RESTRICTED  WORLD TRADE  
ORGANIZATION  G/AG/R/52 
11 November 2008 
 (08-5482) 
Committee on Agriculture  
  
 
SUMMARY REPORT OF THE MEET ING HELD ON 18 SEPTEMBER 2008 
 
Note by the Secretariat
1 
  
1. The Committee on Agriculture held its fifty-second regular meeting on 18 September 2008 
under the Chairmanship of Ms Valeria Csukasi of Uruguay. 
2. The agenda of the meeting as set out in WTO/AIR/3237 of 8 September 2008 was adopted. 
I. THE REVIEW PROCESS 
A. M
ATTERS RELEVANT TO THE IMPLEMENTATION OF CO MMITMENTS UNDER THE REFORM 
PROGRAMME :  ARTICLE 18.6 
(a) Argentina:  EC's domestic support commitments following enlargement  
3. Argentina noted that the Eur opean Communities (EC) had not proposed negotiations to WTO 
Members on the binding of AMS levels in respect of 25 member States for the period 1 May 20042 to 
31 December 2006 and 27 member States as of 1 January 2007.3  In Argentina's view, it was essential 
to begin this multilateral negotiating process and theref ore Argentina sought clarifications as to:  (i) 
when the EC would supply the statistical data ne eded to begin the negotiations;  (ii) when the 
negotiations would start with all WTO Members;  and (iii) why there had been such a delay in 
initiating negotiations considering the length of tim e that had gone by since the accession of ten new 
members (52 months ago), followed by two new members (19 months ago), to the EC. 
4. Argentina also requested that the EC provide the base period, average exchange rates, value 
of total agricultural production and per subsidized product, and any other information used by the EC 
or necessary to determine, through multilateral nego tiations, the AMS level in respect of 25 and 27 
member States, as appropriate for each period, as we ll as the base level for reduction of overall trade-
distorting domestic support (OTDS) for the purposes of this Committee in Special Session. 
5. The EC stated that in 1995, an approach was ag reed with those involved at that time in the 
GATT Article XXIV:6 negotiations for the move from EC-12 to EC-15.  The agreed approach 
covered a methodology to address export subsidy commitments, domestic support commitments, and 
the netting out of tariff quotas.  This approach w as followed for the move from EC-15 to EC-25;  it 
was also the approach that the EC was currently us ing for the move to EC-27.  The EC recalled that 
some Members have not yet certified the EC-15 Sche dule.  However, the EC was presently in the 
process of ensuring certification of its Schedule, and any new commitments, including those arising 
out of the Doha Development Agenda (DDA), would be based on an updated and certified EC 
Schedule.  
                                                      
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. 
2 Date of accession of ten new member States to the EC. 
3 Date of accession of two new member States to the EC. G/AG/R/52 
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  6. At this time, the EC did not consider the re gular Committee on Agriculture as the appropriate 
forum to present data underlying commitments such  as OTDS or product-specific caps.  These were 
currently negotiated in the DDA and had therefore not yet been included in a final modalities or 
Agreement text. 
7. Argentina considered that the EC had not replie d fully to its queries and reiterated its question 
as to when the EC would notify the start of multila teral negotiations as regards the enlargement to 
EC-25 and EC-27.  Argentina also noted that it had requested data, including as regards the Blue Box, 
in this Committee because when such questions ha d been raised in the Special Session of the 
Committee on Agriculture, there had been no answers.  In the absence of replies at this meeting, 
Argentina urged the EC to provide data in the Special Session.   
8. The United States flagged interest in this matte r and underlined that the EC enlargement and 
how their commitments were de fined were important issues. 
(b) Argentina:  EC's estimation of product- specific Blue Box support during 1995-2000
 
9. Argentina sought the EC's objective estimate as  to how product-specific support was currently 
applied and had been applied in the period 1995-20 00 under the "per hectare compensatory payments 
for producers of cereals not subject to the base area for maize, based on regional base areas" Blue Box 
programme.  The EC  considered that this issue should be addressed in the ongoing DDA negotiations. 
(c) Argentina:  Expansion of EC's garlic tariff quota allocation to China  
10. Argentina queried whether, under the negotiati ng process relating to the enlargement of the 
EC to 27 member States, China benefited from an expansion of the tariff quota for garlic, fresh or 
chilled, of heading 07032000, and if so , the extent of the volume increase. 
11. The EC replied that it was in the process of GATT Article XXIV:6 negotiations with the 
WTO Members having negotiating rights, following the enlargement with Bulgaria and Romania. The 
EC assured that the result of all bilateral negotia tions would be notified to the Membership in due 
course. 
(d) Australia:  Brazil's new support measures in the 2008/09 Agriculture and Livestock Plan  
12. Australia understood that Brazil's 2008/09 Agricultu re and Livestock Plan, announced in July 
2008, had extended a number of existing interest rate, commodity and investment credit programmes 
and had introduced measures valued at US$49 b illion designed to increase agricultural production.  
Australia requested further information about these new measures, including type and level of 
support, eligibility criteria, and intended classification. 
13. Brazil noted that general information about the Agricultural and Livestock Plan 2008/09 was 
available on the website of the Ministry of Agriculture of Brazil4 and that the resources foreseen by 
this Plan amounted to R$65 billion, equivalent to  US$38 billion, according to the current exchange 
rate.  Such resources corresponded to the total stock of credit to be borrowed and paid back by rural 
producers.  The element of support corresponded to the differential between the ma rket rate of interest 
and the rate of interest of the loan, in accordan ce with the established methodology.  The investment 
programmes were basically the same as in the pr evious plan, with minor adjustments to Prolapec.5  As 
                                                      
4 http://www.agricultura.gov.br  
5 This programme finances agricultural production and livestock integration systems.  G/AG/R/52 
 Page 3 
 
 
  for Moderagro6, it was put under a new programme called Produsa7 in order to better attain the 
objective of promoting the recovery of degraded soil and pasture, and support the use of environmentally sound practices.  Another pr ogramme was created to further promote the 
development of storage facilities, for which a cred it line of US$176 million was made available.  It 
was aimed at grain traders with a direct link w ith producers and its cooperatives.  Minimum prices 
were reviewed upwards due to higher production cost s and according to the behaviour of commodity 
market prices.  As to investment credit, changes were introduced to eligibility criteria, increasing the 
maximum value to be financed and the reference level of borrowers' gross income.  Moderfrota's
8 flat 
rate of 4 per cent paid by manufacturers and d ealers of tractors and harvesting machines was also 
eliminated.  An amount of US$294 million from Moderfrota was assigned to finance producers under 
a new programme – Proger9, at an interest rate of 7.5 per cent.   
14. As regards classification, capital credit for low- income and resource-poor producers (through 
Program for Strengthening of Family Agricultu re – PRONAF) and all the investment credit was 
classified under Article 6.2 provisions.  Capital cr edit for producers not covered by PRONAF and all 
commercialization credits were classified as Amber Box measures. 
15. The United States expressed interest in this matter and highlighted the importance of a good 
understanding of Members' domestic support notifications. 
(e) Australia:  India's sugar export subsidies for 2008  
16. With reference to India's responses provided to the Committee on Agriculture10 and bilateral 
discussions in New Delhi in April this year, Australia  noted that on 29 March 2008, the Department of 
Food and Public Distribution had issued an Order extending the Central Government freight export 
subsidies until 30 September 2008.  Although the Orde r was not published on the official website of 
that Department, a hard copy was subsequently pr ovided to Australia during the course of bilateral 
discussions.  In light of the imminent expiry of that  Order, Australia asked India to confirm whether a 
decision had been taken to extend the period of elig ibility for freight export subsidies and if so, to 
provide a copy of the relevant Order.  India reca lled that it had submitted a de tailed reply in the last 
session of the Committee on Agriculture and added that there was no proposal currently under 
consideration to extend the export assistance to  sugar mills beyond 30 September 2008.   
17. In regard to the export subsidies provided by th e State Government of Maharashtra, Australia 
understood that the Maharashtra authorities provided freight subsidies and direct per unit subsidies for 
exports.  Australia noted that it had not identified relevant documentation on the official website of 
the Maharashtra Government nor had the Maharashtr a authorities responded to its request for relevant 
documentation and details of subsid ies currently being granted by those authorities to sugar exports 
from that State.  Australia therefore asked India to  provide the relevant documentation and clarify the 
current status of those arrangements, including expi ry dates and any decision to extend the period of 
eligibility.  Also, in the context of In dia's advice to the Committee on Agriculture11 that the State 
Government of Maharashtra subsidies were subject to  the condition that the total per unit amount paid 
for exports – whether by the Central or Maharash tra authorities – does not exceed actual expenditure, 
Australia sought clarification of the arrangements in place between the Central and Maharashtra authorities for compliance with that condition. 
                                                     
