RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/SPEC/RUS/34 
13 June 2005 
 (05-2475) 
Working Party on the 
Accession of the Russian Federation Original:   English 
 
 
   
ACCESSION OF THE RUSSIAN FEDERATION 
 
 The following submission, dated 9 June 2005, is being circulated at the request of the 
Delegation of the Russian Federation.   Replies to Members' Comments and Questions with Regard to the Agriculture Section of the Draft 
Report of the Working Party, WT/ACC/SPEC/RUS /25/Rev.3 of 15 October 2004 (paragraphs 
549-554) and other information on agricultural is sues submitted by the Russian Federation to the 
Working Party.  
_______________ 
 WT/ACC/SPEC/RUS/34 
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 Question 1  
Descriptive part We would like to invite Russia to provide updated information for the Agriculture section of the 
Draft Report in particular as regards domestic support. 
Answer
: 
As it has been already pointed out the Russian Fede ration firmly believes that the proposed period 
(1993-1995) may be considered representative taki ng into account existing supporting programs and 
budgetary financing.  This was proved by calcula tions of the domestic support for earlier period 
(1989-1992), presented to the Working Party members. 
Question 2  Commitment: Further discussions needed 
Answer
: 
Russia does not have any objections agai nst the need of a further discussion. 
Question 3  
Requests for information or clarifications that should be reflected in the text:   
This section will need further revision once more progress is made in understanding Russia’s 
agricultural policies, in particular, with resp ect to Russia’s supporting tables for domestic 
support and export subsidies.   
We and other countries have pushed to eliminate export subsidies and there is very little 
support for Russian Federation to have reco urse to export subsidies after accession. 
Answer : 
The Russian Federation maintains its approach, that the right for export subsidies is vitally important 
for the country.  Refuse of their use is possible only in case if such a decision was adopted by WTO 
Member States within the Doha round.  This issue is  one of questions on negotiations and no decision 
has yet been taken. 
Question 4  There should be cross references to the section on Ta riff Rate Quotas, i.e. to the description in 
these sections of measures relating to TRQs. 
Answer
: 
Russia notes that the section of the Working Party Dr aft Report "Policies Affecting Foreign Trade in 
Agricultural Products" covers gene ral issues related to the domestic  support and export subsidies.  
Tariff Rate Quotas represents another part of the Wo rking Party Draft Report.  We admit having some 
difficulties in finding  an appropriate place for this re ference to be made.  We, therefore, are ready to 
follow Working Party Members’ advice as regards th e Section of the Draft Working Party Report, 
where such a cross reference might be introduced.  WT/ACC/SPEC/RUS/34 
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 Question 5  
Russian Federation should provide updated supporting tables (beyond 1997), which reflect 
Members’ technical comments to date.   While th ese tables will not be reflected in the text, they 
will provide the framework for advan cing our work on this section. 
Answer : 
Russian Federation strongly believes that the propos ed period (1993 -1995) may be considered as a 
representative one taking into account  currently ex isting support  programs an d budgetary financing. 
This was also proved by calculation of the dom estic support for earlier period (1989-1992), presented 
to the Working Party Members. 
Question 6  As this section evolves, there may need to be additional information reflected in the text. 
Specific Drafting Suggestions:  Delete last sentence of paragraph 551 In this respect, these members also stressed that the disciplines contained in the WTO 
Agreement o n Agriculture on export credits, export credit guarantees or insurance programmes 
needed to be applied by the Russian Federation so as to avoid circumvention of the commitment 
not to provide export subsidies.  
Answer : 
Pending 
Question 7  
Elements of a Commitment: Paragraph 553 is a cceptable, provided that the other requests are 
addressed appropriately. 
Answer : 
Pending 
Question 8  
Paragraphs 549 to 554: As stated by some memb ers, it is supported the need to know the 
domestic support policies of the Russian agric ultural sector in a wide and updated way.   
- It should be also highlighted that, Russia should indicate how does ensure that domestic 
support will not cause "serious damage" to th e rest of the Members in consistency with 
the Agreement on Subsidies a nd Countervailing Measures.  
Answer : 
In 2003 Russian Federation submitted to the WTO Members information on existing domestic support 
measures.  No serious changes were made in dom estic support programs comparing with the period 
1993-1995.  Mechanism of incentive crediting of agri cultural producers has been changed as well as 
intervention prices for grains aiming at stabilizing internal prices.  
