RESTRICTED  WORLD TRADE  
ORGANIZATION  G/AG/R/54 
25 May 2009 
 (09-2510) 
Committee on Agriculture  
  
 
SUMMARY REPORT OF THE MEETING HELD ON 12 MARCH 2009 
 
Note by the Secretariat
1 
  
1. The Committee on Agriculture held its fifty-f ourth regular meeting on 12 March 2009 under 
the Chairmanship of Ms. Valeria Csukasi of Uruguay. 
2. The agenda of the meeting as set out in WTO/AIR/3326 of 2 March 2009 was adopted. 
I. THE REVIEW PROCESS 
A. M
ATTERS RELEVANT TO THE IMPLEMENTATION OF CO MMITMENTS UNDER THE REFORM 
PROGRAMME :  ARTICLE 18.6 
(a) Argentina:  EC-27's total value of pro duction of basic agricultural products (1995-2000)  
3. Referring to the information supplied by the European Communities (EC) at the 53rd Session 
of the Committee on Agriculture2, Argentina requested data on total value of agricultural production 
(VOP) for the EC-27 for each year of the period 19 95-2000.  Argentina pointed out that document 
TN/AG/S/21/Rev.1 did not include the data on tota l VOP for a number of new EC member States.  
The EC provided VOP data3 based on an extraction from the Eurostat Economic Accounts for 
Agriculture made on 6 March 2009.  The EC also noted that different figures might result depending on  the methodology used or data sources.  
(b) Argentina:  EC Blue Box support by individual product
 
4. Following up on the replies supplied by th e EC to the questions raised at the 53rd Session of 
the Committee on Agriculture regarding product-specific  Blue Box subsidies4, Argentina maintained 
that these were not satisfactory.  In Argentina's view, the agreed notification format for Blue Box 
support had no bearing on the scope of Article 18.6 a nd did not relieve the EC of its obligations to 
supply product-specific Blue Box support levels at the request of any Member.  That information was 
also relevant from the Doha Round perspective.  Argentina therefore wondered how the EC intended 
to meet the requirements established in the Draft Modalities5 when it was unable to provide this 
information to the Committee on Agriculture.  
                                                      
1 This document has been prepared under the Secret ariat's own responsibility and is without prejudice 
to the positions of Members or to their rights or obligations under the WTO. 
2 G/AG/R/53, Annex 1 refers. 
 3  See Annex 1. 
 4 G/AG/R/53, paragraphs 8-11, refer. 
 5 TN/AG/W/4/Rev.4, paragraph 40 refers. G/AG/R/54 
Page 2  
 
  5. The EC responded that data on product-specifi c Blue Box support had not been provided 
during the implementation period of the Urugua y Round Agreement on Agriculture (URAA).  
Therefore, other parameters than payments, su ch as area-based or production-based parameters, 
would have to be used to establish product-specifi c caps under the Doha Round.  The EC considered 
that no product-specific Blue Box commitments had been established under the URAA.  Hence, there 
was no requirement to discuss the matter under Article  18.6 which dealt with matters relevant to the 
implementation of commitments under the URAA.   
6. Argentina underlined that the reason for rais ing this matter again was to obtain a specific 
response from the EC.  By contrast to the EC's inte rpretation, Argentina considered that the scope of 
Article 18.6 of the URAA was broader.  Canada, Australia, Brazil and New Zealand concurred with 
Argentina.  They stated that the questions raised by Argentina shou ld be entitled to receive a response 
in the Committee on Agriculture.  While taking note  of these comments, and reiterating that such a 
matter had a bearing on the negotiations, the EC str essed that the scope of Article 18.6 could not be 
defined precisely.  The EC believed that there was no clear cut answer but only options, and, in its 
view, the different options available would rather be a matter for discussion in the DDA context.  The 
EC, however, indicated willingness to reflect on the possibility to supply alternative datasets based on 
such various options, without any commitment.   
7. Argentina thanked the EC for its additional comments.  Argentina considered that the 
notification of Blue Box support at product-specific le vel was an obligation that  needed to be fulfilled 
in response to the future commitments. 
(c) Argentina: EC's abolition of com pulsory set-aside requirements in 2009
 
8. Referring to the EC's decision6 to abolish compulsory set-aside7 of arable land in light of 
"market developments" in the arable crops sector and the introduction of decoupled aids, Argentina 
noted that the decision would lead to farmers making  full use of land in arable or livestock conditions 
while only being subject to eco-conditionality rules.  Argentina (i) sought de tails of those "market 
developments" that had justified the elimination of  set-aside;  (ii) wondered why the introduction of 
decoupled aids coupled with market developments  would require the abolition of set-aside;  and 
(iii) asked for clarification regarding the EC's classification of payments under decoupled aids.  
9. The EC responded that the coupled payments to arable crops had been abandoned as part of 
the decisions taken as a result of the Health Chec k.  Instead, the farmers would receive decoupled 
payments irrespective of market conditions.  The ma ndatory set-aside was abolished in order to allow 
the markets to function without any distortion.  As regards the classification of payments, the EC 
clarified that the decoupled payments were di sbursed under the Single Payment Scheme (SPS) and 
had been notified8 under the Green Box. 
10. Argentina thanked the EC for its responses whic h would be analyzed further.  Argentina 
observed, however, that the three aspects identif ied in its questions had not been specifically 
addressed by the EC.  
                                                      
 6 Council Regulation (EC) No. 73/2009 of 19 January 2009, paragraph 30, refers. 
 7 Established at 10 per cent of total arable land according to Council Regulation (EC) No. 1782/2003. 
 8 See G/AG/N/EEC/58 for the EC's notifica tion of its classification of the SPS.  G/AG/R/54 
 Page 3 
 
 
  (d) Argentina, Australia and Canada:  US  Average Crop Revenue Election (ACRE) Program  
11. With reference to the salient features9 of the ACRE Program, Argentina and Australia 
enquired about its classification by the United States in future domestic support notifications, with 
Argentina seeking specific confirmation regarding the inclusion of such support in the calculation of 
the Current Total AMS.  The United States stated  that the preparation of the domestic support 
notification for 2008 had not started.  Moreover, it was premature to speculate about classification 
matters as the ACRE Program would not come into effect until the crop year 2009.  The United States undertook to notify the programme in full compliance with its WTO obligations. 
12. Referring to recently-projected ACRE payments
10, Canada believed that such figures were 
highly relevant for Members' review of the implem entation of commitments.  Canada sought to have a 
better understanding of these projections and their u nderlying assumptions, such as:  (i) the national 
average market price used to project the ACRE Program guarantee11 and the ACRE Actual State 
Revenue12 for 2010, 2011 and subsequent years;  and ( ii) the ACRE participation rate (for example, 
percentage of corn producers signing up for the programme) assumed in the projections.   
13. The United States replied that the projections were made using historical data from the 
USDA, and given their very preliminary nature , were based on many assumptions.  The price 
guarantee, as stated in the ACRE regulation, was the national average market price of a commodity 
for the two most recent crop years, i.e. crop years 2007 and 2008 for establishing the price guarantee for the crop year 2009.   
14. As for the participation rate, the United States cl arified that the projections were released in 
February 2009 and had been computed using the be st estimates and assumptions available in the fall 
of 2008.  Keeping in view that the underlying assu mptions would certainly change, the United States 
was of the opinion that the value of these projec tions for assessing actual ACRE payments in future 
was limited.  In fact, the sign-up period would only commence on 1 June 2009.  At this time, any 
speculation about the participation rate, etc. would be again mere speculation or just a "best guess".  
With the progress in the implementation of th e ACRE Program, and as the sign-up would proceed, 
increasingly more data would become available.  Additional information would also be hosted on the 
USDA website. 
15. Canada explained that it had raised these ques tions considering that the expected spending 
under ACRE would be a function of prices, yields and participation rates.  Canada had found that the 
projected spending estimates made by the USDA we re considerably lower than those by other 
analysts.  For example, FAPRI and Iowa State Univ ersity had projected ACRE spending figures in the 
range of US$2.5 billion for 2009/ 10, and US$2.3 billion for 2010/11.  The USDA estimates might 
have therefore resulted from a more favourable price assumption and an under-estimated participation rate.  
16. In Argentina's view, the ACRE was a price s upport programme, and therefore would need to 
be accounted for as such in any future notification.  Australia and the EC also expressed interest in 
following the developments in the implementation of the ACRE Program. 
                                                     
 
 9 See Annex 2 for a detailed version of the questions posed by Argentina and Australia. 
 10 See USDA Agricultural Projections to 2018 , released in February 2009.  Projected payments amount 
to US$600 million in 2010; US$400 million in 2011, and US$200 million in subsequent years.  
11 90 per cent of [ACRE benchmark state yield multiplied by  ACRE guarantee price]. 
 12 ACRE actual state yield per planted acre multiplied by  ACRE national average market price. G/AG/R/54 
Page 4  
 
  (e) Australia:  Price support for dairy and sugar under the 2008 US Farm Bill 
 
17. Australia pointed out that until the 2008 United States Farm Bill, market price support 
calculations for dairy had been based on total milk production, whereas under the 2008 Farm Bill, 
price support was provided to specific dairy produc ts, namely cheddar cheese, butter and non-fat dry 
milk.  Noting that the milk used for other purposes accounts for about two-thirds of United States total 
milk production, Australia sought details on the calculation of pr ice support for milk and dairy 
products, particularly:  (i) calculation of price s upport individually for cheddar cheese, butter and non-
fat dry milk;  (ii) calculation of price support pr ovided to drinking milk a nd other dairy products;  
(iii) role of administered support prices under the fede ral and state milk marketing orders for drinking 
milk and dairy products in the calculation of price s upport;  (iv) fixed external reference price for the 
1986-88 base period to be used in case separate administ ered prices for milk and dairy products were 
employed in the calculations;  (v) administered pr ice for milk to be used in case price support was 
intended to be calculated for all milk as in the past .  Australia also enquired about the impact of the 
increased loan rate for cane and beet sugar under the 2008 United States Farm Bill on the amount of 
price support for sugar.   
18. The United States considered it premature to speculate on the amount and calculation of price 
support for dairy products as well as for sugar as it had not yet prepared its domestic support 
notification for 2008.  The United States observed th at in cases where the applied administered price 
still operated, a price-gap methodology would be u sed and any budgetary su pport would be included 
in the calculations, as appropriate. 
19. Australia flagged that it expected the US notifi cation to be forthcoming in a timely manner. 
New Zealand expressed keen interest in this matter, in view of the sharp decrease in dairy prices over 
the last six months, as this might impact on the calculation of price support for milk and dairy products in future domestic support notifi cations submitted by the United States. 
(f) Australia:  US food aid donations a nd development assistance (G/AG/N/USA/65)
  