 
6 Implementation or improvement of fruit trees, inve stments related to floriculture, sheep and goat 
raising, aquiculture, apiculture, swin e, poultry, dairy, sericulture and sy stems of cattle and buffalo traceability. 
7 Programme to recover degraded soil and pasture and support the use of environmentally sound 
practices. 
8 This programme covers farm tractors, harvestin g machines and equipment for processing coffee. 
9 This programme provides financing to small rural producers for the creation of jobs and income. 
10 See G/AG/R/51. 
11 See G/AG/R/51. G/AG/R/52 
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  18. India explained that the Maharashtra Governme nt via their Government Resolutions dated 
27 July 2007 and 5 May 2008 had provided for fina ncial assistance to sugar factories for export of 
sugar.  Although India understood that the copies of these resolutions were provided to Australia 
during the bilateral meeting in April, India would pr ovide the Secretariat with a copy of the resolution 
dated 27 July 2007 for further circulation to the in terested Members.  Regarding the arrangements in 
place between the Central and Maharashtra authorities for compliance with the condition that the total 
subsidy does not exceed actual expenditure, India indi cated that the financial assistance to be provided 
by the Central Government was a fixed amount of Rs . 1,350 per tonne of exports of sugar and this 
condition was included in the said Government Resolution.   
19. Australia noted that the Central Governme nt subsidies involving a maritime freight 
component were not based on cost recovery, but were provided on a flat rate basis without variation to 
any destination.  On the other hand, subsidies not  involving a maritime freight component were based 
on cost recovery, within a ceiling limit.  Australia sought clarification as to why India had elected to apply the two different methods for granting the subsid ies.  India stated that in cases of exports made 
to neighbouring countries involving movement by ro ad and/or rail, and not by ship, the actual 
expenditure incurred in some cases might be less th an if the exports had involved a movement by 
ship.  This was the reason for the two different  methods of providing financial assistance.   
20. Australia remarked that in bilate ral discussions, India had stated that the flat rate subsidy for 
freight and other costs involving a maritime compone nt was less than actual costs.  However, 
Australia considered that there were significant varia tions in freight rates to different destinations and 
further, many of India's sugar export shipments were transacted on an f.o.b. basis.  Australia sought 
clarification of the verification arrangements in pl ace to ensure that the Central and State subsidies 
granted on a flat rate basis do not exceed actual cost s.  India responded that the expenditure incurred 
for the purpose of internal transport and freight  charges (including ocean freight and handling & 
marketing charges) was more than the flat rate of financial assistance.  In the case of sugar mills of 
Maharashtra, the claims were settled by the Gove rnment of Maharashtra subject to the condition 
mentioned in a reply in paragraph 18 above.  
21. In regard to the Duty Entitlement Pass Book (DEPB) scheme, Australia requested 
clarification as to whether the import duty credits earned by sugar exporters were transferable and 
whether they had to be utilised by a specified da te.  India clarified that the DEPB scrips were 
transferable, and once issued, were valid for im ports for 29 months from the date of issuance. 
22. Australia indicated that, if needed, it might  pursue this issue with follow-up questions 
bilaterally at a later stage. 
(f) Australia:  United States' domestic food aid pr ogramme;  and Farm Bill provisions relating to 
sugar  
23. Australia noted that the United States had notif ied domestic food aid expenditure on food and 
nutrition programmes administered by its Food and Nutrition Service for marketing years 2002, 2003, 
2004, 2005.12  Australia asked the United States to provide  details of the criteria used to determine 
which products were purchased for distribution under its various domestic food aid programmes, 
including on an ad hoc basis.  Australia also noted that under Section 1403 of the Food, Conservation 
and Energy Act of 2008 , the Secretary of Agriculture must establish for each crop year appropriate 
allotments for the marketing by processors of sugar at a level that was not less than 85 per cent of the 
estimated quantity of sugar for domestic human cons umption for that crop year.  Australia sought an 
explanation as to how the United States intended to  implement and administer this 85 per cent 
requirement. 
                                                      
12 See G/AG/N/USA/60.  G/AG/R/52 
 Page 5 
 
 
  24. The United States indicated that the U.S. De partment of Agriculture (USDA) purchased a 
variety of meat, poultry, and fruit, vegetable, and specialty crop products throughout the year for the 
National School Lunch Program and other domest ic food assistance programmes.  An annual 
purchase plan was developed based on multiple factor s, including school and other food assistance 
programme needs and desires, expectations of ava ilable funds, market conditions, and past purchases.  
USDA's Food and Nutrition Service (FNS) received  orders for a variety of products from state 
purchasing agents that reflected the demand for th ose products and USDA's Agricultural Marketing 
Service made the actual food purchases.  All purchases we re made at market prices.  In addition, there 
might be legislative requirements,  which would be taken into account , to purchase a certain amount of 
commodities.  During a marketing year, some funds were held in reserve for potential ad hoc  
purchases for domestic food assistance programmes.  Factors involved in these purchases included 
domestic needs and commodity availability.  Th ese purchases were distributed to food banks, 
emergency feeding programmes ("soup kitchens"), a nd other programmes that served needy persons. 
25. Regarding sugar, the United States noted that on 9 September 2008, the USDA established 
some initial parameters for the FY 2009 sugar programme.  The domestic sugar overall allotment 
quantity was established at 8,925,000 short tons ra w value (STRV), 85 per cent of the estimated 
quantity of sugar for domestic hu man consumption of 10,500,000 STRV.13  The USDA was in the 
process of preparing regulations that would provi de a detailed description of the domestic sugar 
marketing allotment programme, includi ng the operation of this provision. 
26. In its follow-up questions,  Australia sought further information as to what "domestic needs" 
referred to in the US response, and the nature of  the "legislative requirements" to purchase certain 
amounts of commodities.  In relation to USDA's US$50 million ad hoc  pork purchase on 1 May 2008, 
Australia also sought details on the criteria that were used by the USDA to  make such purchases for 
donation to its domestic food aid programmes.  The EC expressed interest in this matter and asked whether in the case of domestic food aid programm es, imported products were  also eligible.  The 
United States stated that these follow-up questions would be referred back to capital for response. 
(g) Brazil:  EC's export subsidy notifications:  reflection of DSB recommendations in EC-Sugar
 
27. Brazil noted that public European Commission documents which refe r to annual budgetary 
outlay and quantity levels in excess of the EC-15 sch eduled commitments and footnote (5) to the EC 
export subsidy notification suggested that such notification does not take into account the DSB 
recommendations in the "EC-Sugar" case (DS/266).  Brazil sought confirma tion of its understanding 
and requested clarification as to how the EC inte nded to reflect the results of DS/266 in future 
notifications. 
28. In its response14, the EC stated that it respected its commitments and complied with the DSB 
recommendations in DS/266.  The currently availa ble export subsidy notifications 2003/4 and 2004/5 
concern the period before 22 May 2006 by which date the EC had to comply with the DSB 
recommendations.  Public documents referred to by Brazil and Australia for more recent periods did 
not necessarily correspond to the notification format in the Committee on Agriculture.  Some of these 
documents could include figures on exports of pr ocessed products and the marketing year 2006/7 
covered a 15-month period due to the reform of the marketing organization for sugar.  Therefore, the 
EC recommended that compliance with the commitm ents be reviewed on the basis of relevant 
notifications.  Anticipating the EC notification for 20 05/6 and subsequent years, the EC indicated that 
                                                      
13 As projected in the World Agricultural Supply and Demand Estimates report of 12 August 2008 
(page 16). 
14 This reply also answers the third question from Australia under the review of notifications (see 
Annex 1, paragraph 11) concerning  G/AG/N/EEC/55. G/AG/R/52 
Page 6  
 
  the exports concerned by footnote (5) would be  included and hence this footnote would not be 
applicable from that year. 
29. Brazil underlined its interest in this issue whic h in its view, raised major systemic elements 
for the WTO.  Brazil was encouraged by the EC  answer related to future notifications.  
(h) Canada:  China's application of tariffs and other duties and charges
 
30. With reference to China's WTO Accession Agreement15, Canada enquired as to how China 
intended to ensure that the application of an "int erim MFN" tariff for a product was carried out in a 
way that was consistent with the principle of Ch ina's WTO Accession undertakings in regards to not 
causing distortions in the terms of competition be tween substitute products or competing suppliers, 
particularly between substitute oilseeds, including canola. 
31. Noting Canada's concern, China asked Canada to ta ke its special situation into consideration.  
Because of the soaring price of certain oilseeds in the world market and drop in domestic production, China had faced the gap between supply and domestic demand, and decided to levy interim tariffs on 
certain oilseed and vegetable oil products.  China ad ded that the interim tariffs on those products were 
scheduled to be terminated by the end of September 2008. 
32. Noting that China might have special circumstances, Canada pointed out that accession 
commitments needed to be met.  Canada welcomed th e information that the interim tariffs were to be 
removed. 
(i) Canada:  United States' Average Crop Revenue Election programme (ACRE)
 
 
33. Referring to Section 1105 of the Food, Conservation, an d Energy Act of 2008 , specifically 
(g)(2)(A), Canada sought an explanation as to: (i) the significance of the wording acreage "considered 
planted" as opposed to acreage "planted";  (ii) fo r each major crop, the estimated difference between 
the acreage planted and the acreage considered plan ted in a typical crop year; and (iii) whether the 
wording "considered planted" had any implications as to where in its domestic support notification the 
United States might choose to report ACRE paymen ts and, if so, how.  The United States responded 
that the USDA was in the process of reviewing the le gislation for the purpose of preparing regulations 
to implement the programme, which would not come into effect until 2009. 
34. Canada noted that as the implementing legisl ation was being prepared, Canada remained 
keenly interested in how this programme was bei ng implemented and therefore would likely return to 
it in a subsequent meeting. 
(j) China:  Lifting of EC import ban on Chinese poultry  
 35. China noted that the EC lifted a six-year  import ban on Chinese poultry from 2 September 
2008.  However, due to the limited tariff quota and high out-of-quota tariff, the market share that the 
Chinese enterprises can enjoy is relatively small.  China expected the EC to ensure the reasonable 
market share of Chinese poultry products through subs tantive negotiations to be launched as soon as 
possible. 
                                                     
 
15 Annex 8, Schedule CLII, Part I, Section 1-A Tariffs, paragraph 2(b): "China undertakes in principle 
to apply its tariff, both bound and applied rates, as well as other duties and charges, in such a way as to not 
cause distortions in the terms of competition between substitute products or competing suppliers.  In this regard, there was particular interest in ensuring fair compe tition between rape (canola) seeds and soybeans, rape 
(canola) oil and soybean oil […]".  G/AG/R/52 
 Page 7 
 
 
  36. The EC congratulated the Chinese authorities for their successful efforts to comply with the 
requirements enabling the EC to lift its ban on th e imports of cooked poultry and China was now 
entitled to participate in the tariff quota of 11,443 tonnes, which was established in GATT 
Article XXVIII negotiations in 2006.  The EC wa s very much aware that China had repeatedly 
requested to have a greater share of the EC market .  However, the EC could not recognize the claim of 
a substantial interest.  The WTO had clear rules and China was not in the same position as certain 
other Members who had historical exports to the EC.  The EC was convinced that it had fully complied with WTO rules, and therefore there was no possibility to proceed to substantive 
negotiations with China on this issue.  
37. China considered that it had substantial interest  in this issue and looked forward to finding a 
mutually acceptable solution with the EC through bila teral channels.  Argentina flagged interest in 
this matter. 
(k) China:  U.S. 2008 Appropriation Act:  provisi ons relating to poultry products imported from 
China  
 
