RESTRICTED  WORLD TRADE  
ORGANIZATION  G/AG/W/80 
11 January 2011 
 (11-0205) 
Committee on Agriculture  
  
 
RESPONSES TO POINTS RAISED BY MEMBERS UNDER THE REVIEW PROCESS 
 
Compilation of responses to questions raised during the Committee on Agriculture meeting 
 
on 18 November 20101 
  
The present document compiles the responses recei ved in writing by the Secretariat to the 
questions raised in document G/AG/W/79/Rev.1. 
_______________ 
 
 
Table of Contents
 
 
I. MATTERS RELEVANT TO THE IMPLEMENTATION OF 
COMMITMENTS UNDER THE REFORM PROGRAMME:  ARTICLE 18.6 ...............4  
A. CANADA 'S DAIRY POLICIES ........................................................................................................4  
II. POINTS RAISED IN CONNECTION WITH  INDIVIDUAL NOTIFICATIONS ............5  
A. NOTIFICATIONS RELATING TO IMPORTS UNDER TARIFF AND OTHER QUOTA 
COMMITMENTS (TABLE MA:2)...................................................................................................5  
1. Korea   G/AG/N/ KOR/41 ........................................................................................................5  
B. NOTIFICATIONS IN THE CONTEXT OF THE SPECIAL SAFEGUARD (TABLES MA:3  TO 
MA:5).......................................................................................................................... ................5  
1. Philippines   G/AG/N/PHL/40..................................................................................................5  
C. NOTIFICATIONS IN THE CONTEXT OF DOMESTIC SUPPORT COMMITMENTS 
(TABLE  DS:1)......................................................................................................................... .....7 
1. Brazil   G/AG/N/BRA/26 ......................................................................................................... .7 
2. China   G/AG/N/CHN/17.......................................................................................................... 8 
3. Costa Rica  G/AG/N/CRI/24/Rev.1 and CRI/30.....................................................................8  
4. Dominican Republic   G/ AG/N/DOM/18/Rev.1......................................................................9  
5. Israel  G/AG/N/ISR/42/Rev.1...................................................................................................9  
6. Israel  G/AG /N/ISR/45.......................................................................................................... ..10 
(a) Notified AMS level............................................................................................................. ......10  
(b) Green Box ...................................................................................................................... ...........12  
                                                      
1 This document has been prepared under the Secret ariat's own responsibility and is without prejudice 
to the positions of Members or to their rights or obligations under the WTO. G/AG/W/80 
Page 2  
 
  (i)
 "Agriculture by the Torah (Bible)" ...........................................................................................12  
(ii) "Environment reform in the dairy farms" .................................................................................13  
7. Namibia  G/AG/N/NAM/18....................................................................................................13  
8. Norway  G/AG/N/NOR/59......................................................................................................13  
(a) Calculation of Current Total AMS ...........................................................................................13  
(i) Reasons for breach in Current Total AMS................................................................................13  
(ii) Steps taken to ensure compliance .............................................................................................14  
(iii) Price support for beef ......................................................................................................... ......15  
(b) Green Box ...................................................................................................................... ...........15  
(i) Environmental programmes......................................................................................................1 5 
(ii) "Vacation and Replacement Scheme".......................................................................................16  
9. United States  G/AG/N/USA/77 .............................................................................................16  
(a) Green Box ...................................................................................................................... ...........16  
(i) Green Box expenditures......................................................................................................... ...16 
(ii) General Services - Exte nsion Activities ....................................................................................16  
(iii) General Services - "Rural Energ y for American Program" .....................................................16  
(iv) General Services - "State Pr ograms for Agriculture" ..............................................................17  
(v) General services - "State  Credit Programs".............................................................................17  
(vi) Decoupled income support - "Tobacco Quota Buyout"............................................................17  
(vii) Decoupled income support - "Direct payments".......................................................................17  
(viii) Structural adjustment through investment aids - "Farm Service Agency/Farm Credit 
Programs"...................................................................................................................... ...........18  
(ix) Environmental payments - "Conservation Reserve Program" .................................................18  
(x) Environmental payments - "W etland Reserve Program"..........................................................19  
(xi) Environmental payments - "Environmen tal Quality Incentives Program"...............................19  
(b) Calculation of Current Total AMS ...........................................................................................19  
(i) Values of production........................................................................................................... ......19  
(ii) Market price support calcula tions for dairy products ..............................................................20  
(iii) Livestock Indemnity Payments..................................................................................................2 1 
(iv) Milk Income Loss Contract...................................................................................................... .21 
(c) Non-product-specific support ................................................................................................... 22 
(d) Average Crop Revenue Election (ACRE) Program..................................................................24  
D. NOTIFICATIONS IN THE CONTEXT OF NEW OR MODIFIED DOMESTIC SUPPORT 
MEASURES (TABLE  DS:2).........................................................................................................24  
1. Ecuador   G/AG/N/ECU/25....................................................................................................24  
2. Honduras   G/AG/N/HND/31 .................................................................................................24   G/AG/W/80 
 Page 3 
 
 
  3. Namibia   G/AG/N/NAM/19...................................................................................................26  
E. NOTIFICATIONS IN THE CONTEXT OF EXPORT SUBSIDY COMMITMENTS 
(TABLES  ES:1,  ES:2  & ES:3) ....................................................................................................27  
1. Korea   G/AG/N/KOR/42 .......................................................................................................27  
2. Switzerland   G/AG/N/CHE/50 ..............................................................................................27  
3. United States   G/AG/N/USA/78 ............................................................................................28  
F. NOTIFICATIONS IN THE CONTEXT OF EXPORT PROHIBITIONS AND RESTRICTIONS 
(TABLE  ER:1)......................................................................................................................... ...28 
1. Ukraine   G/AG/N/UKR/5 ......................................................................................................28  
III. OVERDUE NOTIFICATIONS:  QU ESTIONS BY AUSTRALIA....................................32  
(a) China:  Domestic support....................................................................................................... ...32 
(b) Egypt:  Domestic support and export subsidies........................................................................32  
(c) India:  Tariff quota administration, tari ff quota fill, domestic support and export 
subsidies...................................................................................................................... ..............32  
(d) Korea:  Domestic support and special safeguard ......................................................................33  
(e) Turkey:  Domestic support and export subsidies......................................................................33  
 G/AG/W/80 
Page 4  
 
  I. MATTERS RELEVANT TO THE IMPL EMENTATION OF COMMITMENTS 
UNDER THE REFORM PROGRAMME:  ARTICLE 18.6 
A. C
ANADA 'S DAIRY POLICIES  
1. Questions by New Zealand:  New Zealand remains concerned about the cumulative 
protection-driven measures that Canada has impl emented in its dairy sector and urges Canada 
to supply further details about these measures, as well as to explain how they are consistent with 
Canada's WTO obligations and with Canada 's commitment not to introduce new trade-
restrictive measures.  Measures of concern include:  
(a) modifications to the 4(m) milk classes' programme, which undercuts the price of 
imported ingredients used in cheese; 
(b) the "100 per cent Canadian milk" ice cream subsidy programme where there is 
a lack of clarity about the degree of involvement of a government agency (the Canadian Dairy Commission);  and 
(c) changes to Canadian compositional sta ndards for cheese, which unjustifiably 
restrict the use of imported ingredients in cheese (as previously raised in the 
TBT Committee). 
Canada considers that the measures are consis tent with its WTO rights and obligations and 
that Canada stands by its commitment not to introduce new trade restri ctive measures.  More 
specifically:   (a) As already noted in Canada's response to the same questions posed by New Zealand 
at the 57
th Committee on Agriculture, the modifi cations to the Class 4(m) seek to 
expand the market by stimulating demand fo r milk protein concentrates by Canadian 
dairy processors and further processors.  Impor ts of milk proteins in the Canadian 
market are used in many different  applications, including food products, 
neutraceuticals and non-food usages.  There is no evidence that the modifications to 
Class 4(m) had any significant impact on the overall imports of milk proteins. 
(b) As already noted in Canada's response to the same questions posed by New Zealand 
at the 57th Committee on Agriculture, the Ice Crea m Promotion Initiative is a private 
contractual agreement, between the Dair y Farmers of Canada, a non-governmental 
organization, and individual ice cream processors.  The Canadian Dairy Commission (CDC) has no part in determining the terms and conditions of the Ice Cream 
Promotion Initiative.  Its sole role is to  include, in its monthly producer revenue 
pooling calculations, the revenues impacted by th e Initiative.  It was decided that this 
was the most efficient way to calculate th e Initiative's impact on producer revenues at 
the national level. 
(c) Canada does not see the Canadian compos itional standards for cheese as unjustifiably 
restricting the use of imported ingredients in  cheese.  Canada also notes that Canadian 
dairy ingredient imports remain solid year after year.  For example, these imports (whey products, casein and casein products, pr oducts consisting of natural milk 
constituents and milk protein subs tances) have doubled since 2006, from 
115,862 tonnes to 233,939 tonnes in 2009.  In addition, Canada's dairy ingredient 
TRQs are filled every year.   
  G/AG/W/80 
 Page 5 
 
 
  II. POINTS RAISED IN CONNECTION WITH INDIVIDUAL NOTIFICATIONS 
A. NOTIFICATIONS RELATING TO IMPORTS UNDER TARIFF AND OTHER QUOTA COMMITMENTS 
(TABLE MA:2) 
1. Korea   G/AG/N/ KOR/41 
2. Questions by the United States:  The United States notes that Korea notifies zero or very 
low fill rates for certain dairy products (skim mi lk powder, whole milk powder, other milk and 
cream) despite Korean trade statistics showing the import of quantities beyond the TRQ level.  
(a) Is the product entering at out-of-quota tariff rates? 
Certain dairy products are being imported at  out-of-quota tariff rates.  Most out-of-quota 
imports are under the duty drawback system for re-exporting but not for domestic 
consumption.  Under this system, the duties are paid when the materials are imported and 
refunded when the final products are re-exported.  
(b) Why would importers not fill the TRQ quantities? 
Regarding TRQ imports, Korea conducts auctions for import licences where private 
enterprises can import the aforementioned TRQ products.  In 2008-2009, however, the fill 
rates were low because the import prices were hi gher than the domestic prices.  Consequently, 
only a few private entities participated in the auctions.  
 
