WORLD TRADE  
ORGANIZATION  RESTRICTED 
G/AG/W/92 
16 January 2012 
 (12-0253) 
Committee on Agriculture  
 
 
 
RESPONSES TO POINTS RAISED BY MEMBERS UNDER THE REVIEW PROCESS 
 
Compilation of responses to questions raised during the  
Committee on Agriculture meeting on 17 November 20111 
  
 The present document compiles the responses recei ved in writing by the Secretariat to the 
questions raised in document G/AG/W/89 as well as follow-up comments made by Members during 
the Review Process. 
 
 Outstanding responses will be circulated in a ddenda to this document as soon as they are 
provided by Members.  A comprehensive version of the present compilation will be issued thereafter. 
 
_______________ 
 
                                                      
1 This document has been prepared under the Secret ariat's own responsibility and is without prejudice 
to the positions of Members or to their rights or obligations under the WTO.   
   G/AG/W/92 
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  Table of Contents 
 
 
I.  MATTERS RELEVANT TO THE IMPLEMENTATION OF 
COMMITMENTS:  ARTICLE 18.6 ....................................................................................... 5  
A.  OBSTRUCTION OF MARKET ACCESS :  STATEMENT BY ARGENTINA  ........................................... 5  
B.  COSTA RICA'S COMPLIANCE WITH AMS  COMMITMENTS  ............................................................ 6  
C.  SWITZERLAND 'S COMPLIANCE WITH ARTICLE 9.1( C) ................................................................. 7  
D.  CANADA 'S ICE CREAM PROMOTION INITIATIVE  ......................................................................... 8  
E.  BRAZIL 'S SUPPORT TO RICE UNDER "PEP" .................................................................................. 9  
F.  CHINA 'S COTTON RESERVES PURCHASING SYSTEM  ................................................................... 10  
G.  ECUADOR 'S IMPORT LICENSING OF CERTAIN FOOD AND AGRICULTURAL PRODUCTS  ............... 11  
H.  EGYPT 'S IMPORT BAN ON COTTON ............................................................................................. 12  
I.  THAILAND 'S RICE PROCUREMENT POLICIES  .............................................................................. 12  
II.  POINTS RAISED IN CONNECTION WITH  INDIVIDUAL NOTIFICATIONS .......... 12  
A.  IMPORTS UNDER TARIFF AND OTHER QUOTA COMMITMENTS (TABLE MA:2) ........................ 12  
1.  Canada   G/AG /N/CAN/85 ..................................................................................................... 12  
(a)  TRQ administration ............................................................................................................ ...... 12 
(b)  TRQ fill ...................................................................................................................... ............... 13  
B.  DOMESTIC SUPPORT COMMITMENTS (TABLE  DS:1) ................................................................ 13  
1.  Canada   G/AG /N/CAN/86 ..................................................................................................... 13  
(a)  Green Box - Income insurance and income safety-net programmes ........................................ 13  
(b)  Amber Box ..................................................................................................................... ........... 14  
(i)  Product-specific AMS .......................................................................................................... ..... 14 
(ii)  Non-product-specific AMS ...................................................................................................... .. 15 
(iii) De minimis claims ............................................................................................................. ........ 17 
(iv)  Classification ................................................................................................................ ............ 17  
2.  China   G/AG/N/CHN/21 ........................................................................................................ 18 
(a)  Green Box ..................................................................................................................... ............ 18  
(i)  Outstanding Table DS:2 ........................................................................................................ ... 18 
(ii)  General services .............................................................................................................. ......... 18 
(iii) Public stock holding fo r food security  purposes ....................................................................... 19  
(iv)  Decoupled income support ...................................................................................................... . 19 
(v)  Payments for relief from  natural disasters ............................................................................... 21  
(vi)  Environmental programmes ......................................................................................................  22 
(vii) Regional assistance programmes ............................................................................................. 23  
(b)  Amber Box ..................................................................................................................... ........... 23  G/AG/W/92 
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  (i)  General ....................................................................................................................... .............. 23  
(ii)  De minimis claims ............................................................................................................. ........ 23 
(iii) Negative Support .............................................................................................................. ......... 23 
(iv)  Product-specific AMS:  Market Pric e Support - Administered price ....................................... 24  
(v)  Product-specific AMS: Market Pri ce Support - Eligible production ........................................ 24  
(vi)  Product-specific AMS: Pork .................................................................................................... . 25 
(vii) Product-specific AMS: Cotton ..................................................................................................  25 
(viii) Non-product-specific AMS ...................................................................................................... .. 26 
3.  India   G/AG/N/IND/7 .......................................................................................................... ... 26 
4.  Japan   G/AG/N/JPN/167 ....................................................................................................... 27 
5.  Jordan   G/AG /N/JOR/14 ....................................................................................................... 27 
(a)  Green Box ..................................................................................................................... ............ 27  
(i)  General servicies ............................................................................................................. ......... 27 
(ii)  Domestic food aid ............................................................................................................. ........ 28 
(b)  Amber Box ..................................................................................................................... ........... 28  
(i)  De minimis claims ............................................................................................................. ........ 28 
(ii)  Product-specific AMS: Market Pri ce Support - Administered price ........................................ 28  
(iii) Product-specific AMS:  Market Pric e Support - Eligible production ....................................... 29  
(iv)  Product-specific AMS: Livestock .............................................................................................. 29 
6.  Korea   G/AG/N/KOR/43 ....................................................................................................... 2 9 
7.  Nepal   G/AG/N/NPL/2 .......................................................................................................... . 31 
8.  Oman   G/AG/N/OMN/8 ......................................................................................................... 3 1 
9.  Kingdom of Saudi Arabia   G/AG/N/SAU/6 ......................................................................... 31  
C.  NEW OR MODIFIED DOMESTIC SUPPORT MEASURES (TABLE  DS:2) ........................................ 32  
1.  Japan   G/AG/N/JPN/168 and G/AG/N/JPN/168/Corr.1 ..................................................... 32  
2.  Korea   G/AG/N/KOR/44 ....................................................................................................... 3 2 
(i)  Green Box - Public Rice St ockholding Programme .................................................................. 32  
(ii)  Green Box - Fixed Payment Scheme for Paddy Fields ............................................................. 33  
(iii) Green Box - Direct Payment Scheme for Landscape Conversion ............................................ 34  
III. OVERDUE NOTIFICATIONS:  QU ESTION BY AUSTRALIA ...................................... 34  
  G/AG/W/92 
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  I. MATTERS RELEVANT TO THE IMPL EMENTATION OF COMMITMENTS:  
ARTICLE 18.6 
A. OBSTRUCTION OF MARKET ACCESS :  STATEMENT BY ARGENTINA  
1. Argentina would like to share with the other Members its concern over the growing use of 
sanitary measures and technical regulations that r estrict imports in a manner inconsistent with 
international obligations, thereby undermining th e objectives laid down in the Agreement on 
Agriculture. 
2. As is known, the Agreement on Agriculture laid  the ground rules for initiating a process of 
reform in agricultural trade with a view to securing a fair and market-oriented trading system.  In this 
connection, paragraph 4 of the Preamble mentions th at the liberalization of trade in agriculture shall 
be achieved not only through disciplines in the th ree pillars (domestic support, market access and 
export subsidies), but also throug h an agreement on sanitary and phytosanitary measures, as referred 
to in Article 14 of the Agreement. 
3. With respect to import restrictions, Article 4.2 of the Agreement on Agriculture further 
establishes rules for the elimination of non-tariff restrictions on imports, apart from a very limited 
number of exceptions, and of other import restrictions  that are not ordinary customs duties.  This 
modest first step in the agricultural reform process would be seriously undermined if other non-tariff 
import restrictions, such as sanitary or technical measures, were applied arbitrarily or unjustifiably.  
In short, Argentina considers th at the Agreement on Agriculture recognizes the very close linkage 
between trade liberalization goals in the sector and the proper application of other types of measures 
(sanitary and technical) whose impact in terms of market access can be just as decisive, if not more 
decisive, than tariffs, domestic  support or export subsidies. 
4. Argentina is aware that there are specific agreements that regulate the adoption and 
application of these measures as well as commi ttees that monitor the implementation of the 
agreements and have the technical capacity to an alyse the substance of each one of the measures 
concerned.  Nevertheless, while respecting th e scope of each agreement, the Committee on 
Agriculture cannot simply stand by and watch as san itary and phytosanitary measures continue their 
relentless progress, not to mention technical regulat ions that undermine the objectives enshrined in the 
Agreement on Agriculture owing to their dubious co nformity with the Agreement on the Application 
of Sanitary and Phytosanitary Measures and th e Agreement on Technical Barriers to Trade. 
5. In view of these circumstances, Argentina would li ke to draw the attention of Members to the 
growing proliferation of measures of this kind which seriously undermine the export potential of 
many countries.  An examination of the agendas of the different committees will show that complaints 
against these types of import restrictions (sanitary and technical) are more and more common.  Lack of scientific evidence tends to be the main cause for complaints agai nst import restrictions such as 
unjustified delays, deviation from inte rnational standards without scientific justification, discretionary 
labelling systems, and discriminatory treatment of new technologies such as biotechnology and 
nanotechnology.  In other words, international agricu ltural trade, which continues to be administered 
owing to the delays in the reform process, is  being lumbered with increased non-tariff import 
restrictions. 
6. Secondly, Argentina is also concerned at th e impact of these unjustifiable or arbitrary 
measures on food security.  According to FAO estimat es, by 2050 food production will have to be 
increased by 70 per cent to guarantee food security in  the face of a sharp population increase.  More 
specifically, the FAO concluded that developing coun tries would have to increase their agricultural 
production by 100 per cent, and that this would re quire an estimated net investment of 83 billion 
dollars per year in those countries, chiefly in in frastructure and applied technological innovation.  G/AG/W/92 
Page 6 
 