38. China noted that Section 733 under the U.S. 2008 Appropriation Act provided that the funds 
available must not be used to establish or implem ent a rule allowing poultry products to be imported 
from China.  In China's view, Section 733 was discri minatory and protectionist, which failed to be 
based on science in conformity with WTO rules.  China requested the United States to abolish this 
provision and open its poultry market to China. 
39. The United States considered that this issue would be more appropriately addressed, as it had 
been in the past, in the Committe e on Sanitary and Phytosanitary M easures.  The United States placed 
great importance on ensuring that its measures were  based on science and in compliance with the SPS 
Agreement.  The United States noted that its SPS offi cials continued to raise China's concerns with 
the appropriate authorities in Washington and hoped to resolve this issue as soon as possible. 
40. China considered that the Comm ittee on Agriculture was an appropriate venue to discuss this 
issue because it fell within the ambit of this Committee and the U.S. 2008 Appropriations Act was 
related to the implementation of agricultural policy.   China looked forward to further discussions with 
the United States through bilateral channels.   
B. REVIEW OF NOTIFICATIONS  
(a) Notifications in respect of which questions have been raised in advance of the issuance of the 
convening airgram  
41. The Committee reviewed the notifications as listed in the agenda.  Specific points raised with 
respect to these notifications and the r esponses thereto are summarized in Annex 2  to this report. 
(b) Notifications subject to review in respect of wh ich no questions have been raised in advance 
of the issuance of the convening airgram  
42. The Committee took note of the notifications which had been circulated in advance of the 
date on which the notice convening the present me eting was issued, but in respect of which no 
questions had been raised by that date under th e Committee's Working Procedures (G/AG/1).  These 
notifications are listed in Annex 3. G/AG/R/52 
Page 8  
 
  (c) Notifications circulated or made available af ter the notice convening the meeting was issued
 
43. The following notifications were subject to prelim inary review and are to be reverted to at the 
next meeting for substantive review in accordan ce with paragraph 9 of the Committee's Working 
Procedures. 
(a) in the context of the administration of tariff and other quota commitments 
(Table MA:1):  from the United States (USA/63); 
(b) in the context of the special safeguard (Tables MA:3 to MA:5):  from Norway 
(NOR/48); 
(c) in the context of domestic support commitments (Tables DS:1 and DS:2):  from 
Chinese Taipei (TPKM/61);  and 
(d) in the context of export subsidy commitments (Tables ES:1 to ES:3):  from 
Switzerland (CHE/42/Corr.1 and CHE/44). 
(d) Points concerning notifications raised at previous meetings  
44. The Chairperson recalled that delegations have the possibility to inform the Committee of the 
outcome of discussions which are of general interest , but which may have been pursued bilaterally as 
a result of the review of notifications.  Th ere was no discussion under this agenda item. 
(e) Counter-notifications  
45. The Committee took note that no counter-notifi cations had been received under Article 18.7 
of the Agreement on Agriculture. 
(f) Deferred replies to questions raised under the Review Process  
46. There were no deferred replies to questions previously raised. 
(g) Overdue notifications  
47. An updated room document, dated 17 Sept ember 2008 showing the current status of 
compliance with notification obligations was made available by the Secretariat.   
(i) Argentina - EC:  Notifications relating to domestic support 
48. Argentina noted that without prejudice to Memb ers' obligations in respect of Notification 
Requirements and Formats, a delay in submitting no tifications of trade-distorting domestic support 
made it extremely difficult to verify implemen tation of the Agreement, and especially the 
effectiveness of cuts in these subsidies, which were under discussion in this Committee in Special 
Session, and consequently the fulfilment of the pa ragraph 5 mandate of the Hong Kong Ministerial 
Declaration.  Argentina asked the EC to indicat e the date on which this Committee would receive 
notifications of the applied level of domestic support for the following outstanding periods:  
2004/2005, 2005/2006, 2006/2007 and 2007/2008. 
49. The EC stated that the Committe e could expect to see the presentation of domestic support 
notification 2004/2005 and 2005/20 06 soon.  The notification for these years would include for the 
first time elements of the CAP reforms decided in the period 2003-2005.  The EC noted that the data  G/AG/R/52 
 Page 9 
 
 
  collection for 2006/2007 was to be initiated in Nove mber this year while the data collection for 
2007/2008 required the completion of the budget year 2008. 
(ii) Australia - EC and EC member States:  Outstanding notifications 
50. Australia noted that according to the room doc ument concerning compliance with notification 
obligations, notifications were outstanding for certain member States16 prior to their accession to the 
EC.  Australia sought clarification as to when tho se notifications would be provided, noting that the 
most recent notification of the EC17 pertained to the EC-15 before  1 May 2004 and the EC-25 after 
1 May 2004.  The EC stated that it would work towards completion of its notification obligation. 
(iii) Australia - India:  Notifications relati ng to imports under tariff quotas, tariff quota 
administration, domestic support and export subsidies 
51. Australia noted that according to the room doc ument concerning compliance with notification 
obligations, India had a number of notifications  pending for domestic suppor t and export subsidies 
and had not submitted notifications  regarding its imports under tari ff quotas.  Australia asked when 
India would provide Members with an opportunity to review its domestic support for the years 1998 – 
2007, export subsidy programmes for the years 1995,  2001-2007, and imports under tariff quotas, 
including both Tables MA:1 and MA:2, specifying administration and fill rates. 
52. India confirmed that the process of gathering in formation in preparation for compliance with 
notification obligations was underway and as soon as th is process was completed, India's notifications 
would be circulated to Members.  As regards imports under tariff quotas, India provided the following 
information in Annex 1. 
53. In its follow-up comments, Australia noted that  it looked forward to the submission of the 
overdue notifications as soon as possible. 
(iv) Argentina - United States:  Notificati ons relating to domestic support 
54. Argentina noted that without prejudice to Memb ers' obligations in respect of notification 
procedures, the delay in submitting notifications of  trade-distorting domestic support for 2007 made it 
extremely difficult to verify implementation of the Agreement, and especially the effectiveness of cuts 
in the subsidies which were under discussion in this  Committee in Special Session, and consequently, 
fulfilment of paragraph 5 of the Hong Kong Ministeria l Declaration.  Argentina enquired as to when 
the US would submit the notifications of the applie d level of domestic suppor t for the outstanding two 
years (2006 and 2007). 
55. The United States stated that it was in the process of drafting the 2006 domestic support 
notification and would submit it upon completion.  Th e 2007 marketing year had just ended for some 
commodities and final data were not yet available.  The United States noted that it was among the 
group of WTO Members that were most up-to-dat e with domestic support notifications.  The United 
States added that as regards its other outstanding no tifications, it hoped to have them soon and it 
encouraged all Members to get their notifications up-to-date. 
                                                      
16 Bulgaria, Cyprus, Czech Republic, Lithuania, Malta and Poland. 
17 G/AG/N/EEC/55. G/AG/R/52 
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  II. OTHER MATTERS WITHIN THE PURVIEW OF THE COMMITTEE 
A. T
RANSITIONAL REVIEW UNDER PARAGRAPH 18 OF THE PROTOCOL ON THE ACCESSION OF 
THE PEOPLE 'S REPUBLIC OF CHINA (WT/L/432) 
 56. The Committee held its seventh annual review under paragraph 18 of the Protocol on the 
Accession of the People's Republic of China.  The United States had submitted questions and 
comments to China in advance of the meeting.
18 
(a) Statement by China  
 57. In its opening remarks, China noted that si nce its accession, seven Transitional Reviews had 
been held under this Committee regarding the implementation of China's WTO accession 
commitments in the area of agriculture.  In a sp irit of enhancing transparency, China had addressed 
the questions and comments from Members with patien ce and good faith in previous meetings.  China 
believed that those replies could not only enable  Members to have a much more comprehensive 
understanding of the measures and policy tools by Chin a in the area of agriculture but also clarify the 
issues being misunderstood. 
58. In response to question 1, China stated that China's Enterprise Income Tax Law (EITL) had 
no specific definition of the term "enterprise" in the context of pork producers and pork processors. 
However, Article 2 stated that "enterprises" refer to those established within  the territory of China 
pursuant to China's laws and regul ations which cover the domestic and foreign enterprises with the 
status of legal persons.  Furthe r, Article 27 of China's EITL, and Article 86 of the Implementation 
Rules for China's EITL, set out that enterprises enga ged in projects of agriculture, forestry, animal 
husbandry and fisheries, including preliminary processi ng of agricultural products might be subject to 
exempted or reduced enterprise income tax. 
59. China added that the years 2006 and 2007 had witn essed a downturn in China's pork industry, 
illustrated by the dramatic slowdown of output and the abrupt jump in the price of pork due to the 
high price of feed in the international market , the outbursts of high fever disease, an unprecedented 
snow storm disaster in Southern China, and the dev astating earthquake in the Sichuan Province.  With 
a view to facilitating the recovery of pork producti on and stabilizing the market supply and price, the 
Chinese Government had started a number of progra mmes in relation to the pork industry, including 
those described below. 
60. As regards the amount of revenue generate d by pork producers and pork processors in 2007 
and 2008, China noted that there was no nation-wide  category of statistics on the amount of revenue 
generated by pork producers or processors in China.  
61. Regarding question 2, China noted that support to sow producers was RMB 50 per head, 
amounting to a total of about US$353 million.  Chin a remarked that the total figure indicated by the 
United States was incorrect but confirmed that support for pork in 2008 was RMB 100 per head.  
Under this programme, the sow breeders in China, re gardless of farms or individual breeders, were all 
eligible to receive this payment. 
62. In response to question 3, Chin a stated that the sow insuran ce programme had started at the 
end of August 2007.  Sow breeding farmers and ente rprises that could qualify to the insurance terms 
would receive premium support after their application.  China noted that the figures mentioned by the United States were incorrect.  
                                                     