B. N
OTIFICATIONS IN THE CONTEXT OF THE SPECIAL SAFEGUARD (TABLES MA:3  TO MA:5) 
1. Philippines   G/AG/N/PHL/40 
3. Questions by Australia:  For calendar year 2008 it was notified that the price-based SSG 
was "reinstated" in January 2007 and for calendar year 2009 it was notified that the measure was "reinstated" in January 2007 and "lifted" in November 2009.  
(a) Can the Philippines clarify whether th e price-based SSG was continuously 
applied from January 2007 until November 2009?  If the measure was in place 
continuously for nearly 36 months, ca n the Philippines explain the basis for 
applying the measure for this period of time?  Should the price-based SSG not be applied on a shipment-by-shipment basis, given that import prices vary for each shipment resulting in a variation of any additional duties? 
A price-based SSG was indeed in place/invoked from January 2007 to November 2009 on 
poultry products under HS code 0207.14.92 (cuts of the species Gallus Domesticus , other 
than livers, frozen ).  Since 2002, the Philippines implements and administers its SSG 
entitlements in accordance with Chapter III of  the Safeguards Measures Act (Republic Act 
8800, issued in 2000).  Although the price-b ased SSG was invoked continuously for nearly 
three years, this was only applied on a shipment -by-shipment basis, hence SSG remedies in 
accordance with the Agreement on Agricultu re were only imposed on those specific 
shipments which actually breached the trigger price. 
 G/AG/W/80 
Page 6  
 
  (b) Can the Philippines provide data on the import prices, trigger prices, volumes, 
number of shipments affected and the additional duties applied to show that the measure was in compliance with Articl e 5 of the Agreement on Agriculture? 
While the price-based SSG was "in place or invoked"  continuously from January 2007 to 
November 2009, it does not follow that SSG duti es were applied to and collected from every 
shipment within this period, as the invocation is merely an operational mechanism by which 
the Secretary (Minister) of Agriculture request s customs authorities through the Secretary of 
Finance to operationalize the SSG at a given period subject to the requirements of the 
Safeguards Measures Act which is based on the SSG provisions in the Agreement on Agriculture.  
(c) Paragraph 7 of Article 5 of the Agreement on Agriculture specifies that 
"Members undertake, as far as practica ble, not to take recourse to the 
provisions of subparagraph 1(b) – the price-based SSG – where the volume of imports of the products concerned are declining".  Can the Philippines confirm 
that the volume of imports was not declining prior to the invocation of the price-
based SSG?  Australia remains concerned that these kinds of issues need to be 
adequately addressed as they are similar to the concerns raised in respect of the 
possible misuse of a price-based Special Safeguard Mechanism (SSM) as is being proposed in the Doha negotiations. 
Unfortunately, this information remains a wo rk-in-progress with the Philippines' customs 
authorities,  hence the Philippines shall endea vour to provide the data as soon as it becomes 
available.  
4. Question by the United States:  How many to nnes of poultry were subject to the special 
safeguard duty during each of the years reported?  
See reply in paragraph 3(c). 
 
5. Supplementing the above responses, the Philippines noted that it has hardly used its right to 
the SSG.  In fact, the Philippines invoked the SSG only for two products (poultry and onions) despite entitlements of around 13 per cent (or 118) of its agri cultural lines.  The Philippines began exercising 
its right to the mechanism only in 2002, seven year s after the beginning of the implementation of the 
Uruguay Round results.  Secondly, the Philippines tak es transparency very seriously.  The Philippines 
is in full compliance and up-to-date with its no tification obligations under Tables MA:4 and MA:5.
2  
Thirdly, the Philippines also highly respects and valu es the predictability concerns of Members.  For 
instance the price triggers have been availabl e to all Members since 23 September 2002 through 
G/AG/N/PHL/27 ("up-front" Table MA:4), including th e bases of the fixed trigger prices (import 
prices in 1986-1988) which have been available to ex porters before making decisions in shipping their 
products.  These trigger prices and calculations were subjected to public consul tations, and officially 
published in newspapers in 2002.  Finally, based on the foregoing, Members should rest assured that 
the Philippines adheres and complies with the SSG provisions under Article 5 of the Agreement on 
Agriculture. 
                                                      
2 See G/AG/N/PHL/5, 9, 18, 22, 25, 33, 39 and 40 for Table MA:5; G/AG/N/PHL/27, 28 and 29 for 
Table MA:4;  and G/AG/N/PHL/30 for Table MA:3.  G/AG/W/80 
 Page 7 
 
 
  C. NOTIFICATIONS IN THE CONTEXT OF DOMESTIC SUPPORT COMMITMENTS (TABLE  DS:1) 
1. Brazil   G/AG/N/BRA/26 
6. Questions by the United States:  In reviewing the Central Bank's website it appears that 
the SELIC rate is, in effect, a government-set ra te, at which financial instruments are cleared 
between banks.  However, it does not appear that th is is a market rate that is normally available 
in commerce to customers of financial institutions.  Could Brazil describe the SELIC rate, its 
function, and its connection to market rates normally ava ilable in commerce?  
The SELIC rate is the base rate under which the government finances its debts and that 
determines the costs of financial instrume nts traded among banks.  The SELIC rate is 
considered an adequate benchmark because it re presents the cost of opportunity for banks 
when they are financing agricultural operations.  Moreover, it is important to highlight that 
this type of credit is to be provided only by private banks.  The role of the government is 
limited to controlling the interest rate charged. 
 
7. In its response to the question in paragraph 17 of document G/AG/W/78, Brazil noted 
that the implicit subsidy is estimated for "e ach programme".  However, there is only one 
measure notified as "non-product-specific produc tion and marketing credit".  Could Brazil list 
each programme that is captured under this measure?  
Refer to paragraph 20(a) of document G/AG/W/78.  
 
8. Regarding its response to the question in paragraph 20(b) of document G/AG/W/78, 
could Brazil list each programme for which the S ELIC interest rate is utilized to calculate the 
interest rate subsidy, and each programme for wh ich the Referential Interest Rate (TR) is used 
to calculate the interest rate subsidy?  Could Brazil confirm that the addition of 2 per cent and 11 per cent to the SELIC and TR rates respect ively, are for each programme so listed?  
Irrespective of the programme, the SELIC interest rate plus 2 per cent was used as the 
benchmark for investment debt rescheduling, wh ile the TR (Referential Interest Rate) plus 
11 per cent was used for production and commercialization debt rescheduling. 
 
9. In its response to the question in paragraph 21 of document G/AG/W/78, Brazil 
confirmed that the debt rescheduling programmes do not include debt forgiveness.  Where are transfers of outstanding debt from financial inst itutions into the "Active Union Debt (DAU)" of 
the National Treasury notified?  
Brazil notifies only the implicit subsidy of the debt rescheduling programmes.  Under such 
programmes, instead of private financial institu tions, the Union is now the creditor for such 
debts.  Only the credit provider was subject to change. 
 10. Why are equalization payments not in addition to the interest rate subsidies, since these 
payments appear to be necessary for the financia l institutions to provide these subsidized rates?  
Brazil notifies only the implicit benefits for agri cultural producers, and not the benefits for the 
financial institutions. 
 G/AG/W/80 
Page 8  
 
  2. China   G/AG/N/CHN/17 
11. Questions by the United States:  Do all farmers who have contracted land receive direct 
payments, or must they apply for those payments ?  Are those payments made to the farmer, or 
to the collective who actually owns the land?  
All farmers with contracted land are eligible to  receive direct payments, and applications are 
not needed.  The recipients of the direct pa yment are farmers themselves, not collectives. 
12. In China's response to questions regarding "public stockholding"
3, China notes that one 
of the purposes of the Central Grain Reserve is to  deal with a "big harvest", and that volumes 
are determined in part based on market s upply and demand, and the price situation.   
(a) What particular role does the Central Grain Reserve have in a "big harvest", 
and how does price affect the volume purch ased, particularly when there is a big 
harvest and low prices? 
The Central Grain Reserve plays a dominant role  in China's grain reserve system. China's 
"centrally reserved grains" refer to the grains and edible oils reserved by the central government, being used to adjust the total domestic grain supply and demand, in order to 
stabilize the domestic market in the event of severe natural disasters and other emergency 
situations.  The Central Grain Reserve is the main tool used by the Chinese Government to 
implement macro-economic adjustment of the grain market.  In a "big harvest", the 
government may purchase part of the grains from farmers and hold it as the Central Grain Reserve, to counter fast and extreme price d eclines in the domestic grain market, thus, 
protecting farmers' interests.  
(b) When the purchase price of grain for the reserve is made by way of direct 
procurement, how are these prices established and communicated to producers?  China notes that these prices are based on  the prevailing market prices, but in 
what specific ways are they based on p revailing market prices? (In other words, 
are they the same?  Are market prices part of a pricing formula that determines 
grain reserve prices?, etc.)  Are these pr ices made public either before or after 
procurement, and are the amounts procured also made public? 
The purchase price is mainly decided in consider ation of factors "to cover the production cost 
and guarantee a slight profit for farmers".  The price will be announced by the grain reserve points through public media before the sowing season every year.  The volumes of public 
stockholding are calculated based on the Final Account of State Revenue and Expenditure.  
There is no direct connection between the stock holding volume and the purchase price.  The 
volume of the purchase is normally announced to the public.  
3. Costa Rica  G/AG/N/CRI/24/Rev.1 and CRI/30 
13. Questions by India (on G/AG/N/CRI/30):  Costa Rica's Current Total AMS for 
agriculture was US$62.5 million in 2008 and US$91.7 million in 2009, compared to a maximum 
committed level of US$15.9 million.  The larg est increase has been in product-specific AMS 
which has grown nearly three times since 2007 and seven times since 2006.  Thus, the violations 
are increasing in size from 2007 onwards.  Most  of the increase can be attributed to product-
specific support that has been provided for rice through price support.  On comparing with the 
previous notifications of, say, year 2000, admi nistrative price support has more than doubled, 
                                                     
 
3 Paragraph 29 of document G/AG/W/78 refers.  G/AG/W/80 
 Page 9 
 
 
  though the eligible production has more or less remained at the same level.  Considering that 
Costa Rica is a member of the Cairns Group of agricultural exporting countries, its exceeding of 
Bound Total AMS levels may also have livelihoo d implications for developing countries and 
NFIDCs in terms of high import bills.  India would therefore like to join other WTO Members who had raised this issue in flagging their concern s.  Costa Rica is requested to adhere strictly 
to its bound commitment levels in reduction of AMS.  Could Costa Rica explain why its Total 
AMS commitment is being exceeded?  What step s does Costa Rica propose to take to ensure 
that its Current Total AMS is within commitment levels in future?  
14. Questions by the United States:  Following up on questions raised in several previous 
meetings of the Committee on Agriculture, coul d Costa Rica provide an update on its review of 
its domestic support programmes and what speci fic steps have been undertaken to ensure the 
Bound Total AMS commitment level is not exceede d?  When can Members expect that Costa 
Rica will be back under the Bound Total AMS commitment level?  
At the meeting held on 23 September 2010, Costa Rica informed the Committee of the 
reasons why it had exceeded its bound AMS leve l in 2007, 2008 and 2009 as a result of 
applying its price support mechanism for rice.   In September, the Committee was also 
informed that the Government of Costa Rica had set up a Commission of vice-ministers of Foreign Trade, Agriculture and the Economy.  This Commission is responsible for finding 
technical solutions to the problem and establis hing as soon as possible a regime in support of 
the agricultural sector consistent with the c ountry's multilateral obligations.  The Commission 
of vice-ministers is still working on preparing a solution, which will be notified to this 
Committee in due course. 
 As a preliminary measure, the Government of  Costa Rica has lowered the producer purchase 
price by 18 per cent;  it is hoped that this will lower rice production levels in 2011 and 
facilitate the implementation of the propo sal being developed by the Government. 
 