 
  At the Meeting of Agriculture Ministers of the Am ericas held in Costa Rica last 19-21 October, a 
declaration was adopted in which the Ministers stre ssed that agricultural innovation was a catalyst for 
growth and vital to increasing and intensifying pr oduction and productivity,  and hence to achieving 
food security and a decent quality of life for all. 
7. To illustrate the point, Argentina would like to cite an example of the positive impact of 
investment in new technologies on food security.  The last two biotechnology crops authorized for use 
in Argentina (maize in both cases) have improved yields by about 10 per cent compared to other 
similar biotechnology products already on the mark et and up to 25 per cent compared to their 
conventional counterparts.  These technologies also  reduce farmers' expenditures on agrochemicals 
and the use on machinery, bringing down co sts and helping to preserve the environment. 
8. The aforementioned restrictions adversely a ffect the development of many agricultural 
exporting countries and hence their food security, esp ecially in the case of small scale producers for 
whom it is impossible to adapt to the unjustifiable re quirements of certain markets.  As a result, there 
is a disincentive to produce and innovate which is th e leading cause of the current situation in the food 
markets. 
9. The concern over the proliferation of this tec hnical protectionism through import restrictions 
is reflected in the Communique from the 36th Ministerial Meeting of the Cairns Group in Saskatoon 
last September.  It had already been brought up by the delegation of Argentina at the 37th FAO 
Conference last June. 
10. In light of the above considerations regard ing the proliferation of these types of import 
restrictions, the Argentine delegation calls for co mpliance with the aforemen tioned agreements, with 
particular regard for the provisions on special a nd differential treatment.  This means refraining from 
introducing further restrictive technical measures an d eliminating existing ones, in compliance with 
WTO rules. 
Follow-up:  Australia, Brazil, Canada, Chile, Colombia, El Salvador, Mexico, the 
Philippines, the United States voiced similar apprehensions.  Canada fully supported 
Argentina's initiative to rai se the Committee's awareness of the importance and relevance of 
other WTO agreements in the agricultural trade  context.  Australia considered, however, that 
some tariff barriers, domestic support and export subsidy practices could also significantly 
affect market access conditions.  Furthermo re, Members had the right to apply SPS and 
TBT measures different from international stand ards provided these were justified under the 
relevant disciplines.  The Philippines also exp ressed concerns with respect to Argentina's 
drawing of certain linkages with the food security debate which it wished to pursue 
bilaterally. 
B. COSTA RICA'S COMPLIANCE WITH AMS  COMMITMENTS  
11. Questions by:  
 (a) Canada:  Canada appreciates the updates that Costa Rica has provided at past 
meetings of the Committee regarding this issue.  However, Canada reiterates the 
grave concerns expressed about Costa Rica's continuing violations of Article 3.2 of the Agreement on Agriculture.  What  concrete steps has Costa Rica taken 
since the last meeting of the Committee to rapidly bring itself into compliance 
with the Agreement on Agriculture? 
(b) the United States:  The United States and a number of other Members have 
raised Costa Rica's notified total A ggregate Measurement of Support breaking  G/AG/W/92 
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  its commitment at a growing rate at a number of meetings of the Committee on 
Agriculture.  The United States strongly urges Costa Rica to bring its domestic 
rice support back within Costa Rica's WTO commitment level.  Provide details 
on concrete actions Costa Rica has taken since the last meeting to comply with 
its AMS commitment. 
Costa Rica is not in a position to give this Committee an estimate of when it will be 
able to bring its AMS levels in line with its commitments. 
 
Follow-up:  Echoed by Australia and the Un ited States, Canada reiterated on-going concerns 
about the absence of an indication as to when Co sta Rica would be in a position to provide 
assurances that it would no longer violate its bound Total AMS commitment.  In this connection, Australia pointed to Korea's successful reforms. 
C. S
WITZERLAND 'S COMPLIANCE WITH ARTICLE 9.1( C) 
12. Questions by: 
 
(a) the European Union:  In reply to a qu estion from New Zealand at the regular 
meeting of the Committee on Agricultu re on 29 September 2011 concerning a 
decision announced by the Swiss government on 31 August 2011 to implement a 
compulsory levy of Sw F 0.01/kg of marketed milk, Switzerland confirmed that:  
"On 31 August, the Federal Council ruled on this request and announced that the 
two following IP Lait measures were ap plicable to non-members:  firstly, the 
essential elements of a standard contract for the purchase of milk at the first and 
second levels;  and secondly, a contributio n of one centime per kilogram of milk 
marketed, to support relief measures on th e milk-fat market.  This extension of the 
measures to non-members will be applicable until 30 April 2013." 
In its reply Switzerland also indicated that: 
"IP Lait should collect an estimated total of Sw F 34 million per year of which only 
Sw F 1.7 million will come from non-members  to export butter in order to relieve 
the Swiss market." 
Could Switzerland explain its presumed compliance with its WTO 
commitments, where it, by virtue of government action on 31 August 2011, allocates Sw F 34 million for the export of  butter, while it has no provisions for 
subsidized exports of butter in its schedule?  The EU recalls that Article 9.1(c) of 
the Agreement on Agriculture states that  government action does not necessarily 
imply a charge on the public account, but includes payments that are financed 
from the proceeds of a levy imposed on the agricultural product concerned. 
(b) New Zealand:  From Switzerland's response to New Zealand's question under 
Article 18.6 at the 63
rd session of the Committee on Agriculture, New Zealand 
noted that on 31 August 2011 the Federal Council made mandatory a levy of one 
centime per kilogram of milk sold co mmercially to finance measures that 
support the export of butter.  The levy is collected by IP Lait , and it is estimated 
that around Sw F 34 million per year will be collected through this levy.  
New Zealand also noted that Switzerland said there is no public money and no 
public administration involved with collecting or distributing the money. G/AG/W/92 
Page 8 
 
 
  Article 9.1(c) of the Agreement on Agriculture states that:  
"Payments on the export of an agricultural product that are financed by virtue of 
government action, whether or not a charge  on the public account is involved, 
including payments that are financed fr om the proceeds of a levy imposed on the 
agricultural product concerned or on an agricultural product from which the 
exported product is derived." 
Could Switzerland explain how it considers that enacting legislation which 
enables a compulsory levy on milk on all milk producers and processors to provide funds for a measure to suppo rt butter export does not require 
notification against Swiss export subsid y commitments consistent with its WTO 
obligations?  While the proposed payments are not a charge on the public account, the anticipated revenue of Sw F 34 million per annum will result in 
financing payments on the export of an agricultural product. 
Switzerland suspended its milk quota in 2009.  This liberalization was followed by a 
period of market restructuring.  At present, the vast majority of Swiss milk producers, 
represented by the Swiss Inter-professional Association of the Milk Producers 
(IP Lait) , show a desire to use private regulati on to stabilize the Swiss milk market.  
In order to prevent free-riders from underm ining the private initiative to stabilize the 
market, the federal council ruled on a request by IP Lait, declaring that the two 
IP Lait measures indicated in Switzerland's reply at the 63
rd regular meeting of the 
WTO Committee on Agriculture were applicable to non-members. 
 
The contribution of one centime per kilo of milk marketed is collected by a private organization to support relief measures on the milk fat market and also applies to 
producers who are not members of IP Lait.  The federal authorities do not receive any 
monies from this contribution nor do they prescribe how it is to be used. 
 
Consequently, the Federal Council's d ecision merely subjects non-members to 
measures decided upon by IP Lait.  It is not a provision of State funds but simply a 
form of assistance to private regulation to avoid a private measure from being 
undermined by free-riders - an established practice well known to WTO Members.  As IP Lait is a private association, and does not exercise any State authority, it is 
clearly not an export subsidy under Article 9.1(c) of the Agreement on Agriculture. 
 
Follow-up:  The European Union and New Zealand expressed doubts on compliance with 
Article 9.1(c) and reserved their rights to raise further questions at the next meeting. 
D. CANADA 'S ICE CREAM PROMOTION INITIATIVE  
13. Question by New Zealand:  Given that the Canadian Dairy Commission (CDC), a 
Crown corporation, calculates the pooling returns and sharing of promotion costs related to the 
Ice Cream Promotion Initiative on behalf of the Dairy Farmers of Canada (DFC), the Canadian 
government clearly plays a role in administering this programme.  Given that the Canadian 
government has a clear role in this programme , New Zealand invites Canada to reconsider the 
response it provided at the Committee on Agriculture on 29 September 2011 to New Zealand's 
question about this programme.  In particular Ne w Zealand seeks details on:  the total value of 
the pooling returns;  and a breakdown of the pr omotion costs since the initiative was launched. 
 
As already noted in Canada's response to the same questions posed by New Zealand at the 
57th, 60th, 62nd and 63rd Committee on Agriculture, the Ice Cream Promotion Initiative is a  G/AG/W/92 
 Page 9 
 
 
  private contractual agreement between the Dairy Farmers of Canada, a non-governmental 
organization, and individual ice cream processors. 
 The Canadian Dairy Commission (CDC) has no pa rt in determining the terms and conditions 
of the Ice Cream Promotion Initiative.  As the secretariat of the Western Milk Pooling 
Agreement and the Agreement on the Eastern Cana dian Milk Pooling, its sole role is to 
perform the pooling calculations each month. 
 The CDC does not receive a breakdown of the promotion initiative costs by ice cream 
manufacturer, it calculates the pooling returns and provincial sharing of promotion costs 
related to the Ice Cream Promotion Initiative which are included in the CDC's aggregate 
revenue and cost sharing component of the pool s.  The CDC is unable to provide the data 
requested.  This information is of a confiden tial commercial nature and is provided to the 
CDC on the understanding by the partic ipants that it will not be shared. 
E. B
RAZIL 'S SUPPORT TO RICE UNDER "PEP" 
14. Questions by the United States:  The Unit ed States appreciates Brazil's replies to its 
questions at the September 2011 Committee on Agri culture.  According to both press reports 
and data from Brazil's CONAB website as well as from trade data, Brazil appears to have 
supported about one million tonnes of rice in calendar year 2011 with the PEP programme, and exported about 875,000 tonnes of rice in the same period.  The United States also notes that data 
from Brazil's CONAB website show much high er usage of PEP for rice in 2006 and 2007: 
 (a) Clarify the differences found on the website vis-à-vis the response to the 
September questions. 
There are a number of elements that can explain such differences. 
 
First, when Brazil provided its response in  September, it clarified that the data 
presented was subject to change, since the programme for crop year 2010/11 was still 
under implementation.  The objective was to provide as much transparency as 
possible using available data at that point in time.  In fact, the final data regarding disbursements under PEP auctioned from November 2010 to September 2012 will 
only be available after February 2012, whic h is the deadline for the seller to submit 
the documents that prove that the comme rcialization of the product was made in 
accordance with the regulations of the progr amme.  The preliminary data that Brazil 
has today indicates that about 450 thousa nd tonnes of rice were supported under the 
programme.  The value of total subsidizati on is about US$27 million, which is less 
than 1 per cent of value of production for rice in Brazil.  The final value, however, 
will only be available after February 2012. 
 It is also important to highlight that the data presented refers to crop year and not 
calendar year.  The data referred to the ques tion raised by the United States relates to 
calendar year.  
Finally, it is also important to bear in  mind that when CONAB announces that a 
programme for a specific product is going to be implemented;  the figures published 
in its website are the quantity and the valu es available for the programme concerned.  
As the subsidies are given through auctions, the figures for the quantity and the values actually supported are usually far below what was previously announced.  
Therefore, the numbers presented at the September 2011 meeting of the Committee G/AG/W/92 
Page 10 
 
 
  on Agriculture were the amount and value of rice actually supported, according to the 
data Brazil had at that point in time. 
 