20. While it had no objection, in principle, to the provision of responsible development assistance 
to countries in need, Australia had serious concerns  about donations that disrupted viable commercial 
trade and local production.  Referring to the notifie d amounts of US food aid to LDCs and net food-
importing developing countries (NFIDCs), and the notified value of donated commodities which had 
been monetized, Australia sought (i) details of the quantities of the commodities listed in Section 1 of 
G/AG/N/USA/65 that had been moneti zed in fiscal years 2004 to 2006;  (ii) an explanation as to how 
the donations made under each of the respective pr ogrammes complied with Article 10.4(b) of the 
Agreement on Agriculture, including the FAO Prin ciples of Surplus Disposal and Consultative 
Obligations;  (iii) a description of the mechanisms that the United States had in place to prevent the 
monetization of donated commodities from displ acing commercial production and sales at the 
wholesale level;  and (iv) data on the amount of emergency food aid provided to NFIDCs and LDCs 
during the notified period, in quantity and value terms.  
21. The United States stated that a detailed breakdown of the quantity of food aid that was 
monetized was unavailable.  However, it could be  reasonably estimated that approximately 22 per 
cent, 14 per cent and 17 per cent of the total food aid provided by the United States was monetized in the fiscal years 2004, 2005 and 2006, respectively.  The United States considered that it fully 
complied with the provisions of Article 10.4(b) by  adhering to all relevant provisions of the FAO 
Principles of Surplus Disposal and Consultative Ob ligations, including the use of Usual Marketing 
Requirements in making decisions about monetized f ood aid.  Market analyses were also conducted to 
identify gaps between estimated consumption a nd the total of local production and commercial 
imports, prior to the provision of food aid.  No assistance was provided by the United States when local production and commercial imports were suffi cient to meet the needs of the country.    G/AG/R/54 
 Page 5 
 
 
  22. On the amount of emergency food aid to NFIDCs  and LDCs, the United States indicated that 
it could be reasonably estimated that 48 per cent,  62 per cent and 57 per cent of total food aid 
responded to emergencies in the fiscal years 2004,  2005 and 2006, respectively.  Australia expressed 
interest in receiving a more detailed breakdow n of the information as soon as available. 
(g) Canada: Brazil's agricultural credit and financing programmes  
23. Referring to the report13 by the Secretariat prepared for the Fifth Trade Policy Review of 
Brazil, Canada noted that Brazil operated a comple x system of credit and financing programmes to 
support agricultural producers.  Canada specifically  referred to the following credit and financing 
programmes for agriculture identified by the Brazilian Development Bank (BDD)14:  
(a) National Program for Strengthening of Family Agriculture (PRONAF);  
(b) Program for the Modernization of the Agricultural Tractor Fleet and Related 
Accessories and Harvesters (MODERFROTA) 
(c) Irrigation and Storage Incentive Program (MODERINFRA);  
(d) Program for Modernization of Agriculture and Conservation of Natural Resources 
(MODERAGRO);  
(e) Program for Commercial Planting and Recovery of Forests (PROPFLORA);  
(f) Cooperative Development Program for the A ddition of Value to Farming Production 
(PRODECOOP);  
(g) Warehousing Incentive Program for Brazilian Cereal Companies;  
(h) Sustainable Farming Production Incentive Program (PRODUSA); and  
(i) Capitalization Program for Credit Coope ratives (PROCAPCRED), which seemed to 
complement other programmes such as th e Federal Government Loan Program 
(EGF); the Rural Employment and Revenue  Generation Program (PROGER); and the 
Rural Product Certificate Measure (RPCM).   
24. Canada found that the information on the above-mentioned credit support programmes was 
not clear in Brazil's domestic support notifications15, where the information was included in generic 
terms and not arranged by various programmes.   Canada therefore asked Brazil for (i) a 
comprehensive explanation of where each of th ese programmes had been reported in its domestic 
support notifications, (ii) the classification of such programmes with reference to the relevant criteria 
of the Agreement on Agriculture, and (iii) the am ount of support notified under each programme.  
Canada also enquired about the changes in cred it and financing programmes since 2003/04 and asked 
whether Brazil had any plans to increase agri cultural support through such programmes.   
25. Acknowledging Canada's reference to the Fifth TPR  exercise, Brazil cons idered that the WTO 
Secretariat had analyzed its agricultural support programmes, including the credit programmes, while 
relying heavily on OECD sources.  Brazil believed that, as it was primarily based on OECD sources, 
the Secretariat's TPR report might have perhaps created a false impression that Brazil was a major 
                                                      
 13 Section IV(2)(iii) of  WT/TPR/S/212 refers. 
 14 http://www.bndes.gov.br/english/programs.asp#agro  
 15 See G/AG/N/BRA/22 and 23. G/AG/R/54 
Page 6  
 
  agricultural subsidizer.  In this respect, Brazil st ressed that the average Producer Support Estimates 
(PSE) of 4 and 6 per cent respectively reported for th e years 2004 and 2005, should be considered as 
modest.  Brazil flagged that its PSE level was indeed ve ry close to that registered by Australia or New 
Zealand, and was low compared to the PSE levels
16 registered by some other OECD members. 
Moreover, Brazil believed that the Secretariat's TPR report was excessively focussed on the amount 
of credit stocks available rather than on the mini mum level of support derived from those stocks. 
26. Brazil pointed out that it would be in a position to supply an update to its domestic support 
notification by the end of the current se mester and supplied detailed information17 on investment 
credit subsidies for 2004, as allocated to the various  programmes.  Brazil also clarified that PRONAF 
was not a BDD programme but rather a public polic y programme falling under the competence of the 
Ministry of Agrarian Reform (MDA).18  Brazil considered that production credit for small farmers 
under PRONAF, and all investment credit generally available for agriculture, complied with Article 6.2 of the Agreement on Agriculture a nd was therefore exempt from domestic support 
reduction commitments.  Additionally, the PR OCAPCRED was not directed exclusively to 
agriculture; the EGF was not classified under Article  6.2 of the Agreement on Agriculture;  and the 
RPCM was a private financial instrument without governmental participation.   
27. As regards future plans with respect to agri cultural support, Brazil noted that the amount 
allocated to the Agricultural and Livestock Plan
19 2008/2009  was R$65 billion (equivalent to 
US$38 billion at the current exchange rate).  Sin ce 2003/04, some adjustments had been introduced in 
the existing credit support and financing programm es in pursuance of the following objectives:   
(a) to promote the recovery of degraded soil and pastures and to support the use of 
environmentally sound practices.   PROLAPEC20 and an element of MODERAGRO 
had been combined under a new programme called PRODUSA;   
(b) to further promote the development of stor age facilities.  A new programme targeted 
to grain traders having a direct link with producers and their cooperatives had been created with an available credit line of US$127 million;   
(c) to introduce changes in the investment credit programmes addressing the eligibility 
criteria, the maximum financing value, a nd the borrowers' gross income reference 
levels;   
(d) to eliminate MODERFROTA's flat rate of 4 per cent which was paid by 
manufacturers and dealers of tractors and harvesting equipment; and  
(e) to assign a total amount of US$213 million from MODERFROTA in order to finance 
producers under PROGER at an interest rate of 7.5 per cent.   
28. As regards plans to increase spending under va rious credit and financing programmes, Brazil 
indicated that the existing programmes would be maintained with possible minor adjustments. 
29. The EC, Switzerland and the United States flagged their interest in its credit and financing 
programmes.  
                                                     
 
 16 Brazil referred to PSE figures of 34 per cent and 58 per cent. 
 17 See Annex 3. 
 18 See  www.mda.gov.br . 
 19 See www.agricultura.gov.br . 
 20 It finances agricultural production and livestock integration systems.  G/AG/R/54 
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  (h) Canada: Exceptional support measures by the EC for pigmeat and beef in Ireland  
30. Referring to the EC Regulations 1278/200821 and 94/200922 which had been introduced in 
response to increased levels of certa in contaminants in pigmeat and/or beef in Ireland, Canada sought 
information on: (i) the duration of the disposal schem e for pigmeat and beef;  (ii) the method used by 
the Irish authorities to determine the amount of  part-financing per an imal and meat product 
compensated as per Article 3.2 of Regulation 94/2009 ;  (iii) the means by which the Irish authorities 
would ensure that the maximum average amounts of support outlined in Regulation 94/2009 would be respected;  (iv) the way the Irish authorities inte nded to ensure, in response to Article 2.2 of 
Regulation 94/2009, that the compensation would not exceed the market value of the animals and 
products at the moment prior to the recall of th ese products from the market;  and (v) whether the 
compensation would be paid to the agricultural producer, to the slaughterhouse, or to both. 
31. The EC indicated that no duration was explicitl y prescribed for this measure in Regulation 
94/2009.  However, the retroactive applica tion of this measure from 13 December 2008
23 and the 
provisions of Article 2(3) of Regulation 94/2009 wh ich specifically allowed EU co-financing for this 
scheme for expenditures declared in respect of July 2009 at the latest, would ensure that the disposal 
scheme should effectively be implemente d from December 2008 to July 2009.   
32. As regards part-financing per animal and meat  product compensated, the EC explained that 
the amounts would be determined on the basis of the market value of the animals and products concerned at the moment prior to the Irish d ecision to recall all pigmeat from the market, as 
prescribed in Article 3(2) of EC Regulation 94/2009.   The amount paid for an individual animal or a 
tonne of pigmeat might, therefore, be higher or lower than the average amounts fixed in Article 3(1).  
The EC confirmed that, in overall terms, however, the maximum average amounts of part-financing in 
Article 3(1) would be respected.  As regard the app lication of Article 2(2), the EC pointed out that it 
was up to the Irish authorities to decide how to apply these provisions so as to avoid any overcompensation.  The situation might be verified  by the Commission in case of an audit.  The EC  
also clarified that the definition of the actual recipi ents of the compensation was not settled in the 
Regulation itself.  Thus, it would be again for the Irish authorities to determine the sharing of 
compensation among the suppliers of animals, slaughterhouses or other operators, for example, rendering plants. 
(i) China:  EC's recognition of China as " a party with substantial interest " in poultry tariff quota 
negotiations  
33. Following up on the previous discussions on this matter, China recalled that it had raised its 
concerns on numerous occasions in the Committee on Agriculture. 24  In its view, this matter remained 
unresolved.  China asked the EC to explain (i) whethe r the EC considered that the tariff modifications 
that it sought on three poultry products complied with Article 4.2 of the Agreement of Agriculture.  
China, for its part, believed that Article 4.2 pr evailed over Article XXVIII of GATT 1994;  (ii) how 
the requirement contained in the Ad Note  7 to paragraph 1 of Article XXVIII of GATT 1994 was met 
in the EC's selection of parties  "with substantial interest ";  and (iii) the allocation made for the tariff 
quota in 2008.   
                                                      