Costa Rica repeats that it attaches the utmo st importance to compliance with its WTO 
commitments and respect for the principle of transparency.  
4. Dominican Republic   G/AG/N/DOM/18/Rev.1 
15. Question by the European Union:  The cover page of the revised notification does not 
contain a short summary on the background of the revision.  Under "best practices", it was 
agreed that such a summary would contribute to th e efficiency of the Review Process.  Will the 
Dominican Republic in future, in the case of correc tions or revisions of notifications, include 
such a summary?  
The revision of the notification simply cont ains a more detailed breakdown of programmes 
granted and the Dominican Republic can confirm th at in the future it shall include a summary 
of the revisions presented in the notifications. 
5. Israel  G/AG/N/ISR/42/Rev.1 
16. Comment by the European Union:  The Euro pean Union notes the explanatory notes on 
modifications introduced in the 2006 domestic support notification and thanks Israel for 
facilitating a more efficient review in line with recommendations under "best practices".  
These modifications were as detailed as possible.  However, Israel would be glad to answer 
the European Union if it has any specific questions  on that issue or if any further clarification 
is needed. 
 G/AG/W/80 
Page 10  
 
  17. Questions by the United States:  "Environment reform in the dairy farms" is listed 
under "Payments under environmental programmes"  for measures exempt from the reduction 
commitment.  Could Israel provide further information as to how the measure meets criteria under Annex 2, paragraph 12?  In particular, could Israel confirm that these payments are limited to external costs or loss of income complying with the programme?  
The environmental reform in the dairy sector started in 1999 and was ongoing until 2008.  
The dairy sector has been recognized as having significant environmental impact especially 
on Israel's limited water aquife rs and underground water reservoir.   Most of the dairy farm 
waste and manure is treated in plants built in several regions producing bio gas as a by-product.  More than 95 per cent of the dairy fa rms in Israel are now operating in a close and 
separate model known as a "bubble dairy farm" so that no dairy waste or manure is spilled 
onto the environment.  The total government expend iture in the form of grants for this reform 
amounts to some 717 million new sheqalim where 545 million new sheqalim have already been allocated in the reform.  
This programme meets the criteria set forth in  Annex 2, paragraph 12, since eligibility for 
such payments is determined as part of a clearly-defined government environmental 
programme.  This particular programme was ca rried out in close cooperation with, and under 
the supervision of, the Israeli Environment Protec tion Ministry.  More information can also be 
obtained from their website.
4  Payments were made to dairy farms to partially compensate for 
investments involved in complying with the e nvironmental requirements of this programme. 
 
18. When does Israel plan to submit its Table DS :2 notification in regard to "Environment 
reform in the dairy farms" programme?  
The Table DS:2 notification is under preparation. 
 6. Israel  G/AG/N/ISR/45 
(a) Notified AMS level
 
19. Questions by Australia:  There has been a significant increase in AMS spending in 
recent years and Israel breached its Total AMS commitment level in 2008.  What has led Israel 
to breach its Total AMS commitm ent level?  Will Israel be implementing measures to ensure 
that it does not breach its Total AMS commitmen t level in future years?  Can Israel outline 
what these measures might be?  There has been a large increase in the administered support 
price for milk (21 per cent increase) and eggs ( 30 per cent increase) from 2007 to 2008.  Can 
Israel provide some information on the reasons for these increases?  
20. Questions by Canada:  Canada appreciates Israel's commitment to transparency and 
the information provided in its notification.  Canada views with alarm that Israel reports a 
Current Total AMS in excess of its scheduled commitme nt level in 2008.  This appears to violate 
Article 3.2 of the Agreement on Agriculture wh ich states that "... a Member shall not provide 
support in favour of domestic producers in excess of the commitment levels specified in Section 
I of Part IV of its Schedule".  What procedures did Israel use before and during 2008 to project its expected 2008 Current Total AMS?  What steps did Israel take in 2009 to avoid a recurrence of a violation in that year and later years?  
21. Questions by the European Union:  For th e year 2008 the European Union notes that 
notified Current Total AMS exceed s the bound commitment level.  What steps are taken in 
order to bring back a situation of respect of the AMS ceiling?  
                                                     
 
4 Please refer to http://www.sviva.gov.  G/AG/W/80 
 Page 11 
 
 
  22. Questions by the United States:  Israel's Current Total AMS increased 44 per cent 
between 2007 and 2008, exceeding its Total AMS commitment level in 2008 by nearly US$13.7 
million.  It appears that much of the increase was in support of the e gg and dairy industry.  
Could Israel clarify if action has been taken to comply with its Bound Total AMS commitment 
and explain what measures have been or will be taken to reduce the Current Total AMS levels 
in 2009 and future periods so that it do es not exceed its Bound Total AMS commitment.  
23. Questions by Uruguay:  Uruguay would welcom e detailed clarification on Israel's recent 
Current Total AMS expenditure, noting that Israe l's Table DS:1 notification for 2008 shows 
Current Total AMS above its Final Bound Total AM S commitment level of US$568.980 million.  
This appears to violate Article 3.2 of the Agr eement on Agriculture.  What steps has Israel 
taken to avoid a future recurrence of a violation of its Total AMS commitment?  
Israel's total AMS support measures mainly concer n two products:  raw milk and table eggs.  
As a net food-importing country, Is rael imports the majority of its fodder grains and various 
ingredients used for animal feed.  Production of  milk and eggs is en tirely dependent on import 
of animal feed due to the fact that no pastur e is available in Israel's arid and semi-arid 
agricultural lands.  Milk and eggs  production in Israel is considered a food security concern 
and an essential source of income in remote co mmunities.  Production is being carried out in a 
balanced and responsible manner.  However,  the food crisis of 2007-2008 and the resulting 
sharp increase of the price of many commodities in the world markets led to a sharp increase 
in the production costs of these two products.  In addition, several major grain-exporting 
countries imposed export restrictions on different types of grains and feed during this period, 
thus further worsening the impact of the crisis  in the world markets, and resulting in severe 
shortages and extraordinary price increases.  Grain prices tripled during the 2007-2008 
period, pushing the world market prices of m ilk, milk powder and other commodities to new 
world records.  According to Israel's figures, the share of imported feed ingredients to the 
production costs has reached more than 35 per cen t of the total production costs of milk and 
more than 60 per cent of the total production co sts of table eggs, and this despite extremely 
efficient production environment. 
 
Israel provides almost no direct support to its farm sector.  As mentioned above, the only 
support notified to the WTO is the AMS for milk and eggs.  The level of support is calculated 
by multiplying the production quota by the differe nce between the applied local administered 
price and the external reference price.  Th e calculated market price support for these two 
products is carried out by using an external re ference price which reflects the prices of these 
commodities over 20 years ago.  It does not repr esent in any way the radical changes in the 
world market of these products, nor does it react to their price fluctuations.  
The external reference price Isr ael uses to calculate the market  price support for milk is the 
New Zealand 1986-1988 milk price, i.e. US$157 per tonne.  This figure can be compared to U$472 per tonne in 2007 and US $289 per tonne in 2008, according to the OECD producer 
price at farm gate in New Zealand.  Had Isr ael used these figures as external reference prices 
for its market price support calculation for milk, Current Total AMS for 2008 would have been approximately US$300 million below the act ual total AMS commitme nt level for that 
same year.  
 
The administrative prices used for milk and eggs  are directly linked to world grain prices.  
Since most of the feed ingredients are importe d, Israel are exposed to and influenced by 
extraordinary phenomena and sudden surges in food prices relative to the fixed external 
reference price.  Please note that the price of gr ain has increased by more then 26 per cent in 
2008 whereas the target price for milk has incr eased by only 17 per cent in comparison to 
2007 prices. G/AG/W/80 
Page 12  
 
   
Moreover, the nominal increase in target prices used for 2007-2008 period is significantly lower than the actual increase notified during this peri od.  This is due to the fact that Israel is 
using US dollars in its domestic support calculati ons and not its domestic currency, the Israeli 
new sheqel.  The 2008 US dollar exchange rate  had a dramatic influence on Israel's AMS 
calculations.  Had Israel used the 2006 excha nge rate, the Current Total AMS would have 
been only US$478,866 thousand instead of the current figure for 2008 Current Total AMS of US$582,704 thousand, and it would have been mo re than US$90 million below the total AMS 
commitment level for 2008. 
 
As described above, the changes in the Curre nt Total AMS during 2008 reflect unusual global 
circumstances rather than a change in dom estic production policy.  No changes in the 
production policy of milk and eggs were made in Israel during this  period, neither did any real 
increase of support to farmers themselves take  place.  The 2008 calculated market price 
support reflects an abnormal situation which is  a direct result of an outdated methodology 
combined with an unfavourable US$/NIS exchange rate. 
 Israel remains strongly committed to its WTO obligations and assures Members that it will 
take all the necessary steps to avoid the reoccurre nce of such incidents in future years.  The 
Table DS:1 notification for 2009, which will be submitted shortly, is in full compliance with 
Israel's WTO commitments. 
 
(b) Green Box
 
(i) "Agriculture by the Torah (Bible)" 
24. Question by Australia:  Can Israel explain ho w the "Agriculture by the Torah (Bible)" 
programme or research fund operates?  
This unique research programme was designed in  order to reach certain objectives in the 
production of fresh produce important to the relig ious communities in Israel.  Two examples 
of research programmes that are being funded are as follows:  
 (i) "Economic significance of appropriate trimming methods to keep the Shmita by the 
Jewish Halacha in vineyards".  Shmita, also called the Sabbatical Year, is the seventh 
year of the seven-year agricultural cycle ma ndated by the Torah for the Land of Israel, 
and still observed in contemporary Judaism.  Du ring Shmita, the land is left to "rest" and 
all agricultural activity, including ploughing, planting, pruning and harvesting, is forbidden by Torah law.  Other cultivation techniques, such as watering, fertilizing, 
weeding, spraying, trimming and mowing, ma y be performed as a preventative measure 
only, and not to improve the growth of trees or plants. 
 (ii) "The use of Bio Fumigation and the treatme nt of seedlings before planting, as means for 
growing vegetables without insects in a reduced toxin environment".  G/AG/W/80 
 Page 13 
 
 
  (ii) "Environment reform in the dairy farms" 
25. Questions by the United States:  "Environment reform in the dairy farms" is listed 
under "Payments under environmental programmes"  for measures exempt from the reduction 
commitment.  Could Israel provide further information as to how the measure meets criteria under Annex 2, paragraph 12?  In particular, could Israel confirm that these payments are 
limited to external costs or loss of income complying with the programme?  
 See reply in paragraph 17. 
 
26. When does Israel plan to submit its Table DS:2  notification in regards to "Environment 
reform in the dairy farms" programme?  
 The Table DS:2 notification is under preparation. 
 
7. Namibia  G/AG/N/NAM/18 
27. Questions by the European Union:  The Eu ropean Union notes a significant increase of 
support in the Green Box for extension services  during the period 2000/2001 – 2009/2010.  
Could Namibia elaborate on the circumstances fo r this increase?  Could Namibia give examples 
of support measures?  
 The increase in Green Box support is attributed to the introduction of the Dry Land Crop 
Production Programme (DLCPP) which is target ed at rural households in the communal 
areas.  The objective of the programme is to increase crop yields for rain-fed agriculture by 
combining mechanized agriculture with con servation agriculture practices. As a result, 
tractors drawing rippers/furrows, planters, and fertilisers applicators are introduced to lessen 
farmers’ dependency on manual la bour which is a concern due to various factors including 
the impact of HIV/Aids and migration.  The DLCPP includes the provision of seeds, fertilizers, and ploughing services at subsidized prices to smallholder farmers.  
8. Norway  G/AG/N/NOR/59  
(a) Calculation of Current Total AMS
 
(i) Reasons for breach in Current Total AMS 
28. Questions by Australia:  In 2008 Norway brea ched its Total AMS commitment level.  
However, in 2009 Norway met its Total AMS commitment.  Can Norway explain why it 
breached its Total AMS commitment in 2008?  Was the decline in domestic support spending, 
which occurred in 2009, a result of amendments  to programmes to ensure that spending met 
Total AMS commitments or did it result from other developments?  Can Norway outline the reasons for the decline in Current Total AMS sp ending in 2009?  In the explanation to why 
Norway exceeded its Total AMS commitment, it stated that "the AMS for rye, oilseeds and goat milk was not taken into account as the Curren t AMS for these three products was included in 
the notifications as a result of the Trade Policies Review of Norway in October 2008".  Can 
Norway explain the relevance of this?  
29. Question by New Zealand:  New Zealand no tes that Norway has notified Current Total 
AMS of NOK11,550 million in 2008.  This notified  amount is in excess of Norway's Final Bound 
Total AMS commitment level of NOK11,449 million.  Could Norway please explain why its AMS commitment appears to have been exceeded?  G/AG/W/80 
Page 14  
 