The list of supporting programs within green a nd amber box, which had been presented to the 
Working Party Members, clearly demonstrated dom estic agricultural policy’s succession and stability.  WT/ACC/SPEC/RUS/34 
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 This was, as well, proved by the "Main directions of the agricultural policy of the Russian Federation 
until 2010", which, as well, has been pr esented to the Working Party members. 
Taking into account the absence of any serious  changes in supporting programs the Russian 
Federation believes that, the amounts of domestic su pport proposed by the Russian Federation do not 
seriously distort trade and cannot cause any damage to  the agriculture of WTO Member States.  This 
assumption in fact was proved by the growth of foreign trade (imports into Russian Federation) in agricultural and food products in this period. 
Question 9  
Export Subsidies: Argentina requests that Ru ssian Federation confirms its commitment 
not to apply or introduce any form of export subsidies, as in paragraph 552.  
Answer
: 
The Russian Federation believes that the right to pr ovide export subsidies is vitally important for the 
country.  Refuse of their use would be possible only in case if such decision was taken by all WTO Member State within the Doha round.  However, th is issue is one of questions on negotiations and no 
decision has been taken yet. 
Question 10  Domestic Support: Amber Box Base Period The base period should be recent and representative  of the Russian Federation policies for the 
change towards a market economy, especially th ose related to agricultural domestic support, 
and not one corresponding to the early post-soviet  period (which was a period of very high 
levels of trade-distorting domestic support).  
The base period proposed by Russia is not repr esentative of its recent do mestic support policies 
and will not comply with the existing WTO discipli nes.  But, to establish an appropriated base 
period, Russia should submit more recent information (2000-2003) 
Answer
: 
Russian Federation would appreciate if more detaile d reasoning was given to the statement that the 
"base period proposed by Russia … will not co mply with the existing WTO disciplines". 
Russian Federation believes the proposed period (199 3-95) to be representative, taking into account 
currently existing supporting programs and budgetary fi nancing.  This was proved by calculations of 
the domestic support for earlier period (1989-1992) , presented to the Working Party Members. 
Question 11  
Domestic Support: Green and Amber Boxes 
We wish to reiterate the comments and issues pu t forward by us in relation to the Green and 
Amber Boxes, namely: 
Green Box a) Paragraph 3 related to the constitution of public stocks for food security purposes 
includes the creation of an Emergency Seed Stock Program, through which it would be  WT/ACC/SPEC/RUS/34 
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 ensured the seed supply in case of natural disa sters and emergency situations, as well as 
the seed supply to non-producing or limited production areas.  
 In that sense, it is appropriate to ask the Russian Federation what the name of the food 
security framework program established by the national legislation, on which the 
current Seed Stock Program depends, is; what seeds are susceptible to be delivered 
under the present program; Which organism determines the seeds to be delivered in case of donation; and to what extent the s eed supply to limited production areas is 
related to stock piling and maintenance.  (How it is ensured that the produce is only for 
self-consumption and is not traded.) 
 If emergency seed stock is sold at market prices, what is the support to producers in 
emergency situations or fr om non-producing areas abou t? All producers are supposed 
to purchase seeds at market prices.  Also, ask the Russian Federation when the Seed 
Stock was created and how much stock there is.  
b) They are included in paragraph 2 (b) "Subsidies for waste collecting plants."  The 
Russian Federation is asked to explain how this program works and on which laws and 
regulations it is based.  Furthermore, wh ich are the differences with the Operating 
Payment Program (including the cost of p est and disease control, etc.)? How does the 
Russian Federation ensure that said s ubsidy is not used for other purposes? 
c) The Russian Federation includes a Program on Credit and Financial Support to the 
agricultural sector under paragraph 11.  We ask the Russian Federation which law or 
regulation established these credits.  Also ask about the requisites for these credits to be 
granted and the payment conditions.  
Answer
: 
a) In accordance with the Federal Law "On seed-far ming" federal seed stocks represent stocks of 
plants and are to be distributed in regions where there is no production of seeds or there are 
limited opportunities of seeds production as well as to render assistance to entities and to 
natural persons involved in farming industry in case of natural disasters and other emergency 
situations. 