 
18 G/AG/W/69 and Corr.1.  G/AG/R/52 
 Page 11 
 
 
  63. Regarding question 4, China stated that th is programme involved support for pig breeding 
farms with over 500 head in such areas as waste treatment, standardized improvement of pig pens, 
and construction of auxiliary facilities for water, elec tricity, roads and prevention of epidemics, with a 
view to improving the sanitary conditions of the breeding farms and protecting the environment.  
There were four levels of support payments:  (i ) RMB 200,000 for farms with 500-999 head;  (ii) 
RMB 400,000 for farms with 1,000-1,999 head;  (iii)  RMB 600,000 for farms with 2,000-2,999 head;  
and (iv) RMB 800,000 for farms with 3,000 head and above.  China noted that the figures mentioned by the United States were incorrect. 
64. Responding to question 5, China noted that it did not arrange for specific funds to be 
disbursed to pork producers in Southern China for weather-related losses.  Rather, there was a more 
favourable investment arrangement given to disaster areas as a whole, including the snow storm and 
earthquake disaster areas, for the recovery of animal husbandry production.  As there was no specific arrangement for the pork industry in this regard, China therefore would be interested in knowing 
where such information had been found.  
65. In reply to question 6, China stated that it w as not aware of the existence of any financial 
support to pork processors related to the slaughteri ng of hogs and that it would be interested in 
knowing where such information had been found.  
66. Regarding question 7, China remarked that the information provided by the United States was 
incorrect.  A programme was launched during the second half of 2007 when the Chinese Government 
had chosen 200 counties with be tter developed technical servi ces networks for the artificial 
insemination of sows, with over 30 per cent preval ence rate for artificial insemination, and 20,000 
head of sows in stock, in order to carry out th is "superior breed" payment programme.  The breeding 
farmers and enterprises in these counties were eligible  for the payment.  China further indicated that 
the total value of this pilot pr ogramme was RMB 180 million in 2007. 
67. In response to question 8 regarding the tota l value of China's pork production in 2007 and 
estimates for 2008, China noted that the total amount of pork production was around 43 million 
tonnes in 2007.  
68. China also noted that almost all the figures cited by the United States in its questions were 
either incorrect or there was a huge discrepancy.  China was therefore interested in knowing the 
sources of these data used by the United States.  China reiterated that all the above-mentioned 
programmes had been carried out in a special contex t and aimed at the recove ry or better development 
of animal husbandry production.  Related measures could be fo und in China's Animal Husbandry 
Law, the Instruction on Restora tion Planning after Snow Storm Di saster, the Working Planning on 
Post-Disaster Recovery of Animal Husbandry Prod uction, the Notice of Implementing the Projects of 
Superior Breed by the Ministry of Agriculture and Ministry of Finance, which were all available on 
the Internet at http://www.agri.gov.cn
 and http://www.mof.gov.cn . 
69. As regards question 9 concerning China's VAT exemptions, China remarked that in the 
previous Transitional Reviews as well as in China' s Trade Policy Review, China pointed out that 
when the agricultural commodities such as wheat, co tton and corn were imported, they entered the 
circulation market where they were subject to the same taxation policy as domestic products in the 
same market.  Both were assessed the VAT, therefor e, there was no discriminatory treatment in the 
VAT taxation.   
70. As regards the VAT exemption policy for agricultural products directly produced and sold by 
farmers, it was mainly based on the following cons iderations.  Firstly, China's agricultural producers 
were characterized by large population, small-scal e and very scattered distribution.  The average 
arable land per farmer in China was only 2.3 mu (1  mu is equal to 0.067 hectares) while for example G/AG/R/52 
Page 12  
 
  in the United States, one family farm occupied arable land of as much as a few hundreds to a few 
thousands mu, with an average of 1,100 mu.  In addition, farmers in China were dispersed and the 
costs for assessing taxes would be hundreds times more  than those in the United States.  In this 
context, with a view to increasing efficiency and lowering the costs of taxation, China had adopted 
VAT exemption policy for farmers according to Ar ticle 16 of the Provisional Regulation on VAT of 
the People's Republic of China.  Nonetheless, this exemption was limited only to agricultural products 
produced and sold directly by farmers.  Tho se products purchased and sold after this initial 
transaction, i.e. in the circulation market, were s till subject to VAT taxation which was the same as for 
imported products.  
71. Secondly, agricultural inputs such as pesticides,  machinery and fuel, were VAT inclusive.  
However, this part of costs could not be de ducted by farmers upon purchase.  Based on the above 
considerations, China had adopted a VAT exemption policy for products directly produced and sold 
by farmers.  China considered that the sale of sel f-produced agricultural products by farmers could not 
be compared to importation of those products.  From  the perspective of taxation policy for agricultural 
products in relation to their importation and domest ic circulation, VAT was assessed in both cases, 
and, therefore, the above-mentioned taxation policy was in line with WTO rules.   
72. Thirdly, with regard to VAT policies for agri cultural inputs, under the current tax regime, 
certain domestically-produced fer tilizers such as carbamide as well as seeds, pesticides, herbicides, 
agricultural machinery and fertilizers during the pha se of wholesale and retail were exempted from 
VAT.  Currently, most imported fertilizers and most imported seeds were also exempted from VAT.  China noted that pesticides and ag ricultural machinery sold by domestic producers or imported should 
be assessed VAT at 13 per cent.  Although pesticid e and agricultural machinery were VAT exempted 
at the domestic wholesale and retail phase while impo rts of such products were assessed VAT, due to 
the principle of chain deduction of VAT, these VAT exempted domestic pr oducts could not deduct 
their input tax in the next transaction.  Hence,  the VAT incidence was included in the product and 
both domestic and imported products bear the same level of tax incidence.   
73. China noted that the related measures coul d be found in circulars 2001/113, 2005/87, 
2007/171 and 2007/93 issued by the Ministry of Finance and the State Administration of Taxation.  
74. In reply to question 10 concerning export VAT reba tes, China stated that according to China's 
Provisional Regulation on VAT, the tax rate for e xported products was zero unless otherwise stated 
by the State Council.  Measures which spelled out ho w to calculate the export rebate were provided in 
circulars 1994/31, 2002/11 and 2007/7 by the Ministry of Finance and the State Administration of 
Taxation.  However, these circulars did not provide information on how to calculate the export rebate 
for a specific product.  Under the current tax rebate  regime, VAT rebate should be equal to or less 
than the assessed VAT rate.  The difference betwee n the assessed rate and the rebate rate multiplied 
by f.o.b. price should be turned into cost acc ount from import tax which was the paid part and the 
remaining import tax would be covere d by export rebate.  This system ensures that the export rebate 
will not exceed the VAT assessed. 
75. As regards question 11, China remarked that it was not clear.  If the question referred to 
agricultural and food products under the processing trade, then under the current tax system the 
imported part was subject to a policy implemente d in the bonded area which meant no taxation on 
imports and no re bate on exports. 
76. In reply to question 12, China stated that th e information sought by the United States would 
be disclosed upon request with the permission of c oncerned enterprises.  However, most enterprises 
were highly concerned that such specific info rmation was commercially sensitive and would not 
provide it.  Therefore, the Chinese Government, resp ecting the enterprises' deci sion, could not provide 
such information.  As regards the applied duty rat es for tariff quotas, China stat ed that they should be  G/AG/R/52 
 Page 13 
 
 
  fixed within one year and the Chinese Government w ould issue notice for the next year by the end of 
each year.  China suggested that Members refer to  TQ rates on imports in the Appendix of China's 
Customs Tariff on Imports and Exports 2008 in order to check the tariff quotas for 2008.19  
(b) Follow-up questions and comments by Members and China's responses thereto  
 
77. The United States thanked China for the detaile d responses.  Some of the inaccuracies with 
the figures that were cited in the questions reflect ed the fact that it was sometimes challenging to 
obtain the correct information.  The United States  would appreciate receiving the responses in writing, 
including the references to relevant websites, as they would be referred back to capital for possible 
follow-up questions.  The United States noted that  the Transitional Review Mechanism was an 
important process not only in this Committee but in all WTO Committees.  
78. In response to the request for the Internet addr esses, China noted that the relevant information 
could be found at the Chinese Government website at http://www.gov.cn .  The United States 
remarked that if it had difficulties in finding the specific information at this website, it would follow 
up bilaterally. 
(c) Report to the Council for Trade in Goods (CTG)  
 79. With respect to the Committee's report on th e Transitional Review to the CTG, the 
Committee took note that the Chairperson would su bmit a factual report on her own responsibility.  
The report would make reference to all relevant documents submitted in the context of this review and 
make reference to the Secretariat's summary repor t of this meeting reflecting the discussions held 
under this agenda item.
20 
B. IMPLEMENTATION -RELATED ISSUES  
80. Paragraph 2 of the Doha Ministerial D ecision on Implementation-Related Issues and 
Concerns21 instructs the Committee to follow up on three di stinct issues:  (a) Members must develop 
disciplines on export credits as per Article 10.2 of  the Agreement on Agriculture;  (b) the Committee 
must examine possible means for improving the eff ectiveness of the implementation of the NFIDC 
Decision;  (c) the Committee must al so ensure that Members' tariff quota regimes are administered in 
a transparent, equitable and non-discriminatory ma nner, keeping such regimes under review.  The 
Chairperson recalled that over the past few years,  two reports had been submitted to the General 
Council22 on these issues.   
81. Argentina stated that, without prejudice to the provisions of Article 10.1 of the Agreement on 
Agriculture, the establishment of additional and sp ecific disciplines on export credits, export credit 
guarantees or insurance programmes remained an outstanding implementation issue resulting from the 
Uruguay Round Agreement on Agriculture.  Argentina therefore requested that this item be retained 
on the agenda of the Committee on Agriculture in regular session.   
82. Cuba expressed its support and solidarity with  countries affected by devastating natural 
disasters – Haiti, the Dominican Republic, Cuba and th e United States.  As regards the three issues 
discussed under this agenda item, Cuba noted that in  the area of export competition, mainly credits, 
                                                      
19 A hard copy of "Customs Tariff on Import and Exports 2008" is compiled by the Office of Customs 
Tariff Commission of the State Council and Tariff Department of the Ministry of Finance of the People's 
Republic of China. 
20 The report was subsequently circulated in document G/AG/25 (dated 23 September 2008). 
21 WT/MIN(01)/17 (14 November 2001). 
22 See G/AG/16 (4 July 2003) and G/AG/16/Add.1 (13 June 2006).   G/AG/R/52 
Page 14  
 
  and in the matter of the Marrakesh Decision, there w as now a much clearer picture in the negotiations.  
In its view, it would be timely to evaluate what  had been achieved or not achieved, given the 
successive documents submitted by the Ch airman of the Special Session.  
83. Cuba proposed that the reports that had so far provided guidance to Members' discussions on 
implementation-related issues (i.e., G/AG/16, G/ AG/16/Add.1, and G/AG/22) be updated by the 
Secretariat taking account of the latest version of the Draft Modalities, notably in the areas of export 
credits, effectiveness of the Marrakesh Decision, a nd transparency in tariff quota administration.  
Cuba also recalled that the Director-General in hi s report of 27-28 July 2008 to the TNC stated that 
the export competition pillar had been practically st abilized, and balanced.  Cuba noted however that 
it had concerns regarding export credits and that it w ould continue to discuss this issue in the Special 
Session.   
84. The Chairperson noted that there was a clear line between the competence of this Committee 
and matters relating to the Doha  Round negotiations which the Committee could not disregard while 
discussing Cuba's request.   
85. Cuba clarified that it did not intend to make the linkages but to refer to the competence of the 
Special Session as well as to what was related to  the Regular Session of the Committee.  Cuba 
considered that there was now a situation in the negotiations that could enable a balance to be 
achieved as regards the follow-up to the Marrak esh Decision and the implementation-related 
decisions taken in Doha.   
86. Further to this clarification, the Chairperson noted that a follow-up to Cuba's request would 
be made. 
C. O
THER BUSINESS  
 (a) Annual Report to the Council for Trade in Goods
 
