -statutory charges 
include mandi labour, transportati on costs, driage losses, custody and 
maintenance charges, interest and milling charges, etc.  
Mandi labour charges ranged from rupees 9.47 per quintal to  rupees 
14.09  per quintal in respect of wheat in major  procuring states (Punjab, 
Haryana, UP and MP) during the period 2006 -07 to 2011 -12. 
Transportation and handling charges ranged from rupees 11.83 per quintal to 
rupees 27.98 per quintal in respect of wheat in major procuring states 
(Punjab, Haryana, UP and  MP) during the period 2006 -07 to 2011 -12.These 
charges, however, ranged from rupees 11.56 per quintal to rupees 17.97 per 
quintal in respect of Rajasthan during the same period."  G/AG/W/165  
 
- 34 - 
 
  Table 1 - Estimates for delivery of Haryana 2013 crop wheat to Kandla port i n 50-car 
unit trains  
Item  Rupees 
per 
metric 
tonne  Dollars 
per 
metric 
tonne1 Source and comments  
Cost of wheat  13,500  221.31  IFY 2013/2014 minimum support price  
Storage charges  368.4  6.04 3.07 rupees/month/50 -kg bag at CWC warehouse Karnal  
Handling charges 
(mandi and 
warehouse labor)  301 4.93 Karnal CWC labor costs, 40 -45 rupees/metric ton per 
movement, times 4 movements (~170 rupees total), plus 
mandi labor costs per Haryana State Agricultural 
Marketing Board,2 6.55 rupees per 50 kg. bag, or 
131 rupees per metric ton  
Gunny cost  600 9.84 Price of jute bags at Karnal, 30 rupees/bag times 20 bags 
per ton  
Administrative 
charges  334.68  5.49 http://fciweb.nic.in/finances/view/9 , Procurement 
incidentals, wheat  
Statutory taxes  1,417.5  23.24  Haryana tax rate of 10.5% times MSP, which includes 
market fees, market cess, VAT  
Rail transportation  1,486.08  24.36  http:// www.fois.indianrail.gov.in   
TOTAL  18,008  295.21   
1 Exchange rate 61 rupees per dollar.  
2 "Market charges (payable by the Buyer per unit for  50 kg)". See page 2 of 
Memo No ME(I) -A-III-2013/76955 -7706 dated 3 December 2013, 
http://hsamb.gov.in/notification.pdf . 
 
The United States notes that by this estimate, the cost of wheat ex FCI's warehouse in 
Kandla may exceed the minimum export price established by India of $260 per metric 
tonne by $35.21.  
Table 2 - Estimated the cost to India of a 30,000 metric ton shipment  of FCI wheat 
exported from Pipava port following the tender that closed on 3 February 2014  
Item  Rupees 
per 
metric 
tonne  Dollars 
per 
metric 
tonne1 Source and comments  
Cost of wheat  13,500  217.74  IFY 2013/2014 minimum support price  
Storage charges  368.4  5.94 3.07 rupees/month/50 -kg bag at CWC warehouse Karnal  
Handling charges 
(mandi and warehouse 
labor)  298 4.81 Ludhiana CWC labor costs, 40 -45 rupees/metric ton per 
movement, times 4 movements (~170 rupees total), plus 
11.80 rupees per quintal at the mandi per 
http://dfpd.nic.in/fcamin/policy/Punjab.pdf  
Gunny cost  646.8  10.44  64.68 rupees/quintal per 
http://dfpd.nic.in/fcamin/policy/Punjab.pdf  
Administrative charges  334.68  5.40 http://fciweb.nic.in/finances/view/9 , Procurement 
incidentals, wheat  
Statutory taxes  1,957.5  31.57  Punjab tax rate of 14.5% times MSP  
Rail transportation  1,841  29.69  http://www.fois.indianrail.gov.in/ , Ludhiana -Pipava  
TOTAL  18,946  305.59   
1 Exchange rate average of 62 rupees per dollar in February 2014.  
Note According to press reports, the price of that wheat as awarded was $275.20/metric ton. The 
United  States of America has assumed for purposes of this estimate that the wheat was of Punjabi 
origin and was shipped by 5 0-car unit train ("50 -wagon rake") from Ludhiana.  
 
According to this estimate, this shipment of wheat was exported at a price $30.39 below 
the total cost to the Indian government. Please confirm the accuracy of these 
calculations. If they are incorrect, pl ease explain how and provide a more accurate 
figure for the subsidy provided.  
 
Answer by India  
 
India thanks the United States for their continued interest in this issue. Reference to Australia's 
question AG -IMS ID 83106 is unnecessary as India has already  replied to that question. In 
addition, a corrigendum to India response to G/STR/Q1/IND/11, has already been circulated, G/AG/W/165  
 
- 35 - 
 
  clarifying the position. As regards the o ther aspects of the question, India  does not, at this stage, 
have any further information. Ind ia will respond to the Committee in due course.  
Follow -up: As the programme was intended for food security and would likely be  covered by the 
permanent solution for public stockholding  programmes, Australia noted its strong interest in 
understanding  how the system operated including what safeguard measures and  parameters  for 
procurement were applied. W ith regard to procurement targets , Australia noted India's response 
did not seem  to suggest that there was any limitation on the amount procured . In Au stralia's view, 
India seemed to be more interested in procuring a certain amount other  than limiting procurement 
and this suggest ed any production would be eligible for  procuremen t. Regarding India's  response 
on OMSS and end use restrictions, Australia was  pleased  to learn that there were some restrictions  
on wheat exports distributed through the OMSS. Australia requested India to  provide more details 
on these safeguards given the range of concerns raised by many non -proponents  on the PSH  
propos al on export ed wheat from public stockholding programmes. Canada,  Pakistan,  the Russian 
Federation and Ukraine , as wheat exporters,  express ed interest in this mechanism. Given this topic 
was part of the negotiation agenda, Argentina, Colombia, Costa Rica, the European  Union, Mexico, 
New Zealand, Paraguay and Thailand registered systemic concern  and underlined the importance 
of transparency to facilitate work in  the negotiation process .  
   
1.21  India's support price for Rabi crops  
1.21.1   Question by United States of America (AG-IMS ID 84071)  
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 or regulations that limit the eligibilit y of procurement of eligible 
product from all states.  
 
Answer by India 
 
India undertook to provide a response at a later stage.  
 
1.22  Thailand's import permits for feed wheat  
1.22.1   Question by Australia (AG -IMS ID 84059)  
Noting that Thailand's measures to limit imports of feed wheat to stabilize the domestic 
price of maize have now been in place for approximately six months, Australia seeks 
clarification as follows:  
a. What is the current status of the temporary measures?  
b. Has Thailand established a timeframe for when the temporary measure will be 
removed?  
c. Why has Thailand not notified Members of its changes?  
d. Has the measure relieved the situation of corn oversupply to date, noting the 
measures have been in place for approx imately six months?  
Answer by Thailand  
 
a. Thailand  has set the final bound tariffs for wheat at 27% since 2004 (reduced form the 
initial rate of 2.75 Baht/KG or 71% in 1995). Since September 2007 Thailand has 
exempted import tariffs for wheat to reduce the burden of the private sector.  
b. Thailand has started importing large amount s of feed wheat since 2012 and this has led 
to negative impact on corn farmers during harvest season.  
c. The import permit for feed wheat is a temporary measure which was put in place to  
relieve the situation of corn price depression.  G/AG/W/165  
 
- 36 - 
 
  d. The Ministry of Commerce is currently reviewing the increased importation of wheat at a 
reasonable level and is in consultation with the Ministry of Agriculture and the private 
sector in finding a satisfacto ry measure.  
Animal feed  manufacturers are required to be registered with the Department of 
Livestock Development.  
1.22.2   Question by United States of America (AG -IMS ID 84074)  
On 19 January 2017, Thailand instituted import permits for the import of feed wheat. It 
is the United States' understanding that in order to receive an import permit, importers 
must: 1) be feed mill owners, 2) demonstrate a three to one domestic corn absor ption 
rate (e.g., to import one ton of wheat, a mill will have to use three tons of domestically -
produced corn), and 3) not re -sell the imported feed wheat.  
 
The United States also understands that the regulation was developed as a result of a 
Thai Cabine t decision in 2016, and according to the Thai Ministry of Commerce, the 
objective is to regulate wheat imports to support corn producers through the 
stabilization of corn prices. The issue was raised at the March 2017 Committee on 
Agriculture session. In r esponse to questions about the measure, Thailand confirmed 
that importers are required to purchase domestically -produced corn in order to obtain 
an import permit to import feed wheat. Thailand also stated that that this was a 
temporary measure, which was p ut in place to relieve the situation of market oversupply 
of corn. However, for portions of the regulation, Thailand stated that it was slightly 
unprepared to answer questions and agreed to relay these concerns to the capital. The 
United States respectfull y requests answers/updates to the following questions 
originally posed at the March 2017 Committee on Agriculture session:  
a. Please clarify whether under the new system, mill owners can be located in 
foreign countries or must have a physical presence in Tha iland.  
b. The structure of Thailand's wheat import regime appears to require that the 
government maintain a balance of grains by controlling the ratio of 
domestically -produced corn to imported feed wheat used to produce feed by 
Thai feed mills. Please explai n how these requirements are consistent with 
Thailand's WTO obligations. The United States is concerned that this regime is 
designed to afford a preference to domestically -produced grains.  
c. Thailand's wheat import regime appears to restrict the re -sale of i mported feed 
wheat. Is the internal sale and/or distribution of feed wheat, corn, or other 
products also restricted for domestic products? Please explain how these 
requirements are consistent with Thailand's WTO obligations.  
d. The United States understands from Thailand that this is a temporary measure. 
When does Thailand expect this measure to be revoked?  
Answer by Thailand  
 
See reply above.  
 