(b) Also, as requested in September, provide a breakdown for rice of activity by 
tonnage of the PEP, specifically, what tonnage moved to domestic markets and 
what tonnage moved to overseas markets under the programme. 
Regarding what tonnage is moved to domes tic markets and what tonnage is moved to 
overseas markets under the programme, as Brazil mentioned in a previous response to the Committee, Brazil does not have this info rmation readily available in its database. 
 
In 2005/06, 100 per cent of products acquired under the programme were commercialized in the internal market, since the programme was designed 
exclusively for the domestic market.  Data from 2006/07 and 2007/08 are not 
available because CONAB did not record this kind of information in that period.  In 
2008/09 and 2009/10, the programme was not implemented. 
 
Brazil has asked CONAB to provide the data  for the crop year 2010/11 but they were 
not able to finish the work so far.  The sh ipments of the products that are part of the 
programme are still under way, so any value to be provided will not be final before 
February 2012. 
 
Follow-up:  The United States welcomed the clar ifications provided by Brazil and hoped that 
Members' concerns would be taken into account should the same programme be implemented 
again next year. 
F. CHINA 'S COTTON RESERVES PURCHASING SYSTEM  
15. Questions by the United States:  Press reports indicate that China initiated a cotton 
reserves purchasing system to promote domestic  production.  The reports cite that the 
programme provides a support price of Y 19, 800 per tonne (US$1.412 per pound at the 
current exchange rate) for baled cotton lint type 328 and that the programme is 
operating from 1 September 2011 to 31 March  2012 in 13 provinces (Tianjin, Hebei, 
Shanxi, Jiangsu, Anhui, Jiangxi, Shandong, He nan, Hubei, Hunan, Shaanxi, Gansu and 
Xinjiang): 
 
(a) Provide a description of how the system functions. 
China is a major cotton producer.  Cotton farmers are mostly located in minority 
inhabited areas, border areas and poverty-stricken areas.  Cotton production is the 
main source of income for local farmers.  Due to ever-changing market and natural 
conditions, the income of cotton producers fluctuates greatly, sometimes even cannot 
cover the costs.  Based on former experience to guarantee the minimum income for 
cotton producers to survive, the Chin ese government initiated a cotton reserves 
purchasing system.  The purchasing price (domestic average cotton price at 
19,800 Y/tonne) is calculated on the cost of cotton producers.  The fundamental goal 
of this policy is to ensure that impoveri shed cotton producers get basic compensation 
for the cost of production when the market fluctuates unusually and the cotton price 
falls too much.  G/AG/W/92 
 Page 11 
 
 
  (b) Under what category of support does Ch ina plan to notify this purchasing 
system? 
Please see China's future notifications on  how this measure will be notified. 
Follow-up:  The United States looked forward to China's future notification. 
G. ECUADOR 'S IMPORT LICENSING OF CERTAIN FOOD AND AGRICULTURAL PRODUCTS  
16. Questions by the United States:  Can Ecuado r confirm the existence and enforcement of 
an official governmental memorandum2 which effectively limits the importation of certain 
agricultural and food products in favour of simila r product produced domestically in Ecuador?  
The United States has questions regarding Ec uador's Ministerial Decree No. 172, dated 
27 April 2011: 
(a) Article 1 of the Decree states:  " To regulate the exceptional granting of licences 
and permits for the importation of milk and its by-products by the Ministry of 
Agriculture, Livestock, Aquaculture and Fisheries ."  Define what is meant by the 
term of " exceptional " in this context and what the specific criteria are for 
making such a determination. 
(b) Article 2 of the Decree notes that " Exceptionally, the Under-Secretariat of 
Technical Services of this Ministry may grant licences and permits to import these products, following a technical assessment report issued by the Under-Secretariat 
of Livestock Development at MAGAP.  The Under-Secretariat of Livestock 
Development to issue the technical report must set import quotas for milk and its derivatives. "  Explain the specific information that is contained in the referenced 
"technical assessment report " and the process that is employed in establishing 
the referenced import quotas.  Regardi ng the latter point, how are these 
established and maintained in manner that  is consistent with Ecuador's WTO 
obligations? 
(c) Article 3 of the Decree states that " For the exceptional granting of permits or 
import licences it must be considered th e appropriateness and technical feasibility, 
as well as the legal and social appropriaten ess of the import, in order to effectively 
ensure food sovereignty and that they do not generate distortions in the domestic 
production market, commercialization an d consumption of milk and its by-
products. "  With respect to the granting of import licences, elaborate on what is 
meant specifically by each of the term s emphasized above and explain how the 
application of these criteria is enforced in a manner consistent with Ecuador's 
WTO obligations. 
Concerning Ecuador's import licensing of certain food and agricultural products, non-
automatic licences are used to manage 17 tariff quotas for the importation of such 
products, under the terms of the Agreem ent on Import Licensing Procedures.  
Furthermore, these tariff quotas are distributed among supplying countries in 
accordance with Article XIII of the GATT 1994.  Additional information on these 
licences can also be obtained from the responses by Ecuador during its latest Trade Policy Review, which concluded successfully on 16 November 2011. 
 
                                                      
2 Memorandum No. MAGAP-SFG-2011-1757-M, 19 October 2011. G/AG/W/92 
Page 12 
 
 
  H. EGYPT 'S IMPORT BAN ON COTTON  
Egypt has transmitted those questions to capita l and is still waiting for feedback from the 
relevant authorities.  
 
Emphasizing the importance of the issue, the European Union and the United States flagged 
their strong concerns and encouraged Egypt to pr ovide a response as soon as possible.  The 
United States indicated its intention to pursue this matter bilaterally with Egypt through the 
US Embassy in Cairo. 
 
I. THAILAND 'S RICE PROCUREMENT POLICIES  
17. Questions by the United States:  The United  States appreciates Thailand's replies to its 
questions at the September 2011 Committee on Agri culture.  The United States continues to be 
concerned about the transparency and operation of Thai rice stock policies.  The average export 
prices, while masking any variability in seasonal or quality differences in rice prices, may still 
have been lower than the prices at which the ri ce was procured.  Similarly, the government sale 
prices to rice millers or exporters could have b een below the export prices.  Selling government 
stocks at market prices may not be relevant if th e market price is below the procurement price: 
 
(a) Can Thailand provide information on the prices at which rice was procured for 
government stocks? 
The request for information has been rela yed to the government.  Thailand believes 
that the response may be delayed due to flooding situation in Thailand, including 
Bangkok.  
(b) The United States has also seen market reports that the Thai government sells 
stocks to exporters contingent on expo rt and remains concerned about those 
reports.  Are these press reports accurate?  Please comment on them. 
Thailand confirms that the government has neither a law nor a regulation requiring 
the acquired stocks to be exported.  Rice purchased from the government-owned 
stocks can be traded domestically as we ll as exported, according to the market 
conditions.  
Follow-up:  The United Sates expressed appreciatio n for Thailand's provision of responses in 
advance of the present meeting despite of the fl ooding situation.  The Philippines indicated 
that it would pursue two questions bilaterally w ith Thailand, namely the impact of the current 
floods on food security, considering that Thailand is the world's largest exporter on rice;  and 
the possible increase in trade distortions w ith the introduction of Thailand's policies. 
II. POINTS RAISED IN CONNECTION WITH INDIVIDUAL NOTIFICATIONS 
A. IMPORTS UNDER TARIFF AND OTHER QUOTA COMMITMENTS (TABLE MA:2) 
1. Canada   G/AG/N/CAN/85 
(a) TRQ administration  
18. Question by Australia:  The figure for in-quota  imports for the fluid milk tariff quota of 
64,500 tonnes (product weight basis) remains "non-applicable" in the notification.  The related 
footnote 3 states that the General Import Perm it regulates "importation for personal use, any  G/AG/W/92 
 Page 13 
 
 
  resident of Canada may import fluid milk."  Howe ver, the terms and conditions in the Part V of 
Canada's schedule indicate that the quantity was established on the basis of annual cross-
border purchases imported by consum ers.  It does not appear to limit the use of the tariff quota 
to only private consumers.  Can Canada explai n why this tariff quota then is confined to 
personal usage? 
Canada answered similar questi ons on the administration of its fluid milk tariff quota as 
recently as the 55th and 56th Committee on Agriculture meetings on 2 July 2009 and 24 and 
25 September 2009.  Canada's reply can  be found in the reports of the 55th and 56th meetings.3 
 
Canada's MA:1 notification on the administ ration of tariff quotas (G/AG/N/CAN/45) notes 
that Canada's tariff quota for fluid milk is administered on a global basis and is subject to General Import Permit #1, which regulates the im portation of dairy produc ts for personal use, 
so that any resident of Canada may import flui d milk.  There are no formal applications for 
any resident of Canada to import fluid milk in  Canada.  Consumers importing fluid milk must 
only invoke General Import Permit #1 when co mpleting the normal customs entry document.  
Canada's current administration of this tariff quota as outlined in Canada's MA:1 notification 
of 2 August 2001 (G/AG/N/CAN/45) is consistent with its WTO obligations. 
 
(b) TRQ fill 
19. Question by the European Union:  Could Canada explain the reasons behind lower 
tariff quota fill compared to earlier noti fications (G/AG/N/CAN/83, G/AG/N/CAN/79, 
G/AG/N/CAN/77, G/AG/N/CAN/75) for the follo wing products:  beef and veal, powdered 
buttermilk and margarine? 
 
The tariff rate quota (TRQ) for beef and veal and for margarine has not been filled during 
calendar year 2010.  This can be explained by the competitive nature of the domestic industry. 
 