 21 The measure provides assistance fo r private storage of pigmeat that is not affected by contaminated 
feed.    
22 The measure establishes a disposal scheme for certain pigs and cattle that come from farms with 
contaminated feed. 
 23 The starting date of the disposal of animals and meat by the Irish authorities under the Regulation. 
 24 See, for example, G/AG/R/53, paragraphs 15-16; G/AG/R/52, paragraphs 35-37; and G/AG/R/51, 
paragraphs 22-24. G/AG/R/54 
Page 8  
 
  34. The EC observed that the questions posed by China were identical to  the ones raised in 
March 2008 and thus indicated that it would reply by  referring to the relevant sections of the summary 
report.
25  China argued that its concerns had yet to be  addressed.  In its view, the EC's continued 
denial of China's status as " a party with substantial interest " was unjustifiable as China's exports of 
poultry products were totally banned by the EC in the past.  Considering that its exports of cooked 
poultry products accounted for about 20 per cent of world poultry trade, China believed that it could 
have built significant market share in the EC market.  The EC took note of China's position and 
reiterated that it had fully complied with the WTO rules relating to the conduct of negotiations under 
Article XXVIII of GATT 1994.  The EC recalled that  China, together with other Members, had access 
to a tariff quota allocation of more than 11,000 tonnes of poultry products. 
(j) China:  US measure on poultry from China  
35. China reiterated its concerns over Section 733 of the US Omni bus Appropriation Act of 2008.  
Such concerns had been repeated ly expressed to the United States, both bilaterally and multilaterally, 
with China requesting the abolition of what it cons idered a discriminatory provision, so that the 
bilateral trade of poultry products could be normalized as soon as possible.  The United States referred 
China to its previous responses26, maintaining that the SPS Committee was the appropriate forum to 
address this issue.  The US SPS officials continue d to raise Chinese concerns with the appropriate 
authorities in Washington and hoped to resolve the issue as soon as possible. 
36. Under specific instruction from capital, China expressed serious concerns on the US Omnibus 
Appropriation Act of 2009 which was approved by th e US Senate on 10 March 2009 and incorporated 
the measure at issue, i.e. Section 727.27  China claimed that Sec tion 727 clearly constituted a 
discriminatory measure against Chinese poultry imports  since it replicated the contents of Section 733 
which was due to expire.28  The provision amounted to an obvious violation of the basic rules of the 
WTO, including the MFN principle.  China rejected  the United States' view that Section 727 was in 
conformity with the provisions of the SPS Agreement,  which it considered irrelevant.  Hinting at the 
G20 commitment as well as other calls to resist trad e protectionism, China wondered about the type of 
initiatives that WTO Members could jointly take, at this  critical juncture of the global crisis, in order 
to prevent unfair practices from undermining the mult ilateral trading system, and perhaps counter the 
enactment of similar discriminatory measures in the future.  
37. The United States took note of the intervention made by China and undertook to convey 
China's concerns to capital. 
(k) New Zealand: Temporary tariff reductions on selected food imports by Chinese Taipei   
38. New Zealand commended Chinese Taipei for its decision to implement a 50 per cent tariff 
reduction on selected food imports.  New Zealand e nquired about the likelihood for these temporary 
reductions to become permanent in the future.  Ch inese Taipei replied that a temporary measure had 
been introduced in February 2008 in the form of a 50 per cent tariff reduction on certain agricultural 
imports, such as wheat and milk powder, for a peri od of six months, in accordance with the Customs 
Act.  Before its expiry, the relevant authorities woul d carry out a periodical review of that measure in 
line with the conditions set forth in the Customs Ac t, to determine whether it should be extended.   
                                                      
 25 G/AG/R/51, paragraphs 22 and 23 refer. 
 26 See G/AG/R/53, paragraphs 18-19; and G/AG/R/52, paragraphs 38-40. 
 27 Section 727 reads: "none of the funds made available in this Act may be used to establish or 
implement a rule allowing poultry products to be imported in to the United States from the People's Republic of 
China." 
 28 In this regard, China referred to the statement made by the United States at the June 2008 TPRM 
meeting (paragraph 51 of WT/TPR/M/200/Add.1 refers).  On that occasion, the United States had indicated that: 
"Section 733 is set to expire at the end of the fiscal year ."  G/AG/R/54 
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  (l) New Zealand:  Reintroduction of expor t subsidies on dairy products by the EC  
39. New Zealand expressed disappointment over the EC's recent decision to reintroduce export 
subsidies for dairy products.  Noting that th e Commission had characterized its decision as a 
temporary measure only, New Zealand asked the EC to  comment on its duration.  The EC replied that 
its decision to reintroduce export refunds for dair y products was a temporary measure without any 
predetermined duration.  In the process of allocati ng these export subsidies, the EC undertook to fully 
respect its WTO commitments. 
40. New Zealand followed up with comments relating to the current global economic crisis.  In 
this respect, New Zealand consider ed that the key players should not yield to domestic pressures in 
resorting to protectionist policies.  This was all the more critical in the ag ricultural sector so as to 
ensure that global food markets could operate ef fectively while the global economy recovered.  
Referring to the development imperatives, New Ze aland observed that developing country markets 
required access to food at a reasonable cost.  Clear a nd non-distorted price signals were also required 
to enable developing countries to contribute to global food production.  New protective steps by developed countries seeking to further insulate th eir already highly-protected economies would only 
damage further the global balance in the overall food demand and supply.  New Zealand called upon 
the EC, as a leader in the global economy, to re move these export subsidies in line with the 
commitment made by the G20 leaders in Washington  to resist the protectionist impulses which could 
aggravate the current global crisis. 
41. Australia supported the intervention made by New Zealand.  Australia recalled the Cairns 
Group's media statement released on 27 January 2009 on this particular issue,  where deep concerns 
had been expressed regarding the EC's decision to reintroduce export refunds for a number of 
agricultural products.  The Cairns Group had noted th at export subsidies were a seriously damaging 
form of trade-distorting support.  The Group had campaigned relentlessly for their elimination, 
including in the context of the DDA.  In 2005, WTO Ministers in Hong Kong, China, had agreed that 
these subsidies should be eliminated entirely by 2 013, a commitment which had been reflected in all 
subsequent versions of the draft negotiating texts.   
42. Supporting Australia's statement, Argentina, Br azil, Canada and Pakistan expressed concerns 
that were similar to New Zealand's, including with respect to the application of export subsidies on 
other product categories.  Canada was disappointed at  the EC's continued willingness to turn to export 
subsidies, including for pork, as was the case in th e previous year.  Canada had systemic concerns 
with the reintroduction of export subsidies in genera l, but also concerns with its possible negative 
impacts by artificially depressing world prices and slowing recovery.  Brazil called on Members to 
resist protectionist moves at this crucial j uncture.  Brazil referred to the concept of " murky 
protectionism "
29 which suggested that, although in full co mpliance with WTO rules, some measures 
could be indeed "protectionist".  Pakistan stressed that developing countries were in a difficult position due to the unavailability of fiscal space to provide any export subsidies. 
                                                     
 
29 That concept was introduced in a study entitled "The collapse of global trade, murky protectionism, 
and the crisis: Recommendations for the G20"  (see http://www.voxeu.org/). G/AG/R/54 
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  B. R
EVIEW OF NOTIFICATIONS  
(a) Notifications in respect of which questions have been raised in advance of the issuance of the 
convening airgram  
43. Since the 4 December session, 43 notifications ha d been circulated by the Secretariat to all 
Members.  The Committee reviewed the notifications  as listed in the agenda.  Specific points raised 
with respect to these notifications and the responses thereto are summarized in Annex 5  to this report.  
The additional questions presented by Australia afte r the issuance of the convening airgram will be 
automatically included in the Committee's agenda at its next session.30 
(b) Notifications subject to review in respect of wh ich no questions have been raised in advance 
of the issuance of the convening airgram  
44. The Committee took note of the notifications which had been circulated in advance of the 
date on which the notice convening the present me eting was issued, but in respect of which no 
questions had been raised by that date under th e Committee's Working Procedures (G/AG/1).  These 
notifications are listed in Annex 6.    
(c) Notifications circulated or made available af ter the notice convening the meeting was issued  
45. The following notifications were subject to prelim inary review and are to be reverted to at the 
next meeting for substantive review in accordan ce with paragraph 9 of the Committee's Working 
Procedures. 
(i) in the context of imports under tariff and other quota commitments (Table MA:2):  
from Brazil (BRA/24) and Mexico (MEX/18) 
(ii) in the context of the special safeguard (Tables MA:3 to MA:5):  from Mexico 
(MEX/19) and Switzerland (CHE/46);  and 
(iii) in the context of export subsidy commitm ents (Tables ES:1 to ES:3):  from Costa 
Rica (CRI/23) and Chinese Taipei (TPKM/64). 
(d) Points concerning notifications raised at previous meetings  
46. The Chairperson recalled that delegations have the possibility to inform the Committee of the 
outcome of discussions which are of general interest , but which may have been pursued bilaterally as 
a result of the review of notifications.  Th ere was no discussion under this agenda item. 
(e) Counter-notifications  
47. The Committee took note that no counter-notifi cations had been received under Article 18.7 
of the Agreement on Agriculture. 
(f) Deferred replies to questions raised under the Review Process  
48. There were no deferred replies to questions previously raised. 
                                                      