Follow -up: The European Union reiterated its concern on  the measure. Ukraine noted interest in 
understanding how Th ailand considered this measure could comply  with WTO obligations.  
1.23  Thailand's rice policies  
1.23.1   Question by United States of America (AG -IMS ID 84103)  
The United States respectfully requests a complete response to the following questions 
originally posed at t he March 2017 Committee on Agriculture meeting:  
  
On-Farm Rice Pledging Program  G/AG/W/165  
 
- 37 - 
 
    
Thailand's On -Farm Rice Pledging Program, which started in November 2016, currently 
includes pledging for up to 1 million metric tonnes (MMT ) of white rice with an 
intervention price of 200 USD/MT and 2 MMT of fragrant and glutinous rice with an 
intervention price of 270 USD/MT. According to the Ministry of Commerce, the 
programme received around 1 MMT of paddy rice between November 2016 and 
February  2017, of which approximately 80% was fragrant paddy rice, with the 
remainder being glutinous paddy rice, Pathum fragrant paddy rice, and white paddy rice.  
  
a. Please confirm the prices used and quantities procured by the government of 
each type of ri ce under this programme.  
b. Are there any plans to extend or modify the pledging programme? If so, are 
there plans to increase the eligible quantity of rice or the intervention price of 
rice under the programme?  
Interest Rate Subsidy Program  
  
Thailand's Interest Rate Subsidy Program for rice millers, traders, and farmer 
institutions supports the production of white rice varieties.  
  
a. Besides the On -Farm Rice Pledging Program and the Interest Rate Subsidy 
Program, are there any other rice suppor t programmes in place that benefit 
white rice? Does the government of Thailand have any plans to implement new 
programmes that would include support for white rice?  
b. Please provide details on any other programmes that are currently in place or 
that are exp ected to be implemented that would include white rice.  
Answer by Thailand  
 
Thailand has implemented various programmes such as a programme to promote the usage o f 
high quality Hom Mali seeds, a programme to promote large scale agriculture, and an organic rice 
programme. These programmes aim to facilitate rice production focusing on development and 
addressing the production and marketing aspects throughout the supply chain. The programmes 
are focused on reducing costs, promoting technology to increase produ ction, and providing support 
for production planning in line with marketing aspects.  
 
1.24  U.S. Federal Milk Marketing Order (FMMO)  
1.24.1   Question by Canada (AG -IMS ID 84055)  
According to a 1953 Wisconsin State Law, the sale of butter is prohibited without either 
a W isconsin or Federal Grade Mark 
(https://docs.legis.wisconsin.gov/statutes/statutes/97/II/176 ). According to several 
news articles, the KerryGold brand of butter produced in Irelan d has been pulled off 
store shelves as it does not meet the conditions of the Law. However, consumers can 
still purchase this brand of butter in Nebraska and Illinois.  
a. What is the objective of the current butter laws in Wisconsin?  
b. Could the U.S. please d escribe why butter laws in Nebraska and Illinois are 
different from Wisconsin? Are they not pursuing the same objective?  
Answer by United States of America  
 
The United States notes that these questions are outside of the scope of the Committee on 
Agricult ure and suggests that these questions are more appropriate to be raised in the 
TBT Committee to be addressed by appropriate experts.  
 G/AG/W/165  
 
- 38 - 
 
  1.24.2   Question by Canada (AG -IMS ID 84056)  
According to the Wisconsin State Journal: "the Wisconsin Department of Agriculture, 
Trade and Consumer Protection Secretary Ben Brancel and New York Agriculture 
Commissioner Richard Ball wrote to USDA Acting Deputy Secretary Michael Young on 
Friday (April 7th, 2017) seeking assistance for their states' dairy farmers. They want the 
USDA to buy cheese and butter in storage to distribute in its nutritional aid programs, 
including food banks and the school lunch program" . 
(http://host.madison.com/wsj/business/wisconsin -new-york-seek -usda -aid-for-dairy -
farmers -impacted/article_dac02e88 -e923 -51ba -8082 -b0b3ecf4746a.html ). Canada 
notes that this would call for cheese purchases under the US DA Section 32 of the 
Agriculture Act of 1935.  
a. Could the U.S. please confirm if the USDA is planning to purchase cheese 
and/or butter from processors in Wisconsin and New York, or other states in 
the Upper Midwest, Mideast and/or Northeast Federal Milk Mar keting 
Order  (FMMO)?  
b. In 2016, the U.S. made two purchases of cheese using Section 32 of the 
Agriculture Act of 1935. Were the last two purchases procured from 
processors/handlers in the Upper Midwest, Mideast and/or Northeast FMMO ? If 
so, from which states in particular?  
Answer by United States of America  
 
a. No purchases of dairy products have been announced under the Section 32 program me 
in 2017. Purchases under Section 32 are made through an open bidding procedure in 
which all app roved vendors may participate.  
b. As with all USDA foods purchasing, purchases under Section 32 are made through an 
open bidding procedure in which all qualified vendors may participate. USDA evaluates 
offer prices and other factors (including past performan ce), and contracts are awarded to 
achieve the best value to the government. The location of the vendors is not a 
consideration in the evaluation of offers. Information on dairy product purchase requests 
and awards can be found at the following link: https://www.ams.usda.gov/open -
purchase -request/Dairy_Products%2C_Grades_&amp;_Procurement_of . 
 
1.24.3   Question by Canada (AG -IMS ID 84064)  
According to an artic le in the Wisconsin State Farmer, (2017 -04-25) entitled "Don't 
Blame Canada for Dairy Woes, Look Around" 
(http://206.75.155.11/Agcan/m.endbbsummarie s.asp?articleId=/agcan/products/new
s/f0042110.htm ), "heavy volumes of cheap, out -of-state milk are invading Wisconsin — 
at prices several dollars under the Class III (cheese) milk price, delivered. Dozens of 
trailer loads of out -of-state milk have arrived in Wisconsin every day this spring. USDA's 
Dairy Market News reports each week discounted prices at which out -of-state milk is 
delivered to Wisconsin dairy plants. Right now, depending upon the day of the week, 
out-of-state milk is priced at $2.00 to $5.00 /cwt. below the monthly federal milk order 
value. Annual contracts for Michigan milk are being offered to Wisconsin cheese plants 
are prices of $2.00/cwt. Below the Class III (cheese) milk price."  
 
As Wisconsin and Michigan (as well as presumably the othe r out -of-state milk 
references) are under Federal Milk Marketing Orders (FMMO), could the United States 
explain how and why the price being paid by processors/handlers is below the minimum 
FMMO price in the cases listed in the article above? Are the produc ers not receiving 
minimum prices for their milk?  
 
Answer by United States of America  
 
The U.S. Federal Milk Marketing Order program me only requires the pooling of Class I (fluid) milk. 
The pooling of manufacturing milk and Milk Classes II, III, and IV (so ft products, cheese, butter, G/AG/W/165  
 
- 39 - 
 
  and non-fat dry milk) is voluntary. Minimum regulated classified prices are not enforced on milk 
not pooled. Manufacturers who opt to not pool their manufacturing milk are free to contract for 
milk purchases at prices they nego tiate privately with suppliers.  
 
Follow -up: The European Union noted that question AG -IMS ID 84055 could fall within the TBT 
Committee but was disappointed that the United States did not respond at this Committee given 
this was an important agriculture su bject. The European Union would seek U.S. verification at the 
TBT Committee concerning whether all states had similar measures in place.  
 
1.25  Turkey's IPR programme  
1.25.1   Question by Russian Federation (AG -IMS ID 84113)  
a. What amount of wheat has been imported under IPR since 2010 ?  
b. What amount of flour has been exported by Turkey under IPR since 2010?  
c. Under IPR what index is applied for an equivalent duty-free import of wheat 
when exporting one tonne of flour?  
Answer by Turkey  
 
Turkey undertook to provide a response at a later stage.  
 
Follow -up: The European Union and the United States flagged interest in the question.  
 
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   Thailand (G/AG/N/THA/82, G/AG/N/THA/84)  
AG-IMS ID 84102: Question by United States of America - Transparency issues  
The United States welcomes Thailand's timely notification of tariff -rate quota  (TRQ) 
administration measures and imports withi n the TRQs. Does the Government of Thailand 
have any domestic purchase requirements as a condition for importers to receive 
permission to import under tariff -rate quotas for soybeans, soybean meal, fresh 
potatoes, and non -fat dry milk? If so, please provid e a copy of the written measure and 
describe how the requirements are administered.  
 
Answer by Thailand  
 
The Thai government has no domestic purchase requirem ents for the importation under TRQs for 
soybeans, soybean meal, fresh potatoes, and non -fat dry milk. According to  statistics Thailand has 
expanded its importation of the abovementioned products above its obligations under the WTO.  
 
2.2  IMPORTS UNDER TARIFF AND OTHER QUOTA COMMITMENTS (TABLE MA :2) 
2.2.1   European Union (G/AG/N/EU/37)  
AG-IMS ID 84053: Question by Canada - Tariff quota fill  
Canada notes that based on the European Union's Table MA:2 
Notification  (G/AG/N/EU/37), many of its TRQs have reported low fill rates. What steps 
and changes to TRQ a dministration is the European Union envisioning to ensure that 
quota fill is maximised, including simplifying quota procedures?  
 
Answer by European Union  
 
The European Union does not consider that the low fill rates in question are linked to 
TRQ management methods. Thanks to the reforms the European Union has implemented over G/AG/W/165  
 
- 40 - 
 
  several decades, the internal EU  price for many agricultural products is much more closely aligned 
to the world market price, which itself is much higher than in the past. F or many products there is 
therefore less of an economic interest to import. The European Union would like to underline that 
already 44 of the 64 TRQs listed in notification G/AG/N/EU/37 are managed on a first -come, 
first-served basis. These TRQs are indica ted in the notification by means of an * in the column 
"In-quota imports during the period".  
AG-IMS ID 84101: Question by Guatemala - Tariff quota fill  
According to the EU notification of TRQ G/AG/N/EU/37, most of the TRQ's have not 
been fully used. What i s the reason of this situation?  
 