The TRQ for powdered buttermilk has had a lo wer fill rate during calendar year 2010, 
compared to the fill rate of 2008 and 2009.  This can be explained by modest import demand 
due to prevailing market conditions. 
 B. D
OMESTIC SUPPORT COMMITMENTS (TABLE  DS:1) 
1. Canada   G/AG/N/CAN/86 
(a) Green Box - Income insurance and income safety-net programmes 
20. Questions by the European Union:  With ref erence to questions raised by the United 
States at the March 2011 meeting4 on Canada's CAIS programme: 
 (a) Could Canada explain the distinction between the CIDC and CISC components? 
The CAIS-Income Disaster Component (C IDC) and CAIS-Income Stabilization 
Component (CISC) were two separate components with different eligibility criteria.  
                                                      
3 Paragraph 3 in Annex 2 of G/AG/R/55 and paragraph 2 in Annex 2 of G/AG/R/56 refer. 
4 Paragraphs 28 and 31 of G/AG/W/83/Rev.2 refer. G/AG/W/92 
Page 14 
 
 
  (b) Do farmers register separately for each of  the two components in order to have 
coverage or does a single registrat ion provide the coverage under both 
components? 
Producers chose a coverage level but did not have to register separately. 
(c) Is it the income loss that triggers whatever component is activated?  
CIDC payments (reported in Supporting Table DS:1) were triggered when a 
producer's whole-farm income margin in the claim year experienced a decline of 
more than 30 per cent, while CISC paym ents (reported in Supporting Table DS:9) 
were triggered with a decline up to 30 per cent. 
(d) Does the existence of the CISC component have a knock-on effect on the 
participation in the CIDC component of CAIS? 
The percentage of government compensati on for the income lo ss increased as losses 
deepened, but in no case would the govern ment compensation exceed 70 per cent of 
the producer's income loss.  Moreover, supply-managed commodities were eligible 
under CIDC but were excluded from CISC.  The CIDC payments satisfied 
paragraph 7 of Annex 2 of the Agreemen t on Agriculture, as notified in Canada's 
DS:2 (G/AG/N/CAN/64).  
21. Question by the European Union:  In G/AG/N/CAN/64, Canada states that its CAIS 
programme operates on a whole-farm margin basis.  The margin is, in this notification, defined 
"as the difference between total eligible sales and other revenues minus expenses directly related to 
production (e.g., commodity purchases, seed, f ertilizer, pesticides and veterinary expenses) ".  How 
does Canada match this definition with the refere nce income in paragraph 7 (a) of Annex 2 of 
the Agreement on Agriculture, i.e.:  "the gro ss income or the equivalent in net income terms 
(excluding payments from the same or similar schemes)"? 
 
Paragraph 7(a) of Annex 2 requires that eligib ility be determined by an income loss, taking 
into account only income derived from agricultu re, which exceeds 30 per cent of the average 
gross income or the equivalent in net income  terms.  Canada noted that the text made 
reference to gross income or net income, but does not refer to revenue.  CAIS was based on 
the "whole-farm" gross income or margin concept using revenue from all commodities 
produced on the farm net of certain expenses, to  ensure that the programme would not distort 
farm production and purchase decisions.  The CAIS programme was consistent with 
paragraph 7 of Annex 2, including the 7(a) criteria. 
(b) Amber Box  
(i) Product-specific AMS 
22. Question by the United States:  Under the 2001 Federal-Provincial Agreement for 
Chicken, minimum prices for live chicken were es tablished, as well as quantities of production 
corresponding to quota allocations,  to limit chicken production by province.  Please explain why 
activity under that agreement was not noti fied as support to chicken producers. 
 
No administered price applies in the chicken sector.  Poultry prices in Canada are negotiated 
between provincial poultry produ cer boards and primary poultr y processors based on market 
conditions.  The Government of Cana da has no role in poultry pricing. 
  G/AG/W/92 
 Page 15 
 
 
  (ii) Non-product-specific AMS 
23. Question by the European Union:  Wh at are "CAIS enhancements"(page 20)? 
 
The CAIS Enhancements consisted of CAIS top-up programmes.  The Alberta Reference 
Margin Initiative (formerly the Alberta CAIS  Reference Margin Pilot Project) provided 
support by using the better option of the Olympic average or the previous three-year average 
to establish the reference margin.  The Albe rta Margin Enhancement increased the CAIS 
reference margins by 15 per cent and by 25 per cent of fuel and fertilizer costs based on the 
2004 programme year.  The Nova Scotia Margin  Enhancement increased the CAIS reference 
margins by 10 per cent based on the 2003 programme year. 
 
24. Questions by:  
 
(a) Japan:  Could Canada explain in detail the Agri-Insurance scheme and the 
difference from its predecessor programme (Production Insurance)? 
(b) the United States:  Provide additional information on Agri-Insurance and how it 
differs from the prior programme?  Explain how the premia are cost-shared between federal and provincial government?  Do producers pay some share of 
the premia?  If so, how much? 
AgriInsurance is a federal-provincial-produ cer cost-shared programme that stabilizes 
a producer's income by minimizing the economic effects of production losses caused 
by natural hazards.  AgriInsurance is a pr ovincial delivered programme to which the 
federal government contributes a portion of to tal premiums.  Premiums for low risk 
crops are cost-shared with 40 per cent paid  by producers, 36 per cent paid by the 
Government of Canada, and 24 per cent pa id by the provincial governments.  
Producers may pay more than 40 per cent of  the premium for increases in risk and 
coverage levels.  The Farm Income Protection Act requires that insurance 
programmes must be self-sustaining.  Th e Canada Production Insurance Regulations 
also require that the setting of premium ra tes be established in an actuarially sound 
manner. 
For crops, premium rates are updated on a crop and risk-zone basis.  Risk-zone rates 
are based on the claim payment history specific to each crop and risk zone.  The 
dollar-per-acre premium is calculated using a combination of the premium rate, the 
long-term average yield, the selected coverage level, the insured price, and the producer's experience discount or surcharge. 
Producers may select a certain contract to c over their long-term av erage yield.  For 
example, if the average yield is 100 t onnes for barley, AgriInsurance offers a 
guarantee of 70 tonnes at the 70 per cent covera ge level.  If the actual harvest is only 
30 tonnes, a claim is paid to the producer  on the 40-tonne shortfall, multiplied by the 
insured price for barley. 
AgriInsurance provides the same benefits  previously under the Production Insurance 
and the name was changed to align with other business risk management 
programmes.  It is available to almost all commercially grown commodities (more 
than one hundred) across Canada. Any produ cer in Canada can participate in the 
programme for eligible agricultural products.  New product coverage under 
AgriInsurance is now expanding to other products such as horticultural crops and 
livestock where there is interest from producers. G/AG/W/92 
Page 16 
 
 
  25. Questions by: 
 
(a) Japan:  Could Canada kindly explain the detail of Cost of Production Payment 
(COP)? 
(b) the United States:  Provide information on "Cost of Production Payment 
(COP)", including a brief description and the criteria for payments. 
The Cost of Production (COP) payment was a one-time programme to help Canadian 
producers address increasing production costs.  Payments were based on a fixed percentage (i.e. 2.36 per cent) of a producer's average net sales of eligible 
commodities for the 2000-2004 tax years up to a sales cap of Can$450,000.  For 
producers who farmed after 2004, payments were based on the average net sales for 
the 2005 and 2006 tax years (or the 2006 tax years only, if it was the first year of 
farming).  Producers must have reported sales of eligible commodities to the Canada 
Revenue Agency for income tax purposes.   Eligible commodities were grains, 
oilseeds and special crops, edible hortic ulture, non-edible horticulture, cattle and 
calves, sheep and lambs, other red meats,  hides, and other commodities (excluding 
supply managed).  
26. Questions by the United States:  Provide information on the following programmes, 
including a brief description and the criteria for payments: 
 
(a) Canadian Farm Family Options Programme 
The Canadian Farm Family Options Progr amme (CFFOP) was a two-year federal 
pilot programme (2005 and 2006 tax years) to provide farmers and their families with 
short-term financial assistance and access to professional development services that 
would enable them to improve their family  income.  Eligible applicants received a 
payment based on their relevant income tax re turn that would bring their total income 
level up to a maximum of Can$25,000 fo r farm families and Can$15,000 for 
individual farmers if they operated a comme rcial farm. Applicants  must have reported 
gross farming income of at least Can$50 ,000 (before expenses) to the Canada 
Revenue Agency in the tax year and must  have committed to take skills training, 
complete a Farm Business Assessment, or an equivalent.  Applicants had to have 
received a payment in the first year of the programme to be eligible to receive a 
second-year payment.  For those receiving payments in both years of the programme, the second-year payments would be reduced by 25 per cent and prorated to ensure 
that payments did not exceed the tota l funding allocated for the programme. 
 
(b) COP enhancements 
The COP Enhancements funding was provi ded under the Ontario's Cost Recognition 
Top-Up Programme.  Any producers who received a federal COP payment would be eligible to receive an Ontario Cost  Recognition Top-Up Programme payment 
equalling two-thirds of the federal COP payment. 
 
(c) AgriInvest Kickstart 
Starting with the 2007 programme year, AgriInvest replaced the top-tier of the 
Canadian Agricultural Income Stabilization programme (i.e., margin declines up to 
15 per cent).  To assist producers in the tr ansition to the new suite of business risk 
management programmes under Growing Fo rward, the AgriInvest Kickstart  G/AG/W/92 
 Page 17 
 
 
  programme provided a one-time payment to producers to put a starting amount of 
money into individuals' AgriInvest account s.  To be eligible for the payments, 
producers must have reported sales of eligible commodities to the Canadian Revenue Agency for income tax purposes; agreed to participate in AgriInvest for 2007; 
confirmed active farming in 2007; and i ndicated deposit/withdrawal option.  For 
producers who farmed in 2004, payments  were based on a fixed percentage 
(i.e., 2.63 per cent) of a producer's averag e net sales of eligible commodities for the 
2000-2004 tax years up to a sales cap of Ca n$3.0 million.  For producers who farmed 
after 2004, payments were based on the av erage net sales for the 2005 and 2006 tax 
years (or the 2006 or 2007 tax year only, if it was the first year of farming).  Eligible 
commodities were grains, oilseeds and special  crops, edible horticulture, non-edible 
horticulture, cattle and calves, sheep and la mbs, other red meats, hides, and other 
commodities (excluding supply managed). 
 
(iii) De minimis claims 
27. Questions by the United States:  The United States is concerned that future revisions to 
the statistics for net farm receipts might increa se the ratio of non-product-specific AMS to the 
value of production beyond the de minimis  level.  Provide information on the steps Canada takes 
to revise its domestic support no tifications when considerable ch anges occur in its underlying 
statistics. 
 
In recent years Canada has submitted revised or  corrected notifications in connection with: 
 
 changes in the calculation of value of produc tion for grains and oilseeds in order to 
better correspond to the value of production, in  contrast to the value of receipts;  and 
 
 removing the value of price-related direct payments from the values of production, in 
contrast to the practice of earlier notifica tions.  When making such changes, Canada 
used updated Statistics Canada data also for earlier years.  
 