30 See Annex 4.  G/AG/R/54 
 Page 11 
 
 
  (g) Overdue notifications  
49. An updated room document, da ted 11 March 2009 showing the current status of compliance 
with notification obligations was made available by the Secretariat. 
(i) Argentina and Australia - EC and EC member States on domestic support 
50. Referring to previous EC's replies31, Argentina sought an indication on the date on which the 
EC's notifications of the applied level of domes tic support for 2006/07 and 2007/08 would become 
available.  The EC pointed out that the notifications covering the 2004/05 and 2005/06 reporting periods had been submitted in Febr uary 2009.  The data collection fo r 2006/07 was ongoing while that 
for 2007/08 would start later in 2009.  The EC ob served that it provided the information for the 27 
member States, but that in fact this involved th e aggregation of both member State and Community 
spending.  As not all member States used th e same budgetary periods, the classification and 
verification processes were rather complex. 
51. Following up on the EC's previous responses,  Australia enquired about the outstanding 
notifications by certain member States for the implementation period prior to their accession to the 
EC.  Australia also wondered whether, rather than directing this question to the EC, it should ask the 
relevant individual EC member States to explain such delays and provide a more specific timeframe 
within which the overdue notifications would be submitted.  The EC responded that it was in the 
process of completing the set of notifications, althoug h a specific timeframe could not be indicated at 
the moment.  Any questions to individual member States would have to be answered by the EC 
directly. 
52. Australia stated that it looked forward to more timely notifications from the EC as it 
continued its streamlining and harmonization process to  gather data from all of its member States.  
Australia requested further elaboration by the EC  as to the nature of difficulties which prevented 
individual EC member States from submitting the outstanding notifications covering the implementation period before their accession to the EC.  The EC confirmed that streamlining of administrative procedures was on-going and that new communication lines were being established.  
However, the administration of new member States a nd that of the central EC service may have been 
confused about their respective roles.  Coordinatio n between the various offices was being improved.   
(ii) Canada – EC notifications on tariff quota fill 
53. Noting that the last Table MA:2 notification supplied by the EC (G/AG/N/EEC/48) had been 
circulated to Members in February 2004 and c overed the marketing year 2002/03, Canada wondered 
when the EC would submit updated notifications on ta riff quota fill.  The EC stated that it was well 
aware of the delays in complying with its notifi cation obligations on tariff quota fill.  An additional 
effort was ongoing to fully meet such obligations.  On an indicative basis, the EC expected that the 
missing Table MA:2 notifications would be publis hed within the coming months.  The delays 
registered were also due to a simplification of administration methods whic h had a negative impact on 
the collection of statistics required for notification purposes. 
(iii) Australia – Egypt on domestic support and export subsidies for 1999-2007 
54. Noting that the Room Document entitled Compliance with Notification Obligations  dated 
3 December 2008 (thereafter, " the Compliance Document ") showed that Egypt had outstanding 
domestic support and export subsidy notifications for the period 1999-2007, Australia asked Egypt to 
advise the Committee when it intended to meet its no tification obligations.  Egypt responded that the 
                                                     
 
31 G/AG/R/52, paragraph 49, and G/AG/R/53, paragraph 27, refer. G/AG/R/54 
Page 12  
 
  questions posed by Australia had been transm itted to capital.  Egypt undertook to convey any 
responses as soon as received to the delegation of Australia. 
(iv) Australia – Iceland on domestic support, ex port subsidies, tariff quota fill and special 
safeguards 
55. Referring to the Compliance Document, Australia  noted that Iceland had outstanding Table 
MA:2 (imports under tariff quota), MA:5 (annual spec ial safeguard actions), DS:1 (domestic support), 
and ES:1 (export subsidies) notifications.  Austra lia asked Iceland to advise when it intended to 
comply with its notification obligations.  Icela nd responded that the Permanent Mission in Geneva 
had been in contact with the Ministry of Agricultu re, and confirmed that the outstanding notifications 
were being prepared for submission within a couple of months. 
(v) Australia and Canada – India on domestic support, export subsidies, tariff quota 
administration and tariff quota fill 
56. Australia recalled that, at the 52
nd regular meeting of the Committee of Agriculture held on 
18 September 2008, Australia had asked India to indicate when it would expect to comply with its notification obligations.  India had responded that th e process of gathering information in preparation 
for compliance with its notification obligations was underway, which, as soon as completed, would 
enable it to circulate its notifications.  Austra lia stressed that as of March 2009, India had not 
submitted the outstanding notifications.  Moreover,  the Compliance Document indicated that India 
had outstanding notifications in the domestic suppor t area (Table DS:1) for the implementation years 
from  1998 to 2007;  in the export subsidy area (Table ES:1) for the years 1995, and 2001 to 2007; as well as for tariff quota imports (Table MA:2) for each  of the years 2003 to 2007.  Australia asked 
India to advise the Committee when it intended to comply with its notification obligations. 
57. India recognized that there were delays in comp lying with notification obligations.  Members' 
concerns had been conveyed to the relevant authoritie s.  India pointed out that the primary reason for 
the delay has been the difficulty in compiling complete information from all the provincial 
governments and the Ministry of Agriculture.  The compilation process had been completed and the 
capital-based officials had indicated that the data  would be soon formalized in notifications for 
circulation to Members.  In its follow-up remarks,  Australia observed that, since the compilation stage 
had been now completed, India was now well on tr ack to provide the missing notifications soon. 
58. Noting further that an International Food Policy Research Institute  (IFPRI) discussion 
paper
32 dated September 2008 provided  "shadow" domestic support notif ications for India covering 
the implementation period 1998-2005, Australia asked India to advise whether the IFPRI paper 
accurately reflected its provision of domestic s upport, and when India's formal domestic support 
notification for the same period would be presente d.  India replied that a discussion paper by an 
independent research institute could hardly reflect the current position of Indi a's provision of domestic 
support to agricultural producers.  India therefore c onsidered that an accurate picture of the situation 
could only be obtained from a formal notification to the Committee on Agriculture. 
59. Canada underlined that India had yet to subm it a Table MA:1 notification to indicate how it 
was administering the four tariff quotas that had been incorporated in its Schedule XII since 2003 
(covering the following products: skim milk powder, corn, crude sunflower and safflower oil, and 
refined rape, colza, canola and mustard oil).  Ca nada requested India to provide a Table MA:1 
notification for its tariff quota commitments, i ndicating the information applicable on these import 
                                                      
32 India:  Shadow Agricultural Domestic Support Notifications , Munisamy Gopinath, International 
Food Policy Research Institute, Discussion Paper 00792, September 2008.  G/AG/R/54 
 Page 13 
 
 
  arrangements, as set out in G/AG/2.  In addition, Canada sought an indication, for each of these tariff 
quotas, of the relevant marketing or fiscal year  period under which they were administered.   
60. India was of the view that much of the info rmation sought by Canada , as it related to the 
volumes, the concessional rates of duties, and the tariff quotas released for the implementation years 
2005-06 to 2007-08, had already been supplied to the Committee on Agriculture at its 52nd session .33  
The relevant 12-month period was the financial year  starting 1 April, and ending on 31 March.   
61. In its follow-up remarks, Canada underlined th at it was well aware of the data already 
provided by India on tariff quota release.  That in formation had actually been considered by Canada 
when preparing its questions for inclusion in the agenda of the present session.  Rather, Canada was 
interested in obtaining information on India's met hod of tariff quota administration, as already sought 
in November 2003, which had been followed by a pr eliminary response by India in March 2004.  No 
Table MA:1 notification has ever been presented by  India to the Committee on Agriculture to explain 
how the four tariff quotas in question were being administered.  Canada flagged that some recent 
reports appeared to suggest that these tariff quotas we re administered in a different way than that 
reported by India to the Committee back in 2004, hence Canada's questions on India's outstanding 
notifications at the present session. 
(vi) Canada – Indonesia on tariff quota fill, speci al safeguard, domestic support and export 
subsidies 
62. Canada underlined that Indonesia's notificati ons on tariff quota fill, recourse to special 
safeguard, domestic support, or export subsidies remained outstanding since the 2000 reporting 
period. Canada asked for an explanation of the reasons why Indonesia had not met its notification 
obligations and whether it considered that it would be able to meet these reporting requirements.  
Indonesia stated that it was fully aware of this  matter while emphasizing that limited domestic 
capacity in fulfilling notification obligations was th e main reason behind the delays.  The relevant 
information needed for notification purposes w as compiled from various ministries and Indonesia 
recognized that additional concerted efforts we re required.  Indonesia had received positive 
indications from capital that notifications would soon be submitted.  An intensive coordination 
process was under way for the collection of informati on, particularly in relation to domestic support 
and export subsidies.  In that context, Indonesia stressed the importance of technical assistance for 
developing country Members in fulfilling their obligations under the Agreement on Agriculture. 
63. Concerning its two scheduled tariff quotas (milk and rice), Indonesia flagged that since 2001, 
the respective tariff quota fill rates had been nil.  As the applied duties were already below the 
respective bound in-quota duties, Indonesia considered that it had unilaterally liberalized its market 
for milk and rice.  Indonesia also observed that, si nce 2001, it had not invoked the special agricultural 
safeguard.  Canada thanked Indonesia for the usef ul information shared on tariff quota fill and the 
special safeguard.  Canada understood that a ll Members, including Canada, were experiencing 
difficulties in bringing themselves into complianc e with established notification requirements.  
Canada looked forward to receiving the re lated notifications in due course.   
(vii) Australia – Korea on domestic support, export subsidies and special safeguards 
64. Noting that the Compliance Document showed  that Korea had outstanding Table MA:2, 
MA:5, DS:1 and ES:1 notifications, Australia request ed Korea to advise when it intended to meet its 
notification obligations.  Korea responded that it  was doing its utmost to meet its notification 
obligations in due time.  The notifications rela ting to tariff quota imports for 2005-07 had already 
                                                      