  30. Question by United States:  Current Total AMS exceeded Norway's commitment level in 
2008 by US$106 million.  It appears that much of  the increase was in support of wheat, rye, and 
beef producers.  Could Norway explain what caused such high AMS levels?  
The reason for the notified Current Total AMS level for 2008 is twofold:  
 
 (i) The Trade Policy Review (TPR) of Norway in October 2008 identified the need to 
include rye, oilseeds and goat milk in AM S calculations for Norway's domestic support 
notifications.  This has been implemente d in subsequent submissions of domestic 
support notifications from Norway.  Complying with Norway's WTO commitments is of course one of the preconditions when a nnually negotiating prices and support with 
farmers' organizations.  At the time of the TPR the negotiations on price and support 
levels for 2008 with the farmers' organiza tions had already been concluded and the 
results implemented, meaning that the nego tiators had no possibility of taking into 
account the reduced availability of AMS.  
 (ii) In order to meet Norway's WTO commi tments, variation in production volumes is of 
course always taken into account when negotiating prices and support.  In 2008, 
however, a concurrence of large producti on volumes for multiple products consumed 
almost the entire "buffer" in Norway's antic ipated AMS levels.  When adding the AMS 
of the three new products, amounting to 188.6 million NOK, the Current Total AMS exceeded Norway's commitment level by 106 million NOK.  
(ii) Steps taken to ensure compliance 
31. Question by Australia:  What action is Norw ay taking to ensure that the annual Current 
Total AMS levels will be in compliance with the Bound Total AMS commitment levels from 
2009 onwards?   
32. Question by Canada:  Canada appreciates No rway's commitment to transparency and 
the information provided in its notification.  Canada views with alarm that Norway reports a 
Current Total AMS in excess of its scheduled commitment level in 2008.  In a footnote to the 
2008 Table DS:1, Norway states that "action has b een taken in order to ensure that annual 
AMS levels will be in compliance with the co mmitment levels from 2009 onwards", presumably 
referring to the price support reported as EMS in Supporting Table DS:8 for 2009.  
33. Question by the European Unio n:  The European Union notes that, for the year 2008, 
Norway exceeded its Total AMS commitment and notes that on page 2 of the notification the 
statement in footnote 1 that "action has been taken in order to ensure that the annual AMS 
levels will be in compliance with the commitment levels".  The European Union is very much 
interested in the content of this action.  Could Norway elaborate on the type of measures taken, 
notably in relation to price gap support?  
34. Question by New Zealand:  What steps are being taken to ensure that Current Total 
AMS is within commitment levels for future years?  
35. Question by the United States:   Please describe the specific steps Norway has 
undertaken, or is taking, to ensure that it s Bound Total AMS commitment will not be exceeded 
in the future.  
36. Questions by Uruguay:  Uruguay would welc ome detailed clarification from Norway on 
its recent Current Total AMS expenditure, noting  that Norway's Table DS:1 notification for 
2008 shows Current Total AMS above its Fi nal Bound Total AMS commitment level of  G/AG/W/80 
 Page 15 
 
 
  NOK11,449 million.  This appears to violate Articl e 3.2 of the Agreement on Agriculture.  What 
steps has Norway taken to avoid a future recurrence of a violation of its Total AMS commitment?  
Firstly, Norway would like to underline that it respects its WTO obligations.  As explained 
under the previous question, a number of factors contributed to the unfortunate situation in 
2008.  Projected support levels will be even more carefully monitored in the future. 
 
(iii) Price support for beef 
37. Question by Australia:  Can Norway expand on its explanation of why, as at 1 July 2009, 
the target price for beef  is no longer in place?  
38. Question by Canada:  Could Norway expl ain how the price support measures 
introduced for beef in 2009 operate, specifically by contrasting them against the price support 
measure for beef ("target price") reported in 2008?  
In 2008 it was decided that a reform in the meat sector had to be implemented in order to 
comply with Norway's AMS commitments.  In spring 2009, the Parliament decided 
unanimously to eliminate the administered targ et price for beef as of 1 July 2009.  As a 
consequence, market prices for beef are no longe r supported by a target price.  Measures such 
as export subsidies and storage of surplus beef have been discontinued. 
 
The EMS measure for beef reported in the second half of 2009, represents budgetary 
payments for beef used in processed products.  This support is paid to processors based on the 
quantity of beef used in processed products (e.g . pizza).  This measure is notified as EMS as 
the target price was abolished from the same date.  For the first six months of 2009 AMS for 
beef was calculated in the same manner as the pr eceding years.  This is why the notification 
contains both an AMS and an EMS calculation for 2009.   
(b) Green Box
 
(i) Environmental programmes 
39. Questions by Australia:  Are there any speci fic conditions that Norwegian farmers must 
fulfil in order to receive support for enviro nmental programmes?  What is the basis for 
payments under the "National Environmental Programme"?  
In order to be eligible to receive payments  under this programme, producers have to establish 
environmental plans for their enterprise.  By means of planning, the producers should be able 
to document that the agricultural area include d in the programme is managed in accordance 
with the prevailing requirements in the Environmental Plan Regulation.  In addition, certain actions are prohibited.  The economic meas ures under the environmental programmes shall 
cover additional costs linked to the participa tion in the programme through the maintenance 
of the agricultural landscape and other envir onmental requirements, and represent payments 
for the production of environmental goods.  Fo r further details, see Norway's Table DS:2 
notification, G/AG/N/NOR/55.  G/AG/W/80 
Page 16  
 
  (ii) "Vacation and Replacement Scheme" 
40. Questions by Australia:  Can Norway explain its "Vacation and Replacement Scheme"?   
Under which section of Annex 2 is this programme notified?  
The "Vacation and Replacement Sc heme" is part of the general welfare system in Norway.  
There are two schemes notified under "social welf are", namely the vacation and replacement 
scheme and the refund for alleviation of financ ial difficulties due to illness.  Both schemes are 
in line with national regulations re lated to the work environment.  
 
The main objective of the "Vacation and Replaceme nt Scheme" is to enable farmers to hire 
workers for replacement during vacation and time off, while the objective of the second 
scheme is to alleviate financial difficulties of producers due to illness and pregnancy.  For 
both schemes eligible farmers receive paym ents based on documented expenses for hiring 
replacements during vacation or illness.  The programme is notified under "other" in 
accordance with the second sentence of Annex 2, paragraph 5. 
 
9. United States  G/AG/N/USA/77 
(a) Green Box
 
(i) Green Box expenditures 
41. Question by India:  Could the United States provide detailed clarification on the reasons 
why, despite the fact that the total domestic su pport of the United States has remained in the 
range of US$80-85 billion, there is a noticeable shift in support from the Amber Box to Green 
Box.  Within the Green Box, the increase is mainly due to support under "Environmental 
Quality Incentives Program" (EQIP), where support has increased three times from 2002 to 2007.  
Although budgetary outlays under the EQIP pr ogramme have expanded, the primary reason 
for the growth in Green Box outlays is incr eased expenditures on domestic food aid.  The 
increased outlays reflect greater participation in domestic food and nutrition programmes, 
primarily due to the severe economic re cession over the past several years. 
 
(ii) General Services - Extension Activities 
42. Question by Australia:  Could the United States elaborate on what is meant by 
"technology transfer" under this heading?  
Extension activities assist technology transfer by providing information and technical 
assistance to support adoption of new technologies.  Through cooperation with the state land-grant university systems, support is also provided for research into new technologies for agriculture.  
(iii) General Services - "Rural Energy for American Program"  
43. Question by Australia:  The description stat es that the programme involves "grants to 
farmers, ranchers and small rural businesses to  purchase renewable energy systems".  Does this 
not involve direct transfers to producers?  
The "Rural Energy for American Program" provid es grants and loan guarantees to both farm 
and non-farm rural businesses for the purchase a nd installation of renewable energy systems  G/AG/W/80 
 Page 17 
 
 
  and energy efficiency improvements.  Grants ar e available for up to 25 per cent of project 
costs, and guaranteed loans up to 75 per cent of project costs.  Specific data on what share of 
grants and loan guarantees were awarded to  farmers and ranchers is not available. 
(iv) General Services - "State Pr ograms for Agriculture"  
44. Question by Australia:  Could the United St ates specifically identify what sort of 
expenditure is involved?  
"State Programs for Agriculture" include expenditu res for agricultural associations, and fairs; 
agricultural boards and advisory commissions;  provision of agricultural extension services; 
agricultural experiment stations and other rese arch activities;  and all regulatory and licensing 
activities (for livestock, dairy, crops, and all other products). 
(v) General services - "State Credit Programs" 
45. Questions by Australia:  Could the United St ates explain why it has not notified these 
programmes as it has previously done?  H ave the "State Credit Programs" expired?  
Data on "State Credit Programs" formerly notif ied were collected in a series of surveys 
conducted in the late 1980s to 1994.  The survey  was discontinued and the 1994 data has been 
used to report "State Credit Programs" each year through 2007.  Reporting was discontinued 
because of the length of time since th e last new data had been collected. 
(vi) Decoupled income support - "Tobacco Quota Buyout"  
46. Question by Australia:  Could the United States explain how "payments are funded 
through assessments on tobacco pr oduct manufacturers and importers"?  
The funds required to pay for the "Tobacco Tr ansition Payment Program" and other related 
costs are obtained through assessments on manufacturers and importers of all tobacco 
products totalling no more than US$10.14  billion over the ten-year period.  
 
The national assessment is divided by the Commodity Credit Corporation (CCC) of USDA among each class of tobacco based upon CCC's determination of each class's share of total 
national excise taxes paid.  The value of the ex cise taxes paid for each class of tobacco are 
based upon the reports filed by domestic manuf acturers and importers of tobacco products 
with the Department of the Treasury and the De partment of Homeland Security.  For the first 
year of the assessments in fiscal year 2005, the national assessment was  divided as follows:  
(i) cigarettes, 96.331 per cent;  (ii) cigars, 2.783 pe r cent;  (iii) snuff, 0.539 per cent;  (iv) roll-
your-own tobacco products, 0.171 per cent;  (v) chewing tobacco, 0.111 per cent;  and 
(vi) pipe tobacco, 0.066 per cent.  For fiscal years 2006 through 2014, the division of the 
national assessment for each class of tobacco is adjusted annually.  
(vii) Decoupled income support - "Direct payments"  
47. Question by Brazil:  Could the United States indicate how the classification of direct 
payments as decoupled income support under A nnex 2, paragraph 6, of the Agreement on 
Agriculture is consistent with th e Appellate Body's findings in the United States – Subsidies on 
Upland Cotton  case?  
The United States believes that the direct paymen ts meet the criteria for decoupled income 
support in paragraph 6 as well as paragraph 1 of  Annex 2 of the Agreement on Agriculture.  G/AG/W/80 
Page 18  
 