28. Question by the United States:  Explain the rationale for including payments such as the 
Net Income Stabilization Account (NISA), Cr op Insurance, Provincial stabilization 
programmes, and other programmes as part of the value of production (as reflected in net farm 
receipts).  If one subtracts these payments from net farm receipts, one obtains a lower value of 
production, and in 2007, the value of production appears to drop sufficiently as a result to 
surpass the de minimis  level of 5 per cent. 
 
The value of production in column 5, row "Non-Product-Specific AMS", in Supporting Table DS:4 is the sum of the entries in the rows for individual products of that column.  The 
payments under the programmes mentioned in the question are reported separately from market receipts in the Statistics Canada source indicated in Note 1) in Supporting Table DS:4 
and does not enter the values of production fo r individual products.  The payments should 
therefore not be subtracted as suggested in the question.  
 
(iv) Classification  
29. Questions by the European Union:  In the starred footnote on page 19, Canada states 
that the "Advance Payments Programme" will in future be notified as non-product specific 
AMS. 
 G/AG/W/92 
Page 18 
 
 
  (a) Can Canada confirm that in the calculat ion of the support no product specific 
parameters such as prices are used?  
A number of producer organizations across the country are delivering cash advances 
under Advance Payments Programme (APP) .  The federal government guarantees 
repayment of cash advances issued to producers by the producer organizations.  Cash 
advances are up to Can$400,000 with an  interest-free assistance up to Can$100,000 
across crop and livestock products.  The APP re quires that the sum of cash advances 
does not exceed 50 per cent of a producer's est imated sales value of eligible products.  
This is similar to general loan applications  that require collateral against borrowing.  
The interest-free support is only applicable up to a fixed amount of Can$100,000 of a 
producer's cash advance.  
(b) Under which considerations ha s Canada so far notified this support as product 
specific ? 
Canada changed the reporting of APP from product-specific AMS to non-product-
specific AMS, when eligibility for the progr amme was broadened to include livestock 
and additional crops. The same programme crite ria are applied to all eligible products 
under the APP. The APP is considered non-product-specific support provided in 
favour of agricultural producers in general as per Article 1(a) of the Agreement on 
Agriculture.  
2. China   G/AG/N/CHN/21 
(a) Green Box 
(i) Outstanding Table DS:2 
30. Questions by:  
 
(a) Japan:  Could China explain the reason why Green Box payments increased 
significantly from the year 2005 to 2008 without the presentation of Table DS:2 notifications? 
(b) the United States:  Under Payments for relief from natural disasters and 
Payments for environmental programmes, are any of these outlays new or modified programmes, for which a Table DS :2 notification should be submitted? 
In the 2005-2008 agricultural domestic suppor t notification, the Green Box measures 
notified this time are consistent with th ose in the 2002-2004 notification without any 
new measures such as structural adjustment support, etc. 
(ii) General services 
31. Questions by: 
 
(a) Australia:  There has been a 350 per cent increase over the period 2005-2008 in 
Green Box spending on the Other General services category.  Could China explain the reason for this significant increase? 
(b) Brazil:  Could China provide further information explaining the increase in 
Other General Services between 2005 and 2008?  G/AG/W/92 
 Page 19 
 
 
  (c) the European Union:  The EU appreciat es the effort that China has made to 
accelerate its delayed notifications on domestic support.  The EU notes that there 
is an almost doubling of Green Box expenditure from just over Y 300 billion in 2005 to almost Y 600 billion in 2008.  Could China explain the increase in Other 
General Services"? 
The main reason for the increase is that, af ter the reform of government revenue and 
expenditure classification, China began to apply a new classification in 2007 and the 
expenditure classification became more detailed.  
(iii) Public stock holding for food security purposes 
32. Question by Australia:  Under Public stockhold ing for food security purposes, there has 
been a Y 13,000 million increase in the past during the period 2005-2008.  Australia 
understands that certain amounts of food stocks are swapped annually.  Can China confirm the 
amount of the turnover, and whether the sal es and purchases were made at current market 
prices, in accordance with Annex 2, paragr aph 3 of the Agreement on Agriculture?  
 China believes that these payments  are in accordance with related rules of the Agreement of 
Agriculture.  
33. Questions by the United States:  
 
(a) Could China provide information on the "predetermined targets related solely to 
food security"  for each of the products listed. 
According to the current classification of the State Revenue and Expenditure, China 
is not able to provide information for single products.  
(b) The United States understands that  Chinese government entities make 
purchases at support prices for various  commodities, including sugar cane, 
sugar beets, soybeans, corn, rapeseed, cotton, and pork.  Are these purchases 
part of the public stockholding scheme?  Or are outlays reported elsewhere?  
The stockholding subsidies for soybeans, corns, rapeseeds and other products are 
listed under the item of "stockholding fo r food security purposes" in Supporting 
Table DS:1, while the stockholding subsidies for cotton are listed under the product-
specific aggregate measurements of support. 
 
(iv) Decoupled income support 
34. Questions by:  
 (a) Brazil:  Brazil notes a significant increase of direct payments to farmers under 
the heading Decoupled income support. 
(b) Canada:  The amounts entered as Deco upled income support have increased 
consistently and considerably  since their introduction in 2004.  How much of the 
increase between 2004 and 2008 results from increases in " the land owned by the G/AG/W/92 
Page 20 
 
 
  qualified farmers "5, which perhaps might be read as "contracted land", and how 
much from increases in the rate of payment per mu of contracted land? 
(c) the European Union:  Could China expl ain whether the increase in decoupled 
income support (direct payments to fa rmers) over the period 2005-2008, and in 
particular the steep increase over 2007-200 8, is due to an increase of the number 
of eligible farmers, the area covered by  these direct payments, a combination of 
the two, or was it the per hectare payment which increased?  How is the direct 
payment per hectare calculated? 
(d) the United States:  What accounts for the large increase between 2005 and 2008? 
The main reason for the increase be tween 2005 and 2008 is that the local 
governments increased the payments to the fa rmers.  On the other hand, there may be 
a problem of double counting in the State revenue and expenditures.  China is also 
studying how to solve this technical problem.  
35. Questions by: 
(a) Brazil:  Could China provide detailed information on the structure of this 
measure, explaining how it is consiste nt with paragraph 6 of Annex 2 of the 
Agreement on Agriculture?  What kind of criteria is used for such payments? 
(b) the European Union:  With reference to an earlier question of the EU6, China 
replied that farmers are eligible for the support on the basis of "Opinions of the 
CCCPC and the State Council Concerning Some Policies on Promoting the Increase of Farmers' Income"  and also that " Farmers shall have contracted land 
to qualify for the support while the base period for determining acreage for the 
contracted land is set at the time wh en the land contract was signed":  Could 
China elaborate in further detail on how the "Opinions…" establishing farmers' 
eligibility reflect the clearly-defined criteria required under paragraph 6(a) of 
Annex 2 of the Agreement on Agriculture? 
(c) Japan:  Is there any difference in the criteria for the decoupled direct payment 
by region?  If so, what are the minimum national criteria that are applied to all 
the regions, and how are criteri a adjusted for each region? 
(d) the United States:  Provide further information on the payments;  What 
products are eligible and what are the criteria for the payments?  Do criteria vary by province? 
All farmers with contracted land are eligible to receive the payments. The programme 
does not require farmers to produce a certain pr oduct.  In China, land in the rural area 
is owned by the farmers collectively.  I ndividual farmers sign contracts with the 
collective economic organization.  The term for the land contract is 30 years.  The 
direct payments to the farmers are implem ented by the provincial governments.  The 
criteria of the payments vary between different provinces and there is no universal 
national criteria. 
 
                                                      
5 G/AG/N/CHN/18 refers. 
6 Paragraph 66 of G/AG/W/78 refers.  G/AG/W/92 
 Page 21 
 
 
  36. Question by the European Union:  With ref erence to China's reply during the review of 
its Table DS:2 notification G/AG/N/CHN/18 rel ated to "Direct payments to farmers", can 
China provide information on the area of land covered by the programme and the total agricultural area? 
 China is not able to give the information on the specific area of land and the total agricultural 
land area since China has a huge population of fa rmers and the land owned by each farmer is 
very small.  
37. Questions by the European Union:  With reference to an earlier question of the EU
7, 
China replied that farmers are eligible for the support on the basis of " Opinions of the CCCPC 
and the State Council Concerning Some Policies on  Promoting the Increase of Farmers' Income " 
and also that " Farmers shall have contracted land to qu alify for the support while the base period 
for determining acreage for the contracted land is set at the time when the land contract was 
signed ": 
 
(a) How does "the base period for determining acreage for the contracted land is set at 
the time when the land contract was signed"  meet the requirement of a defined 
and fixed base period in the sense of paragraph 6(a) of Annex 2 to the 
Agreement on Agriculture? 
It is in accordance with the related rules of  Agreement of Agriculture to establish the 
base period by the land area set by the contracts.  
(b) How, and to what extent, do  new farmers enter the system? 
A new farmer cannot acquire new land within  the contract term according to the 
system.  
(c) How, and to what extent, does new la nd enter into the system?  Can land 
contracts be renewed? 
The arable lands in China are being decre ased in recent years.  According to the 
Property Law of the People's Republic of Chin a, "After the contractual term expires, 
the holder of the right to the contracted management of land may, according to the 
relevant provisions of the state, contract continuously."  
(v) Payments for relief from natural disasters 
38. Questions by:  
(a) the European Union:  The EU notes th at no support for income insurance 
programmes was notified:  Can China confirm?  Does China operate any such 
insurance programmes and can it el aborate on how these programmes are 
funded?  If not to producers, is public funding provided to the operators of 
insurance programmes? 
(b) the United States:  The United States understands that China began 
implementing an insurance scheme in 200 7, including a sow insurance scheme.  
Are these programmes notified? 
                                                      