33 G/AG/R/22, Annex 1, refers. G/AG/R/54 
Page 14  
 
  been circulated.
34  Those relating to domestic support a nd special safeguard actions after the 
implementation year 2005 were under preparation.  Korea undertook to do its best to submit the 
outstanding notifications at the earliest.   
(viii) Canada – Malaysia on tariff quota fill 
65. Canada observed that Malaysia  had not provided any notifications on tariff quota fill since 
2005 when a notification covering the 1998 reporting pe riod had been circulated.  Malaysia was asked 
to explain the reasons why it had not met its Ta ble MA:2 notification obligations and whether it 
considered that it would be able to meet these reporting requirements.   
66. Malaysia stated that its scheduled tariff qu otas covered 73 agricultural tariff lines (HS 1996 
nomenclature).  However, since the applied duties for most of these tariff quota products (this 
includes dairy, livestock and livestock products, rou nd cabbage, coffee and sugar) were already set at 
zero, Malaysia considered that, in effect, its tariff quota system was not in operation.  Since 
1 April 2008, Malaysia had imposed differentiated duties for in-quota and out-of-quota imports for 17 
livestock products tariff lines and one round cabbage  tariff line.  Malaysia was aware that its 
Table MA:2 notifications were outstanding since 1999 and indicated that it was currently updating 
information on imports covering that period. 
(ix) Australia – Mexico on domestic support, export subsidies, tariff quota fill and special 
safeguards 
67. Observing that the Compliance Document showed that Mexico had outstanding Table MA:2, 
MA:5, DS:1 and ES:1 notifications, Australia asked Mexico to advise when it intended to meet its 
notification obligations.  Mexico pointed out that  its Table MA:2 notifications for implementation 
years 2000-200735 and Table MA:5 for 2006 and 200736 had been recently sent to the Central Registry 
of Notifications for circulation.  As for Tables DS:1 and ES:1, capital-based authorities had recently 
indicated that data compilation and analysis was on going.  Mexico therefore expected to be able to 
meet its notification obligations soon. 
(x) Australia – Turkey on domestic support and export subsidies 
68. With reference to the Compliance Document, Australia asked Turkey to advise when it 
intended to meet its notification obligations with regard to Table DS:1, ES:1 and ES:2 notifications.  
Turkey flagged that the submission of such notifica tions had been delayed due to the modification of 
the national support system after the economic crisis  suffered by Turkey in 2001.  Between 2003 and 
2008, a reform process had also been launched to li beralize the structure of the domestic agricultural 
policies and to harmonize the agriculture-related institutional frameworks.  Along with the limited 
resources of developing countries, changes in agricultural policies, and particularly ongoing 
institutional transition, have caused delays in the presentation of notifications.  Turkey undertook to 
submit its notifications within the best possi ble timeframe upon the completion of the ongoing 
institutional and structural reform process.    
(xi) Australia and Canada – United States on tariff quota fill 
69. With reference to the Compliance Document , Australia sought an indication from the 
delegation of the United States as to the envi saged timeframe for submission of outstanding 
Table MA:2 and MA:5 notifications.  Canada flagge d that the last Table MA:2 notification from the 
                                                      
34 G/AG/N/KOR/40, dated 2 March 2009, refers.  
35 G/AG/N/MEX/18, dated 11 March 2009, refers. 
36 G/AG/N/MEX/19, 11 March 2009, refers.  G/AG/R/54 
 Page 15 
 
 
  United States, i.e. G/AG/N/USA/54, covered the 2 003 calendar year, and had been circulated to 
Members in February 2005.   
70. The United States responded that it was working to catch up on its notification requirements 
and that it encouraged other countries to also catch up on overdue notifications.  In February 2009, the 
Table MA:5 notifications covering the 2007  and 2008 periods had been circulated .37  As for Table 
MA:2 notifications, that for the year 2004 had just  been submitted;  those for 2005 and 2006 would be 
presented soon38;  and those covering the years 2007 and 2008 were under preparation . 
(xii) Australia – Members listed in Section A of the Compliance Document dated 3 December 2008 
71. Australia noted that Section A of the Compliance Document39 provided a listing of those 
Members having long overdue notifications (i.e. for the 1995-2002 implementation years).  In the 
spirit of working cooperatively and constructively w ith all Members, Australia suggested that the 
Members listed in Section A could perhaps iden tify initiatives that could be undertaken in the 
Committee on Agriculture in order to assist them towards the improvement of compliance with their 
notification requirements.  Noting further that  the agenda item II.A below also focussed on 
compliance issues, Australia deferred its intervention on this matter. 
II. OTHER MATTERS WITHIN THE PURVIEW OF THE COMMITTEE 
A. REQUEST BY THE CHAIRMAN OF THE GENERAL COUNCIL :  IMPROVEMENT OF TIMELINESS 
AND COMPLETENESS OF NOTIFICATIONS AND OTHER INFORMATION FLOWS ON TRADE 
MEASURES  
72. The Chairperson noted the request by the Chairm an of the General Council to the Chairs of 
all WTO Councils and Committees to  consult with Members on ways to improve the timeliness and 
completeness of notifications and other informa tion flows on trade measures falling within the 
purview of the Committee.  The Committee switched to  informal mode to address this agenda item. 
73. In the ensuing informal discussion, a number of constructive ideas for further work were 
expressed, ranging from a need to better understand the difficulties Members faced in preparing and 
analyzing notifications, to preliminary suggestions as to how to address them.  As instructed by the 
Chairman of the General Council, the Chairperson unde rtook to directly inform the Chairman of the 
Trade Policies Review Body of the resu lts of these informal consultations.   
B. IMPLEMENTATION -RELATED ISSUES  
74. Paragraph 2 of the Doha Ministerial D ecision on Implementation-Related Issues and 
Concerns40 instructs the Committee to follow up on three di stinct matters:  (a) Members must develop 
disciplines on export credits as per Article 10.2 of  the Agreement on Agriculture;  (b) the Committee 
must examine possible means for improving the eff ectiveness of the implementation of the NFIDC 
Decision;  (c) the Committee must al so ensure that Members' tariff quota regimes are administered in 
a transparent, equitable and non-discriminator y manner, keeping such regimes under review. 
                                                      
37 G/AG/N/USA/67, dated 2 March 2009, refers. 
38 G/AG/N/USA/69, dated 4 May 2009, refers. 
39 This room document is updated by the Secret ariat at each formal m eeting of the Committee on 
Agriculture in regular session. 
40 WT/MIN(01)/17 (dated 14 November 2001). G/AG/R/54 
Page 16  
 
  75. The Chairperson recalled that further to th e request made by Cuba and the informal 
consultations held in October 2008, at the Decemb er meeting of the Committee, the Secretariat was 
asked to prepare a compendium of documents rela ted to the three above-mentioned issues.  A first 
draft of the Compendium of Documents on Impl ementation-Related Issues was circulated on 
19 February 2009, seeking comments from a group of 15 Members.  Based on the feedback received 
from those delegations, a second draft was distribut ed on 25 February 2009, followed by informal 
consultations on 2 March 2009.  These consultations allowed the Secretariat to prepare a draft which 
was circulated in advance of this mee ting for consideration by the Committee.  
76. Cuba thanked the Chairperson and the Secretar iat for the development of the Compendium 
and considered that this document would be partic ularly useful to Members as it would consolidate 
information with respect to the outstanding work in the area of implementation.  Cuba requested that 
this item be retained on the agenda of the Committee on Agriculture in regular session.  The 
Chairperson noted that the Compendium would be  updated as any new rele vant elements emerge. 
77. Argentina stated that, without prejudice to the provisions of Article 10.1 of the Agreement on 
Agriculture, the establishment of additional and sp ecific disciplines on export credits, export credit 
guarantees and insurance programmes remained an  outstanding implementation issue resulting from 
the Uruguay Round Agreement on Agriculture.  Argen tina therefore requested that this item be 
retained on the agenda of the Comm ittee on Agriculture in regular session. 
C. WTO
 LIST OF NET FOOD-IMPORTING DEVELOPING COUNTRIES (NFIDC S) 
78. The Chairperson noted that in line with  the Decision adopted by the Committee on 
21 November 199541, the WTO list of NFIDCs was considered at the regular March meetings of the 
Committee.42    
79. The delegation of Swaziland informed the Comm ittee that the Kingdom of Swaziland was in 
the process of collating the statistical data necessary to  be considered for inclusion in the WTO list of 
the NFIDCs and that it would soon submit these da ta to the WTO Secretariat for consideration by 
Members at the next regular March meeting of the Committee in 2010, as stipulated in paragraph 2 of 
document G/AG/3.  The Committee took note of the statement. 
D. ELECTION OF THE CHAIRPERSON  
80. The Chairperson noted that consultations we re continuing on the appointment of the 
Chairpersons for the regular meetings of WTO Co mmittees.  The Chairperson therefore proposed that 
the agenda item should be taken up again at the beginning of the next meeting of the Committee.   
E. OTHER BUSINESS : DATE OF NEXT MEETING  
81. According to the Committee's rules of procedur es, regular meetings of the Committee are to 
be held in March, September and November.  Th e Chairperson noted that various Members expressed 
the desire to establish a date for the next mee ting to be held in June, as is possible under the 
Committee's rules of procedures.  The next (55th) regular meeting of the Committee on Agriculture is 
therefore scheduled to be held on 2 July 2009.  On this basis, the convening airgram will be issued on 
22 June 2009. 
                                                      