 As it has been pointed out for several times Russian Federation considers the creation seed 
stock program as measure which can provide food security with the aim of guaranteeing 
farming reproduction in regions being exposed  by natural disasters and other emergency 
situations as well as in regions where production of seeds is absent or, there are limited 
opportunities of seeds production.  Thus Seed St ock Federal Program is aiming at providing 
opportunities of purchasing seed at market prices (this is the sense of the support) by farming-producers in regions where production of seeds is absent or there are limited opportunities of seeds production.  Purchasing of seed aiming at next selling has no economic sense, as their 
potential partners (buyers) also have access to the supply of seeds from Federal Seed Stock at 
market prices. 
b) Mechanism of this program functioning a nd its difference from Operating payment Program 
are presented in documents: WT/ACC/SPEC/RUS/23 of 28 November 2001, WT/ACC/SPEC/RUS/26 of 25 September 2002, WT/ACC/SPEC/RUS/27 of 6 December 2002.  Beginning from 2001 the realiza tion of this program is regulated by the 
Resolution of the Government of the Russian Federation No. 272 of 6 April 2001  "On 
stipulation of the order of subsidizing from federal budget in 2001 aiming at supporting 
separate farming-production industries" (w ith amendments of 30 January 2002, 
25 February 2003). WT/ACC/SPEC/RUS/34 
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 c) Description of this program is presen ted in WT/ACC/SPEC/RUS/23 of 28 November 2001, 
WT/ACC/SPEC/RUS/26 of 25 September 2002, WT/ACC/SPEC/RUS/27 of 6 December 2002. Description of legislation in th e field of realization if supporting programs 
was presented to the Working Part y Members as non-paper in 2002. 
Question 12  Amber Box a) External reference price.  Under Annex 3 of the AOA, it shall be fixed.  The Russian 
Federation took the external reference price of each year for which it estimated its AMS, highlighting that those years (1991-1995) are not considered to be representative. 
b) De minimis : The de minimis  level increased from US$ 64 million in 1993 to US$ 684 
million in 1995. This change accounts for a growth of more than 1,000 per cent in the de 
minimis  level in two years.  It is appropriate to require the Russian Federation to 
explain this rise, referring to the specific products to which this increase corresponds 
and the respective values. 
c) Non product specific subsidies and compensa tions: The level of non product specific 
subsidies almost doubles in two years (from  US$ 5,902 million in  1993 to US$ 11,823 
million in 1995).  We require the Russian Federation to explain this increase 
corresponding to the 1993-1995 period. 
Answer
: 
a) External reference price is calculated on the basis of FOB price of the unit of agricultural 
product when Russia is net-exporter, or  on the basis of CIF price of the unit of agricultural 
product, when Russia is net-importer if this produc t in corresponding year.   As stipulated in 
paragraph  9 Annex 3 of AOA:  "…external re ference price shall be based on the years 
1986-1988…etc."   If this rule is applied to acceding country, the Russian party is ready to 
submit all necessary calculations. 
b) Calculation of the de minimis  is absolutely technical procedure and was carried out in the 
course of preparation of tables on domestic support in agriculture.  Bearing in mind presented calculations, one can conclude that the increase of the de minimis  level was connected with 
the share of product-specific support in value of the corresponding cattle-breading product. 
c) The Russian party has alread y commented on the cause of increas e of the domestic support in 
1995. This boost was explained by the includi ng in calculation the prolonged and written-off 
debt of farming producers upon centralized state credit. 
Question 13  
Domestic Support
  (Non Paper by the Russian Federation) 
We welcome the Non Paper provided by the Russian  Federation.  The tables presented in this 
paper are consistent with our view that the years 2000-2002 provide a recent and representative 
base period.  We thank Russian Federation fo r its assessment that its agricultural policies 
haven’t changed, and note that this neither po ses any obstacle to the adoption of a 2000-2002 
base period nor offers any reason why a di stant base period should be preferred.  WT/ACC/SPEC/RUS/34 
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 We also note that years more recent than the 1980's or 1990's, such as 2000-2002, more 
accurately represent: 
- how Russia’s agricultural policies are currently applied; 
- the context in which those policies are currently applied; 
- on average, the level and composition of support currently provided; and 
- on average, the level and composition of current agricultural production. 
Answer : 
As it has been pointed out for several times the Russian Federation Working Party considers the 
proposed period being representative taking into account existing supporting programs and budgetary 
financing.  This was proved by calculation of the domestic support for earlier period (1989-1992), 
presented to the Working Party Members.  As was showed in list of programs for period after 1997, 
the major directions and programs remain  the same.  
Question 14  
Use of Local Currency and US Dollars  
Data on support and subsidy levels in agricul ture supporting table must be recorded in local 
currency values.  This is the accepted prac tice amongst WTO Members and we expect all 
acceding countries to conform to this standard. 