7 Paragraph 66 of G/AG/W/78 refers. G/AG/W/92 
Page 22 
 
 
  The agricultural insurance plan  China applied does not belong to income insurance.  
It is a kind of agricultural insurance premium policy, i.e., the aim is to provide a 
percentage of insurance premium subsidy to  the farmers who are policy-holders.  The 
relevant payment is included in the "p ayment for relief from natural disasters".  
39. Questions by:  
(a) Australia:  There was a significant increa se in payments for natural disaster 
relief.  Can China confirm that these payments complied with the requirements 
contained in Annex 2, paragraph 8 (a)-(d) of the Agreement on Agriculture?  
(b) Canada:  The amounts entered as "Paymen ts for relief from natural disasters" 
have increased consistently and cons iderably since 2002.  The name and 
description of the measure are the same as in China's base period, with the 
addition of the element "financial assistance to their post-disaster livings".  
What mechanisms does China apply to ensure that these increasingly large 
payments continue to meet all the criteria of paragraph 8 of Annex 2 of the Agreement on Agriculture? 
China believes that these payments are in accordance with related rules of Agreement 
of Agriculture.  
40. Questions by: 
(a) Brazil:  Could China provide further information explaining the increase in the 
Payments for relief from natura l disasters between 2005 and 2008? 
(b) the European Union:  The EU appreciat es the effort that China has made to 
accelerate its delayed notifications on domestic support.  The EU notes that there is an almost doubling of Green Box expenditure from just over Y 300 billion in 
2005 to almost Y 600 billion in 2008.  Could China explain the increase in 
"Payments for relief from natural disasters"? 
The main reason for the increase in the Pa yments for relief from natural disasters is 
that there were frequent natural disasters in 2007 and 2008. 
41. Question by the United States:  Under Paymen ts for relief from natural disasters, where 
these payments have increased dr amatically between 2005 and 2008.  Provide additional 
information on the specific programmes and th e criteria by which the payments were made. 
The payments that China notified for the relie f from natural disasters include various national 
and sub-national relief measures, which are in ac cordance with the Agreem ent of Agriculture.  
The main reason for the increase is that ther e were frequent natural disasters in 2007 and 
2008.  China is not able to provide additiona l information on subsidy criteria since the 
statistical procedures of China are different  from those of the United States and other 
Members. 
(vi) Environmental programmes 
42. Questions by:  
(a) Brazil:  Could China provide further information explaining the increase in the 
Environmental programmes between 2005 and 2008?   G/AG/W/92 
 Page 23 
 
 
  (b) the United States:  Payments for en vironmental programmes have increased 
dramatically between 2005 and 2008.  Provide additional information on the 
specific programmes and the criteria by which the payments were made.  
The main reason for the increase in Envir onmental programmes is that the Chinese 
government is paying more attention to th e sustainable development of the society 
and the environmental protection.  The paym ents that China notified include various 
environment protective measures from national and sub-national government. 
 
(vii) Regional assistance programmes 
43. Question by Australia:  The payments und er regional assistance programmes have 
increased significantly in the period 2005-2008.  Can China confirm how these payments were consistent with the requirement s of Annex 2, paragraph 13? 
 China believes that these payments are in a ccordance with related rules of Agreement on 
Agriculture. 
44. Question by the European Union:  The EU appr eciates the effort that China has made to 
accelerate its delayed notifications on domestic support.  The EU notes that there is an almost 
doubling of Green Box expenditure from just ove r Y 300 billion in 2005 to almost Y 600 billion 
in 2008.  Could China explain the increase in "Regional assistance programmes"? 
 
The notified "regional assistance programmes" ar e mainly the payment to alleviate poverty, 
which is consistent with the require ment of the Agreement on Agriculture.  
(b) Amber Box 
(i) General 
45. Question by the European Union:  The EU notes the differentiation between national 
and sub-national support in Supporting Table DS:1 .  Does such a differentiation also exist for 
the Amber Box, notably in Supporting Table DS :7 for "improved crop strains and seeds" and 
for the "input subsidies" in Supporting Table DS:9? 
 China would like to seek some further explana tion on the European Union's question.  The 
notified data covered both nati onal and sub-national support. 
(ii) De minimis claims 
46. Question by the United States:  The United States requests that China provide a total 
value of agricultural production for 2005-2008 to enable an evaluation of the levels of non-
product specific AMS in Supporting Tables DS:9. 
 
China has notified the relevant information in  connection with total value of agricultural 
production in Supporting Table DS:4.  
(iii) Negative Support 
47. Question by Japan:  In Supporting Table DS:7, China calculates product specific AMS 
of wheat and rice by adding the negative market  price support figure to the direct payment.  
Japan is of the view that the market price support figure, when negative, should be treated as G/AG/W/92 
Page 24 
 
 
  "zero" in the calculation of AMS.  How does China justify its treatment of negative market 
price support figures? 
 
The calculation is consistent with previous reports, and refers to some other members' 
methods and rules of the WTO secretariat; China believes that it is technically feasible. 
(iv) Product-specific AMS:  Market Price Support - Administered price 
48. Question by Australia:  In Supporting Ta ble DS:5, under the Minimum Procurement 
Price Scheme, the applied administered price fo r wheat remained constant at 1,490 Y/tonne 
between 2006-2008.  However, the section entitled " Agriculture – price controls and marketing " 
of the last TPR8 indicates that the Government raised the procurement price for wheat twice in 
2008.  Can China explain the difference? 
 This question arises from a misreading by Aust ralia. In Supporting Table DS:5, the applied 
administrated prices for wheat were 1,410 Y/to nne in 2006 and 2007, and 1,490 Y/tonne in 
2008.  Supporting Table DS:5 clearly reflected the government's raising of the procurement 
price for wheat. 
49. Question by the European Union:  The EU does not find reference to the Protective 
Price System in the notified period 2005-2008.  Has the system been ab andoned or was it not 
operated?  Are the external reference pric es used under the Minimum Procurement Price 
Scheme the same as those used for the Protective Price System? 
 Now China uses minimum procurement price instead of protective price system. 
 
50. Question by the United States: the United St ates asks China to confirm that the applied 
administered price and the fixed external refer ence price for rice in Supporting Tables DS:5 are 
on a comparable basis (either both rough, or both milled). 
 
Please refer to the relevant information in Supporting Table DS: 5 regarding the applied 
administered price and the fixed external re ference price for rice.  In 2007 and 2008, China 
provided support only to milled rice, but the calculation method notified is the same as in previous years and is on a comparable basis. 
(v) Product-specific AMS: Market Price Support - Eligible production 
51. Question by the European Union: The EU no tes variations of the level of eligible 
production for wheat and rice over the notified period 2005-2008 in Supporting Table DS:5.  
What are the reasons for these variations? 
 
The change of supply and demand leads to th e difference in the amount of procurement. 
 
52. Questions by:  
 
(a) Japan:  What data does China use as "eligible production" when calculating the 
market price support, i.e. the actual am ount of purchased crops or the total 
amount of domestic production?  If the actual amount of purchased crops is 
used, could China explain why the total am ount of domestic production is not 
used? 
                                                      
8 WT/TPR/S/230 refers.  G/AG/W/92 
 Page 25 
 
 
  (b) the United States:  Explain how eligible  production in Supporting Tables DS:5 is 
defined and measured. 
China used the actual amount of crops procured under the minimum procurement 
price scheme as "eligible production" in Supporting Table DS:5.  According to 
China's minimum procurement price policy, to stabilize the food production and to 
motivate farmers, the government announces the minimum procurement price for 
wheat and rice before the sowing of crops.  After the harvest of crops, if the market 
price falls below the minimum procurement price, the producer in areas covered by the minimum procurement price scheme can se ll their crops to the government at the 
minimum procurement price, or they can sell the crops to enterprises.  Only crops 
sold to the government at the minimu m procurement price can maintain the 
administrated price while other crops cannot.  This explains why China uses the 
actual amount of crops which maintained administrated price under the minimum 
procurement price scheme as "eligible productio n" to calculate market price support. 
(vi) Product-specific AMS: Pork 
53. Questions by:  
(a) Canada:  In relation to Supporting Tabl e DS:7, a new subsidy for breeding 
productive sows is reported in 2007 and 2008 (Y 2.4 billion and Y 5.2 billion, 
respectively).  Would China be able to indicate a source for further information 
on how this rapidly growing subsidy is provided? 
(b) the United States:  Provide further details about how the subsidy for breeding 
productive sows (notified in Supportin g Table DS:7 for 2007 and 2008) is 
implemented. 
In 2007, the pig market in China saw substan tial fluctuations.  In order to protect the 
sustainability for the pig industry and enhance th e raisers' enthusiasm for production, China, 
from 2007, began to grant a direct subsidy to the pig raisers with the standard rate of Y 50 per 
breeding productive sow.  In 2008, the standard rate was promoted to Y 100 per breeding productive sow. 
(vii) Product-specific AMS: Cotton 
54. Question by Japan:  Could China explain in de tail how the "subsidy for reserve cost" to 
cotton works?  If the government purchases cotton or  supports farmer's storage of cotton in this 
programme, explain the reason why China does no t classify this support as market price 
support. 
Cotton is the important strategic material, sec ond only to food.  China established the national 
cotton reserve system in order to guarantee th e cotton supply and reduce market fluctuations. 
China can achieve the objective of macroec onomic control through storage-collection and 
stock-releasing. China National Cotton Reserves Corporation (CNCRC) is responsible for the 
storage-collection and stock-releasing by mean s of public market operations.  The cotton 
stored is owned by the state, the money to collect storage and store is covered by CNCRC through bank loans, and the central budget will subsidize the interest fees.  The relevant 
"subsidy for reserve cost" to cotton has been notified in the amber box support of a cotton 
product-specific support.  The National Cotton R eserve is one important method to achieve 
macroeconomic control, not in the scope of market price support. G/AG/W/92 
Page 26 
 
 
  (viii) Non-product-specific AMS  
55. Questions by:  
(a) Australia:  China has reported a significant increase for non-product specific 
AMS (by a factor of more than 35 per cent) in input price subsidies which are 
described as primarily "price subsidies"  over the reporting period 2005-2008.  
Can China explain the nature of these pr ice subsidies and which inputs were 
contained in this item? 
(b) Brazil:  In relation to Supporting Table DS:9, Brazil notes with concern a sharp 
increase in input subsidies, which are highly distortive, reaching 
Y 78,863.54 million in 2008.  Could China elaborate on the reasons for such an 
increase in input subsidies from 2005 to 2008? 
(c) Canada:  In Supporting Table DS:9, "input  subsidies", which have increased 
from Y 1.6 billion in 2004 to Y 78.7 billion in 2008, are explained to be "price 
subsidies for means of production".  In reply to some Members' questions in the 
meeting of 23 September 2010, China clarified that the means of production are 
mainly agricultural machines, fertili zers, agricultural diesel oil and feeds9:  
Could China provide a breakdown of the amount of subsidies provided for each of these inputs in the years 2005 to 2008?  Have subsidies been introduced for 
any additional inputs during this period, compared to 2004? 
(d) the United States:  Given the significant increase in the level of outlays for input 
subsidies, provide a breakdown and further information on the input subsidies 
notified in Supporting Tables DS:9. 
The main reason for the significant increase of input  subsidies is that, China began to apply a 
comprehensive and direct subsidy to the agricu ltural means of production in 2007, as the price 
for agricultural means of production saw a consider able increase in that  year.  China is not 
able to provide the list for individual products , as this subsidy was calculated in an overall 
manner. 
Follow-up:  Australia questioned the in crease on particular Green Box programmes and 
emphasized that compliance with the fundamental requirements of paragraph 1 of Annex 2 
was important.  Australia sought additional  details on some Green Box programmes, 
particularly regarding the dis aggregation of expenditures under the Public Stockholding 
scheme.  The European Union registered int erest in gaining a better understanding of China's 
policies and indicated that they would raise follow-up questions on Decoupled Income 
Support.  
3. India   G/AG/N/IND/7 
56. Question by Japan:  Japan appreciates India's answers in the last meeting.  Japan 
understands that the government purchases rice, wh eat and coarse grain for its buffer stock at 
the minimum support price and not at the current market price.  Could India explain why it 
classifies this programme not as market pri ce support but as Public stockholding for food 
security purposes under Annex 2, paragraph 3? 
 