Answer by European Union  
 
The reason is economic. Thanks to the reforms the EU has undertaken over several decades, the 
internal EU price for many agricultural products is much more closely aligned to the world market 
price, which itself is much higher than in the past. For many products there is therefore less of an 
economic interest to import. The EU would like to underline that already 44 of the 64 TRQs listed 
in notification G/AG/N/EU/37 are managed on a first -come, firs t-served basis. These TRQs are 
indicated in the notification by means of an * in the column "In -quota imports during the period".  
 
Follow -up: As most of the EU TRQs were administered on a first come and first served basis 
Canada asked whether the European Union would consider the same administration arrangements 
for the rest of its TRQs. The United States supported Canada's follow -up question. Argentina and 
Brazil flagged interest in this issue.  
 
2.2.2   Japan (G/AG/N/JPN/210)  
AG-IMS ID 84052: Question by European  Union - Other  
Japan's dairy TRQs in recent years have had a low fill rate, e.g. SMP fill rates are 
respectively 27,3%, 27%, 25,2% and 25% for 2012 to 2015, and butter fill rates 
respectively 28,6%, 20,5%, 25% and 29% for 2012 to 2015.  
 
The European Union thanks Japan for its reply at the June 2016 meeting to questions 
from the European Union  on Japan's notification G/AG/N/JPN/210 of 7 March 2016 
covering fiscal year 2014. Taking into account the reasons given for such low fill rates 
(very restrictive scope  for the use of these products) which is producing the same 
negative effect in fiscal year 2015, the European Union  suggests to Japan to eliminate 
the restrictions associated with these imports, i.e.  eliminate the requirement that they 
be destined for scho ol lunch and for other purposes requirements for SMP and 
consumption by international airlines, international trade fairs and other specialized 
purposes for butter/buttermilk.  
 
Answer by Japan  
 
Japan operates TRQs appropriately in a fair and transparent ma nner, consistent  with WTO 
agreement . Underutilization of some TRQs is mainly related to a decrease in domestic demand for 
those TRQs. Furthermore, a scheme of reallocation such as providing several opportunities of 
application per year has already been int roduced to fill up the quotas.  
 
Follow -up: The United States indicated interest  in this question.  
 
2.2.3   United States of America (G/AG/N/USA/102/CORR.1)  
AG-IMS ID 84100: Question by Guatemala - Tariff quota fill  
The U.S. notification, G/AG/N/USA/102/Corr.1, in  relation of imports under tariff 
quotas. We noticed that  for "Raw Cane Sugar" the quota fill for the year 2013 is 53.7%. 
Based on the U.S. notification for the year 2012 G/AG/N/USA/94, the quota fill was 
of 113%. What is the reason for this low fill rate and the difference in comparison with 
the previous year?  
 
Answer by United States of America  G/AG/W/165  
 
- 41 - 
 
   
The reason for this difference is that in any given year, the extent to which the raw sugar cane 
tariff quota is subscribed depends on domestic market conditions and world sugar markets. In 
some years, when there is a lack of raw sugar, the Secretary of Ag riculture authorizes additional 
imports above the minimum Uruguay Round commitment of 1,117,195 metric tons. In 2012, the 
United States imported 1,263,083 MT of raw sugar under the in -quota tariff rate.  
 
2.3  DOMESTIC SUPPORT COMMITMENTS (TABLE DS:1)  
2.3.1   Argentina  (G/AG/N/ARG/36)  
AG-IMS ID 84099: Question by United States of America - Transparency issues 
(including Table DS:2)  
In AG IMS ID 83049 Argentina indicated that two programmes, Support Programme for 
Small and Medium -Sized producers (PAPYM) and the Agricultu ral Social 
Programme  (PSA), ceased to function independently in 2013 and were merged into a 
single programme, the Inclusion and Rural Development Programme (PIDER), in 2013. 
All of these measures, as the United States understands Argentina's response, oper ate 
under a broader unidentified policy that had been implemented for years.  
 
a. To increase transparency, could Argentina provide information regarding this 
and any other unidentified policy in its Table DS:2 notification, which is 
intended to report new or modified measures to this Committee.  
b. To help Members better understand Argent ina's policies, until a Table DS:2 
notification is submitted, please describe how the PIDER programme is 
implemented and explain the broader policy context for all three identified 
measures notified.  
Answer by Argentina  
 
As indicated in the replies given by Argentina at the 83rd meeting of the Committee on Agriculture, 
although the Inclusion and Rural Development Programme (PIDER) appears as a new programme 
in the most recent notification submitted by Argentina (G/AG/N/ARG/36 for the 
2011-2012 period), it was created under policies that were already being implemented through the 
Agricultural Social Programme (PSA) and the Support Programme for Small and Medium -Sized 
Producers (PAPYM). The purpose of these two programmes, which were duly notified by Argentin a 
to the WTO, was to provide training and financial and technical assistance to small -scale producers 
in various provinces. The specific aim of the PIDER is to promote the economic, social, political and 
cultural integration of family farmers, small and me dium-sized producers and indigenous 
communities, with due regard to gender and generational equity, and it is implemented in a 
framework of cooperation, coordination and complementarity with other public rural development 
policy actors. This programme also  seeks to promote and enhance access to natural resources and 
land tenure security with a view to raising standards of living and encouraging settlement in rural 
areas, as well as building the organizational capacity of the sector and increasing its visibi lity as a 
key political actor in the new rural paradigm. In terms of socio -economic development, priority is 
being given to the provision of training for, and the strengthening of, agricultural and 
agro-industrial cooperatives in the context of their core values.  
 
2.3.2   Brazil (G/AG/N/BRA/41, G/AG/N/BRA/40, G/AG/N/BRA/32)  
AG-IMS ID 84051: Question by European Union - Transparency issues (including Table 
DS:2)  
The European Union thanks Brazil for its reply to the EU question on  Brazil's 
notifications G/AG/N/BRA/41 , G/AG/N/BRA/40  and G/AG/N/BRA/32 in the context of 
the 83rd meeting of the Committee. Based on the explanations provided by Brazil, the 
European Union would like to ask the following follow -up questions:  
 
a. Has Brazil notified or does Brazil intend to notif y to the WTO the use of 
BRL 528 million which has been disbursed by IBA as support for projects in the 
cotton sector?  G/AG/W/165  
 
- 42 - 
 
  b. Brazil explains that 81.5% of the remaining amount of BRL 1,619 million was 
put into investment funds. How has the remaining 18.5% of the 
BRL 1,619  million been spent?  
c. Brazil explained that the amount placed into the BR Partners Investment Fund 
was BRL 870 million. According to our understanding BRL  449.485 
((1,619*81,5%) – 870) was put to other investment funds, could Brazil confirm 
and if so provide further details?  
d. Are financing decisions of the BR Partners Investment Fund in any way directed 
by the Brazilian government? Is the financing of the cotton sector in any way 
prioritised in the investments of the BR Partners Investment Fund?  
Answer by Brazil  
 
a. As Brazil explained to the European Union in the last CoA meeting, the funds received 
under the "Memorandum of Understanding Related to the Cotton Dispute" (hereinafter 
the "MOU"), signed by Brazil and the United States, are private funds . They are 
managed by a private non -profit civil organization (IBA) which directs the allocation of 
these resources in specific projects within the scope of the authorized activities listed in 
Article II.5 of the MOU, as well as reasonable administrative e xpenses. As clearly 
established in its by -laws, IBA operates with complete patrimonial, administrative and 
financial autonomy from the Brazilian government, whose involvement with the latter is 
limited to ensure compliance with its monitoring obligations u nder the MOU. Therefore, 
neither the funds disbursed nor the projects approved by IBA qualify as domestic 
support measures that require notification within the meaning of the Agreement on 
Agriculture.  
b. For the sake of clarity, as will be explained in the an swer to the following question, all of 
IBA's monies (both the monies transferred under the MOU and any investment income 
thereof) that are not being disbursed in projects are maintained invested within a 
diversified investment portfolio of financial assets . In the case of the remaining funds 
mentioned in the second part of the question, according to IBA's interim financial 
statements (as of June 2016), these funds consisted of "cash and cash equivalents", 
which included the checking account balance and shor t-term investments with daily 
liquidity.  
c. As it is common practice, in order to ensure the value of the monies that has not been 
yet disbursed, IBA maintains an investment policy that pursues the allocation of funds in 
a diversified investment portfolio of  financial assets, which may include, inter alia , 
national treasury notes, bank deposit receipts, first -class bank debentures and 
investment funds managed by first -line management institutions, all in line with Brazilian 
financial regulations. In addition,  the investment decisions and the composition of the 
portfolio are exclusively taken by IBA, and have no involvement of the Brazilian 
government.  
d. Please refer to the previous answer. The Brazilian government has no involvement wi th 
IBA's investment decisio ns.  
2.3.3   Burundi (G/AG/N/BDI/9)  
AG-IMS ID 84049: Question by European Union - Trans parency issues (including 
Table  DS:2)  
The European Union  would recognise the efforts made by Burundi to fulfil its notification 
obligations.  
 
The European Union notes that the notification for the years 2013, 2014 and 2015 
indicates that Burundi did not grant any subsidies to its farmers or the agricultural 
sector. Can Burundi confirm that no Green Box or Article 6:2 (interest and input) 
subsidies were granted to farmers and the  agricultural sector within Burundi?  
 G/AG/W/165  
 
- 43 - 
 
  Answer by Burundi  
 
Burundi undertook to provide response at a later stage.  
AG-IMS ID 84097: Question by United States of America - Transparency issues 
(including Table DS:2)  
Burundi has notified that it has provided n o agricultural domestic support since 2009. It 
is the United States' understanding that the National Fertilizer Subsidy Programme was 
introduced in 2012, which subsidizes the price of fertilizer. According the Second 
Vice-President of Burundi, the governme nt would be allocating funds to facilitate the 
programme during the period covered by this notification and the result of the subsidy 
programme was "a significant increase in crop production… such as maize."  
  
a. Please provide more details with regards to t he implementation of this 
programme and whether the programme has since been expanded to other 
inputs.  
b. Will Burundi be providing updated Table DS:1 and Table DS:2 domestic support 
notifications to reflect this measure?  
Answer by Burundi  
 
Burundi undertook to provide response at a later stage.  
 