As the AMS is designed to be expressed in nomi nal terms, we are not in favour of the approach 
of notifying in non-local currency, as a way to  deal with excessive inflation.  Our preferred 
approach is to address any periods of excessive in flation during the implementation period, by 
notifying the WTO membership of the actual rates of  inflation being faced.  If the inflation rates 
are deemed to be excessive, the Member will be ab le to have recourse to Article 18.4 to make 
appropriate adjustments to the AMS. 
Answer : 
We believe there is no provision in the WTO Agre ements and methodology which is containing any 
requirements that subsidy levels a nd data on support must be recorded in local currency.  It is up to 
each acceding country to choose the currency.  As it is known from the schedules of acceded 
countries they used foreign currencies (US do llars and EU Euros (ECU) and even SDR.  
Question 15  Green Box  
(Creation of Seed Emergency R eserves (Annex 2, paragraph 3)) 
We do not believe this program can be categorized  in this Green Box category.  This Green Box 
category is for the purchase and storage of "foodstuffs" for food security purposes.  The 
subsidization of seeds for production is an input  subsidy and we ask Russia to please re-classify 
this program in the Amber Box.  
Answer : 
In accordance with the Federal Law "On seed-farming" federal seed stocks represent stocks of plants 
and are to be distributed in regions where there is no production of seeds or there are limited opportunities of seed production, and, as well, in order to render assistance to entities and natural 
persons involved in farming industry in case of natural disasters and other emergency situations. WT/ACC/SPEC/RUS/34 
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 As it has been pointed out for several times Russia considers the creation seed stock program as 
measure which provides food security and aims at supporting farming reproduc tion in regions being 
exposed by natural disasters and other emergency s ituations as well as in regions where production of 
seeds is absent or there are limited opportunities of seeds production.  T hus Seed Stock Federal 
Program is aiming at providing opportunities of purchasing seed at market prices (this is the sense of 
the support) by farming-producers in regions where production of seeds is absent or there are limited opportunities of seeds production.  Purchasing of seed aiming at next selling has no economic sense as their potential partners also have access to the s upply of seeds from Federal Seed Stock at market 
prices. 
That is why  Russian Federation believes  these me asures may be categorized as Green box measures 
in compliance  with the criteria of the AOA (paragraph 3 of Annex 2). 
Question 16  
Financial Support for & Crediting of Private Farms (Annex 2, paragraph 11)
 
We do not consider normal operating and st art-up costs incurred by producers to be a 
"structural disadvantage".  According to Annex 2, paragraph 11 of the Agreement on 
Agriculture, the program must be designed acco rding to clearly defined criteria in response to 
objectively demonstrated structural disadvantages. 
Answer : 
Description of this program is presente d in WT/ACC/SPEC/RUS/23 of 28 November 2001, 
WT/ACC/SPEC/RUS/26 of 25 September 2002, WT/ACC/SPEC/RUS/27 of 6 December 2002. Description of legislation in the field of rea lization if supporting programs was presented to the 
Working Party Members as non-paper in 2002. 
Question 17  Amber Box:
 Eligible Production 
While Russian Federation may restrict the quantity of procured product receiving the 
administered price, this will still have an effect on prices of non-procured quantities of product on the market.  As a result prices are not bein g determined by market forces, and Government 
intervention effectively provides price support  for all production, not just the quantity 
purchased by the government for intervention.  In addition it is important to ensure that the 
principles and methodologies of calculating the AM S are accurately followed so that a Member 
is not able to artificially reduce AMS levels of support. 
We therefore ask Russia to conform to the accep ted WTO practice of using "total production" 
as eligible production.  
Answer
: 
As well known "total production" is not "eligible pr oduction" in all cases.  Eligible production might 
be either total production or, in those situations wh ere a specific quantity is identified as subject to 
support, the entire amount so designated, regardless of the quantity actually purchased.  There may be circumstances where eligible production may be less than total marketable production, as for example 
where the minimum price support is only available to  producers in certain disadvantaged regions.  It 
might be the case of legislatively predetermined, non-discretionary, limitation on the quantity of marketable production that a governmental interven tion agency could take off the market at the 
administered price in any year.  It is the case of Russia’s data for particular period of concerned.           WT/ACC/SPEC/RUS/34 
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 Question 18  
Amber Box:  Calculation of External Reference Prices for Milk 
We support the concerns raised by New Zealand th at Russia’s calculations of external reference 
prices for milk are significantly higher than wo rld market prices, and we encourage Russia to 
adopt one of the methodologies outlined by New Zealand.  In years where Russia did not apply 
an administered price, no market price support  should be shown in the supporting tables. 