41 See document G/AG/3. 
42 See document G/AG/5/Rev.8 (dated 22 March 2005).  G/AG/R/54 
 Page 17 
 
 
  Annexes 
  
   Page
 
 
Annex 1 New EC member States – Value of agricultural production, at current prices (1995-
2000) 18 
 
 
Annex 2 Questions posed by Argentina and Australia on the   19 
US Average Crop Revenue Election (ACRE) Program  
 
 
Annex 3 Brazil - Implicit subsidy for investment notified in 2004 20 
 
 Annex 4 Additional questions raised by Australia 21 
 
 
Annex 5  Summary of points raised with respect to notifications 26 
     Administration of tariff and other quotas (Table MA:1) 26 
   Thailand – G/AG/N/THA/66 26 
 
  Imports under tariff and other quotas (Table MA:2) 26 
   China – G/AG/N/CHN/14 26 
 
  Special agricultural safeguard (Tables MA:3 to MA:5) 27  
   Japan – G/AG/N/JPN/138 27 
   Japan – G/AG/N/JPN/139 and G/AG/N/JPN/141 27    Philippines – G/AG/N/PHL/39 28    Chinese Taipei – G/AG/N/TPKM/63 28 
 
  Domestic support (Table DS:1) 29 
   Philippines – G/AG/N/PHL/37 29 
   United States – G/AG/N/USA/51/Rev.1 29    United States – G/AG/N/USA/60/Rev.1 30 
   United States – G/AG/N/USA/66 32 
 
  Export subsidy commitments (Tables ES:1 to ES:3) 44  
   European Communities – G/AG/N/EEC/57 44 
   
Annex 6  Notifications subject to review in respect of which no 46 
  questions have been raised in advance of the issuance of 
  the convening airgram    
 
   G/AG/R/54 
Page 18  
 
  Annex 1 
 
New EC member States:  Value of agricultural production, at current prices (1995-2000)
 
 
Agricultural output, value at producer price 
 
 
1995 1996 1997 1998 1999 2000 
 
Millions of euro (from 1.1.1999)/Millions of ECU (up to 31.12.1998) 
Bulgaria 25,294,444 20,047,337 35, 678,041 31,658,468 29,622,796 29,332,704 
Czech Republic : : : 29,237,348 25,489,981 28,191,357 
Estonia 2,899,978 4,004,295 3, 376,616 3,103,340 2,570,065 3,306,714 
Cyprus : : : : : : 
Latvia : : : 4,324,792 3,613,087 4,176,001 
Lithuania 8,343,814 11,009,079 12, 822,989 12,162,244 10,523,205 11,238,363 
Hungary : : 47,897,064 45,246,885 43,661,962 46,595,370 
Malta : : : 1,248,167 1,275,931 1,250,698 
Poland : : : 121,672,190 105,750,720 121,763,620 
Romania : : : 97,421,691 77,007,716 79,714,584 
Slovenia 9,635,525 10,024,885 10, 217,733 9,941,026 9,371,061 9,523,483 
Slovak Republic 14,229,806 15,591,593 16,822,913 15,158,811 12,970,786 12,615,605 
 
Note : ' : ' = not available. 
 
Source : Eurostat Economic Accounts for Agriculture , extraction made on 6 March 2009. 
  G/AG/R/54 
 Page 19 
 
 
  Annex 2 
 
Questions posed by Argentina and Australia on the  
US Average Crop Revenue Election (ACRE) Program  
  
Argentina 
 
 Beginning in 2009, the Food, Conservation and Energy Act of 2008 (Farm Bill 2008) offers 
producers the option of continuing with the traditi onal counter-cyclical payments (CCP) or enrolling 
in a new revenue-based guarantee called "Average Crop Revenue Election" (ACRE).  The ACRE is a 
scheme of counter-cyclical revenue payment addressed to cover against the risk of an income drop 
from certain levels in a recent period.   Payments are triggered when the actual state revenue for the commodity is less than the 
revenue guarantee and when the indi vidual farm's revenue is below the farm le vel benchmark revenue 
plus crop insurance premiums.  The ACRE Program is available for the same crops as traditional 
CCPs (wheat, sorghum, barley, oats, soybeans, minor oilseeds, corn, rice, peanuts and cotton), but is 
based on planted acres rather than base acres.  Th is programme would remain closely tied to crop-
specific prices and production, and theref ore would remain highly trade-distorting. 
  Could the United States confirm that the ACRE  support will be notified within its Total AMS 
commitment? 
 
 
Australia  
 Australia notes that the 2008 US Farm Bill w ill see the introduction of the optional "Average 
Crop Revenue Election" (ACRE) Program from the 2009 marketing year.  Australia notes that ACRE will only be available to producers who hold progra mme crop bases and that payments will be based 
on current prices and a moving average of past prices;   current yields and a moving average of past 
yields;  and a proportion of the area planted to programme crops for the crop year in question.  
 In light of these characteristics of the ACRE  Program, how does the United States anticipate 
the ACRE Program will be classified in future US domestic support notifications?  
 
 G/AG/R/54 
Page 20  
 
  Annex 3 
 
Brazil - Implicit subsidy for investment notified in 2004
 
 
Programme Implicit subsidy 
(US$ 1,000) 
Banco da Terra 1,068 
Constitutional funds (FNO, FNE and FCO) 29,440 
FINAME 15,002 
Mandatory resources 11,181 
MODERFROTA 53,555 
PROCERA 0 
PRODECOOP 4,505 
PROGER 4,193 
PRONAF 111,697 
Other BNDES programmes 49,808 
Total 280,448 
 
   Source : G/AG/N/BRA/23  G/AG/R/54 
 Page 21 
 
 
  Annex 4  
 
Additional questions on notifications raised by Australia  
  
I. IMPORTS UNDER TARIFF AND OTHER QUOTAS (TABLE MA:2) 
A. K
OREA - G/AG/N/KOR/40   
1. Australia thanks the Republic of Korea for the notification of the level of imports under its 
scheduled tariff quota.  Australia notes that during the calendar years 2005, 2006 and 2007, there are a 
number of tariff quotas with no imports.  For exampl e, for the calendar year 2005, 14 of 63 notified 
tariff quotas had a zero per cent fill rate, covering ma ny products from breeding animals, whole milk 
powder, bird's eggs, honey and potatoes and many others. 
(a) Can Korea please indicate whether the SSG was triggered on any of these products 
(notifications for that period are not available)?  
(b) Can Korea identify whether sanitary and phytosanitary measures were the reason 
behind the lack of imports? 
(c) Does Korea have a plan to reform its ta riff quota administration methods to enable 
better fill of these tariff quotas? 
B. CANADA - G/AG/N/CAN/75   
2. Australia thanks Canada for the notification of the level of imports unde r its scheduled tariff 
quota.  Australia notes that during the marketing year 2005/06 and calendar year 2006, there are a 
number of tariff quotas with in-quota imports duri ng the period being greater than the tariff quota 
quantity, e.g. wheat and barley products, chicken (live/meat and products) an d broiler hatching eggs 
and chicks.  
(a) Can Canada please explain why additional im ports were allowed in that period and 
what in-quota duty was applied to these additional imports? 
(b) Can Canada clarify if the reported in-quot a imports during the period include imports 
for re-export, which may be already subj ect to lower import duties as part of a 
separate programme for Canadian producers? 
3. Australia also notes that for the tariff quota for 'fluid milk' (64,500 tonnes), there is no 
available in-quota import data.  The relevant footnot e states that imports of fluid milk by consumers 
are not counted and that any resident of Canada may import fluid milk.  In Canada's Table MA:1 
notification on the administration of tariff quotas (G /AG/N/CAN/45), the fluid milk tariff quota is a 
'global tariff quota' and there are no allocations to  importers.  Canada's Uruguay Round Schedule also 
states that 'the quantity represents the estimated annual cross-border purchases imported by Canadian consumers'. 
(a) Can Canada explain why the tariff quota is  not open to any importer to import fluid 
milk and not just residents of Canada? 
(b) Can Canada explain how the tariff quota is a 'global' tariff quota, when there are 
restrictions based on personal use? 
(c) Can Canada explain why the tariff quota is  limited to personal use by Canadian 
residents, since this restriction does not appear in Canada's schedule? G/AG/R/54 
Page 22  
 
  II. DOMESTIC SUPPORT (TABLE DS:1) 
A. E
UROPEAN COMMUNITIES - G/AG/N/EEC/59 
4. The questions relate to Supporting Table DS:1, " Measures exempt from the reduction 
commitment : Green Box ", and more specifically on the programmes notified under Decoupled 
Income Support – Single Payment Scheme and supplementary aid (page 21 for 2005/6).    
5. The EC has notified its Single Payment Sche me (SPS) as coming within paragraph 6 of 
Annex 2 to the Agreement on Agriculture.  The EC gives the legal basis of this scheme as " Council 
Regulation (EC) No. 1782/2003 and national expenditure ". 
1. Questions relating to Article 51 of Council Regulation (EC) No. 1782/2003 
6. Article 51 of Council Regulation (EC) No 1782/20031 provided that farmers could use the 
parcels of land they declared under Article 44(3) "for any agricultural activity except for permanent 
crops …;  the production of the products referred to  in Article 1(2) of Council Regulation (EC) No. 
2200/96 and in Article 1(2) of Council Regulation (EC) No. 2201/96 [and] potatoes other than those 
intended for the manufacture of potato starch for which aid is granted under Article 93 ". 
7. That is, the parcels of land in respect of which a farmer was entitled to payment under the 
SPS under Article 44 could not be used for the pro duction of certain products.  Paragraph 6(b) of 
Annex 2 provides that the amount of payments notified under paragraph 6 "shall not be related to, or 
based on, the type or volume of  production … undertaken by the producer in any year after the base 
period ". 
8. In United States – Subsidies on Upland Cotton , the Appellate Body found that similar 
planting flexibility limitations imposed by the United St ates in respect of its direct payments (and 
their predecessor, the production flexibility contract payments) meant that the amount of the payments 
was related to the type of production undertaken by  a producer after the base period, within the 
meaning of paragraph 6(b) of Annex 2 to the Agre ement on Agriculture.  Accordingly, the Appellate 
Body upheld "the Panel's finding … in paragraphs 7. 413 and 7.414 of the Panel Report, that 
production flexibility contract payments and direct payments are not 'decoupled income support' 
within the meaning of paragraph 6, [and] are not green box measures exempt from the reduction 
commitments by virtue of Annex 2 of the Agreement on Agriculture"  2.  At its meeting on 21 March 
2005, the Dispute Settlement Body adopted the A ppellate Body report and the panel report, as 
modified by the Appellate Body report. 
9. Article 3 of the Understanding on Rules and Pr ocedures Governing the Settlement of Disputes 
provides that the "dispute settlement system of the WTO … serves to preserve the rights and 
obligations of Members under the c overed agreements, and to clarify the existing provisions of those 
agreements in accordance with customary rules of public international law". 
10. Given that the WTO dispute settlement system has clarified that conditioning payments on the 
non-production of certain products means that they "are not “decoupled income support” within the 
meaning of paragraph 6" of Annex 2 of the Ag reement on Agriculture, on what basis does the EC 
assert that its single farm payment meets the criteria for decoupled income support in paragraph 6 of 
Annex 2 of the Agreement on Agriculture? 
                                                      