2.3.4   European Union (G/AG/N/EU/34)  
AG-IMS ID 84098: Question by United States of America - Negative support amounts  
In response to AG IMS ID 83083, the European Union stated that the negative level of 
support notified was not taken into account in the Current Total AMS. The United States 
fully agrees that negative amounts are not taken into account in the Current Total AMS, 
as they fall below the de minimis level. However, this is not the concern raised b y the 
United States; the U.S. concern is that the negative product -specific support notified by 
the European Union in column 2 of Supporting Table DS:4 gives the indication that there 
was a negative benefit, tax, or other cost born by beef producers.  
  
Please indicate how the negative market price support for beef notified by the European 
Union was a negative benefit, tax, or other cost born by beef producers, resulting in the 
negation of actual support provided.  
 
Answer by European Union  
 
The EU has ne ver taken the view in its Domestic Support notifications that negative Market Price 
Support is a negative benefit, tax or cost for farmers, as it has consistently been excluded from 
the overall AMS calculation. This would in the EU's view be an inappropria te conclusion to draw 
from the presentation of a negative amount related to Market Price Support in Table DS:4.  
 
2.3.5   Gabon (G/AG/N/GAB/7)  
AG-IMS ID 84077: Question by United States of America - Transparency issues 
(including Table DS:2)  
The United States unde rstands from this notification that no support of any kind was 
provided to agricultural producers from 2013 -2016. However, the United States also 
understands Gabon introduced the "Gabon des Réalisations Agricoles et des Initiatives 
des Nationaux Engages (G RAINE)" programme in 2014, which is co -funded by the 
Government of Gabon. The programme appears to have different components, such as 
initiatives aimed at encouraging new farmers, loan repayment schemes for land 
acquisitions, development of cooperatives an d related activities, and promoting 
mechanization. The United States also notes the Government of Gabon co -funds the 
"Projet de Dé veloppement et d'Investissement Agricole au Gabon (PRODIAG)", which 
was launched in 2011, and has a stated goal of promoting commercialization of 
peri-urban agriculture and supporting higher crop production through cooperatives and G/AG/W/165  
 
- 44 - 
 
  develop husbandry, such as poultry and pigs. These programmes appear to play an 
important role in developing Gabon's agricultural sector, and the Gov ernment of Gabon 
should be recognized for these efforts in this Committee.  
  
a. Please provide details of the Government's role in these and any other 
programmes fully or partially funded by the Government of Gabon.  
b. Please explain how these and any other id entified programmes are 
implemented and the basis for not including these in Gabon's domestic support 
notification.  
c. Will Gabon be amending its most recent DS:1 and DS:2 domestic support 
notifications to account for these measures?  
Answer by Gabon  
 
Gabon undertook to provide response at a later stage.  
 
2.3.6   Guatemala (G/AG/N/GTM/57)  
AG-IMS ID 84076: Question by United States of America - Transparency issues 
(including Table DS:2)  
In July 2016 the Guatemala Ministry of Agriculture and Food introduced the Programa 
de Subvencion de Insumos Agropecuarios (PSIA), which is understood to provide small 
and medium -sized agricultural producers with cash coupons of a fixed value to purchase 
inputs (e.g., fungicides, seeds, fertilizer, etc.). It does not appear Guate mala has 
notified this programme in its 2016 notification.  
  
a. Please provide further details as to how this programme is implemented and 
whether it was a one -time payment to eligible producers for eligible inputs.  
b. Does the programme apply to production co vered by Guatemala's domestic 
support notification for 2016? If so, what is the basis for not notifying this 
programme (e.g., will it be covered in Guatemala's 2017 notification)?  
Answer by Guatemala  
 
Guatemala undertook to provide response at a later sta ge.  
 
2.3.7   Panama (G/AG/N/PAN/41)  
AG-IMS ID 84040: Question by Canada - General services: infrastructural services  
Canada notes the following description of "Rehabilitation of other infrastructure under 
infrastructural services": Rehabilitation and equipping of  public infrastructure with a 
view to providing producer support, e.g. cleaning and adaptation of silos and 
cold-storage facilities to help producers with produce storage, and provision of other 
agro-industrial services (storage, drying, milling, packing, etc.) and a cold chain.  
  
a. Could Panama provide additional information to clarify that this support meets 
the criteria of paragraph 2(g), Annex 2 in that no support was provided for 
on-farm facilities other than for the reticulation of generally available public 
utilities?  
b. Canada notes that there has been a 206% increase in support in 2016 
compared to 2015. Could Panama elaborate on the types of projects that have 
been supported in 2016?  
Answer by Panama  
 G/AG/W/165  
 
- 45 - 
 
  a. The support described in "Rehabilitation of other infrastructure" under "Infrastructural 
services" is not granted in respect of producer farm facilities, rather it is State 
investment in government property (infrastructure and maintenance) with a view to 
providing services to producers.  
b. Support provided i n 2016 was mainly for the repair and maintenance of infrastructure 
owned by the government (Agricultural Marketing Institute), for example:  
 Silos de Las Barreras and Agencia de Soná, in Veraguas province;  
 Silos de la Agencia de David, in Chiriquí province;  
 Silos de la Agencia de Chepo, in Panamá province;  
 Silos La Honda, in Los Santos province;  
 Molino La Campiña, in Coclé province;  
 Frigorífico Panamá, in Panamá province;  
 Warehouse roof repair; office, bathroom and roof refurbishment; and painting work 
at Agricultural Marketing Institute extension agencies;  
 Purchase of grain driers and pre -cleaners;  
 Rehabilitat ion of cold -storage facilities.  
AG-IMS ID 84045: Question by Australia - Direct payments: structural adjustment 
assistance provided through investmen t aids  
Australia thanks Panama for its 2016 domestic support notification. Australia has 
previously raised questions about Panama's programme termed the "Incentive 
programme for the domestic production of grain and other crops".  
 
a. Can Panama confirm that this programme continues to have "no, or at most 
minimal, trade -distorting effects or effects on production", and provide 
evidence to this effect?  
b. Can Panama provide an update on the current and future status of this 
programme; wit h the Table  DS2 notification (G/AG/N/PAN/38) noting that the 
programme will be reviewed 'in the third year after its entry into force 
(1 May 2013)?  
Answer by Panama  
 
a. Panama hereby confirms that the "Incentive programme for the domestic production of 
grain and other crops" continues to meet the fundamental requirement of Annex 2 of 
having "no, or at most minimal, trade -distorting effects or effects on production".  
A number of findings concerning the limited trade -distorting effects or effects on 
production of the crops covered by the Programme (rice, beans, maize, sorghum, 
industrial tomatoes, onions and pigeon peas and Chiriquí beans) are set out below:  
i. Taking the year in which the Programme was launched as a reference, production 
levels of the said crops h ave seen little change.  
ii. Domestic consumption is satisfied in most cases by domestic production and imports 
and in a few cases, such as maize, by a large proportion of imports (around 85%).  
iii. Price changes have been minimal, which leads to the conclusion that  there has been 
little or almost no trade distortion.  
iv. Production performance continues to be largely determined by climatic factors 
(excess rainfall or drought).  G/AG/W/165  
 
- 46 - 
 
  b. Panama hereby advises that the main crops that have received support are rice, maize 
and tomat oes. Law No.  107 of 21  November  2013 "Creating the incentive programme for 
the domestic production of grain and other crops" remains in effect, as described in 
Table DS:2 of notification G/AG/N/PAN/38. As at June  2017, the review of this Law 
pursuant to  Article 9 thereof (which provides that "The Law shall be reviewed in the third 
year after its entry into force in order to assess the possibility of changes in respect of 
certain crops and the scope of the incentives granted") is underway but has not yet bee n 
completed.  
c. In the (short -term) future, Panama does not envisage major changes to the actions 
under this Programme, which are those described in the objectives, scope and measures 
set out in Law No.  107 of 21  November  2013 "Creating the Incentive programm e for the 
domestic production of grain and other crops". This will, however, depend on the 
outcome of the related re view that is currently underway.  
AG-IMS ID 84042: Question by Canada - Direct payments: structural adjustment 
assistance provided through investment aids  
Canada notes that support for the "Incentive programme for the domestic production of 
grain and other crops" notified under "Structural adjustment assistance provided 
through investment aid" decreased significantly (64%) between 2015 and 20 16. 
Panama's Table DS:2 notification (G/AG/N/PAN/38) notes that the programme will be 
reviewed after three years. Could Panama elaborate if the decrease in support is a result 
of the review or other factors?  
 
Answer by Panama  
 
Support  under "Structural ad justment assistance provided through investment aids" decreased 
between 2015 and 2016 as a result of factors unrelated to the review, which was scheduled to 
take place three years after the launch of the Programme.  
 