  The Appellate Body made no findings on direct payments with respect to US obligations 
under Article 7.1 of the Agreement on Agriculture. 
48. Question by India:  Under the Farm Act 2008, it seems that direct payments are not 
totally decoupled from the current production and prices.  As and when the historical planting 
and yields data are updated, it has impact on the current production through wealth and risk 
effect.  Could the United States elaborate on this and also whether the United States has 
updated the historical planting and yield data related to decoupled income after the establishment of the WTO?  
Direct payments are based on historical acreage and yields, not current production.  
Recipients are not required to produce any sp ecific product to receive payments, and do not 
have to produce any crop at all.  Therefor e, direct payments ar e decoupled from current 
production and prices.  The 1996 Farm Bill allowed producers to establish base acres for purposes of payments under the Agricultural Market Transition Act, the predecessor 
programme.  The base acres were based on participation in farm  programmes between 
1991-1995.  In the 2002 Farm Bill, producers with base acres were allowed to add oilseeds to 
their base and were offered the option to est ablish updated base acres and yields for purposes 
of payments under the 2002 Farm Bill.  Approximately one-third of enrolled producers accepted the option to update th eir base acres and yields.  The eligibility for payments under 
both the 1996 and 2002 Farm Bills  was determined by a clearly-defined and fixed base 
period, as specified in the respective legislation. 
(viii) Structural adjustment through investment ai ds - "Farm Service Agency/Farm Credit 
Programs"  
49. Question by Australia:  Part of the criteri a for assistance under paragraph 11, Annex 2 
to the Agreement on Agriculture requires "objective ly identifiable structural disadvantages".  
Regarding "Farm Service Agency/Farm Credit Programs", could the United States elaborate on how the inability to obtain credit is a structural disadvantage?  
The Farm Service Agency (FSA) provides di rect and guaranteed loans to farmers and 
ranchers who face financial or credit constraints.  Due to economies of scale, it is difficult for producers who are not well capitalized to restructure from less viable operations to more viable operations, which often require significan t capital to develop and sustain.  FSA loan 
programmes also target socially-disadvantaged  clients.  A socially-disadvantaged (SDA) 
farmer, rancher, or agricultural producer is one of a group whose members have been 
subjected to racial, ethnic, or gender prejudice because of his or her identity as a member of 
the group without regard to his or her individual qualities.  SDA groups are women, African Americans, American Indians, Alaskan Nativ es, Hispanics, Asian Americans and Pacific 
Islanders. 
(ix) Environmental payments - "Conservation Reserve Program"  
50. Question by Australia:  What losses, if any, do producers participating in the 
programme suffer?  
In return for establishing long-term, resource- conserving covers, FSA provides annual rental 
payments to CRP participants.  FSA bases rental  rates on the relative productivity of the soils 
within each county and the average dryland cash  rent using data provided by the National 
Agricultural Statistical Service or cash-rent equivalent as guidelines.  The maximum CRP 
rental rate for each offer is calculated in adva nce of enrollment.  Producers may offer land at 
that rate or offer a lower rental rate to incr ease the likelihood that their offer will be accepted.   G/AG/W/80 
 Page 19 
 
 
  Thus, the payment or rental rate is based on the loss of income or opportunity cost of not 
renting the land.  In addition, FSA provides co st-share assistance to participants who establish 
approved cover on eligible cropland.  The cost-s hare assistance can be an amount not more 
than 50 per cent of the participants' co sts in establishing approved practices. 
51. Questions by India:  As per the OECD report "Agriculture Policies in OECD Countries, 
2010", the United States is the largest suppo rter of "Conservation Reserve Program" where 
farmers engage in long-term contracts to con serve land outside of agriculture production.  
Outlays have increased by nearly US$250-300 million in the past three years.  As such outlays 
including those of EQIP are covered under Green Box support programmes and have the potential to be output-restricting by keeping wo rld prices for basic grains higher, how does the 
United States view these programmes in the current scenario of rising world food prices?  With 
higher food prices, can any lowering of support  under these categories be expected in future 
notifications?  
According to U.S. Table DS:1 notifications , expenditures for the "Conservation Reserve 
Program" (CRP) have only increased by approximately 50 million dollars in the last 3 years.  
The CRP and the EQIP programmes are voluntary environmental programmes, where eligible 
recipients agree to follow certain practices  or establish specific projects to meet 
environmental objectives, in exchange for payments  to offset some of the costs or loss of 
income.  EQIP payments specifically target work ing lands, that is, agricultural land that is in 
active production. The maximum eligible acrea ge for the CRP was lowered from 39 million 
acres to 32 million acres in the 2008 Farm Act.  The programmes are designed to improve 
environmental conditions, and fu ture participation will depend on available budgetary support 
and producer interest. 
(x) Environmental payments - "Wetland Reserve Program"  
52. Question by Australia:  What sort of fa rming activities (e.g. cropping, livestock) 
occurred on the Wetlands in question prior to their incorporation in this programme?  
The land could have been cropped or used fo r grazing.  Data on specific farming activities 
prior to incorporation into the programme are not available. 
(xi) Environmental payments - "Environm ental Quality Incentives Program" 
53. Question by Australia:  What are the "livest ock production" practices referred to in this 
programme?  
Livestock practices are primarily aimed at animal waste management, with the objective of 
improving water and air quality. 
(b) Calculation of Current Total AMS
 
(i) Values of production 
54. Question by India:  Could the United States provide the detailed methodology to 
estimate the total value of agricultural production as well as product-specific values of 
production?  
The United States estimates total value of production by combining value of production 
reported by the US National Agricultural Sta tistics Service (NASS) for most commodities 
with cash receipts data from the Economic Re search Service (ERS) Farm Income Data.  G/AG/W/80 
Page 20  
 
  NASS provides value of production data only for a specific set of individual commodities;  
ERS cash receipts data provide estimates for crops not reported by NASS.  Cash receipts data are used for fruits, nuts, most vegetables, and some miscellaneous crops, livestock, and 
poultry. 
(ii) Market price support calculations for dairy products 
55. Question by Argentina:  Could the Unit ed States indicate the source and the 
corresponding year for the external reference price under Supporting Table DS:5 used for 
butter, non-fat dry milk and cheddar cheese?  
56. Questions by Australia:  Australia not es that the United States has notified 
US$2,925.440 million in market price support for it s dairy sector for marketing year 2008.  This 
compares to the US$5,011.058 million notified  for marketing year 2007 and US$4,882.010 
million notified for marketing year 2006.  Coul d the United States inform the Committee why 
the notified amount has fallen by some US $2,085.618 million and whether this reflects any 
reduction in the level of market price support provided to the US dairy sector?  Could the United States explain the precise manner in which it  calculated the external reference prices it is 
using for butter, non-fat dry milk and cheddar cheese?  
57. Questions by Canada:  Regarding the calcul ation of market price support for butter, 
non-fat dry milk and cheddar cheese in Support ing Table DS:5, are the external reference 
prices for calendar years or for dairy years?  Co uld the United States indicate the exact sources 
where Members can see the data used for the ext ernal reference prices and for the eligible 
production?  
58. Question by Japan:  Would the United States explain the background to the change in 
policy measures from "MPS to milk" to  "MPS to processed dairy products"?  
The 2008 Farm Act eliminated the support price for milk, which had been established at 
US$9.90 per hundredweight (cwt), or US$218.258 per tonne, since 1999.  The 2008 Farm Act 
authorized the "Dairy Product Price Support Program", which establis hed minimum purchase 
prices, as follows:  non-fat dry milk at US$0.80 per pound (US$1,763. 698 per tonne); butter 
at US$1.05 per pound (US$2,314.853 per tonne);  and cheddar cheese at US$1.13 per pound 
for blocks (US$2,491.223) and US$1.10 per pound for barrels (not used in the notification). 
 Between 1995–2007, market price support fo r dairy was calculated as the applied 
administered price for milk (the statutory supp ort price for milk) minus the external reference 
price for milk, multiplied by all milk production.   Given the change in dairy policy, a new 
market price support calculation was required, one for each of the three supported products, 
using the statutory support prices for the pr oducts as the new administered prices in the 
calculation and external reference prices for the three products.  According to Annex 3, 
paragraph 9 of the Agreement on Agriculture, a fi xed external reference price shall be based 
on the years 1986-88, and shall be the average f.o.b. price for the agricultural product in a net-
exporting country.  The United States was a net-exporter of all three products during the 1986-88 period, so an f.o.b. price was selected.   The reference prices were taken from Dairy: World Markets and Trade , Foreign Agricultural 
Service, US Department of Agriculture.  The prices are f.o.b. North European and selected 
ports on a calendar year basis.  For butter and non-fat dry milk, the external reference prices 
are the same as those used to establish the extern al reference price for milk used in previous 
calculations, as reported in AGST supporting docum ents from the original U.S. notification 
for market price support for dairy, which est ablished commitment levels under the Agreement  G/AG/W/80 
 Page 21 
 
 
  on Agriculture.  The same source was used to est ablish an external reference price for cheddar 
cheese.  Four cheddar prices are reported by FAS (high/low for spring/fall) and a simple 
average of the four prices is used for each y ear.  The specific issue of the report is not 
available on-line; the data for chedda r cheese are reproduced in Annex 1. 
The difference between the applied administered  price and the external reference price is 
multiplied by production of each commodity, as reported in Supporting Table DS:5.  The 
Secretary of Agriculture has the authority to  reduce the minimum purchase price if certain 
inventory levels are exceeded and also has flexibility to raise the purchase prices.  The 
minimum purchase price was increased for two months for non-fat dry milk and cheddar cheese, as noted in Supporting Table DS:5. 
The United States calculates its dairy AMS on an  October–September marketing year.  The 
monthly production data for the dairy products are taken from Dairy Products , National 
Agricultural Statistics Service, US Department of Agriculture, monthly issues.
5 
 
(iii) Livestock Indemnity Payments 
59. Question by Argentina:  Could the United States specify the provision that authorizes 
these payments?  
The "Livestock Indemnity Program" was establishe d by the Food, Conservation, and Energy 
Act of 2008 (the 2008 Farm Act).  The regulation to implement the programme was published 
in the Federal Register on 2 July 2009.6 
(iv) Milk Income Loss Contract 
60. Question by Brazil:  The United States no tified US$756 million for its "Milk Income 
Loss Contract" programme in the product-specifi c AMS.  Could the United States give more 
details on how this programme works and how the payment rates are defined?  
Eligible dairy producers are those who, beginning 1 October 2007, through 30 September 
2012:  (i) commercially produce and market cow milk in the United States;  or (ii) produce 
milk in the United States and commercially market the milk outside the United States.  Sign-up for the programme began on 22 December 2008, and extends through the conclusion of the 
programme on 30 September 2012.  Eligible dairy producers can apply for programme 
benefits anytime during sign-up.
 
 
USDA's Farm Service Agency (FSA) makes MI LC payments on a monthly basis when the 
Boston Class I milk price falls below US$16.94 per hundredweight (cwt) as adjusted by the 
dairy feed ration adjustment.  When the Bost on milk price exceeds US$16.94 as adjusted by 
the dairy feed ration adjustment:  (i) FSA will make no MILC payments to the dairy 
operation;  and (ii) production for that month will not count towards the operation's maximum 
eligible production. 
 
FSA determines the per hundredweight payment ra te for the applicable month by subtracting 
the Boston Class I price for that month from th e US$16.94 baseline price, and multiplying the 
difference by:  (i) 45 per cent during the peri od 1 October 2008, through 31 August 2012; or  
                                                      
5 Refer to http://usda.mannlib.cornell.edu/usda /current/DairProd/Dair Prod-11-02-2010.pdf. 
6 The regulation can be accessed at:  http://frwebgate1. access.gpo.gov/cgi-
bin/PDFgate.cgi?WAISdocID=RTk8XY/4/2/0&WAISaction=retrieve. G/AG/W/80 
Page 22  
 
  (ii) 34 per cent during the period 1 Octobe r 2007 through 30 September 2008, and during 
September 2012.  
The baseline price of US$16.94/cwt is adjusted  upward when the National Average Dairy 
Feed Ration Adjustment (NADFR) is greater  than the following established levels:  
(i) 1 January 2008 – 31 August 2012 = US$7.35;  (ii) 1–30 September 2012 = US$9.50. 
 