                                                      
9 Paragraph 40 of G/AG/W/78 refers.  G/AG/W/92 
 Page 27 
 
 
  Footnote 5 to paragraph 3 of Annex 2 of th e Agreement on Agriculture states that:  " For the 
purposes of paragraph 3 of this Annex, go vernmental stockholding programmes for food 
security purposes in developing countries w hose operation is trans parent and conducted in 
accordance with officially published objective crit eria or guidelines shall be considered to be 
in conformity with the provisions of th is paragraph, including programmes under which 
stocks of foodstuffs for food security purpo ses are acquired and relea sed at administered 
prices, provided that the difference between the acquisition price and the external reference 
price is accounted for in the AMS".  It may be seen that this footnote covers both the 
acquisition and the release of foodstuffs at admini stered prices.  As required, India notifies the 
difference between the acquisition price and the external reference price as AMS.  
4. Japan   G/AG/N/JPN/167 
57. Questions by the United States:  The Un ited States appreciates the responses by the 
Government of Japan to questions regarding Supporting Table DS:1, Environmental payments, 
"Payments for conversion from rice production ":  Provide the scientific "environmental 
benefits" of the "Payments for conversion from  rice production" programme as stated in 
Japan's response to our question in September.  For instance, has Japan conducted studies on 
how this programme prevents floods and soil erosi on; cultivates water resources;  and preserves 
the natural environment as stated in Japan's res ponse?  If the intention of the "Payments for 
conversion from rice production" programme is environmental conservation, has Japan studied 
alternative ways to achieve the d esired impact on the environment? 
 The environmental benefits of the paddy field,  such as its functions of prevention of floods 
and soil erosion, are widely acknowledged in Japan.  For example, the Science Council of 
Japan conducted a study on external benefits of agriculture, and reported that the domestic 
agricultural activities generate, jointly with the production of commodities, external benefits 
that are estimated worth more than ¥8 trilli on. Among them, the council estimates that the 
economic value of the flood preventing function of agriculture, mainly manifested by paddy field, to be ¥3.5 trillion, and that of soil eros ion preventing function to be ¥300 billion yen.  
These are calculated taking into account factors such as the area of paddy field and the normal 
height of paddy ribbing when the paddy field is properly managed. 
 
The "payments for conversion from rice productio n" programme is implemented in order to 
maintain these functions of paddy fields  that are set aside from rice production. 
 
5. Jordan   G/AG/N/JOR/14 
(a) Green Box 
(i) General servicies 
58. Question by the European Union:  On page 3, the description of the measure includes 
expenditure for "trial export shipments to gau ge foreign market acceptability of Jordanian 
products".  While the EU notes that the moneta ry value during the year 2008 was zero, the EU 
wonders whether the measure is still in place.  If  so, could Jordan confirm that the measure, 
when implemented, excludes expenditure allowi ng sellers to reduce their selling price or 
conferring a direct economic benefit to purchasers? 
 
The Horticultural Export Promotion and Technol ogy Transfer Project was launched in 2003, 
financed by a World Bank loan to the govern ment.  The project aimed primarily to increase 
Jordan's horticultural exports through a range of  measures.  The programme ended in 2007.  
 G/AG/W/92 
Page 28 
 
 
  (ii) Domestic food aid 
59. Question by the European Union: On page 3, Jordan notifies an amount of JD 141 
million for domestic food aid.  Can Jordan confir m that the food purchases are made at current 
market prices and applied in a manner that a llows equal eligibility for both imported and 
domestic production? 
Jordan confirms that food purchases are made from both imported and domestic production. 
Most of food subsidies in Jordan are directed  to flour supplied to bakeries for subsidizing 
bread production.  97 per cent of the flour purchases are made through imports.  Domestically 
produced and imported wheat benefit from subsidy towards lowering bread prices for consumers.  
(b) Amber Box 
(i) De minimis claims 
60. Question by Canada: In Supporting Table DS:4, could Jordan confirm whether the 
values of production shown in the footnotes are indeed, as stated, in millions of Jordanian 
dinars? 
Jordan confirms that the values of produc tion shown in the footnote are in Jordanian 
Dinar. 
61. Question by the European Union: Jordan no tifies considerable changes in the use of 
AMS support.  Please find figures in the table belo w.  Could Jordan inform the Committee on 
how it succeeds in containing this high volatilit y in relation to respecting its AMS commitment? 
 
 2005 2006 2007 2008 
Total AMS 
commitment level 
(JD thousands) 1,363 1,334 1,334 1,334 
Use of AMS (%) 0 45 97 0  
Sources:  G/AG/N/JOR/10;  G/AG/N/JOR/11;  G/AG/N/JOR/14. 
Jordan's Total AMS commitment level is very sm all, and even a small nominal variation in 
Current Total AMS would result in significant ch anges in the use of AMS as a percentage of 
Total AMS.  For example, a change of JD 0.7 million (less than JD 1 million) would result in 
almost 60 per cent change in the use of AMS.  In  addition, yearly variations in Current Total 
AMS result from the use of de minimis  exemption.  The AMSs for wheat and barley in some 
years exceed the threshold of 10 per cent of the respective value of production and are thus 
included in Current Total AMS for those years.  
(ii) Product-specific AMS: Market Price Support - Administered price 
62. Question by the European Union:  The EU observes changes of the applied administered 
prices for wheat and barley from one year to  another.  The EU would like to seek more  G/AG/W/92 
 Page 29 
 
 
  clarification as to what constitutes an applied administered price, and what reasons influence 
these changes. 
The applied administered prices for wheat and barley may vary substantially from year to 
year.  These prices are influenced by a numbe r of factors such as world market price, 
production cost, transportation cost, and marginal profit.  
(iii) Product-specific AMS:  Market Pr ice Support - Eligible production 
63. Question by the European Union:  The EU also  notes that the eligible production for the 
calculation of market price support for wheat and barley reveals cons iderable differences from 
one year to another.  In the reply Jordan pr ovided to a question from the United States as 
contained in Annex 3 to the report from the meeting of 10 March 2010, Jordan confirms that 
"Such eligible production figures represent the qu antities purchased by the Government, but do not 
equal the total quantity of production. "10  In order to better understand the notifications by 
Jordan, the EU would like to ask for a furt her explanation of how these quantities are 
determined. 
Total quantities of production do not necessar ily represent the quantities purchased by the 
government.  The procurement of wheat and barley  by the government is subject to certain 
specifications to ensure better quality.  The government tends not to purchase crops that do 
not meet quality standards.  Some local produc tion that does not meet the standards is sold 
domestically or exported.  JD 25,000 of  wheat exports was reported in 2010. 
(iv) Product-specific AMS: Livestock 
64. Question by Canada:  In Supporting Table DS:7 , Jordan reports a significant amount of 
support for livestock in the form "Government f eed sales".  Could Jordan clarify what this 
amount represents and how it is calculated? 
"Government feed sales support (on barley and wheat bran for feed)" represents the support 
resulting from the difference between the cost of fodder and the subsidized prices paid by 
farmers.  The amount of support for livestock is  calculated using the following formula:  (cost 
of fodder - subsidized price of fodder) * the quantity of fodder sold to farmers.  
6. Korea   G/AG/N/KOR/43 
65. Questions by:  
 
(a) Australia:  In 2005 and onward, the Re public of Korea changes its support 
measures of support for rice, significan tly decreasing its Current Total AMS.  
Can the Republic of Korea provide details on what the transition in support 
levels has done in terms of  overall production levels? 
(b) Canada:  In Supporting Table DS:6, Canada understands that policies 
supporting rice producers were changed in  2004 and later years.  The major 
variations in the level and kind of support reported in several supporting tables in G/AG/N/KOR/43 may be related to these changes:  Could Korea elaborate on 
what major policy changes were undertak en in 2004 and later years, and how 
they explain the variations in rep orted support in  2005 to 2008? 
In an effort to shift to a domestic suppor t policy which is more consistent with the 
spirit of the WTO rules, Korea abolishe d the decades-long Rice Purchase Programme 
                                                      
10 Paragraph 2 of Annex 3 of G/AG/R/58 refers. G/AG/W/92 
Page 30 
 
 
  which had accounted for most of the Current Total AMS.  To minimize the negative 
impacts that could have resulted from th e abolition of the Rice Purchase Programme, 
Korea introduced the Public Rice Stockholding Programme, the Fixed Payment Scheme for Paddy Fields and the Deficiency Payment Scheme for Rice Farmers. 
 
The Public Rice Stockholding Programme was introduced for the purpose of food 
security.  The Fixed Payment Scheme for Pa ddy Fields is intended to preserve the 
multi-functionality of rice paddies.  Both programmes are designed as Green Box programmes as notified in document G/AG/N/KOR/44. 
 
The Deficiency Payment Scheme for Rice Farmers was introduced to stabilize rice 
farmers' income by making up for the difference between the target price and market 
price.  It is still classified as product-specific AMS but the total volume of the AMS 
has significantly decreased compared to when the Rice Purchase Programme was in 
force. 
 
Rice acreage had decreased from 1 million hectares in 2004 to 0.94 million hectares 
in 2008. 
 
Rice production has ups and downs depending on climate conditions but is on the 
decrease overall as reflected in the de crease from 5 million tonnes to 4.8 million 
tonnes between 2004 and 2008. 
 
The volume of the AMS has also changed ever y year according to the variations in 
the market price of rice because these vari ations serve as a basis for calculating 
deficiency payments for rice farmers. 
 
66. Question by Canada:  In Supporting Table DS:6, Canada understands that policies 
supporting rice producers were changed in 2004 a nd later years.  The ma jor variations in the 
level and kind of support reported in several supporting tables in G/AG/N/KOR/43 may be 
related to these changes: are similar changes under consideration for other products, such as 
barley? 
The government purchase programme for barley is planned to be abolished in 2012. 
 