The decrease in support is mainly due to  the fact that the disbursements corresponding to 
investments by producers in the 2013 -2014 and 2014 -2015 agricultural cycles were made in 2015. 
The payments were made in 2015 because this was a new programme and there was no relevant 
budget item in 2014.  
AG-IMS ID 84095: Question by United States of America - Direct payments: structural 
adjustment assistance provided through investment aids  
Panama has notified 'Incentive programme for the domestic production of grain and 
other crops' as a 'structural adjus tment assistance provided through investment aid.' In 
response to AG IMS ID 80076 and 80067 Panama stated that payments under the 
programme that are paid "per harvested quintal for farmers with yields higher than 
those established in Law" or "per each addi tional hectare under crops" are one -off 
payments for each occasion the incentive applies. In the example given, Panama states 
"producers may receive the bonus for each additional hectare under crops in 2016 if 
they have in fact increased their planted area ; but this does not mean that if they 
increase that area again in 2017, they are not entitled to receive the bonus with respect 
to the additional area under crops for that year."  
  
a. To clarify the example provided, does this mean that each farmer is only 
eligible for payment once under this measure if they add additional area for any 
of the covered commodities?  
b. Given that payments are in fact "related to, or based on, the type or volume of 
production undertaken by the producer in any year after the base pe riod" how 
does this programme meet the criteria of paragraph 11 of Annex 2 of the 
Agreement on Agriculture?  
In response to AG IMS ID 82018 Panama goes on to explain that the programme is not 
designed to increase production, but rather incentivize improved  production techniques 
and in response to AG IMS ID 80067 Panama states producers would be expected to G/AG/W/165  
 
- 47 - 
 
  make certain types of investments, including those listed in the response, to receive the 
payment.  
  
c. How does Panama ensure producers are making the exp ected investments?  
d. Please explain the basis for using the established seemingly indirect 
determinants of payments rather than directly incentivizing the use of modern 
technology and techniques.  
e. Please provide any other information that would help Members  better 
understand the implementation of this measure in the context of the 
Agreement on Agriculture.  
Answer by Panama  
 
a. Support is provided not for additional increases in surface area, but for the 
implementation of the specific technological elements bei ng promoted (technology, 
mechanization, irrigation, use of certified seeds and non -use of environmentally 
unfriendly farming practices).  
Take the example of a producer seeking support in the specific case of rice and on the 
basis of the use of irrigation t echnology and certified seeds who, in 2015, implemented 
this technology on 20 hectares. This producer will be entitled to support in  2016 only if 
he implements the above -mentioned technology on additional hectares (for example, if 
the total number of hectares is now 25, only the five additional hectares will be eligible 
for support). In 2017, support will only be provided for any hectares using the said 
technology over and above the 25 hectares under crops in the previous year. And so on.  
b. With regard to Question 2, payments to producers are made on the basis of not 
production volume but embodied technology, calculated in accordance with the surface 
area benefiting from the technological investment. For example, support is provided not 
for rice producti on, but for the number of additional hectares where the technology being 
promoted has been implemented.  
c. Panama ensures that producers are making the expected investments by granting 
support only once the relevant requirements have been met. in  our previous  example, 
support payments are made only when, in real terms, additional hectares are under 
irrigation and certified seeds have been used. Consequently, Ministry of Agricultural 
Development officials monitor the Programme and the production process from th e 
outset right up until the existence of the investment infrastructure, such as irrigation, is 
confirmed.  
d. There are no indirect determinants of payments, only the established ones that refer to 
the adoption of specified technology (mechanization, irrigatio n, non -use of ancestral 
farming practices, and use of certified seeds).  
e. Panama wishes to reiterate that, in the framework of the Programme, what it is trying to 
correct are elements related to the following structural aspects of production:  
 The use of farm ing practices that are often ancestral, such as slash and burn, not 
only damage the environment, but lead to yields so low that producers are not even 
able to recover their production costs.  
 Little or no utilization of certified seeds also results in yield s so low that producers 
are unable to recover their production costs.  
 For many crops and for certain producers, the technology used differs considerably 
from one producer group to another and one region to another, and above all in 
comparison to other coun tries. G/AG/W/165  
 
- 48 - 
 
  Panama therefore confirms that the "Incentive programme for the domestic production 
of grain and other crops" has "no, or at most minimal, trade -distorting effects or effects 
on production".  
AG-IMS ID 84043: Question by Australia - Other product -specific AMS/EMS  
Australia notes the large rise in product -specific support for rice, maize and milk 
in 2016. Can Panama provide the prices received by farmers for these products?  
 
Answer by Panama  
 
Official information in Panama is published by the Office of  the Comptroller -General of the 
Republic. To date, information has been published only up until 2015, as shown in the table below. 
The balboa is pegged to the US dollar and both currencies are legal tender in Panama.  
 
1. Premium rice in the husk (per quintal) : 
farm gate price: 2014 : 20.42  balboas; 2015 : 20.79 balboas ; 
market price: 2014 : 23.17 balboas; 2015 : 24.88 balboas  
 
2. Dried maize grain (per quintal) : 
farm gate price: 2014 : 21.45  balboas; 2015 : 21.87 balboas ; 
market price: 2014 : 24.37 balboas; 2015 : 27.38 balboas . 
 
3. Fresh cow's milk (per bottle) : 
farm gate price: 2014: 0.44 balboa cents; 2015 : information not yet available ; 
market price: 2014 : 0.49 balboa cents; 2015 : 0.75 balboa cents.  
AG-IMS ID 84039: Question by Canada - Other product -specific AMS/EMS  
Supporting Table DS:6. Canada notes that there has been a change in how Panama 
records direct payments to rice, maize and milk. They are reported under total 
price -related direct payments (column 7) in 2016 but in 2015 these products were 
reported as other  non-exempt direct payments (column 8). Could Panama elaborate on 
any policy or programme changes that may have occurred in 2016 which would account 
for this change in reporting?  
 
Answer by Panama  
 
With regard to Su pporting Table DS:6 for 2016, Panama  made the mistake of entering in column  7 
information that should have been in column 8. The notification has therefore been amended to 
correct this error. Panama also wishes to make it clear that there have been no policy or 
programme changes.  
 
2.3.8   Russian Fe deration (G/AG/N/RUS/11)  
AG-IMS ID 84038: Question by European Union - Transparency issues (including 
Table  DS:2)  
During the 83rd meeting of the Committee, the Russian Federation made a preliminary 
reply to question AG -IMS ID 83022. Could the Russian Feder ation provide the more 
detailed information as indicated in Russia's  preliminary reply?  
 
Answer by Russian Federation  
 
a. Recapitalisation of RosSelkozBank and RosAgroLeasing has been applied to ensure 
financial stability of these organizatio ns. The recapita lization does not  refer to support of 
the agricultural producers and therefore is not specified in the notification. However 
support in the forms of "Subsidies of interest rate on short term credits and investment" 
and "Machinery and equipment purchase sub sidies" has been provided through above 
organizations.  
b. The Russian Federation has not yet submitted its notification to the WTO for domestic 
support in 2016. Domestic support is not provided to producers of fruit and vegetables. 
However there are support program mes for plant raising where the largest part of G/AG/W/165  
 
- 49 - 
 
  subsidies is provided through the "Subsidies of interest rate on short term credits and 
investment".  
c. Subsidies for the wholesale and distribution centers have been provided in 2016. The 
Russian Federa tion will submit this information in its  notification for 2016.  
AG-IMS ID 84093: Question by United States of America - Transparency issues 
(including Table DS:2)  
The United States is following up on the reply to AG -IMS ID 80046, in regards to the 
Russian  Federation's new decoupled support programme benefitting grain producers. 
Beginning on 1 January 2013, the Russian Federation implemented a new "decoupled 
support" programme to benefit grain producers. The programme was part of the State 
Programme for the  Development of Agriculture and Regulation of Agricultural 
Commodities Markets in 2013 -2020 (Government Resolution No. 717 of 14 July 2012), 
as amended in 2014 (Government Resolution No. 315 of 15 April 2014). Beginning with 
the 2013 Table DS:1 notificatio n (G/AG/N/RUS/9), the Russian Federation included USD 
1.2 billion in decoupled income support (combined federal and sub -federal amount) 
under the category of decoupled income support (point d)) in supporting table DS:1. In 
its 2014 notification (G/AG/N/RUS /13), the Russian Federation notified a total of 
USD 907 million under this category and in its 2015 notification (G/AG/N/RUS/11) it 
notified USD 512 million. In the Russian Federation's reply to AG -IMS ID 80046, it stated 
that "In the payment calculation the Russian Federation takes into account the income 
indicator of all agricultural producers, which are determined by the objective conditions 
of farm management. In order to access the state support there is a requirement to be 
in a compliance with the st atus of agricultural producer and having in a disposal a piece 
of land for sowing."  
  
a. In the Russian Federation's reply to AG -IMS ID 80046, it stated that a 
Table  DS:2 notification for this programme would be notified when it is ready. A 
Table DS:2 notification has not yet been submitted. When does the Russian 
Federation expect to notify th e programme?  
b. In the absence of the Table DS:2 notification, please explain what is meant by 
the "income indicator" and elaborate upon how the income -based eligibility 
criteria are determined for payments as they relate to paragraph 6(a) of 
Annex  2.  
c. Pleas e explain how the "requirement to be in a compliance with the status of 
agricultural producer and having in a disposal a piece of land for sowing" meets 
the requirements of paragraph 6(e) of Annex 2 that no production is required in 
order to receive such p ayments?  
Answer by Russian Federation  
 
a. In the first half of 2016 some regulatory changes have been made with respect to 
intergovernmental relations on federal and sub -federal levels. One  of the purposes of this 
change  is to improve the co-financing system . Although  the changes in regulation did not 
affect the terms of domestic support the Russian Federation  believe s it should describe the 
details in the DS:2 notification to exclude incorrect interpretation.  
 
b. The income indicator reflects different possible agricultural production in different regions 
of the Russian Federation. It is used as the calculation basis when determining which 
amount of transfers from the federal budget to the regional (sub -federal) budgets  will be 
provided. Differences in the transfers to the sub -federal budgets (not to the agricultural 
producers) are therefore based on the differences in climate and soil in different regions of 
the Russian Federation and consequent differences in farm mana gement.  
 
c. The fact of production is irrelevant. Decoupled support is not concerned with the actual 
production. Access to support is based on certain criteria such a status of agricultural 
producer and nominal area.  G/AG/W/165  
 
- 50 - 
 
  AG-IMS ID 84094: Question by United Stat es of America - Market price support  
According to media reports, Agriculture Minister Alexander Tkachev signed a decree this 
March on the completion of public purchasing interventions totaling more than 
9.1 billion rubles for 954 thousand tonnes of grain, including wheat, corn, barley and rye 
from 23 provinces for the 2016 grain harvest. Carryover stocks on 1 January 2017 
amounted to more than 4.04 million tonnes as compared to 2.58 million tonnes of grain 
during the same period in 2016. During 2016, 70 tho usand tonnes of grain were sold 
from the public intervention stocks and the government is considering selling up to 
500 thousand tonnes of grain from the intervention stocks in 2017 in order to free 
storage under the new crop. Part of these public interven tion stocks are being exported. 
The Russian Federation notified market price support for wheat, rye and barley in 2015.  
  