 87. In line with past practice, a short and factual draft report for the CTG on the work undertaken 
by the Committee in the course of 2008 had been circul ated before the meeting in order to facilitate 
Members' consideration of this matter.  The Commi ttee took note of the report and agreed that, after 
updating as appropriate, it would be submitted to  the CTG on the Chairperson's responsibility.
23  
(b) Date of next meeting  
 88. The next (53
rd) regular meeting of the Committee on Agriculture is scheduled to be held on 
Thursday, 4 December 2008.  On this basis, th e convening airgram will be issued on Monday, 
24 November 2008, and the reminder airgram will be issued on Monday, 10 November 2008. 
(c) Provisional schedule of meetings for 2009  
 89. According to the Committee's rules of procedur es, regular meetings of the Committee are to 
be held in March, September and November.  Th e Committee took note of the provisional schedule of 
meetings for 2009.  The dates for each regular m eeting would continue to  be confirmed at the 
preceding meeting of the Committee.  The question of  whether there was a need for a regular meeting 
in June 2009 would be determined by the Chairperson following the March 2009 meeting in 
consultation with Members.  Moreover, the following  schedule may need to be re-visited in light of 
developments in the agriculture negotiations:  [12 and 13] March 2009; [18 and 19  June 2009]; 
[21 and 22] September 2009; and [19 and 20] November 2009. 
                                                     
 
23 The report was later circulated in G/L/856 (dated 23 September 2008).  G/AG/R/52 
 Page 15 
 
 
  Annexes 
  
   Page
 
 
Annex 1 India - Imports under tariff quotas 16 
 Annex 2 Summary of points raised with respect to notifications 17  Annex 3 Notifications subject to review  in respect of which no questions 30 
  have been raised in advance of the issuance of 
  the convening airgram     
 
    G/AG/R/52 
Page 16  
 
  ANNEX 1 
 
India - Imports under tariff quotas 
 
 
 
Sl. 
No. ITC Code No. & Item Quantity of 
Quota Concessional 
duty Quota release for the year 
    2005-06 2006-07 2007-08 
1. Tariff Code No. 0402.10 
or 0402.21 Skimmed and 
whole Milk Powder. Milk Food for babies etc. 10,000 MT 15% Nil Nil Nil 
2. Tariff Code No. 1005.90  
Maize (Corn): other 500,000 MT 15% 1,784 MT 1,842.70 MT 1,021 MT 
3. Tariff Code No. 1512.11 
Crude Sunflower seed or safflower oil or fractions 
thereof.  150,000 MT 50% 116,000 MT 150,000 MT Nil 
4. Tariff Code No. 1514.19 
& 1514.99 Rape, Colza, Canola or Mustard Oil, 
Other (Refined). 150,000 MT 45% Nil Nil Nil  G/AG/R/52 
 Page 17 
 
 
  ANNEX 2 
 
Summary of points raised with respect to notifications  
  
Page
 
 
(i) Table MA:1 
- Japan G/AG/N/JPN/133 18 
 
(ii) Table DS:1 
- Armenia G/AG/N/ARM/16 18 
- Canada G/AG/N/CAN/17/Corr.1, 35/Corr.1   37/Rev.1/Corr.1, 43/Corr.2 19 - Chile G/AG/N/CHL/26 and Corr.1 19 
- Japan G/AG/N/JPN/132 and JPN/137 20 
- Switzerland G/AG/N/CHE/6 and Corr.1, CHE/11   and Corr.1, CHE/15 and Corr.1,    CHE/22 and CHE/34/Rev.1 22 
 
(iii) Table DS:2 
- Australia G/AG/N/AUS/70 23 
 
(iv) Tables ES:1 to ES:3 
- European Communities G/AG/N/EEC/55 26 
- Switzerland G/AG/N/CHE/42 27 
  
 G/AG/R/52 
Page 18  
 
  (i) Table MA:1 (administration of tariff and other quota commitments) 
 
 Japan  G/AG/N/JPN/133
 
 
1. Question by Thailand - Please provide the ration ale for the following criteria set for rice 
bidding applications: The ordinary import system : the bidder must have at least one billion yen 
of owned capital.  The Simultaneous Buy and Sell :  the bidder must have at least 0.1 billion yen 
of owned capital.  
 Regarding the import of crops under the mini mum access requirement by the Government of 
Japan, there are two types of importing systems: th e ordinary import system treated in the bulk unit 
(approximately 10,000 tonnes) and the Simultane ous Buy and Sell (SBS) system treated in the 
container unit (approximately 1,000 tonnes).  In bot h importing systems, an applicant to competitive 
bidding has to meet some requirements such as proof of credit, experience and achievement of import and export of crops, in order to participate in importing.   
 As the requirement of proof of credit, it is n ecessary that an applicant have at least one billion 
yen of owned capital or must be able to obtain a loan  of more than the same amount from the bank. In 
the case of the SBS, taking into account its import scale,  it is required that an applicant have at least 
0.1 billion yen of owned capital.    This is imposed as the benchmark of credit th at we can expect from a trading company which 
has entered into a contract with the government and can certainly implement the fund raising, the 
acquisition of commodities in the exporting country a nd the delivery at the import port in our country.  
We think this requirement is appropr iate.  Furthermore, this requirement  is also needed to ensure that 
the trading company can co mpensate sufficiently in the event th at it is difficult to implement the 
contract due to unforeseeable accidents such as those related to food safety. 
 
Follow-up comments
:  Thailand welcomed Japan's efforts to  comply with its WTO commitment on 
minimum access for rice noting that Japan had ju st recently opened bidding in both systems. 
  
(ii) Table DS:1 (domestic support commitments) 
  Armenia  G/AG/N/ARM/16
 
 
2. Questions by Canada - At the March 2007 Committee on Agriculture meeting, Canada 
asked Armenia the following question: Armenia' s description of measures claimed as green 
under the heading "Payments for relief from na tural disasters" does not indicate how these 
programmes meet the criteria of paragraph 8 of Annex 2. Could Armenia describe these 
programmes with reference to each and every crit erion in paragraph 8, including the need for 
the production loss to exceed 30 per cent to establis h eligibility for payments?  To date, we have 
not received a reply. Can Armenia please update us on the status of the reply to this question?  
 The Delegation of Armenia was not able to attend the meeting.  It was contacted by the 
Secretariat and confirmed that it was waiting to receive replies from capital.  
  G/AG/R/52 
 Page 19 
 
 
  3. Question by the United States - The United States thinks that the artificial insemination 
measures reported under Infrastr uctural Services should be reported as a product-specific 
expenditure instead.  Could Armenia please explain why this item is listed under Infrastructural 
Services?  
 The Delegation of Armenia was not able to attend the meeting.  It was contacted by the 
Secretariat and confirmed that it was waiting to receive replies from capital. 
  Canada  G/AG/N/CAN/17/Corr.1, 35/Corr.1, 37/Rev.1/Corr.1 and 43/Corr.2
 
 
4. Questions by the United States - Can Canada  provide some background to explain the 
nature and extent of the changes to the value of  production for major commodities for the years 
1995–1998?  We notice that changes with respect to  barley were especially large.  For example, 
the increase in the value of production in some years more than doubled; in 1995, it went from 
C$818 million to C$2,171 million.  The revis ion for 1996 was a near doubling from 
C$1,112 million to C$2,003 million.  Wheat inc reased practically every year, and the increases 
for oats were also very large.  In 1998, the incr ease in the value of production for oats resulted 
in the de minimis  provision being triggered, and the AMS actually fell.  Although revisions to 
data are normal, these increases seem unusually large.  We would appreciate an explanation, 
especially for barley and oats.  As noted in th e past, we believe adding the value of direct 
payments to the value of production is inappropriate.  
 Canada has changed its value of production methodology to more accurately report the Value 
of Production of certain individual grains and oil seeds.  A large portion of the production of barley 
and oats, and a smaller portion of wheat and durum and some other crops, is fed to livestock on the 
farm where it is produced (fed on-farm) while some gr ains and oilseeds sold off the farm are sold to 
other farms in the same province (inter-farm sales within a province).    
 The former methodology of using Farm Cash Receipts data from Statistics Canada did not 
account for the value of inter-farm sa les within a province or value of crops fed on-farm.  Therefore, a 
new production multiplied by price-based methodology was used to capture th ese types of sales and 
crops fed on-farm.  Prior to this  change, Canada's value of produ ction for grains and oilseeds was 
underestimated (greatly so for wheat and durum, ba rley and oats).  The new methodology used to 
calculate the value of production figures in the corri genda is consistent with the methodology used to 
calculate the value of production since 2000 and will pr ovide a comparable time  series of values from 
1995 to our most recent notification.  Canada's revised methodology for most grains and oilseeds 
better estimates the value of production of each of  wheat and durum, barley, oats, corn, canola and 
soybeans.   
Follow-up comments
:  The United States noted that Canada's responses would be referred back to 
capital for possible follow-up questions.     Chile  G/AG/N/CHL/26 and Corr.1
 
 
5. Question by Canada – Would Chile please explain the reason why fruit farming is not 
included in the total value of agricultural production?  
 A major proportion of Chile's territory is consid ered to be suffering from soil degradation.  
Following up on its decision to intervene and im prove degraded soil productivity, since 1996 the 
Chilean Government has been implementing the "Incentives for the Recovery of Degraded Land 
Program", the prerequisite for implementation being th at funds are allocated for land in this condition, 
with inspections and monitoring by the governme nt services responsible for the programme.  G/AG/R/52 
Page 20  
 