1 Consolidated version as of 1 January 2006. 
2 See paragraph 342 of the Appellate Body report.  G/AG/R/54 
 Page 23 
 
 
  2. Questions relating to Article 33(1) of Council Regulation (EC) No. 1782/2003 
11. Article 33(1)(a) of Council Regulation (EC) No. 1782/20033 provided that "farmers shall 
have access to the single payment sch eme if they have been granted a pay ment in the reference period 
… under at least one of the support schemes referred to in Annex VI" . 
12. Paragraph 6(a) of Annex 2 to the Ag reement on Agriculture provides that "eligibility for" 
payments classified under paragraph 6 "shall be determined by clea rly-defined criteria such as 
income, status as a producer or landowner, factor use or production level in a defined and fixed base 
period".  
(a) Could the EC explain how the receipt of subsidies is a "criteria such as income, 
status as a producer or landowner, factor use or production level "? 
(b) Does the EC consider that the " clearly-defined criteria " referred to in paragraph 6(a) 
must be of a similar kind to the criteria listed (i.e. of a similar kind to "income, status 
as a producer or landowner, factor use or production level ")? 
3. Questions relating to Article 44(1) of Council Regulation (EC) No. 1782/2003 
13. Article 44(1) of Council Re gulation (EC) No. 1782/20034 provided that "any payment 
entitlement accompanied by an eligible hectare shall give right to the payment of the amount fixed by 
the payment entitlement" . 
14. Paragraph 6(a) of Annex 2 to the Ag reement on Agriculture provided that " eligibility for " 
payments classified under paragraph 6 " shall be determined by clearly-defined criteria such as 
income, status as a producer or landowner, factor use or production level in a defined and fixed base 
period" .   Could the EC explain how the holding of an  eligible hectare at the time of payment is a 
"criteria such as income, status as a producer or  landowner, factor use or production level in a 
defined and fixed base period "? 
III. NEW OR MODIFIED DOMESTIC SU PPORT MEASURES EXEMPT FROM 
REDUCTION (TABLE DS:2) 
A. CANADA - G/AG/N/CAN/73 
1. Grains and Oilseed Payment Program  
15. The program provided a payment to grai n and oilseed producers in FY 2005/2006, 
purportedly based on net sales from 2000-2004 or net sales in 2005. 
(a) When was the program publicly announced, i.e. was it during 2005? 
(b) Why were two  eligibility criteria used to determine producer eligibility i.e. average 
sales from 2000-2004 or sales in 2005?  
(c) What was the average payment per producer?  
(d) How was the amount per producer determined?  For example, did producers who 
suffered a 50 per cent downturn in net sales/prices receive more than producers who suffered a 25 per cent downturn in net sales?   Did producers who suffered a downturn 
                                                     
 
3 Consolidated version as of 1 January 2006. 
4 Consolidated version as of 1 January 2006. G/AG/R/54 
Page 24  
 
  in net sales/prices between 2000 and 2004 receive a higher payment than producers 
who only suffered a downturn in net sales in 2005? 
2. Farm Investment Fund (Nova Scotia) 
16. The Farm Investment Fund, as described, "provides investment for projects
 that enhance 
economic viability, farm and food safety, and promote environmental stewardship ". Applicants can 
receive up to $10,000 per programme year.  
17. Two components of the programme, namely th e Business Management and Human Resource 
Development component, and the Regulatory Comp liance and Food Safety component, are notified 
under paragraph 2 of Annex 2 of the Agreement on Agriculture (sub-paragraphs (c) and (d) 
respectively).  Programmes notified under paragraph 2 of Annex 2 cannot involve direct payments to 
producers and are for programmes which provide servi ces or benefits to agriculture or the rural 
community. 
(a) Can Canada clarify whether producers are receiving payments or subsidies from these 
programmes? For example to purchase: OH&S equipment (like tractor roll bars, seat belts or other devices), animal health equipm ent (like animal handling facilities) or to 
attend training conferences? 
(b) If producers are being provided with actual items, how does that comply with the 
requirement in paragraph 2 that there be no direct payments to producers? 
18. Further, different components of the fund pr ovide money for environmental programmes and 
are notified under paragraph 12 of Annex 2. Project activities include manure storages, fuel 
storages… amongst others. 
(a) What, if any, are the environmental or conservation benefits flowing from the Agro-
Environmental Initiatives?  Did eligible partic ipants, or any other entity, have to carry 
out any sort of environmental planning or impact studies to determine the environmental benefit of proposed activities under the initiative? 
(b) What is meant by building manure and fuel storages and what is the environmental 
benefit of such activities? 
IV. EXPORT SUBSIDY COMMITMENTS (TABLES ES:1 TO ES:3) 
A. C
ANADA - G/AG/N/CAN/74   
19. Australia notes that Canada provided export s ubsidies at around 100 per cent of the maximum 
budgetary outlay for butter, skim milk powder, chees e, other milk products and incorporated products 
for the MY 2005-06 and MY 2006-07.  Given that Ca nada's export subsidies fo r dairy products have 
been up at the maximum budgetary outlays, what reforms are being considered by Canada in 
preparing its dairy sector for the elimination of export subsidies once the D oha Round is concluded? 
20. During 2007, global prices for agricultural products  were at record high levels, notably for 
dairy products. Australia notes that during MY 2006- 07, most countries, including those which have 
historically provided export subsidies, reduced th e value and the volume of dairy export subsidies - 
some Members reduced the export subsidies for sk im milk powder to zero during this period.  
(a) Can Canada explain why it retained such hi gh levels of export subsidies for its dairy 
products during the MY 2006-07?  G/AG/R/54 
 Page 25 
 
 
  (b) Can Canada provide details of the export subsidy arrangements for their processed 
products, including clarifying what basic pr oducts are eligible for export subsidies 
under the incorporated products category?  
(c) Can Canada clarify whether those receiving export subsidies for the export of these 
basic products also receive, for the same  product, additional export subsidies when 
these products are incorporated into processed products? 
 
 G/AG/R/54 
Page 26  
 
  Annex 5 
 
Summary of points raised with respect to notifications
 
 
 
I. ADMINISTRATION OF TARIFF AND OTHER QUOTAS (TABLE MA:1) 
A. THAILAND  - G/AG/N/THA/66 
1. Question by the United States - Thaila nd appears to impose domestic purchase 
requirements for several tariff quota products , including soybeans, soybean meal, fresh 
potatoes, corn, and non-fat dry milk.  Can Thaila nd provide more details in this regard?  Could 
Thailand explain what steps are taken to en sure that allocations are transparent and 
predictable? 
The Government of Thailand has never en acted any legal regulation requiring the 
domestic purchase of soybeans, soybean cake, corn and non-fat dry milk. If there are 
domestic purchases, these are internal agre ements between private sector importers 
and farmers aimed at ensuring the stability of domestic production.  Furthermore, the 
tariff quota allocation is based on the "li cences on demand" administrative method.  
Eligible importers can submit their requests specifying their required amount of imports along with the required documents to the concerned committee.  Generally, 
the committee would issue licences for importing the products in question. 
2. The United States considered that its second ques tion appeared not to have been addressed by 
Thailand. 
II. IMPORTS UNDER TARIFF AND OTHER QUOTAS (TABLE MA:2) 
A. C
HINA  - G/AG/N/CHN/14 
3. Question by Canada – China indicates that  only 100,000 metric tonnes of wheat were 
imported under the tariff quota in 2007.  In G/MA/W/92, China reported that the volume of 
requests for allocation of the wh eat tariff quota in 2007 amounted to 12,983,200 metric tonnes, 
and that the quantity requested which was denied amounted to 3,347,600 tonnes.  Why is the fill rate for the wheat tariff quota so  low when there were applications  for allocations amounting to 
more than the volume of the tariff quota in the same year?  How did China's allocation and re-
allocation mechanism for this tariff quota operate in 2007? Could China provide information on the level of its domestic prices of wheat in 2007?  
According to China's WTO accession commitment, the wh eat tariff quota should be 
applied in the second half of the preceding year, allocated by the end of the year, and used in the following year.  The quantity requ ested is based on the market forecast for 
the following year.  However, as the market fluctuates, there is usually a gap between 
the requested quantity and the actual imported quantity.  
According to China's WTO commitment and re lated laws and regulations, in order to 
establish a unified, fair, transparent, predictable and non-discriminatory tariff quota administration mechanism on agricultural products, the Ministry of Commerce and 
National Development and Reform Commission legislated the Temporary Rules on 
Administration of Tariff Quotas  on Importing Agricultural Products  in 2003.  
Detailed rules were established on the request , allocation, reallocation of tariff quotas, 
and tariff quotas have been managed yearly on that basis.  These rules can be found 
on the web site of the Ministry of Commerce.  G/AG/R/54 
 Page 27 
 