Please explain how the export prices of these public stocks relate to notified market 
price support levels. Are the exports being sol d at a higher or lower price than the 
applied administered prices for the procured grains?  
 
Answer by Russian Federation  
 
The Russian Federation has not exported products from the state intervention fund.  
 
2.3.9   Ukraine (G/AG/N/UKR/18, G/AG/N/UKR/26 and G/AG/N/ UKR/26/CORR.1)  
AG-IMS ID 84032: Question by Australia - Scheduled commitment level  
Australia thanks Ukraine for providing its 2012 domestic support notification 
(G/AG/N/UKR/26). Australia notes that the correct methodology for calculating market 
price supp ort, as written in paragraph 8 of Annex 3 of the Agreement on Agriculture, has 
been utilised by Ukraine in supporting table DS.5. Australia continues to request that 
Ukraine revise its notifications for the years 2009 to 2011 using the Agreement on 
Agricul ture's prescribed methodology. Australia notes that Ukraine's market price 
support for sugar beets has placed Ukraine in breach of its AMS commitments. We 
further note that Ukraine is looking to rectify this issue through changes to its sugar 
market price support programme. Can Ukraine please provide information on what these 
changes entail and when they will take effect?  
 
Answer by Ukraine  
 
Ukraine attentively reviewed WTO Members' points regarding the use of inflation adjustment. 
Ukraine's  interest is to apply  rules across WTO Members' domestic support  in a fair and uniform 
way. Therefore, in response to earlier questions Ukraine elected to notify both adjusted and 
unadjusted AMS values in G/AG/N/UKR/26. Ukraine's initial reaction to re -submitting previou s 
years' domestic support with both adjusted and unadjusted values tends to be favourable. A 
further review wi ll be considered in capital.  
 
Ukraine consider s that the application of the fixed external reference price without adjustment for 
inflation will not reflect the actual level of product support, because the administrative sugar price 
(applied administered price) increases annually due to an excessive inflation and a corresponding 
increase of the cost of  inputs for sugar production. Therefore Ukraine  expect s that WTO Members 
can give due consideration to the influence of such inflation  rate on Ukraine's ability to abide by its 
domestic support commitments.  
 
In addition , Ukraine has been actively reviewing its domestic support regarding sugar productio n. 
The draft Law number 2856 from 18 April 2013 to modify Ukraine's sugar support was not 
adopted. Instead, on 27 April 2016 a new draft Law of Ukraine "On Recognition of some Laws of 
Ukraine on State Regulation of Sugar Production and Sales as void" was i ntroduced in the 
Parliament of Ukraine. At this time the draft Law i s still awaiting its adoption.  
AG-IMS ID 84028: Question by Canada - Market price support  
Regarding G/AG/N/UKR/26, Canada appreciates Ukraine's transparency in providing 
both adjusted and  unadjusted data in its most recent domestic support notification. This 
information enables Members to review the notification while taking Ukraine's domestic 
situation into consideration. During the March 2014 meeting of the Committee Ukraine G/AG/W/165  
 
- 51 - 
 
  indicated th at the Ministry of Agrarian Policy of Ukraine had prepared a draft law 
amending the regulations on the production and sale of sugar (AG -IMS ID 73024). The 
draft law is aimed at:  
 
 maintaining the productive capacity of the sugar industry;  
 formation of pro -market investment, credit and pricing policies for factory beets 
and sugar;  
 settling the issue of sale of sugar produced over quota "A";  
 preservation and improvement of the quoting mechanism for manufacturing and 
supplying on the domestic market of sugar (quota "A"); and  
 the abolition of minimum prices for sugar beets and sugar quotas "A".  
Could Ukraine give an update on the status of thi s proposed amendment in particular, 
the abolition of minimum prices for sugar beets and sugar quotas "A"?  
 
Answer by Ukraine  
 
See reply above.  
AG-IMS ID 84085: Question by United States of America - Market price support  
Regarding G/AG/N/UKR/26 and G/AG/N/ UKR/26/CORR.1, The United States would 
like to thank Ukraine for notifying its domestic support levels for the first time since 
joining the WTO showing the level of support without an inflation adjustment. The 
United States and other Members have repeatedl y stressed the importance of notifying 
support without inflation adjustment so that the Members of this Committee are able to 
fully consider the effects of inflation on a Member's commitments. The United States 
understands that sugar beet production is hig hly dependent on the pricing policy 
implemented by Ukraine due to the low level of profitability compared to other crops. 
Despite this, Ukraine has been regularly exporting sugar in recent years and exports in 
2016 were more than double the value in 2012, the year covered by this notification.  
 
What steps is Ukraine taking to bring its support into compliance with its commitments? 
Please include any updates since Ukraine's response to AG IMS ID 73024 regarding draft 
legislation from April 2013.  
 
Answer by  Ukraine  
 
See reply above.  
AG-IMS ID 84024: Question by Canada - Other product -specific AMS/EMS  
Concerning Supporti ng Table DS:7 in G/AG/N/UKR/26,  in 2012, non -exempt direct 
payments for fruits, berries and grapes, and hop have been reduced to 0 and replac ed by 
product -specific budgetary outlays. Could Ukraine provide information on the changes 
that resulted in different type of support being provided to these products?  
 
Answer by Ukraine  
 
This question has raised a number of questi ons in capital. At this stage Ukraine  does not have a 
definitive answer with sufficient d ocumentation. One possibility is that a mistake was made in 
assigning a support program me to fruits, berries and grapes in the previous notification. This 
review of d ata requires slightly mor e time. Ukraine will be pleased to come back to Canada's 
question w ith a more definitive response.  
AG-IMS ID 84026: Question by Canada - Other product -specific AMS/EMS  
Concerning G/AG/N/UKR/26, product -specific support for cattle reported in Supporting 
Table DS:4 increased significantly going from Hrv 49.1 million in 2011 to 
Hrv 199.3  million in 2012. Support to cattle has noticeably fluctuated in previous years 
as well. Could Ukraine explain why product -specific support for cattle varies so 
significantly f rom one year to the next?  
 G/AG/W/165  
 
- 52 - 
 
  Answer by Ukraine  
 
Ukraine's support for agriculture in general is constrained by economic and financial situation. The 
real possibility to provide support depends on the State Budget of Ukraine, which in some years is 
more flex ible and responsive to the development needs of specific agriculture sectors. In other 
years, budgetary constraints exclude such support, which may be also  due to  external factors.  
AG-IMS ID 84019: Question by Canada - Non-product -specific AMS  
Regarding G/ AG/N/UKR/26, Canada notes there have been significant changes 
since  2011 to the list of programmes notified as non -product specific (Supporting Table 
DS:9) in Ukraine's most recent Table DS:1 notification for 2012. In particular, Canada 
notes the addition of the following:  
 
 Partial reimbursement for the purchase of individual milking installations and 
tribal heifers and cows  
 Planting and maintenance of young orchards, berry fields and vineyards  
a. The descriptions of these programmes seem to indicate that t hey provide 
support to specific commodities. Could Ukraine describe how these two 
programmes meet the criteria under Article 1 which states that non -product 
specific support is "provided in favour of agricultural producers in general"?  
b. Could Ukraine provi de details on how the "Planting and maintenance of young 
orchards, berry fields and vineyards notified as non -product specific in 
Supporting Table DS:9 differs from the programme entitled "State support for 
planting and maintenance of young orchards, berry  fields and vineyards" 
notified as other product -specific support in Supporting Table DS:7?  
c. Canada notes that for the "State support for planting and maintenance of young 
orchards, berry fields and vineyards" notified in Supporting Table DS:7, 
"vineyards"  was not included in the programme name in the 2011 notification. 
Is this a new programme or the result of a modification to an existing 
programme?  
Answer by Ukraine  
 
a. The two measures which form the basis for the notified support is Resolution 
number  587 of the Cabinet of Ministers of Ukraine dated 15 July 2005 "On approval of 
the Regulation of the charging and collection of funds for development of the vineyard, 
horticulture and hop", which can be viewed at: 
(http://zakon3.rada.gov.ua/laws/show/613 -2007-%D0%BF ). The 2005 action was later 
amended in 2007 and can be viewed at: ( http://zakon3.rada.gov.ua/laws/show/613 -
2007-%D0%BF ) and in 2012 ( http://zakon3.rada.gov.ua/laws/show/285 -2012-
%D0%BF/paran5#n5 ). Ukraine is willing to engage in a transparent fashion with 
interested Members to discuss in detail the basis for appropriate classifying of these 
measures.  
b. Ukraine notifies support  which  was clearly and definitely tied to a product in Supporting 
Table DS:7. In contrast , Ukraine notifies in Supporting  Table DS:9 measures stemming 
from the same legislative basis  but where the support is not necessarily tied to a specific 
product. Drip irrigation, controlled atmosphere storage and such "general activity 
support" are generally available for various produc ts. Therefore a separation between 
the allocated support results in some measures in favour of agricultural producers as 
non-product -specific.  
c. No, this is the same program me.  
AG-IMS ID 84034: Question by Canada - Non-product -specific AMS  
Concerning G/AG/ N/UKR/18, Canada notes that for Ukraine's 2011 Table DS:1 
notification (G/AG/N/UKR/18), the total of non -product -specific (NPS) support seems G/AG/W/165  
 
- 53 - 
 
  to differ from the sum of the NPS measure. The total amount reported was 
Hrv 12,280.3  million but the sum of all t he NPS  measures in this table is equal to 
Hrv 11,531.3 million (10.0 + 29.7 + 347.5 + 28.5 + 11,115.6 = 11,531.3). Supporting 
Table DS:4 reports Hrv 12,280.3 million in total NPS support. Could Ukraine please 
explain this discrepancy?  
 