  Although not excluded per se , fruit farming and its development re quire higher-quality soil, which is 
not eligible under the programme.   After 12 years of implementation, 85 per cent of the incentives have gone to the central-
southern and southern areas of the country, which are chiefly engaged in cereal-growing, livestock, 
the dairy industry and forestation.  The remainde r of the funds go to the pre-mountain and drought-
affected areas in the north of Chile, which are not suitable for fruit farming. 
  In order to facilitate the calculation of the de minimis  percentage, the estimated gross value of 
fruit production has been deducted, since fruit farmi ng is not eligible under the programme, for the 
reasons mentioned above.  In quantitative terms, moreover, th is sector makes a significant 
contribution to the gross value of agricultural production.   Japan  G/AG/N/JPN/132 and 137
 
 6. Questions by Australia - Supporting Table DS:7 - Product-Specific Aggregate 
Measurements of Support: Other Product-Speci fic Support and Total Product-Specific AMS  - 
Australia notes that Japan has provided de minimis  support for four product categories - rice, 
eggs, vegetables and fruits - during fiscal ye ars 2005 and 2006.  Can Japan provide further 
details of the data source used for total output  of each product category used to calculate de 
minimis  entitlements in the note to Supporting Table DS:7?  Can Japan provide the gross value 
of production data for those basic agricultur al products receiving product-specific support 
AMS under the 'fruits' and 'vegetables' category?  
 Regarding the total output of vegetables and fruits , we think that providing more detailed data 
used for total output is unnecessary because of the consistency with the commitment in the Schedule 
of Japan in which the AMS is calculated under the classi fication of 'vegetables' and 'fruits'.  While we 
fully support transparency regarding this issue, it wo uld be difficult to provide detailed data regularly 
because it involves a great deal of work.  Regardin g rice and eggs, the total output in the Supporting 
Table DS:7 is the only data.  More detailed data does not exist.  The gross value of the production 
data of vegetables and fruits is detailed in Japan's notification. 
 
7. Questions by the United States  
Please provide an explanation regarding why the Government of Japan's crop 
conversion programme is reported as a Green  Box expenditure in G/AG/N/JPN/137.  The 
description of the programme seems to indicate that it would not be Green Box .   
 The objective of the "Payments for conversion from rice production" programme is to 
preserve a favourable environment for paddy fields by growing crops other than rice or by adopting 
other appropriate management practices.  The support is provided through a publicly funded 
government programme, not involving transfers from consumers.  Furthermore, since the programme 
aims to preserve a favourable envi ronment for paddy fields, it does not have the effect of providing 
price support to producers. 
 In addition, eligibility for payment is depende nt on the fulfilment of specific conditions to 
preserve the environment which are set out by the government, and the amount of payment is limited 
to the extra costs or loss of income involved in  complying with the government programme for the 
preservation of the environment of paddy fields.  Th erefore, this programme meets the criteria for 
"Payments under environmental programmes" set out in  paragraph 12 of Annex 2.  We have notified 
this programme as 'Green Box'.   G/AG/R/52 
 Page 21 
 
 
   In Supporting Table DS:5, for wheat and barley , eligible production is no longer total 
production - it is just what the government proc ures.  In Japan's domestic support notification, 
it appears that Japan still maintains a MAFF resale  price to millers, thus Japan does not have a 
basis for not counting all producti on.  Therefore, it appears that Japan may not be reporting a 
billion dollars' worth of AMS.  Please explain.   
 
 Regarding the domestically-produced wheat a nd barley, the government purchase price and 
government resale price were set in 2005 and 2006, but because all production after 2005 was 
distributed to the private sector, there was no product for the government to control in distribution.  
Therefore, AMS which should be notified as the market price support did not occur.  Furthermore, the 
government purchase price and the government  resale price were abolished in 2007. 
 
 In Supporting Table DS:5, for sugar and sta rch, please explain the rationale for using a 
different formula to calculate column 8.  It appears that there is a circular reference in the 
formula, using the administered price to deflat e the price gap.  Japan's sugar AMS appears to 
be understated by a factor of roughly 10 ($200 m illion instead of $2 billion), and it appears that 
starch is understated similarly.  The United States requests clarification.  
 
 Regarding sugar and starch, the price support includes not only the support to the producer of 
sugarbeet, sugarcane, potato and sweet potato but also the support to th e processor of sugar and 
starch.  The sum of both supports appears as the price gap between the international price and the 
domestic price of sugar and starch.  In the case of calculation of AMS related to sugar and starch 
based on the Agreement on Agriculture , the percentage of support to the producer of material crops 
from the total support is required to calculate AMS. 
 
The United States is aware that Japan does not report any price support in relation to 
its rice programme since the reported change in  the programme, however, could Japan please 
explain the change and how the change wo uld justify not reporting price support.  
 The Food Control Law was abolished in 1996 and the Staple Food Law was introduced. 
Subsequently, detailed operational rules were provide d in the New Rice Policy in 1998, in line with 
the Staple Food Law.  The objective of this series of reforms was the abolition of government control 
on all rice in distribution, an activity which had been  carried out for more than half a century.  As a 
result of this reform, the rice distribution system was left to the private sector without government 
intervention. 
  Previously, all domestically-produced rice was e ligible for government purchases.  As a result 
of the rice policy reform, government purchases were  limited to the minimum necessity to form 
public stockholding for food security purposes.  The purchase prices for stockholding were set at 
actual market prices.  Furthermore, the administered price for rice was abolished and the price band 
system applied in the domestic market was also abo lished.  As a result of these changes, the market 
price support system for rice was entirely eliminated by the end of FY 1997
.  
 
Follow-up comments:   As regards the de minimis  calculation, Australia cons idered that in order for a 
better transparency of all these calculations, there w as a need to provide the total value of production 
so that Members could get a better sense of whether the de minimis  was being met or not.  Hence, 
Australia's questions with regard to de minimis  and whether it applied to basic agricultural product or 
not.  The United States noted that pending review of Japan's responses, it might have follow-up questions at a future meeting.  Argent ina flagged interest in this matter. G/AG/R/52 
Page 22  
 
  Switzerland   G/AG/N/CHE/6 and Corr.1, CHE/ 11 and Corr.1, CHE/15 and Corr.1, CHE/22  
and CHE/34/Rev.1  
8. Question by Argentina - The WTO Secretariat document on total value of agricultural 
production (TN/AG/S/21/Rev.1) does not provide any value for Switzerland.  This information 
is important for calculating the basis in respect of overall trade-distorting domestic support in 
the draft modalities document of the Chairman of  this Committee in Special Session.  Since the 
value in question does not seem to emerge from  the above notifications, could Switzerland 
provide these data for the period 1995-2000?  
 This question was put to us in Spanish.  Comp rehension of the language  prevents Switzerland 
from providing more than an approximate respons e.  We contacted the Argentine delegation on 
8 September to draw its attention to the problem  but have received no reply since.  We would 
therefore request the WTO Secretariat to translate the question, so that we can soon give a more 
specific reply in writing.   If we understand the question correctly, Ar gentina is asking us to provide the 
WTO Secretariat with the data concerning total pr oduction value for the period 1995-2000.  These 
figures are essential for the calculation of overall trad e-distorting domestic support, which is the basis 
for calculating domestic support reduction in the Do ha Round draft negotiating modalities.  Hence the 
figure in question is linked to the negotiations.   We think that the Committee on Agriculture is  not the appropriate forum to address matters 
relating to the negotiations.  The Doha Round negotiations are proceeding in the Committee on 
Agriculture in Special Session.  We therefore requ est the Delegation of Arge ntina to pose its question 
in the framework designated for this purpose, wh ich is the Committee on Agriculture in Special 
Session.  
 On the other hand, we are willing to provide the requested figures to the WTO Secretariat, 
within the appropriate framework. 
Follow-up comments
:  Argentina considered that the value of production was an issue not only of 
negotiations but implementation.  According to Arge ntina, there were several provisions in different 
documents regarding the implementation of the Agreement on Agriculture that establish the 
notification of the value of production, for example,  the Supporting Table DS:9.  Argentina added that 
Switzerland was the only developed country, apart from  a few EC member States, that did not submit 
the value of production data.  As a matter of tran sparency and implementation of the Agreement on 
Agriculture, Argentina urged Switzerland to provide  eight-year delayed data.  Australia and the 
United States supported Argentina's remarks as rega rds the need to provid e the total value of 
production data to improve transparency.  
In response to Argentina's comment concerning a few of the new EC member States that had 
not provided data for the whole period, the EC noted that it would prefer to provide the data in the 
context of the Special Session. 
  G/AG/R/52 
 Page 23 
 
 
  (iii) Table DS:2 (new or modified domest ic support measures exempt from reduction) 
 Australia  G/AG/N/AUS/70  
 
9. Questions by Canada - Would Australia pl ease indicate how the Western Australia 
Natural Disaster Relief Arrangements – Cyclone Isobel, Victorian Government Bushfire Clean-
up and Restoration Grants, Victorian Gov ernment Water Tank Rebate Scheme, South 
Australian Government Planning for Recov ery Programme, South Australian Government 
Storm Damage Relief 2007 - Farm Business A ssistance Grants and Victorian Government 
Concessional Loans 2006/07 notified under para graph 8 of Annex 2 of the Agreement on 
Agriculture meet the policy specific criteria of  this paragraph.  For example, does the 
production loss need to exceed 30 per cent of th e average production in the preceding three-year 
period or a three-year average based on the preceding five-year period, excluding the highest and the lowest entry?  
 Australia highlighted the importance of impr oving transparency in the multilateral trading 
system and noted that the Cairns Group was a strong advocate of improving monitoring and 
surveillance as part of the Doha Round. 
  Australia noted that during the 2006/07 reporting period, Australian state governments administered some programmes which had been no tified as Green Box support.  The small, one-off 
type programmes had been created following the significant impacts and destruction caused by a 
formally-recognized natural disaster – the drought.  These measures did not have the effect of 
providing price support to producers nor did they have trade-distorting effects or effects on 
production.  Rather, the programmes were premis ed on the basis of assisting producers who had 
suffered production losses as a result of a natural disast er to return to pre-existing conditions.  The 
clear policy intent of these measures was consis tent with the objectives of the Green Box. 
 