The NADFR is calculated each month from the pri ce of feed ingredients used to create a 
16 per cent protein dairy feed.  The feed ingr edient prices used to calculate the NADFR are 
posted monthly by the National Agri cultural Statistics Service (NASS).
7 
 
If the triggering feed ration amount is ex ceeded, the benchmark US$16.94 figure for the 
MILC payment calculation will be increased by the percentage amount, which is 45 per cent 
(or 34 per cent for certain periods as indicated above) of the percentage amount by which the 
feed ration cost exceeded its own benc hmark for the period 1 October 2008 through 
31 August 2012.  
FSA issues payments up to the maximum eligible  pounds of milk produced and marketed by 
each operation per fiscal year.  The annual ma ximum eligible pound limit per dairy operation 
per fiscal year is as follows:  (i) 1 Oc tober 2007-30 September 2008 – 2,400,000 lbs;  
(ii) 1 October 2008-31 August 2012 – 2,985,000 lbs.
8  (Except that for fiscal year 2012, the 
fiscal year cap to qualify September 2012 produc tion only will be reduced to 2.4 million 
pounds). 
 
(c) Non-product-specific support  
61. Question by Argentina:  Could the United States explain why it considers the outlays set 
out in Supporting Table DS:9 as non-product-sp ecific, when they clearly do not benefit all 
agricultural products (e.g. crop and revenue insurance, CCPs, etc.)?   
62. Questions by Brazil:  Brazil notes that, despite record high world prices for agricultural 
commodities in 2008, cotton continues to benefi t from high levels of product-specific AMS 
subsidies (US$1.1 billion).  On top of this amount, the United States has also used CCPs 
specifically for cotton.  The Appellate Body ru led in United States – Subsidies on Upland Cotton 
that a proportion of CCPs constitute support  granted to a specific commodity:  cotton.  
However, the United States has consistently cl assified all CCPs as non-product-specific AMS.9  
Could the United States explain why it has cla ssified all CCP payments as non-product-specific 
AMS and how this classification is consistent with Article 1 of the Agreement on Agriculture 
which specifies that non- product-specific support is "support provided in favour of agricultural 
producers in general", particularly in light of the fact that there are distinct target prices for the 
different programme commodities?  
63. Question by India:  The CCPs are based on  historical production and the difference 
between a target price and the current prices.  These payments are product-specific e.g. rice, cotton, etc.  However, in the domestic support  notification, CCP payments are treated as non-
                                                     
 
7 Available at the following website:  http://u sda.mannlib.cornell.edu/usda/current/AgriPric/. 
8 Additional information can be found at: 
http://www.fsa.usda.gov/FSA/newsReleases?area= newsroom&subject=landing&topic=pfs&newstype=
prfactsheet&type=detail&item=pf_20081219_insup_en_milc2008.html . 
9 Please refer to paragraph 15 of G/AG/R/50 for the explanation provided by the United States to the 
European Union.  G/AG/W/80 
 Page 23 
 
 
  product-specific payments rather than as produc t-specific payments.  Can the United States 
explain this?  
The crop insurance provisions are generic a nd broadly available to a wide range of 
commodities.  The premium subsidies are not product-specific but apply equally to all products insured under a particular programme.  Pr emium subsidies vary by type of coverage, 
not by product. 
 CCPs are reported as non-product-specific because payments are based on fixed historical area and yields (i.e. production), not current production.  Recipients are not required to 
produce any product to receive payments.  Recipients can include producers of fruits and 
vegetables (whether because of historical pr oduction, double-cropping, or  the availability of 
non-base-acres).  Because any crop can be grown on the base acres, payments cannot be ascribed to a specific product. 
64. Question by India:  The Farm Security and Rural Investment Act of 2002 introduced 
CCPs to the array of income support programm es for agriculture commodities in the United 
States.  CCPs are available for specified crops when  market prices are below levels set out in the 
legislation.  These payments are trade-distorting as they have an impact on the decision-making 
of the farming community to cultivate a partic ular crop.  Is there any plan for box-shifting 
(from one box to another) of CCPs under the Doha Development Round?  
The United States does not agree that the payments  have an impact on current plantings of a 
particular crop, because the payments are not based on current production.  Payments are 
based on historical acreage and yields.  Therefore, the producer cannot affect the size of 
payment by current planting.  It is prematur e to speculate how programmes would be notified 
until a final agreement under the DDA is conclude d.  Notwithstanding, under the current draft 
Doha text, it is expected that the CCP will qualify as a Blue Box programme, and if so, would 
likely be classified as such. 
65. Question by Argentina:  Could the United States provide information about the 
products eligible for subsidies under Supporting Ta ble DS:9 and the production value of each of 
them in the year notified?  
By their nature, the programmes notified in Supporting Table DS:9 are not product-specific 
and do not provide commodity-specific benefits. 
66. Question by Brazil:  A conservative estimate  of CCP budgetary outlays for cotton would 
be in the order of at least US$1.0 billion out of its total notified value of US$1.2 billion.  Adding the product-specific AMS, the subsidized suppo rt for cotton would be around US$2.1 billion.  
Could the United States confirm whether the est imate for CCP budgetary outlay for producers 
holding cotton contracts is correct?  If not, wh at was the amount destined to producers holding 
cotton contracts?  
The United States cannot confirm Brazil's estimate.   The question is not relevant to how CCPs 
are notified, because participants with base acr es for upland cotton can plant any crop, or no 
crop, on base acres for upland cotton. G/AG/W/80 
Page 24  
 
  67. Questions by Canada:  Canada understa nds that the number of programmes in 
Supporting Table DS:9 providing subsidized insura nce has been increasing.  Could the United 
States elaborate on whether "Crop and revenue  insurance" includes the Livestock Gross 
Margin and the Livestock Risk Protection program mes?  If so, what are the applicable "crop 
years" in this Supporting Table?  
Livestock Gross Margin Insurance and Livestock Risk Protection are not included as part of 
the "Crop and revenue insurance" in Supporti ng Table DS:9.  The Livestock Gross Margin 
program does not provide any premium subsidy.  Both programmes are small pilot programmes with statutorily limited funding. 
(d) Average Crop Revenue Election (ACRE) Program
 
68. Questions by Brazil:  An innovation in the 2008 Farm Bill was the introduction of the 
ACRE Program.  Could the United States indicate the reasons why there has been no notification under that programme in G/AG/N/USA/77?  Could the United States share its initial assessment of the ACRE Program, the partic ipation rate of farmers and the commodities 
most affected by it?  
The United States did not notify the ACRE Pr ogram in its 2008 notification because the 
programme did not begin until 2009.  Producers we re first eligible to sign up for the ACRE 
Program for the 2009 crop year, and approximate ly 7.7 per cent of farms (or 128,620 farms) 
previously enrolled in the Direct and Counte r-Cyclical  Program (DCP) enrolled in ACRE, 
representing 12.8 per cent of total base acres (o r 32,528,628 acres).  These percentages are the 
percentages of farms enrolled in the DCP, a nd of base acres enrolled in the DCP, and not 
percentages of all US farms or farmers. 
D. N
OTIFICATIONS IN THE CONTEXT OF NEW OR MODIFIED DOMESTIC SUPPORT MEASURES 
(TABLE  DS:2) 
1. Ecuador   G/AG/N/ECU/25 
69. Question by the United States:  Please provide details as to how the "Socio Siembra" 
programme meets the criteria for "New or Modi fied Domestic Support Measures exempt from 
Reduction"?  
The support measure for the purchase of agrochemical inputs is a support measure aimed at 
promoting agricultural and rural development, granted through the "Socio Siembra" development programme which is not subject to  reduction, since it is a generally-available 
agricultural input programme for low-income  or resource-poor producers in a developing 
country, in accordance with Article 6.2 of the Agreement on Agriculture. 
2. Honduras   G/AG/N/HND/31 
70. Question by the European Union:  The Euro pean Union notes that Honduras notifies 
four new measures as investment subsidies ge nerally available to agriculture compliant with 
Article 6.2 of the Agreement on Agriculture.  However, the four measures seem to be rather 
selectively targeted.  The measures are inte nded for an irrigation project in specific 
geographical regions, food security of a specifi ed number of families, the establishment of a 
palm oil refinery, and for supporting cattle br eeding.  Could Honduras elaborate on the 
reasoning for including these measures und er Special and Differential treatment?   G/AG/W/80 
 Page 25 
 
 
  These four measures come under the poverty reduc tion strategy plan, the main aim of which 
is to achieve a significant and sustainable reduction in poverty through accelerated and sustained economic growth, with the fair dist ribution of its results, through the improvement 
of access to the factors of production for poor peasant farmers, including the development of human capital and the provision of social security networks.
10 
 
 (i) Quimistán Valley Irrigation Project :  The purpose of the project is to:  (i) increase 
agricultural production in areas cultivated duri ng the three agricultural cycles, optimize 
water composition and enhance the level of t echnology; (ii) improve job opportunities in 
rural areas in the short term, with activities in  the area of construction on the one hand 
and in agricultural employment on the othe r, generated through development of the 
project;  (iii) it is hoped to improve the qua lity of life of small and medium producers 
living in extreme poverty in the valley, through the development of a form of agriculture using adequate irrigation systems as a basi c instrument for enhancing production levels 
and agricultural diversification;  (iv) th e project is also intended to support the 
Government of Honduras in its efforts to ach ieve its long-term objectives, which include 
achieving sustainable economic growth;  creating new job opportunities;  and increasing production for domestic consumption, since a total of 1,800 jobs will be created when 
the project is fully operational, plus 500 jobs for workers in the construction phase. 
 (ii) Irrigation Enhancement Project fo r the Comayagua Valley Micro-Watershed 
(PROMORCO) :  The project has the broad objectives of improving the living conditions 
of its beneficiaries and guaranteeing their food security, and the specific objective of the 
promotion and comprehensive development of agriculture through the construction 
and/or rehabilitation of irrigation infrastruct ure, as well as the design and installation of 
irrigation systems at farm level, and financ ial facilities for fixed investment in land and 
working capital.  The producer-users of the irrigation service are currently developing a 
form of local commercial agriculture which is compatible with the overall objectives of 
the project, and acceptable results are being achieved in terms of increased income for peasant farmers living in extreme poverty. 
 (iii) Establishment of a Micro-Refinery for Palm Oil
:  This measure benefits 135 low-income 
producers and their families (grouped together in the APROVA Cooperative).  The production of African palm generates approximate ly 1,752 jobs, with indirect benefits to 
12,264 persons, including family members of direct employees of the African palm 
plantations.  Peasant farmers have join ed forces in the APROVA Cooperative.  
APROVA is located in the village of Paguales,  Sava Municipality, Department of Colón, 
and has 135 partners.  Its objective is the pr ocessing and marketing of African palm fruit.  
The purpose of having a refinery is to take  advantage of periods of low prices for the 
fruit, to purchase crude oil and to add value to the crop by converting it into refined oil, 
generating employment and improving the quality  of life of the direct and indirect 
beneficiaries.  The refinery is located in the Department of Colón and one of the main 
crops in that area is African palm.  The African palm producers furthest from the refinery are at a distance of some 50 kilometres, while those closest are some 22 kilometres away. 
 (iv) Supervised Livestock Module
:  The project targets small livestock breeders with 
holdings of one to nine head of cattle, and it has a twofold purpose:  livestock breeding for the production of milk and sale of calves.  Around 51.7 per cent of the holdings have 
                                                     