Answer by Ukraine  
 
Ukraine appreciates Canada pointing to this technical error regarding Ukraine's DS:1 notification 
for calendar year 2011 (G/AG/N/UKR/18). Further to  closer review, total non -product -specific 
support should also include the values for the following two meas ures:  
 
 "Financial support of agro -industrial enterprises through the easing of credit mechanism" 
(727.3 million UAH) ; and  
 "Financial support to individual farmers" (21.7 million UAH).  
These two measures were erroneously omitted from the Supporting Table  DS:9 beyond  the 
Ukraine's competence. The c orrigendum to  DS:1 notification for 2011 ( G/AG/N/UKR/18 /Corr.1)  
has been already issued.  
Follow -up: Australia, Colombia, European Union and New Zealand commended Ukraine's efforts in 
transparency by providing b oth adjusted and unadjusted data on market price support calculation 
in its 2012 notification. In Australia's view, the unadjusted data was the correct methodology 
under paragraph 8 in Annex 3 of the Agreement on Agriculture . Australia  urged Ukraine to rev ise 
its previous notifications (2009 -2011) accordingly. Australia and Canada noted interest in 
Ukraine's reform of their  sugar market price support programmes  and look ed forward to future 
updates. The European Union suggested that Members discuss the systemic issue of excessive  
inflation and how it should be dealt with  in notifications.  
 
2.3.10   United States of America (G/AG/N/USA/109)  
AG-IMS ID 84014: Question by European Union - Non-product -specific AMS  
The European Union thanks the Unite  States for its rep ly to the EU question on the 
US notification in the 83rd meeting of the Committee. Based on the explanation provided 
by the United States, the European Union would like to ask a follow -up question. In its 
reply, the United States seems to argue that ARC -CO and PLC programmes are not 
specific to a commodity because payments are made on historical base acres with no 
requirement to plant a particular commodity. Historical base acres however determine 
the area eligible for the payments which is only one of the elements in the payment 
formula. Besides the base acres, the payment to p roducer also depends on 
product -specific payment rates. This is confirmed and explained in detail for example in 
the web -page of FSA, where payment rates for corn, soybean and wheat a re listed: 
https://www.fsa.usda.gov/programs -and-services/arcplc_program/  . 
 
How does the United States sees different payment rates for corn, soybean and wheat 
producers as com plying with the requirement that non -product specific AMS is provided 
in favour of agricultural producers in general?  
 
Answer by United States of America  
 
Payments under the ARC -CO and PLC program mes are not made to producers of particular crops; 
rather, they are made to those who own and/or operate farms with historical base acres of those 
crops. While payment rates are calculated for each covered commodity according to the provisions 
of the 2014 Farm Bill, the base acreage and yields are fixed and based on historical production and 
no production is required to receive payment. Therefore, the payments (if any) cannot be 
associated with current prod uction of a specific commodity.  
 G/AG/W/165  
 
- 54 - 
 
  2.3.11   Zambia (G/AG/N/ZMB/10)  
AG-IMS ID 84086: Question by United States of America - Transparency issues 
(including Table DS:2)  
a. Please provide details regarding how the measure 'Veterinary Services, 
Livestock Development' is implemented. In addition, please describe what 
criteria are applied to determine the beneficiaries of the programm e.  
b. In this notification Zambia notified 'Rural invest fund', 'Irrigation development 
fund', 'Rural finance', and "cooperative finance' all as 'structural adjustment' 
measures under Supporting Table DS:1. These measures were notified as 
'investment subsidi es generally available to the agriculture sector' under 
Supporting Table DS:2 in Zambia's previous notification G/AG/N/ZMB/8.  
i. Please describe what changes were made to these measures such that they 
now qualify as green box.  
ii. When will Zambia be submitting  Table  DS:2 notifications notifying the 
Committee of these changes.  
c. The United States would like to thank Zambia for updating the formatting of its 
Supporting Table DS:1 notification. This formatting appears to have resulted in 
a number of measures being reclassified as different types of measures rather 
than just 'General services.' Please confirm that there were no changes to the 
implementation of these measures that have been reclassified.  
Answer by Zambia  
 
Zambia undertook to provide a response at a l ater stage . 
AG-IMS ID 84087: Question by United States of America - Input subsidies available to 
low-income or resource -poor producers  
a. Please provide details a regarding how the Farmer Input Support Programme is 
implemented. In addition please detail how f armers are determined to be 
eligible beneficiaries of this measure.  
b. Please provide the monetary value for the Farmer Input Support Programme 
for 2013.  
Answer by Zambia  
 
Zambia undertook to provide a response at a later stage . 
 
2.4  NEW OR MODIFIED DOMESTIC SU PPORT MEASURES (DS:2)  
2.4.1   United States of America (G/AG/N/USA/110)  
AG-IMS ID 84013: Question by Canada - Transparency issues (including Table DS:2)  
Canada notes that in the response to New Zealand's question (AGIMS  83061) on the 
Dairy Product Donation Program the United States indicated that it "has notified 
2014  expenditures under these programs as appropriate in its recent DS:1 notification 
for 2014".  
  
a. Could the United States please explain where the expenditure s under this 
programme can be found in the U.S. 2014 domestic support notification 
(G/AG/N/USA/109)?  
b. Could the United States  provide the total outlays for this programme in 2014?  G/AG/W/165  
 
- 55 - 
 
  c. Could the United States  specify which dairy products (e.g., cheese, butter,  etc.) 
were purchased/procurred under the Dairy Product Donation Program, and 
from which U.S. states?  
Answer by United States of America  
 
a. There were no expenditures under the Dairy Product Donation Program in 2014 and it 
was therefore not included in the 2014 domestic support notification.  
b. See the response to part (a) of this question.  
c. See the response  to part (a) of this question.  
2.5  EXPORT SUBSIDY COMMITMENTS (TABLES ES:1, ES:2 AND ES:3)  
2.5.1   European Union (G/AG/N/EU/38)  
AG-IMS ID 84011: Question by Canada - Export subsidies subject to reduction 
commitments (Article 9.1)  
Canada notes that in the European Union's Table ES:1 and Table ES:2 Notification 
(G/AG/N/EU/38), the European Union notified the subsidized quantity of exports for 
sugar based on export licenc es issued.  
 
a. Can the European Union confirm when actual exportation of such sugar 
occurred?  
b. Was any sugar exported following the adoption of the 19 December  2015 
Ministerial Decision on Export Competition?  
Answer by European Union  
 
a. The actual export of t he sugar concerned took place during the validity period of the 
export licence. According to Commission Implementing Regulation (EU) 2016/1239 of 
18 May 2016 a licence is valid from its actual day of issue until the end of the third 
month following the mon th of the day of issue.  
b. Yes, the European Union exports up to 1.35 million tonnes of out -of-quota sugar each 
marketing year. Exports of EU out -of-quota sugar fall under the provisions of footnote  3 
of the Nairobi Ministerial D ecision on Export Competition.   
2.5.2   Malawi (G/AG/N/MWI/6)  
AG-IMS ID 84091: Question by United States of America - Transparency issues  
Malawi's recent notification covers the year 2015/16 and 2016/17, but Malawi has not 
provided any notifications for the years 2012/13 through 2014/15 since its last 
notification G/AG/N/MWI/4, which covered the period ending 2011/12.  
 
a. Does Malawi intend to provide a notification for the years not notified?  
According to the Malawi Ministry of Finance, Economic Planning and 
Development  2016/17 Financial Statem ent, it appears a number of agricultural support 
programmes may have been funded by the Government of Malawi during the period 
covered by this notification, including various infrastructure programmes, irrigation 
programmes, extension and advisory services , etc. These programmes appear to provide 
needed assistance to Malawi farmers and are aimed at helping develop the agricultural 
sector.  
  
b. Please confirm whether these or any other agriculture support measures were 
implemented by the Government of Malawi d uring the period covered by this 
notification.  G/AG/W/165  
 
- 56 - 
 
  c. If so, what is the basis for not notifying these measures?  
Answer by Malawi  
 
Malawi undertook to provide a response at a later stage.  
 
2.5.3   Switzerland (G/AG/N/CHE/79)  
AG-IMS ID 84010: Question by Australia - Other 
Australia thanks Switzerland for its notification for export subsidy commitments 
for 2015 which includes CHF 95.6 million in subsidized exports within a ceiling of 
CHF 114.9  million.  
 
a. What further progress has Switzerland made on the commitment made at  the 
10th Ministerial Conference in Nairobi to eliminate export subsidy entitlements?  
b. How will the commitment be implemented?  
c. What legislative changes, or other action by Parliament, will this involve?  
d. What steps has Switzerland taken to ensure that it complies with the standstill 
commitment of the Ministerial Decision in the interim?  
Answer by Switzerland  
 
In May this year, the g overnment approved a reform package to completely eliminate all 
remaining export refunds and submitted it to Parliament. The reform package includes 
accompanying measures, namely facilitation of inward processing and additional direct payments 
to milk and wheat producers.  
 
Together wit h this legislative reform, the g overnment also submitted to Parliament the Nairobi 
decision an d the required amendments of the schedules of commitments for approval.  
 
After successful completion of the parliamentary process and the optional referendum, the 
legislative reform is expected to enter into force in January 2019. W ithin the same time frame, the 
government will be authorized to notify the amended schedules of concessions.  
 
For the time being, Switzerland continues to grant export refunds for certain processed agricultural 
products in conformity with the Nairobi Ministerial Decision on e xport competition. Since 2015, the 
annual export refund expenditures have r emained on the same level. The g overnment does not 
foresee any budget increase in the remaining period until the abolition of the export refunds.  
 