 The natural disaster relief programmes discussed below contain a number of criteria which 
are designed to ensure that the measures meet Green Box criteria.  These include, amongst others, a 
thorough assessment process which requires applican ts to provide evidence of production losses, 
historical income data, supporting invoices for costs incurred as a result of the event and the existence 
of other assets/resources.  The strictly-enforced paym ent limits exist to make sure that the support 
provided for producers under these programmes does not compensate for more than the total cost of 
replacing/covering the losses.  These programmes do not require production of any type as a condition 
for receiving support.   Western Australia Natural Disaster Relief Arrangements – Cyclone Isobel
 
 
 Cyclone Isobel caused significant production losses to farmers in affected regions when it hit 
the state of Western Australia in 2007.  This six-month scheme – administered under the Western 
Australian Government Natural Disaster Relief Arrangements – was available to farming enterprises 
in that state with demonstrated damage caused as a result of the cyclone.   Farmers had to meet a number of strict criteria in order to be eligible for assistance under 
these arrangements.  All claims for assistance we re assessed on an individual basis and eligible 
applicants were required to demonstrate their n eeds through the assessment process.  In particular, 
applicants had to have demonstrated losses incu rred as measured against production levels preceding 
Cyclone Isobel.  
 Limits were placed on the amount of paym ent permitted under each type of assistance 
package available.  Supporting grants under this  programme were limited to a maximum of $A1,500 
for professional advice relating to production loss issues and $A5,000 for restoration of property G/AG/R/52 
Page 24  
 
  associated with production.  Supporting invoices/recei pts were required for grants above $A5,000 for 
severely damaged properties and these were capped at $A15,000 per applicant.  Recipients were not 
required to produce a specific type or quantity of product as part of the package.    Victorian Government Bushfire Clean-up and Restoration Grants
 
 
 The Clean-up and Restoration Grant provided a one-off, discretionary payment to farmers 
who suffered direct damage as a result of bushfires in the state of Victoria during 2006-07.    All claims for assistance were assessed on an individual basis and elig ible applicants were 
required to demonstrate their needs through the assessm ent process.  Production losses in reference to 
the pre-bushfire period were assessed as part of the process.   Grants were provided to eligible farmers who suffered damage to livestock, crops, pasture or 
other production factors such as farm buildings, fe ncing and/or tools of trade.  The assistance was 
provided for animal welfare, business restoration a nd removal of debris.  The grant was not intended 
to replace insurance and any grant for work which was subsequently covered by an insurance claim 
was to be repaid.   An initial maximum of $A3,000 was available fo r immediate clean-up and/or stock welfare.  
A further $A12,000 was available following a more  detailed assessment which was subject to a 
separate application and included an examination of production losses.  
  Victorian Government Water Tank Rebate Scheme
 
  The water tank rebate scheme was available to e ligible recipients located in certain areas of 
the state of Victoria declared by the Fede ral Government as suffering from 'Exceptional 
Circumstances'.  Farmers who did not receive a dam fill from bulk storages during the 2006-07 financial year due to prolonged drought conditi ons were eligible for assistance under the scheme. 
  Exceptional Circumstances is defined as a rare and severe event that is outside those a farmer could normally be expected to manage using responsible farm management strategies.  An 
Exceptional Circumstances event must be demonstrated to be:  rare (i.e., once in every 20 to 25 years 
on average);  result in a rare and severe downturn in farm income over a prolonged period of time for 
a significant number of farmers in a region or industry; and a discrete event that is not part of long-term structural adjustment processes or of normal fluctuations in commodity prices.  
 Therefore, to be eligible for an Exceptional Circumstances declaration the impact of the event 
on production must be rare, sever e and prolonged. Production losses are required to occur less than 
once in 20 to 25 years for that region.  The pr oduction loss was measured against production levels 
immediately preceding the event and each rebate was limited to a maximum of $A3,000.    Victorian Government Concessional Loans 2006/07
 
 
 This six-month scheme (January – June 2007) provided assistance in the form of concessional 
loans to farmers who suffered losses as a result of  physical bushfire damage.  Applicants were 
required to provide historical financial data a nd information on past production activities at time of 
assessment in order to be eligible for concessiona l financial assistance under these arrangements.  In 
particular, applicants had to demonstrate losses incu rred and the need for financial assistance.  Cash 
and other viable assets were also considered as part of the assessment process.   In general, the loans were limited to $A100, 000 for any single advance and, where more than 
one advance was made, the aggregate limit was $A 150,000.  The interest rate on the concessional  G/AG/R/52 
 Page 25 
 
 
  loans is for a term of five years with repayments spread over terms up to 15 years.  The interest rate 
after the initial five-year period will be set at, or cl ose to, commercial interest rates prevailing at that 
time.  Furthermore, the total cost of the scheme was small – amounting to only $A50,000.   South Australian Government Planning for Recovery Programme
 
 
 The Planning for Recovery Programme is availa ble to eligible recipients located in certain 
areas of the state of South Australia declared by the Federal Government as suffering from 'Exceptional Circumstances'.  
 Exceptional Circumstances is defined as a rare and severe event that is outside those a farmer 
could normally be expected to manage using responsible farm management strategies.  An 
Exceptional Circumstances event must be demonstrated to be:  rare (i.e., once in every 20 to 25 years 
on average);  result in a rare and severe downturn in farm income over a prolonged period of time for 
a significant number of farmers in a region or industry ;  and a discrete event that is not part of long-
term structural adjustment processes or of normal fluctuations in commodity prices. 
  Therefore, to be eligible for an Exceptional Circumstances declaration the impact of the event 
on production must be rare, sever e and prolonged.  Production losses are required to occur less than 
once in 20 to 25 years for that region.  The pr oduction loss was measured against production levels 
immediately preceding the event. 
 
 Limits are placed on the grants of up to $A4,000 for business planning grants and up to $A10,000 for business recovery gran ts.  Furthermore, the total cost of the scheme is small – 
amounting to only $A35,000.  
 South Australian Government Storm Damage  Relief 2007 — Farm Business Assistance 
Grants  
  Storms on 6 January 2007 caused extensive damage  to the Renmark district in the state of 
South Australia. Significant production losses were incu rred by farmers and irrigators in the affected 
area.  This very short programme was availabl e for only three months to farmers who could 
demonstrate damage caused as a result of the storm. 
  In order to be eligible for assistance under these arrangements, farmers had to meet a number of strict criteria.  Applicants were required to  provide financial and pr oduction data at time of 
assessment and had to have demonstrated losses to infrastructure and plantings such as vines, fruit 
trees, trellising, and not recove rable through insurance coverage. 
  The assistance packages were capped at $A 15,000.  Supporting invoices/receipts were 
required for any immediate emergency expenditure wh ich had been incurred.  The total cost of the 
scheme was small, amounting to only $A310,000.  
Follow-up comments
:  Canada noted that, like Australia, it took monitoring and surveillance very 
seriously, and that it also took Green Box criteria ve ry seriously.  In Canada's view, what mattered in 
a review was not the policy intent of the programmes and whether or not they we re consistent with the 
Green Box but the meeting of the specific criteria.   While Australia mentioned an assessment process 
to look at the production loss, there was no clear answer as to whether or not production loss met the 
policy-specific requirements of Annex 2 for the para graph concerned. Australia's responses would be 
referred back to capital for review and possible follow-up questions.  G/AG/R/52 
Page 26  
 
  (iv) Tables ES:1 to ES:3 (export subsidy commitments) 
 European Communities  G/AG/N/EEC/55
 
 
10. Questions by Argentina - In the light of paragraph 14 of document G/AG/1, would the 
EC please indicate per unit subsidies, within the meaning of Article 11 of the Agreement on 
Agriculture, for all tariff headings of the "incor porated products" category in Section II of Part 
IV of its Schedule for the notified periods (2003/04 and 2004/05).  
 The EC notification for 2003/4 and 2004/5 includes as required the total value of export 
subsidies for incorporated products.  With respect to Article 11 of the Agreement on Agriculture and 
paragraph 14 of G/AG/1 on the per-unit subsidy fo r incorporated products and primary product, the 
EC publishes each month the applicable export subsid y for incorporated products and also regularly 
publishes export subsidies applicable to the prim ary product.  Hence Members can regularly monitor 
the export subsidies applicable to the various produc ts in a number of languages, including Spanish.  
This information is directly available on our website – also for the period 2003/4 and 2004/5. 
 11. Questions by Australia  
Australia notes that the EC provides its notifica tions as a single entity to the WTO.  Can 
the EC provide Australia with a breakdown of  the volume and expenditure on pigmeat export 
subsidies by each EC member State for 2003/04 and 2004/05?  In addition, can the EC specify this information by tariff line (as opposed to a total figure for all the tariff lines covered under 
the pigmeat category)?  Further, can the EC advise if any export subsidies have been provided 
to pigmeat after 2004/05?   
Indeed the EC provides its notification as a single entity to the WTO and not for each 
individual EC member State.  The same applies for the notification of each product category such as 
pigmeat.  The EC notification for export subsid ies for 2005/06 and 2006/07 will be available to WTO 
Members shortly.  However, the EC can confirm th at limited export refunds have been provided for 
pigmeat in 2005/06 and 2006/07.  
 Australia requests clarification of the annua l commitment levels now being applied by 
the European Communities, in the context of p revious advice from the European Communities 
that it was applying the EC-15 commitments to the EC-25.
1   
 
 The EC has moved to the application of annual commitments level for EC-25. The 
methodology used to calculate these commitments is the same that was used for the previous EC 
enlargement in 1995.  These commitment levels have been applied from 2006/07. A notification of 
EC export refunds for that year is underway. 
 
 Specifically, in the case of sugar, Australia  seeks clarification of the annual budgetary 
outlay and quantity levels which are being a pplied by the European Commission's market 
managers:  (a) in light of public European Commission documents which refer to levels in 
excess of the EC-15 scheduled commitments2; (b) in regard to footnote (5) to the notification.   
 
 As already stated in our reply to a sim ilar question from Brazil, the EC respects its 
commitments (see paragraph 28).  
                                                     
 
1 G/AG/R/44 of 25 November 2 005, paragraph 3; G/AG/R/47 of 22 December 2006, paragraph 16. 
2 Document de Travail, AGRI C 1, 8 6 5, Point 6, Comité de Gestion Sucre, 26 June 2008, Balance 
Sheet 2006/07 and Fo recast Balance 2007/08-2008/09; sourced from CIRCA website http://circa.europa.eu .  G/AG/R/52 
 Page 27 
 
 
   Australia requests the provision of statistical data for sugar in regard to the total annual 
budgetary outlays and subsidised quantities for th e periods 2003/04 and 2004/05.  The statistical 
data provided by the EC on subsidised exports appear to be incomplete.   
 
 The annual notification includes figures on subsidis ed exports of sugar in outlay and quantity.  
This information is included in the EC notification. 
 