67. Question by the United States:  What is the definition of "eligible production" for 
barley, corn, and soybeans used in Supporting Tables DS:5? 
 
The definition of "eligible production" in Korea's notification is "production actually 
purchased" by the Korean government. 
 
According to Article 1(a)(ii) of the Agreem ent on Agriculture, the constituent data and 
methodology used in the tables of supporting materi al incorporated by reference in Part IV of 
the Member's schedule shall be taken into acc ount in calculating AMS during any year of the 
implementation period and thereafter. 
 
Korea has consistently used "production actua lly purchased" as "eligible production" since 
the time it calculated the initial Base Total AMS.  This methodology is co nsistent with Article 
1(a)(ii) of the Agreement on Agriculture.  Follow-up:  Whilst welcoming Korea's attempts to reduce the most trade-distorting forms of 
support for both on rice and barley and to mo ve towards the Green Bo x, Australia flagged 
concerns regarding the compliance of the D ecoupled Income Support with the criteria  G/AG/W/92 
 Page 31 
 
 
  contained in paragraph 6( a) of Annex 2.  In particular, Australia expressed interest in the 
stated objective of "multi-functionality of ri ce paddies" of the Fixed Payment Scheme for 
Paddy Fields.  
7. Nepal   G/AG/N/NPL/2 
Nepal undertook to provide responses to the questions posed by the European Union in 
paragraph 80 of G/AG/W/89 at a later stage. 
 
8. Oman   G/AG/N/OMN/8 
68. Questions by Canada:  In Supporting Tabl e DS:1, under the heading Infrastructure, 
Oman reports a "subsidy for the introduction of  modern irrigation systems in the farms …": 
 
(a) In light of the criteria for General services (paragraph 2, Annex 2 of the 
Agreement on Agriculture), policies under this heading shall not involve direct payments to producers.  Could Oman elab orate on the nature of the subsidy and 
how it meets this criterion? 
The development of modern irrigation systems does not aim to provide direct funding 
to farmers, but to protect the environment because traditional irrigation systems lead 
to the use of excessive amounts of scarce unde rground water, which results in sea 
water intrusion and soil salinity.  
Given the great importance of agricultura l lands and scarce underground water, this 
programme was designed to protect these crucial natural elements.  Moreover, the expenditure of this programme does not go di rectly to farmers but to the executing 
companies.  As such, these payments are seen as infrastructure investments rather 
than operational expenses for the producers. 
 
(b) Sub-paragraph (g) of the same paragraph 2 also stipulates that the expenditure 
shall exclude the subsidized provision of on-farm facilities.  Could Oman explain 
how introducing irrigation "in the farms" complies with the on-farm exclusion? 
As mentioned above, this programme was designed to protect agricultural land and 
underground water through reducing the ove r-pumping of underground water.  The 
expenditure of this programme does not go di rectly to farmers but to the executing 
companies.  As such, these payments are seen as infrastructure investments rather 
than operational expenses for the producers. 
 
9. Kingdom of Saudi Arabia   G/AG/N/SAU/6 
69. Questions by the European Union: 
 
(a) In 2006 (G/AG/N/SAU/2), AMS support fo r poultry accounted for 5.45 per cent 
of Current Total AMS and as such was qualified as de minimis .  It kept 
increasing over time and in the 2009 notifi cation AMS for poultry is estimated at 
33.56 per cent of Current Total AMS.  Could the Kingdom of Saudi Arabia 
explain what policy measures and/or other circumstances have influenced this 
dramatic increase? 
The increase in AMS support for poultry in 2009 was mostly due to the increase in 
the fixed amount of input subsidy for pou ltry feed products (imported corn and G/AG/W/92 
Page 32 
 
 
  soybean) received by poultry producers. This increase was triggered by 
unprecedented world prices plus an increase  in imported quantities of these products 
to meet local demand in 2009. 
(b) The Table DS:1 notification for 2009 revea ls an important drop in AMS support 
for livestock to 8.4 per cent of AMS ( de minimis ).  Could the Kingdom of Saudi 
Arabia explain what policy measures and/or other circumstances have 
influenced this significant drop from the level of AMS notified in 2008 of 
42 per cent of Current Total AMS (G/AG/N/SAU/4)? 
The drop in the level of the AMS suppor t for livestock in 2009 according to the 
methodological calculations of AMS was e ssentially due to a decrease in the 
difference between the reference price and the price paid by livestock producers for 
imported barley used in animal feed in  the local markets which was increasing 
together with a decline in imported quantities of barley during 2009. 
(c) What are the reasons behind the impo rtant decrease of wheat production 
eligible for market price support? 
Among actions taken by the government of th e Kingdom of Saudi Arabia to deal with 
scarcity of water resources in order to conserve and efficiently utilise natural 
resources, particularly underground water, and to prevent a quick depletion of this 
water, a ministerial decisi on has been taken at the end of 2008 to terminate Saudi 
Arabia's production support policy for wheat gr adually within eight years, after which 
the kingdom would be fully dependent on imports by 2016. 
C. NEW OR MODIFIED DOMESTIC SUPPORT MEASURES (TABLE  DS:2) 
1. Japan   G/AG/N/JPN/168 and G/AG/N/JPN/168/Corr.1 
70. Question by the European Union:  The EU appreciates the replies Japan provided at the 
last meeting of the Committee on Agriculture in September 2011 in relation to this notification.  
The EU would like to ask a follow-up question.  In  its reply provided to a question from the EU, 
Japan explained that "rice production is not included in the base production for the decoupled 
payment".  Could Japan inform whether a farm er who is eligible for the decoupled payment 
and who currently plants rice will still receive the decoupled support? 
 As Japan explained at the last meeting, the e ligibility criteria for receiving this payment are to 
be certified by the municipal government as a "cor e farmer" and to have a production record 
of upland field crops during the past base period from 2004 to 2006.  Therefore, a farmer will 
receive the payment no matter what he/she cu rrently plants, including rice, as long as the 
criteria are met. 
2. Korea   G/AG/N/KOR/44 
(i) Green Box - Public Rice Stockholding Programme 
71. Questions by the United States:  Please provi de more information on the food security 
programme for which rice stocks are a ccumulated and sold.  For example:  
(a) Are the sales targeted at low income cons umers?  If not, who is eligible to 
purchase the rice?    G/AG/W/92 
 Page 33 
 
 
  In addition to low-income consumers, public  institutions such as schools, jails, and 
the military are eligible to purchase the rice.   The rice stocks are also available for 
rice processors and distributors.   
(b) Are the purchase and sales targets manda ted on an annual basis, or are 
purchases and sales dependent on the level of prices? 
The purchase targets are mandated every three years independent by the levels of 
prices.  
(c) Are barley and soybeans also purchased  under the same programme as rice for 
food security purposes? 
Barley and soybeans are not subject to the public stockholding programme. 
 
(d) The United States also understands that the National Agricultural Cooperative 
Federation, on behalf of the government, purchases additional quantities of 
milled rice, at levels much larger than the government purchases.  How are these 
purchases carried out and accounted for in Korea's notifications? 
The National Agricultural Cooperative Fede ration, as a farmers' organization, 
purchases rice with its own budget to protect the interests of its members.  There has 
been no financial support from the government and, accordingly, it has not been accounted for in Korea's notifications. 
 
(ii) Green Box - Fixed Payment Scheme for Paddy Fields 
72. Questions by:  
(a) Canada:  An eligibility condition for the "Fixed Payment Scheme for Paddy 
Fields" is to maintain the original functi on of the farmland.  In a case where the 
original function of the farmland was to produce a crop, the requirement to 
maintain that function seems to contradict  the statement that production is not 
required to receive the payments.  Having  to maintain that function also seems 
to contravene sub-paragraph 6(e) of Anne x 2 of the Agreement on Agriculture.  
Could Korea explain? 
(b) the United States:  Can producers plant any crop on the paddy fields, including 
rice? If no crop is planted, what are the requirements with respect to 
maintaining the land? 
With regard to the eligibility conditions, Ko rean legislations lay out a requirement of 
maintaining the original form and function of farmland.  This requirement is not 
about production of a crop but about mainta ining and managing the soil.  There is no 
limitation on the type of crops to be pl anted after the base period.  To be more 
specific, recipients are required to mana ge irrigation and drainage channels, to 
remove weeds, and to establish and manage  boundaries between paddy fields in order 
to be eligible for fixed payment.  The payment is made even when no crop is 
produced. 
 
Therefore, this requirement does not contrave ne sub-paragraph 6(e) of Annex 2 of the 
Agreement on Agriculture.  
 G/AG/W/92 
Page 34 
 
 
  73. Question by the United States:  Is there any limit on the amount of payment? 
 There is a limit on the eligible size of the land which is 30 hectares for a natural person and 
50 hectares for a legal person.  The unit amount of payment is fixed at W 700,000 per hectare. 
 74. Questions by the United States:  The notifi cation indicates that production is not 
required to receive the payment: 
(a) Does the Rice Income Compensation Ac t or other governing Korean legislation 
require cultivation of the land as a condition for receiving this payment?  If so, 
what are the crops which must be cultivated in order to receive the payment? 
No Korean legislation requires the cultiva tion of a crop as a condition for receiving 
the payment.  There is no limitation on the type  of crops to be planted after the base 
period.  Recipients are eligible for paymen ts even when they do not plant any crop as 
long as they maintain the original form and function of the farmland.  
(b) What has been the production of th ese crops over the past three years? 
- 
(iii) Green Box - Direct Payment Scheme for Landscape Conversion 
75. Question by the United States:  Can the orna mental crops grown on the area be sold 
commercially, or are they st rictly for landscape purposes? 
 
The Direct Payment Scheme for Landscape Con servation is to compensate for the income 
losses incurred by those farmers who cultivate orna mental instead of economic crops to help 
conserve the rural environment and landscape. 
 
There is no regulation that prohibits the sales of ornamental crops.  However, there is some 
limitation to the marketing of those crops in that the relevant authorities examine their 
presence in full bloom before making payments. 
 
III. OVERDUE NOTIFICATIONS:  QUESTION BY AUSTRALIA 
76. Australia notes that Canada's last domestic support notification was for the period 2006 
and 2007.  Can Canada please provide advice on when it intends to submit its overdue notifications? 
The preparation for Canada's outstanding notifi cations is underway.  Canada plans to submit 
its notifications for the March 2012 meeting of the Committee on Agriculture.  
 
 
__________