Follow -up: The European Union and New Zealand expressed disappointment regarding 
Switzerland's increase d export subsidy budget outlay s despite the Bali Ministerial Declaration and 
the Nairobi Ministerial Decision concerning export subsidies. New Zealand commended 
Switzerland's efforts to amend its schedule in advance  of the 2020 deadline. Argentina signaled 
systemic interest in this matter.  
3  DEFERRED REPLIES TO QUESTIONS ON NOTIFIC ATIONS  
3.1  DOMESTIC SUPPORT COMMITMENTS (TABLE DS:1)  
3.1.1   Malawi (G/AG/N/MWI/4)  
AG-IMS ID 84078: Question by United States of America - Transparency issues 
(including Table DS:2)  
The United States resubmits AG IMS ID 70039 in hopes of gaining a greater 
understanding of Malawi's domestic support programmes: The United States of America 
greatly appreciates Malawi updating  its domestic support notifications.  
  G/AG/W/165  
 
- 57 - 
 
  a. Please provide separate breakouts for fertilizer and seed subsidies, which are 
reported in aggregate in the notification.  
b. Please provide guidance as to how Malawi's policy defines "low -income or 
resource poor produc ers."  
Answer by Malawi  
 
Malawi undertook to provide a response at a later stage.  
 
3.1.2   Mali (G/AG/N/MLI/8)  
AG-IMS ID 84047: Question by European Union - Transparency issues (including Table 
DS:2)  
The European Union  recognises the efforts made by Mali to fulfil  its notification 
obligations. During the 83rd meeting of the Committee, Mali undertook to provide a 
response at a later stage to the question ID 83021. The European Union would welcome 
a reply to the question.  
 
Answer by Mali 
 
Mali undertook to provide a response at a later stage.  
AG-IMS ID 84096: Question by United States of America - Transparency issues 
(including Table DS:2)  
The United States resubmits AG IMS ID 83091.  
  
The United States would like to note the steps taken by Mali over the past few year s to 
bring its domestic support notifications up to date, and Mali's continued efforts to notify 
this Committee of its measures on a regular basis. This step towards increased 
transparency is to be commended. The United States notes that Mali had a number of 
domestic support measures from 2004 to 2012 (see notification G/AG/N/MLI/2), some 
of which included seeds, fertilizer, rural equipment; however, in subsequent years, 2014 
and 2015 in G/AG/N/MLI/7 and 2016 in G/AG/N/MLI/8, Mali notified no domestic 
suppo rt measures. The United States understands that, in 2015, a number of measures 
were approved by Mali's Council of Ministers. One example is the Ministry of Rural 
Development's Irrigation Development programme in the Bani Basin and Selingue with 
an objectiv e of building hydro -agricultural infrastructure to allow for the development of 
land for agricultural production of crops including rice.  
  
a. Have any of these measures related to agriculture been implemented since 
being approved by the Council of Ministers ?  
b. If so, in what year(s) did implementation of these measures begin?  
c. To gain a better understanding of Mali's agricultural situation, please explain 
the reason for not notifying any domestic support measures since 2012.  
Answer by Mali  
 
Mali undertook to  provide a response at a later stage.  
 
3.1.3   Togo (G/AG/N/TGO/8)  
AG-IMS ID 84092: Question by United States of America - Input subsidies available to 
low-income or resource -poor producers  
The United States resubmits AG IMS ID 83094.  
  
The United States would lik e to recognize Togo for the steps taken in recent years to 
bring its notifications up to date.  G/AG/W/165  
 
- 58 - 
 
   
Togo has notified subsidies for fertilizers classified as meeting the criteria of Article  6.2. 
Please explain how the fertilizer subsidy is implemented, how th e monetary value 
notified is calculated, and how Togo defines "low -income or resource -poor producers".  
 
Answer by Togo  
 
Togo undertook to provide a response at a later stage.  
 
4  OVERDUE NOTIFICATION S 
4.1.1   India  
AG-IMS ID 84090: Question by United States of America  
In AG IMS ID 83100 India stated its notifications are under preparation and will be 
notified in due course.  
  
a. Please provide an update on India preparatory work.  
b. Given the long period since its last notification, is India considering submitting 
a partial notification with information it has collected?  
c. Please confirm whether India is preparing Table DS:2 notifications and if so, for 
what measures.  
Answer by India  
 
India is in the process of finalizat ion of its DS notifications, which will be submitted shortly.  
 
Follow -up: Canada, the European Union and the United States expressed concern regarding India's 
delayed notifications and looked forward to reviewing the updated notifications.  
 
4.1.2   Nigeria  
AG-IMS ID 84009: Question by European Union  
The latest Table DS:1 notification from Nigeria dates from 2012 covering 2011. Since 
then Nigeria has implemented the Agricultural Transformation Agenda (ATA) and the 
Agricultural Promotion Policy (2016 -2020).  
 
Will Nigeria submit a Table DS:1 notification for years after 2011 including Green Box 
support as well as Article 6:2 support?  
 
Answer by Nigeria  
 
First, Nigeria has transmitted the question to its capital. Nigeria would like to assure the European 
Union  that Nigeria has undertaken the process of ensuring that it is up to date with its notification 
obligations, particularly in the context of its 5th policy review which will be held on 13 and 
15 June 2017.  
 
Second, Nigeria is working hard to provide responses to the EU question as soon as possible. In 
the meantime, the European Union may wish to know that starting in 2010 -2011 the government 
of Nigeria, after years of neglect, began to re -focus on the agricul ture sector, as per the strategy 
the government implemented in the Agriculture Transformation Agenda. In 2011 to 2016, the 
focus has been on building up to address the lack of financial assistance to farmers and the 
dramatic levels of food imports.  
 
Finally, counting on the EU understanding and cooperation, Nigeria would like to request for 
additional time for feedback until internal process and coordination are completed. Nigeria shall 
notify its domestic support accordingly.  
 G/AG/W/165  
 
- 59 - 
 
  4.1.3   Thailand  
AG-IMS ID 84089: Q uestion by United States of America  
The last time Thailand notified the WTO of its domestic support policy changes was 
in 2008. Since then, Thailand's rice policies have undergone several major reforms. In 
June 2016, Thailand stated in response to AG IMS ID 80082 it was consulting its 
domestic agencies regarding prior notifications. At the April 2017 U.S. -Thailand TIFA, 
Thailand agreed to respond to a U.S. request of at the very least making an interim 
partial notification on rice subsidies since 2008 prio r to the next WTO Committee on 
Agriculture on June 7 -8, 2017.  When does Thailand plan on submitting its next domestic 
support notification(s)?  
 
Answer by Thailand  
 
Thailand is currently still gathering informatio n from relevant agencies and its  capital is  working 
hard to submit its  domestic support notification s to the WTO.  
 
4.1.4   Turkey  
AG-IMS ID 84008: Question by Canada  
Canada notes Turkey's efforts to keep Members informed of its domestic processes to 
complete and submit its outstanding domestic support an d export subsidy notifications. 
The Committee last reviewed Turkey's 2001 domestic support notification in 2002 and 
its 2000 export subsidy notification in 2001. At the 83rd meeting of the Committee on 
Agriculture (AG -IMS ID 83102 and AG -IMS ID 83034) Turk ey indicated that the 
Domestic Support Committee had started to collect data and the related information 
needed to prepare the outstanding notifications. Could Turkey provide an update on the 
progress towards completing and submitting the outstanding notif ications?  
 
Answer by Turkey  
 
As Turkey stated in past C ommittees , various inter -minister ial committees have been formed  in 
order to gather data and to raise awareness among the ministries . After gathering the data, the 
committees have started to analyze t he support system in line with WTO rules with the help of 
WTO S ecretariat and Turkish mission at Geneva. As each Member  State is aware of the history and 
the philosophy of the WTO rules , the system of support should not disrupt  other countries ' 
agriculture production and internat ional trade. Based on  the data and the analysis that has been 
carried out, the Turkish agriculture  support system is a social support system whi ch has no, or 
limited, effect on agriculture production, utilized land , dome stic trade and international trade. The 
committee has scientific proof through time series of production, land utilization and domestic  and 
international  trade. Apart from the technical explanations, the Turkish Minist ry of Food and 
Agriculture and Livesto ck is actively  carrying out  activities to raise  awareness about  the WTO. So 
far, Turkey has organized conference at Ankara with the support of Canada, Australia and Brazil. 
Experts from these countries share d their experiences about the  WTO with the expert s from the 
Ministr y. The outcome of the conference is more th an satisfactory for each party . In this respect, 
Turkey would like to thank Canada, Australia and Brazil for their active support . Turkey strongly 
support s and believes in the  WTO and will keep o n preserving this effective structure in the future.  
AG-IMS ID 84007: Question by European Union  
The European Union  thanks Turkey for the reply to its question ID 83034, and 
acknowledges the efforts made by the Turkish authorities, including those concern ing 
the work related to SPS notifications.  
 
Can Turkey please inform Members as to what progress it has made in relation to 
Domestic Support and Export Competiti on notifications, and when WTO M embers should 
expect to be able to examine these long overdue notifications?  
 
Answer by Turkey  
 
See reply above.  G/AG/W/165  
 
- 60 - 
 
  AG-IMS ID 84088: Question by United States of America  
Turkey's last domestic support notification covered the 2001 year. In AG IMS ID 83102 
Turkey stated it has formed internal committees to address the overdue notifications 
and would share information and analysis gathered.  
  
a. Please provide an update on wha t specific steps the Domestic Support 
committee has currently taken.  
b. What analysis and information can Turkey share with this Committee to date, 
including any timelines for completion and submission of partial or full 
notifications?  
Answer by Turkey  
 
See reply above.  
 
Follow -up: Australia, Canada, the European Union, New Zealand and the United Sates supported 
and encouraged Turkey's internal process on notification preparation and urged Turkey to finalize 
its notifications soon. Australia and the European Union highlighted the par ticular importance of DS 
notifications given the current negotiation context.  
 
 
__________