 Also in regard to sugar, Australia seeks clarification of the reasons for the significant 
increase in total exports, from 3.9 million to nnes in 2003/04 to 6.3 million tonnes in 2004/05. 
 
 During the period 2003/04 subsidized exports (excluding the re-exports of ACP sugar) only 
accounts for some 0.663 million tonnes compared with 1.13 million tonnes in the period 2004/05.  The period 2004/05 includes for the first time suga r production of EU-25 and this combined with 
higher sugar production led to an increase in exports.  12. Question by the United States - Member  States of the European Union make 
contributions to the cause of food assistance worldwide and are individually members of the 
Food Aid Convention and the WTO.  Would the EC confirm whether or not food assistance provided by the member States is reflected in G/ AG/N/EEC/55?  If not, when and in what form 
will notification of member State food aid spe nding take place for the years 2004/05 and prior 
periods?  
Confirmed. 
Follow-up comments
:  The United States flagged that it might seek additional information as regards 
the individual member States.  The EC was a large food aid donor and this issue was increasingly important, especially in current times of high prices.  In its reply, the EC reiterated that it reported as a 
single entity because the EC was one Member, just like the United States was one Member, and not 
the individual states.  The United States commented th at the request, if any, would be made in the 
spirit of transparency.  Also, it to ok note of the comparison but pointe d out that in the United States, 
individual states did not have in ternational food aid programmes whereas in the case of the EC, 
individual member States had such operations.  Hen ce, in addition to the total figure for the EC, the 
individual member State information could sometimes be useful. 
Switzerland  G/AG/N/CHE/42
 
13. Question by Argentina - In the light of paragraph 14 of document G/AG/1, would the 
Swiss Government please indicate per-unit subsidies, within the meaning of Article 11 of the Agreement on Agriculture, for all tariff head ings of the "processed products" category in 
Section II of Part IV of its Schedule for the notified period (2005 and 2006).  
 Once again, we have no translation of the qu estion posed by Argentina.  Our response is 
therefore based on an approximate co mprehension of the Spanish language. 
  As we understand it, Argentina wishes to obtain further details regarding export subsidies for 
processed agricultural products.  Such  subsidies are governed by the Order regulating contributions to 
exports of processed agricultural products ( Ordonnance réglant les contributions à l’exportation de 
produits agricoles transformés ) and Protocol II to the Free-Trade Agreement between Switzerland 
and the European Economic Community of 1972.   These documents explain how the compensation 
mechanism operates.  To enable us to r espond more specifically, we would request the 
WTO Secretariat to provide us with a translation of the question posed by the Argentine delegation. 
 G/AG/R/52 
Page 28  
 
  14. Questions by Australia - Australia notes that Switzerland has previously provided 
export subsidies for processed products at either  its maximum entitlement or close to it - for 
example in 2002 to 2004 the budgetary outlays were 114.9 million Swiss francs (i.e. 100 per cent 
of its maximum entitlement), and in 2001 and 2005, 98.6 million and 90 million Swiss francs 
respectively (86 per cent and 78 per cent of its maximum budgetary entitlement respectively).
3  
The 2006 notification does not appear to have an entry for processed products. Can Switzerland 
clarify whether it provided export subsidies fo r processed products for 2006?  Australia notes 
that Switzerland provides export subsidies on processed products containing milk and dairy 
products, preserved eggs, flour and other milled pr oducts, oils and fats and sugar and molasses. 
Can Switzerland provide details of the export su bsidy arrangements for its processed products, 
including those basic agricultural products (i.e . dairy, breeding animals, potatoes and fruit) 
which are also eligible for export subsidies?  
 We thank Australia for its question and for dr awing our attention to the problem, which is a 
simple matter of omission on our part for wh ich we apologize to Members.  For 2006, export 
subsidies for processed agricultural products totalle d 90 million Swiss francs, i.e. the same amount as 
in 2005.  A corrigendum of notification G/AG /N/CHE/42 has alrea dy been sent to the 
WTO Secretariat.4 
  Export subsidies are based on the Federal La w of 13 December 1974 on the import and export 
of processed agricultural products ( Loi fédérale du 13 décembre 1974 sur l’importation et 
l’exportation de produits agricoles transformés ).  The purpose of this me chanism is to level the 
playing field for the export food industry by elim inating the pricing disadvantage facing commodities 
from Switzerland.  This partly offsets the "handicap" suffered by Swiss raw materials. 
  The processed agricultural product export subs idy programme differs completely from export 
subsidies for basic agricultural products.  The pr ogramme is governed by the Order regulating 
contributions to exports of processed agricultural products ( Ordonnance réglant les contributions à 
l’exportation de produits agricoles transformés ) and Protocol II to the Free-Trade Agreement 
between Switzerland and the European Economic Community of 1972 .  This Protocol is periodically 
reviewed to take price trends for European and Swiss raw materials into account.  The price 
differential is offset by this mechanism.  
 Export subsidies for basic agricultural products  are regulated separately in respect of each 
market order.  On no account is the same e xport good eligible for export subsidies both as a 
commodity and as a processed product.   We would also mention the fact that under its agricultural policy reform programme 2011, 
Switzerland has decided to eliminate all export subs idies on basic agricultural products up to the end 
of 2009.  This is a major reform which bears witn ess to Switzerland's resolve to contribute to the 
favourable outcome of the Doha Round negotiati ons on agriculture, even if this will make 
Switzerland, along with the other G10 countries, one of the principal net payers in this Round. 
 Follow-up comment
:  Australia reiterated its interest in Switzerland's provision of export subsidies 
and any future reform and would be following this matter closely.  Argentina echoed concerns raised 
by Australia.   
                                                     
 
3 G/AG/N/CHE/33, G/AG/N/CH E/37 and G/AG/N/CHE/42.  
4 See G/AG/N/CHE/42/Corr.1, dated 16 September 2008.  G/AG/R/52 
 Page 29 
 
 
  15. Question by Canada - With respect to Switzerland’s 2005 & 2006 Table ES:3 
notification contained in document  G/AG/N/CHE/42, could Switzerland please specify through 
what programme and to what countries the 45.01 tonnes of processed cheese was sent as food aid for the years in question?  
 These 45 tonnes of cheese are part of Switzerland's contribution to humanitarian aid for 
internally displaced persons (IDPs) in Algeria.  Switzerland supplies 45 tonnes of cheese annually to 
the World Food Programme, which is responsible for transporting and distributing the goods among 
the beneficiaries.  
16. Question by Thailand - Please clarify the me aning of "triangular transactions from 
developing country to developing co untry" according to the second footnote
 of Table ES:3  
(Notification of the Total Volume of Food Aid).  
 Triangular transactions are food purchases made in a developing count ry neighbouring on or 
close to the recipient country.  The term is define d in Article XII of the 1999 Food Aid Convention, to 
which Switzerland is a contracting party.  Most of the triangular transactions contained in this 
notification are carried out by the World Food Pr ogramme.  "Triangulation" has been judged by 
numerous scientific studies to be one of the best ways to provide food aid.  According to a WFP study, the purchase of food in local and region al markets is an effective way of supplying food 
aid that helps stimulate regional trade and is better suited to local food habits in the recipient country. 
 Follow-up comments
:  Thailand noted that the system mentioned by Switzerland of buying food from  
neighbouring countries and distributing it as food aid might be a good way to help a country in need. 
  G/AG/R/52 
Page 30  
 
   
ANNEX 3 
 
Notifications subject to review in respect of which no questions have been raised 
 
in advance of the issuance of the convening airgram  
 
 
(i) administration of tariff and other quota commitments (Table MA:1) 
- Switzerland G/AG/N/CHE/13/Add.10 
  
(ii) imports under tariff and other quota commitments (Table MA:2):   
- Croatia G/AG/N/HRV/6 
- Dominican Republic G/AG/N/DOM/14 and Corr.1 - Japan G/AG/N/JPN/134 - South Africa G/AG/N/ZAF/64 
 - Switzerland G/AG/N/CHE/43 
- Chinese Taipei G/AG/N/TPKM/59 and Corr.1   
(iii) special safeguard (Tables MA:3 to MA:5):   
- Costa Rica G/AG/N/CRI/21  
- Japan G/AG/N/JPN/135 
- Japan G/AG/N/JPN/136 
- South Africa G/AG/N/ZAF/63 - Chinese Taipei G/AG/N/TPKM/58 - Chinese Taipei G/AG/N/TPKM/60  - Uruguay  G/AG/N/URY/34  
 
(iv) domestic support commitments (Table DS:1):  
- Argentina G/AG/N/ARG/26 
- Australia G/AG/N/AUS/69  - Canada G/AG/N/CAN/49/Corr.1  - Canada G/AG/N/CAN/53/Corr.1 
- Canada G/AG/N/CAN/60/Corr.1 
- Dominican Republic G/AG/N/DOM/15 - Hong Kong, China G/AG/N/HKG/24 - Japan G/AG/N/JPN/21/Corr.2 - Japan G/AG/N/JPN/34/Corr.1 
- Japan G/AG/N/JPN/47/Corr.1 
- Japan G/AG/N/JPN/61/Corr.1 - Japan G/AG/N/JPN/72/Corr.1 - Japan G/AG/N/JPN/98/Corr.1 - Japan G/AG/N/JPN/124/Corr.1 - Japan G/AG/N/JPN/129/Corr.1 
- Macao, China G/AG/N/MAC/23 
- Mauritius G/AG/N/MUS/1 - Oman G/AG/N/OMN/5  - Oman G/AG/N/OMN/6  - Singapore G/AG/N/SGP/18 
 - South Africa G/AG/N/ZAF/65 
 - Uruguay G/AG/N/URY/35 
  G/AG/R/52 
 Page 31 
 
 
  (v) new or modified domestic support measures exempt from reduction (Table DS:2): 
- Armenia G/AG/N/ARM/14 
- Armenia G/AG/N/ARM/15 
 
(vi) in the context of export subsidy commitments (Tables ES:1 to ES:3): 
- Croatia G/AG/N/HRV/7 
- Dominican Republic G/AG/N/DOM/16 - Macao, China G/AG/N/MAC/22  - Mauritius G/AG/N/MUS/2  - Singapore G/AG/N/SGP/19 
- South Africa G/AG/N/ZAF/66 
- Uruguay G/AG/N/URY/33 
 
(vii)  in the context of export prohibitions  and restrictions (Table ER:1): 
- Kyrgyz Republic G/AG/N/KGZ/2 
 
__________