Answer : 
For the meeting on 24 September 2004 Russian Federa tion has submitted documents with calculation 
of external reference prices for milk using th e methodology outlined by New Zealand. Russia has 
followed the approach of calculating of the "milk equivalent" reference price on the basis of the 
foreign trade statistical data according to the volume and import value of butter and skim 
milk-powder. 
Question 19  
General Comments:  
The section presents opposing arguments from Russian Federation and from Working Party 
Members with views similar to us.  The major ou tstanding domestic support issue (base period 
for measuring the base for Russia’s commitment on Total Aggregate Measurement of Support – 
Total AMS) is not resolved.  The view put forth by  us and some others, viz., that Russia could 
have recourse to green box measures rather than  large amounts of the more distorting AMS 
support, is represented in the section.  On expo rt subsidies, the two square-bracketed texts 
represent the as of yet unresolved status of Russia’s entitlement to any export subsidy 
commitments larger than zero. 
Specific Problems:  
Domestic Support.  The text represents Russia’s de sire to obtain the entitlement to provide large 
amounts of distorting support in the future within its commitment on Total AMS.  Some 
Working Party members, including us, argue th at Russia’s agriculture sector can be reformed 
with the help of measures meeting the criteria of Annex 2 of the Agreement on Agriculture (so-called green box). 
Russian Federation has been asked to provide data for years later than 1997, in order to 
demonstrate to Working Party members that 1998 was an outlier crisis year (as claimed by Russian Federation) and to reassure members that  Russian Federation has not taken advantage 
of the prolonged accession process to increase th e amount of distorting support provided. 
Russia Fedearion has not provided such later data , indicating that members would use any data 
for later years to impose a lower commitmen t on Total AMS than the commitment resulting 
from 1995-1997 data. 
- While the arguments of Russian Federation and some Working Party Members are 
represented in the text, there is no resolution of the base period and the resulting 
commitment on Total AMS. 
- Paragraph 553 refers to a commitment, the ba sis for and level of which have not been 
determined.  While the paragraph does not refer to (and need not refer to) the 
underlying "Supporting Tables", they will n eed to be referred to in the Russia’s WT/ACC/SPEC/RUS/34 
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 commitment (Part IV, Section I).  The absence of agreement on the years for which such 
supporting tables are needed is holding up progress on domestic support in agriculture. 
- Technically there are some drafting problems in the text (e.g., an amber box is not 
defined in the Agreement).  However, these minor problems need not be addressed at 
this stage. 
Export subsidies. Russia argues that it needs to  be entitled to provide export subsidies in 
agriculture in the future because the EU and others use them.  This, in our view, is not a fact that should entitle Russia to use export subsidies in the future (i.e., Russia would have non-zero commitments on export subsidies).  Rather, any non-zero export subsidy commitment for 
Russia would need to be based on Russia having  provided export subsidies in a selected base 
period. 
Possible Solutions and Drafting Proposals:
 
- The gulf separating Russian Federation a nd some Working Party members on domestic 
support and export subsidies is  large.  It will need to be bridged before appropriate 
language can be inserted in the report.  In ge neral, such language would need to indicate 
that Russia’s commitments are based on da ta provided for an appropriate period. 
Answer : 
As it has been stipulated for several times in documents submitted by the Russian Federation 
agricultural policy aims at use of green box measu res as well as amber box measures.  At the same 
time Russia as other countries considers wider use of green box measures being more appropriate.  
At the same time Russian Federation assumes that the usage of amber box measures provides 
successful realization of the economic reform in th e agricultural sector.  Besides that the volume of 
support required by Russia is substantially lo wer than in many other developed countries. 
Russia believes that with reference to the domestic  support the presented period is quite representative 
due to the fact that: 
- it does not contradict with requirements of the WTO; 
- it contains agricultural supporting programs, which are being used at present  time; and 
- it reflects an appropriate measurement  of Ru ssian commitments taking into consideration the 
volume of domestic support in the developed countries. 
Russian Federation still maintains that the right fo r export subsidies is vitally important for the 
country.  "Zero" commitment with regard to export subsidies would be possible only and when such a 
decision was taken by all WTO Member States within the Doha round.  This issue is one of Questions 
on negotiations and no decision has been taken yet. 
__________