 
10 Digital documents of Honduras: http://cidbimena.desastres.hn/ri-hn2/pdf/doch0031/doch0031.htm , 
available on the United Nations Development Programme portal for Honduras: 
http://www.undp.un.hn/reduccion_de_la_pobreza.htm . G/AG/W/80 
Page 26  
 
  herds of one to nine head of cattle, while 36. 2 per cent have herds of ten to 49 head.  The 
small producers' fund for livestock replenis hment was initiated under a financing scheme 
with an in-kind credit component.  In-kind credit was used to purchase 1,000 heifers which will be distributed among the small livest ock breeders.  It was decided to grant 
loans in-kind to the small producers under th is project since they have no access to or 
eligibility for credit and do not fulfil the requirements laid down by the commercial 
banks.  Under the project, small producers have access to financing for five heifers, as well as to appropriate technology and techni cal assistance for their management:  the 
loans are paid off with heifers, that is  in-kind and not in-cash.  The Technological 
Exchange Centres (NIT) are each made up of five families with a very low 
socio-economic profile who are located in livestock breeding areas.  The small 
producers' fund for livestock replenishment uses a group methodology based on the NIT system which develops a process of compre hensive technical assistance adapted to the 
characteristics and situation of the small livest ock breeders targeted by the project.  The 
beneficiaries are small livestock breeders tr aditionally engaged in milk production who 
possess land suited to stockbreeding. 
It should be pointed out that, in the context of these four measures developed in consultation 
with the European Union, the Government of  Honduras makes no direct payments to small 
producers located in highly disadvantaged regions of the national territory.  
3. Namibia   G/AG/N/NAM/19 
71. Questions by the European Union:  Namibi a establishes a national grain reserve.  How 
does Namibia procure the grain?  Are the purch ases made at current market prices?  Is the 
financing of this program me from public funding?  
The Namibian Government established the stra tegic food reserves to enhance national food 
security.  The grains for the reserves are bought  solely from local producers at Namibian 
market prices applicable at the time of purch ase.  The cost of the programme in terms of 
construction, procurement and managing the grai n reserves is financed entirely from public 
funding.  
72. Questions by the United States:  Namibia notifies the measure "Livestock Marketing 
Scheme" as an investment subsidy generally av ailable to agriculture.  The scheme supports 
transportation and quarantine costs, which m ay meet exemptions under different parts of the 
Agreement on Agriculture.  Could Namibia explai n how this measure qualifies as an investment 
subsidy exempt from reduction under Article 6.2?  
The Namibian Veterinary Cordon Fence (VCF) was erected to contro l the movement of 
animals between the North (which is a foot-and-mouth Disease (FMD) prone area) and the 
South (which is an FMD-free zone) in order to  meet the requirements of export markets.  
However, the animal health status north of the VCF places additional costs to the marketing 
of livestock from the northern communal areas in re lation to those marketed in other parts of 
the country.  These costs are largely related to additional transport and quarantine costs since 
all animals north of the VCF have to undergo a 21-day quarantine period before slaughter.   
The Government thus introduced the Livestoc k Marketing Scheme as a means of addressing 
the constraints faced by farmers in the rural areas.  As indicated in the notification, the 
Livestock Marketing Scheme has a two-pronge d objective of promoting the marketing of 
livestock in order to reduce pressure on the land particularly in cases of drought as well as 
promoting the marketing of livestock through th e formal marketing systems.  As the United 
States rightly pointed out, the scheme meets exemptions under different parts of the  G/AG/W/80 
 Page 27 
 
 
  Agreement of Agriculture.  The scheme could also be considered to qualify under the 
Article 6.2 exemption of the Agreement on Agri culture because this is assistance provided by 
the Government to encourage development of the livestock sector in rural areas.  
E. NOTIFICATIONS IN THE CONTEXT OF EXPORT SUBSIDY COMMITMENTS (TABLES  ES:1,  ES:2  & 
ES:3) 
1. Korea   G/AG/N/KOR/42 
73. Questions by the United States:  
(a) Can Korea explain how "cost reduction  measures" applied for fruit and 
vegetables? 
According to the provisions of Article 9.4 of the Agreement on Agriculture, developing 
countries can provide subsidies to reduce marketi ng costs.  To reduce the distribution costs of 
fruit and vegetables, the Korean Government provi des exporters with distribution subsidies of 
up to 15 per cent of the distribution costs.  Distribution costs for exports consist of the costs for collecting and shipping products, packag ing costs, and domestic and overseas shipping 
costs. 
 
(b) The United States notes that Korea noti fied additional products (grain and 
processed food for 2007 and 2008 and trad itional liquor in 2008) than found in 
previous export subsidy notifications.  Can Korea provide additional detail on the subsidies as well as identify the specific products including the HS tariff code? 
Processed steamed rice and rice are included in the category of Grain and Processed Food.  In 
2008, subsidies amounted to 66 million Ko rean won for processed steamed rice and 
15 million Korean won for rice.  These subsidies are rather insignificant as they represent amounts of less than 0.2 per cent of the total export subsidies.  They were eliminated on 
1 July 2010.  In 2008, the subsidy for trad itional liquor amounted to 127 million Korean won. 
 2. Switzerland   G/AG/N/CHE/50 
74. Question by the European Union:  The Euro pean Union notes that Switzerland did not 
notify support for some primary goods that nevert heless are included in the listed incorporated 
products (egg, flour, oils and sugar).  The European Union recalls its position that, in accordance with Article 11, no subsidies are p ayable for these incorporated products in the 
absence of payments for corresponding primary goods.  Has Switzerland considered following 
the EU's reading of Article 11?  
Switzerland confirms that it grants no export subsidies for primary products included in the 
list of processed products in Part IV, Secti on II of its Schedule of  Concessions under the 
heading "Processed Products". 
 
Switzerland recalls its position that, pursuant  to Article 11 of the WTO Agreement on 
Agriculture, WTO Members are not prohibited fro m granting subsidies, in accordance with 
Part IV of Section II of their Schedules of  Concessions, on processed products in the event 
that the primary products contained in such pr ocessed products are not subsidized in the same 
manner. 
 G/AG/W/80 
Page 28  
 
  Article 11 cannot be interpreted as preventing a Member from eliminating its export subsidies 
on primary products - as notified by Switzerland - without eliminating export subsidies on the 
corresponding processed products.  Otherwise, a WTO Member would be obliged to maintain 
or reintroduce export subsidies on primary pro ducts solely in order to be assured of the 
possibility of granting such subsidies for processed products.  Such a prohibition would run 
counter to the spirit of the reduction commitment undertaken in the Uruguay Round. 
 
3. United States   G/AG/N/USA/78 
75. Questions by the European Union:  
(a) The United States indicates in footnote 2 to Table ES:1 (for both 2007 and 2008) 
that WTO dispute settlement proceedings determined that a certain export 
credit guarantee programme (GSM-102) conferred an export subsidy.  In the footnote the reader is referred to an int ernet web page for information about the 
use of the export credit guarantee programme in question during the relevant time periods.  Could the United Stat es consider a more transparent account of 
the GSM-102 activity; including a consideration on how the values represented 
at the web site should count against the export subsidy commitments of the United States. 
The United States is providing a very transparent account in reporting historical and current 
summary data on destination, commodity and do llar value registered under its Export Credit 
Guarantee Program.  Those data are readily ava ilable for viewing on the US web site by the 
public and are updated monthly.  The WTO dispute settlement proceedings resulted in a 
determination that the Commodity Credit Corporation export credit guarantee programme (GSM-102) conferred an export subsidy with r espect to specific agricultural goods during the 
US fiscal year 2006. 
(b) When will the United States provide Table ES:3 tables for the period from 1997? 
According to G/AG/2, a Table ES:3 notification showing the total volume of food aid should 
be provided unless this information is required to be provided in the Table ES:1.  The United 
States has reported in Table ES:1 information required for Table ES:3. 
F. N
OTIFICATIONS IN THE CONTEXT OF EXPORT PROHIBITIONS AND RESTRICTIONS 
(TABLE  ER:1) 
1. Ukraine   G/AG/N/UKR/5 
76. Questions by the European Union:  The Euro pean Union notes the notified recourse to 
temporary export restrictions on cereals (wheat and blend of wheat and rye (meslin), spelt, 
corn, barley, rye and buckwheat) in accord ance with Article XI:2(a) of GATT 1994 and 
Article 12.1 of the Agreement on Agriculture.  The European Union recognizes the right of any 
WTO Member to take such measures, provid ed that that Member can convincingly 
demonstrate that these restrictions are necessary to prevent or relieve critical shortages of 
foodstuffs.  However, at the same time the Eu ropean Union is aware that Ukraine and Russia 
have recently signed a memorandum on exports of  2 million tonnes of Ukrainian coarse grain to 
Russia.  Against this background, the European Union avails itself of the right as a WTO Member to request consultations with Ukraine on this issue, noting the preparedness of Ukraine 
to do so, mentioned under point 3 of G/AG/N/UKR /5.  Anticipating such consultations, could 
Ukraine forward all relevant information regardi ng the existence and causes of the critical 
shortage of agricultural products invoked  in Ukraine's notification to the WTO?   G/AG/W/80 
 Page 29 
 
 
  77. Questions by Japan:  Would Ukraine explai n how the volumes of these quotas have been 
determined?  Are there any objective criteria (e.g. with regard to the production, the volume of exports, the stock level and/or the domestic mark et price) to determine "a significant imbalance 
in the domestic market", to which "critical shortages of foodstuffs" prescribed in Article XI:2(a) of GATT 1994 can be applied?  
78. Questions by the United States:  Ukraine stat es that export prohibitions and restrictions 
have been introduced to prevent a shortage in the domestic market result ing from a poor 2010 
harvest and to eliminate an imbalance in the domestic grain market.  Can Ukraine provide 
more detailed information about the contributing fa ctors to the domestic shortage and resulting 
imbalance?  How many tonnes of  wheat, corn, barley, rye a nd buckwheat were produced in 
Ukraine in 2010 compared to 2008 and 2009, and how many tonnes of these grains are expected 
to be consumed domestically in 2010 compa red to 2008 and 2009?  According to USDA 
statistics, it appears that Ukraine still produced significantly more grain this year than it will 
consume.  Is Ukraine concerned that the reduction s in prices to its domestic producers due to 
these restrictions will lead to lower produc tion and further shortages in future years?  
Adverse weather conditions during the maturati on and harvesting of crops, especially summer 
droughts, had a negative influence on the ve getation and formation of a poor agricultural 
harvest, and caused the downward correction in the production estimation.  
Thus, the production of grain is expected at  a level of 38.6 million tonnes against the 
45-46 million tonnes predicted at the beginning of the summer (see Annex 2). 
 
Shortages in the production of grain in this  marketing season caused the increase firstly in 
world market prices and subsequently in domestic prices.  Offer prices for grain have risen substantially from the beginning of the 2010/2011 ma rketing year (from October to June):  for 
wheat for human consumption – by 25 per cent, feed wheat, corn – by 35 per cent, for barley 
– by 230 per cent.   According to balance sheet  calculations, national grains exports in the 
2010/2011 marketing year constitute about 12,8 23 thousand tonnes, of which 5,849 thousand 
tonnes are for wheat (including 4,482 thousand tonnes of wheat for human consumption), 40 
thousand tonnes of rye, 2,500 thousand tonnes of barley, and 4,233 thousand tonnes of corn.  That means that for four months of the current marketing year, seasonal export capacity has been exhausted by 98 per cent for rye, 88 per cent for barley, 35 per cent for wheat and 11 per cent for corn.  In addition, the domestic consump tion deficit for buckwheat is estimated in this 
marketing year at about 50-60 thousand tonnes.  It should be noted that at the beginning of 
October, i.e. at the time of adoption of the R esolution of the Cabinet of Ministers of Ukraine 
concerning the export restrictions on grain, there was only 79 per cent of the necessary grain volume at the state food stock.   
Thus the necessity to adopt the relevant export quotas was based on:  (i) reduction in the grain 
harvest in the 2010/2011 marketing year by 25 per cent compared to the previous season;  (ii) rapid growth in domestic market prices fo r grain at the beginning of the marketing season, 
i.e. during the period of greatest supply;  (iii) l ack of grain at state and regional resources;  
(iv) limited capacity to export rye and barley;  and (v) deficit of buckwheat in the domestic 
market. 
 
79. Questions by the European Union:  
(a) Could Ukraine elaborate on the due consid eration it has given to the effects of 
the export restriction on importing Members' food security? 
The Resolution was adopted primarily in order to  eliminate imbalances in Ukraine's domestic 
grain market, which is essential for food security and the stability of the grain market, through G/AG/W/80 
Page 30  
 
  the introduction of the  temporary export quotas and licences of  certain agricultural products 
until 31 December 2010.  Along with the export quotas for wheat, there remains the possibility to export flour, which would fac ilitate more effective capacity utilization by 
national flour plants and increase exports of products with higher level of processing.  It 
should therefore be noted that such temporary measures  will not affect the food security of 
importing Members. 
 
(b) Could Ukraine indicate why it was not prac ticable to give notice in writing of the 
export restrictions to the Committee on Ag riculture in advance of the institution 
of such restrictions? 
Ukraine knows the requirements listed in the WT O Agreements and as is well known is doing 
its level best to notify possible changes in due  time according to these rules.  The Ukrainian 
officials took this case, as well as others c oncerning the trade regime, very seriously, 
requiring great efforts, and time-consuming di scussions in the ministries and in the 
Government.  Since this issue has been discu ssed several times in the Government, it 
appeared possible to notify to the WTO Secretariat on 18 October. 
 
80. Questions by Japan:  
(a) Is there any possibility that the duration of application of the measure will be 
extended beyond 31 December 2010?  If so, by when will it be decided? 
The Ukrainian Government has no intention to extend the application of the measure beyond 
31 December 2010. 
(b) How is the export quota allocated to ex porters or importing countries?  Is it 
proportional to the historical trade volume?  Is there any other rule for fair allocation? 
Pursuant to the provisions of Article 16 of  the Law of Ukraine "About foreign economic 
activity", decisions on quota allocation and li cence issuance are taken by the Ministry of 
Economy of Ukraine.  The process of issuing licences and quota allocation for grain export is 
determined by the "Procedure for issuing licences on certain agricultural products and 
distribution of quotas" (hereinafter referred to  as "the Procedure") approved by the Resolution 
"On approval of quotas for certain agricultural products, the exports of which are to be 
licensed until 31 December 2010, and adoption of the procedure for issuing licences on 
certain agricultural products and distribution of  quotas" and is accomplished according to the 
recommendations of a specially created commissi on on consideration of the applications for 
issuing licences on certain agricultural products and distribution of quotas (hereinafter "the 
Commission") founded by the Ministry of Economy.  According to paragraph 6 of the Procedure, the decision of the Commission to distribute quotas is taken subject to the 
conclusion of the Ukrainian Ministry of Agricu lture regarding the available volumes of grain 
in economic entities and their capacity to export them.  The total quota volume is distributed by the Commission among economic entities, whic h submitted their applications, proportional 
to the volumes, indicated in the conclusions of the Ministry of Agriculture of Ukraine. 
 
(c) According to the document issued by the Ministry of Economy on 1 November
11, 
it is under consideration that exports to countries which have a free trade 
agreement with Ukraine be exempt from  the export quota.  What is the 
                                                      
11 Please refer to http://me.kmu.gov.ua/control/uk/publish/article?art_id=152733&cat_id=32862 .  G/AG/W/80 
 Page 31 
 
 
  conclusion of the consideration?  If this  exemption is enforced, will it not have 
adverse effects on Ukraine's critical food shortage? 
Currently, the above-mentioned temporary export  restriction applies to all countries.  
However, the possibility that exports for count ries having free trade agreements with Ukraine 
should be exempt from the export quota has been  under consideration of the Government, 
pursuant to the free trade agreements between  countries which provide that Contracting 
Parties should refrain from application of any quantitative restrictions or any measure on 
export and/or import equivalent to them in th e mutual trade, under the agreement.  Such 
agreements are ratified and took effect according to the national legislation. 
 
(d) Are flour and other processed products of grain subject to export quotas?  If 
not, what is the reason for not covering these products? 
According to the Resolution "On approval of quotas for certain agricultural products, the 
exports of which are to be licensed until 31 December 2010, and adoption of the procedure 
for issuing licences on certain agricultural prod ucts and distribution of quotas", flour and 
other processed products of grain are not subject to export quotas. 
81. Questions by the United States:  
(a) On page 2 of the notification, the to tal quantities of export quota licences 
available are listed for wheat, corn, ba rley, rye and buckwheat.  Can Ukraine 
provide more information on the process fo r obtaining an export licence?  What 
is required to obtain a licence?  Who may apply for a licence?  We have heard 
reports from traders that there have been problems in obtaining the necessary 
certificates to apply for a licence. 
See reply in paragraph 80(b). 
 Application forms, the list of necessary documen ts for obtaining a licence, the executive order 
of consideration and introduction of licences a nd grounds for refusal in obtaining the licence, 
are established by the Regulation, approved by the Order of the Ministry of Economy of Ukraine of 9 September 2009 N
o 991 "On Commodities Export Licensing Procedure".  It 
determines the single procedure for the arrange ment and issuing of licences on products for 
export.  Thus to obtain a licence, a foreign ec onomic entity should submit:  (i) an application 
form for issuing a licence, established by the Order of the Ministry of Economy;  (ii) a letter 
of request for licence arrangement along with th e guarantee for the state tax payment for its 
issuance;  (iii) a copy of the certificate of registration, certified according to the procedure under the laws in action;  (iv) a copy of the foreign trade agreement (contract), all annexes 
and specifications thereto, certified according to the procedure under the laws in action;  (v) an expert conclusion (original) with the i ndication of the country of origin and the product 
HS code, issued by the Chamber of Commerce of Ukraine or by a regional chamber of 
commerce;  and (vi) other documents require d for submission under the legislation of 
Ukraine.  
(b) Can Ukraine confirm that this temporary export ban applies to exports to all 
countries?  Are any countries exempt from the export prohibition and 
restrictions? 
See reply in paragraph 80(c). G/AG/W/80 
Page 32  
 
  (c) Do the export quotas apply to grain alrea dy purchased and loaded onto ships or 
in transit? 
Export quotas do not apply to grain that is already purchased and loaded onto ships or in 
transit.  
III. OVERDUE NOTIFICATIONS:  QUESTIONS BY AUSTRALIA 
(a) China:  Domestic support
 
82. Australia welcomes China's recently submi tted domestic support notifications for 
calendar years 2002-2004.  Australia notes that do mestic support notifications for the period 
2005-2009 are still outstanding.  Could China explai n the cause for the delay and indicate when 
it intends to submit these outstanding notifica tions?  We would be grateful if China could 
observe "best practice" and provide its response in writing.  
China has notified its 2002-2004 domestic support to the WTO, and now is preparing its 
notification for the year 2005 onwards.  Fo r reasons of statistical method and data 
consistency, China needs to do more data co llection and conversion work.  China will notify 
the WTO immediately after completion of preparatory work. 
(b) Egypt:  Domestic support and export subsidies  
83. Australia notes Egypt has outstanding domestic support and export subsidy 
notifications for the period 1999-2009 (Egypt's la st notification was submitted in May 1999).  
Could Egypt explain the cause for the long delay and indicate when it intends to submit these 
outstanding notifications?  We would be grat eful if Egypt could observe "best practice" and 
provide its response in writing.  
A process has been streamlined to further comp ile the data required for the notifications and 
that this process is ongoing and the Committee on Agriculture will be appropriately informed 
of further developments. 
(c) India:  Tariff quota administration, tariff quot a fill, domestic suppor t and export subsidies  
84. Australia notes that India has not submit ted a notification to the Committee on 
Agriculture since June 2002.  Australia notes also that since the 52nd Regular meeting of the 
Committee on Agriculture, Australia has consis tently asked India when Members could expect 
India to comply with its notification obligations.  
85. For example, India has still not made a Table MA:1 notification to explain the 
administration of tariff quotas that have been incorporated in its Schedule since 2003 (covering skim milk powder, corn, crude sunflower and saffl ower oil, and refined rape, colza, canola and 
mustard oil).  This issue was raised in 54
th Regular meeting of the Committee on Agriculture 
(refer to G/AG/R/54, paragraphs 59-61).  
86. Could India provide Members with an update  on progress of gathering information to 
prepare its WTO agriculture notifications?  Coul d India provide an indicative time when it 
intends to submit these outstanding notifications?   We would be grateful if India could observe 
"best practice" and provide its response in writing.  
The process of compilation and verification of information for the notifications under the 
three pillars is near completion, as indicated at the fifty-ninth meeting of the Committee.   G/AG/W/80 
 Page 33 
 
 
  India expects to file most of the notifications shortly.  India assures Australia that it is aware 
of its obligations and is making all effort s to bring its notifications up-to-date. 
(d) Korea:  Domestic support and special safeguard  
87. Australia notes that Korea has outstanding  domestic support and special safeguard 
notifications for calendar years 2005-2009.  Could Korea indicate when it intends to submit 
these outstanding notifications?  We would be gr ateful if Korea could observe "best practice" 
and provide its response in writing.  
Korea is exerting its utmost efforts to fulfil the duty of submitting WTO notifications in a 
timely manner.  As part of its efforts, Korea recently circulated its Table MA:2 from 2008 to 
2009 and Table ES:1 from 2005 to 2008.12  Korea is making efforts to finalize the other 
notifications, including Tables DS:1 and MA:3-MA: 5, and will do its best to circulate the 
related data in the near future. 
 (e) Turkey:  Domestic suppor t and export subsidies
 
88. Australia notes that Turkey has outstandi ng domestic support and export subsidy 
notifications (Turkey's last notification was s ubmitted in May 2002).  Could Turkey explain the 
cause for the long delay and indicate when it in tends to submit its outstanding notifications?  
We would be grateful if Turkey could observ e "best practice" and provide its response in 
writing.  
Turkey is working on its delayed notifications  for 2003-2009.  They will be presented as soon 
as the compilation and verification of all require d data are completed.  Turkey will comply 
with all of its commitments under the Agreement on Agriculture. 
 
                                                      
12 G/AG/N/KOR/41 and G/AG/N/KOR/42, respectively. G/AG/W/80 
Page 34  
 
  Annex 1 
United States – G/AG/N/USA/77
 
External reference prices for international cheddar cheese  
 
 
1986 1987 1988 Price US$ per tonne 
Spring    
   High 1,200 1,200 1,500 
   Low 1,100   900 1,250 
Fall    
  High 1,100 1,300 2,050   Low  1,000 1,000 1,800 
 
Simple Average 1,100 1,100 1,650 
     Source :  Dairy: World Markets and Trade , Foreign Agricultural Service, US Department of Agriculture.  
 
  G/AG/W/80 
 Page 35 
 
 
  Annex 2 
 
Ukraine – G/AG/N/UKR/5  
Production and domestic demand of grain  
  
 Production 
('000 tonnes) Domestic demand 
('000 tonnes) 
 2010/2011 
marketing 
year 
(forecast) 2009/2010 
marketing 
year 2008/2009 
marketing 
year 2010/2011 
marketing 
year 
(forecast) 2010/2009  
marketing 
year 2008/2009 
marketing 
year 
All grain 38,614 46,028 53,290 26,290 26,468 27,499 
Including:       
Wheat 17,190 20,886 25,885 11,661 11,950 11,509 Rye 492 954 1,051 705 891 928 
Barley 8,703 11,833 12,612 6,079 6,020 6,859 
Corn 10,611 10,486 11,447 6,203 5,682 6,353 Buckwheat 162 189 241 216 235 207 
 
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