 
  According to the Government's statistical  data, in 2007, the average domestic 
purchase price of wheat in the main production areas was 1,480 Yuan per tonne. 
III. SPECIAL AGRICULTURAL SAFEGUARD (SSG - TABLES MA:3 TO MA:5) 
A. JAPAN  -  G/AG/N/JPN/138 
4. Questions by Australia - Could Japan indicate  if its dairy industry has been negatively 
affected by external prices and if so to what extent?  Will the SSG action on "butter and other 
fats and oils derived from milk; dairy spreads " have any commercial impact on the domestic 
Japanese dairy industry?  
The out-of quota imports of "butter and other fats and oils derived from milk; dairy 
spreads"  have been increasing every year, which may damage our domestic dairy 
industry. The SSG mechanism was invoked in  conformity with the relevant WTO 
agreements. 
5. Question by New Zealand  - Japan has notifi ed use of the volume-based SSG for butter. 
However, we understand that Japan faced a shortage of butter supplies during 2008 and consequently had to initiate emergency imports of butter using the current access tariff quota to 
make up for this shortage.  It appears that it was these emergency measures which caused the 
very increase in imports that then triggered  the volume-based SSG.  Has Japan considered 
taking any measures to ensure that SSG actions are no longer triggered in situations where 
import increases have actually been essential  to rectify shortages in domestic supply?  
The volume-based SSG was invoked for butter imports because the total volume of 
the butter imported, both in-quota and out-o f-quota, had exceeded the trigger level. 
The out-of quota imports of dairy products have been increasing every year, which 
may damage our domestic dairy industry. The SSG mechanism was invoked in conformity with the relevant WTO agreements .  As for the shortage of domestic dairy 
products supplies, the deficiency was cove red by in-quota imports, which were not 
subject to the additional SSG duty.  
6. From Japan's response, New Zealand understood that the emergency imports were undertaken 
within the tariff quota, and therefore not subject to  the SSG remedy.  New Zealand indicated that it 
would be concerned if the volume of these emergency imports had been used in the calculation of the 
SSG trigger level.  New Zealand pointed out that it would follow up on this matter in due course, if 
necessary.  The EC indicated that it was extremely interested in Japan's replies and would study them 
carefully. 
B. J
APAN  - G/AG/N/JPN/139  AND G/AG/JPN/141 
7. Question by Australia - Could Japan indicate if its dairy industry has been negatively 
affected by external prices, and if so, to what extent?  
The imports of "yogurt" have been increasing every year, which may damage our 
domestic dairy industry. The SSG mechanis m was invoked in conformity with the 
relevant WTO agreements. 
8. Australia flagged that it might have foll ow-up questions regarding this matter.  G/AG/R/54 
Page 28  
 
  C. P
HILIPPINES  - G/AG/N/PHL/39 
9. Questions by Canada - Paragraph 5 of Article 5 of the Agreement on Agriculture 
outlines the calculation of the triggers for the price-based SSG, which notes, inter alia , that the 
triggering of the price-based SSG is based on the difference between the c.i.f. import price of the 
shipment expressed in terms of the dom estic currency and the trigger price.   
10. In its Table MA:5 notification dated 11 November 2008, the Philippines have supplied, 
for each notified tariff line, information on the period of time during which the price-based SSG 
actions were taken but no information is given on the number of shipments or the quantities affected.  For example, in the 2005 calendar ye ar, price-based SSG actions were applied on 
tariff line 0207.14.92 "Other cuts of offal of fowls of the species Gallus domesticus, frozen " from 
27 November 2004 to December 2006.  Given that th e price-based SSG is applied on a shipment-
by-shipment basis and that the Table MA:5 noti fication reports price-based SSG usage over a 
period of time (e.g. from 27 November 2004 to December 2006 for tariff line 0207.14.92), can the Philippines provide information on : (i) the numb er of shipments affected by the price-based 
SSG as well as the percentage of shipments affected, for each notified tariff line
; and  (ii) the 
quantity of imports affected by the notified price-based SSGs?  
The Philippines implements its SSG based on the Republic Act 8800 issued in  2000, 
and Administrative Order No. 03, series of 2000.  Those laws and regulations were essentially developed in accordance with the WTO provisions on SSG under Article 5 of the Agreement on Agriculture, particular ly on the calculation of triggers and 
remedies. The Philippines undertook to provide the requested information on the 
number of shipments affected as soon as received from capital. 
D. C
HINESE TAIPEI  - G/AG/N/TPKM/63 
11. Questions by Australia - As regards the volume-based SSG for other liquid milk, can 
Chinese Taipei explain why it has grouped the 13 tariff lines together to calculate the trigger 
level? Would the SSG have been triggered on all of these tariff lines if the calculations had been 
made separately (i.e. tariff line by tariff line)?   
Chinese Taipei indicated that it has adopted a grouping approach to the calculation of 
the trigger for "other liquid milk" due to the lack of availability of consumption data for each tariff line.  As for the data used in  the calculation of the trigger level, similar 
questions have been raised before, i.e. at the 45
th and the 46th regular meetings of the 
Committee on Agriculture.  Chinese Taipei c onfirmed again that the calculation and 
activation of the SSG for "other liquid milk " was fully in accordance with Article 5 of 
the Agreement on Agriculture.   
12. Question by Australia: Article 5.4 of the Agreement on Agriculture specifies that the 
trigger level shall be set on imports as a percen tage of the corresponding domestic consumption 
during the three preceding years. As the SSG wa s triggered at the end of 2008, can Chinese 
Taipei please explain why 2007 data was not u sed in the calculation of the trigger level?  
According to Article 5.4 of the Agreement,  the SSG trigger level should be calculated 
using the "average quantity of imports during th e three preceding years for which 
data are available".   The 2008 trigger level for other liquid milk was calculated and 
published by the end of 2007.  At that time , the 2007 data was not available, therefore 
the trigger level was calculated using the data for the three years from 2004 to 2006.  G/AG/R/54 
 Page 29 
 
 
  IV. DOMESTIC SUPPORT (TABLE DS:1) 
A. PHILIPPINES  - G/AG/N/PHL/37 
13. Question by the United States in relation to Supporting Tables DS:5 for the years 2002 
to 2004 -  Our data indicates that eligible production  for corn and rice is significantly higher 
than what is reported in these tables, which wo uld suggest that total market price support 
should also be much higher.  The calculation of  total market price support should be based on 
the quantity of production eligible to receive pr ice support, not on the actual quantity procured, 
as reported in these tables.  On what basis does the Philippines justify not including all eligible production in the calculation of total market price support for corn and rice?  
Annex 3.8 of the Agreement on Agriculture provides that the calculation of market 
price support is a product of the price gap between the external reference price and 
the administered price multiplied by “the quantity of production eligible to receive 
the applied administered price".  In the Philippines' context, this eligibility is qualified 
and limited by two factors, namely, (i ) the total budgeted or appropriated amount, 
which in this case is limited to 2 billion  Philippine Pesos (between US$400,000 and 
US$500,000 depending on the exchange rate) and (ii) the fact that the price support 
programme under Republic Act 7606 mandates di rect procurement and purchase only 
from subsistence farmers whose annual income does not exceed 180,000 Philippine 
Pesos.  
The notified amount of 194,871 metric tonn es refers to actual procurement. We note 
the comment made by the United States that the figure for eligible production should 
be a different number from the actual quantity  procured, and we are awaiting capital's 
response.  However, we reiterate that the quantum of support, being of a fixed amount 
limited by the budgetary appropriation for the programme, the amount of eligible 
production could not be significantly higher than the indicated amount. 
B. U
NITED STATES  - G/AG/N/USA/51/R EV.1 
14. Questions by Brazil on the Bioenergy Progr am and Ethanol Excise Tax – The revised 
notifications for the years 2000 and 2001 add p ayments made for corn, sorghum, soybeans and 
wheat, classifying them as product-specific support: 
(a) Could the United States confirm that the notified budgetary outlays are those 
authorized by Section 9010 of the Farm Security and Rural Investment Act of 2002 (Public Law 107-171, of 13 May 2002)?   
 From 1 December 2000 to 30 Sept ember 2001, the USDA Bioenergy 
Program was authorized and funded by the USDA Commodity Credit 
Corporation (CCC) under Section 5(e) of the CCC Charter Act, 15 U.S.C. 
714c authority.  The Final Rule im plementing the programme was published 
on 13 November 2000 in the Federal Register  and is codified at 7 CFR, Part 
1424.  As noted in Brazil's question, the Bioenergy Program was continued 
under Title IX, Section 9010, Farm Secu rity and Rural Investment Act of 
2002 and funded by the CCC.   
 The programme terminated on 30 June 2006. 
 G/AG/R/54 
Page 30  
 
  (b) Considering that the purpose for revisi ng the notification s for the years 2000 
and 2001 was to include payments under the "Bioenergy Program", and that ethanol blenders have been benefiting fr om an excise tax credit of 51 cents per 
gallon, a subsidy that is considered "one of the major drivers behind ethanol 
expansion over the last decade"  according to the USDA, could the United States 
indicate if, and how, this subsidy is acco unted for in its notifications for the years 
2000 to 2007? 
  Although the United States does not agr ee with Brazil's characterization of the 
ethanol blender tax credit, the United States has regularly notified the (prior) excise tax exemption and current tax credit provisions  that accrue to ethanol blenders as an 
industrial subsidy to the WTO Committee on Subsidies and Countervailing Measures. 
 
15. Question by Canada: The "Bioenergy Program Payments " are notified as "other 
product-specific budgetary outlays", but only for corn, sorghum, soybeans and wheat.  
However, the Program apparently could support many other products. While the authority is 
not notified, it appears that the Bioenergy Pr ogram was established in 7 CFR Ch. XIV, part 
1424 and lists eligible commodities such as: barl ey, corn, grain sorghum, oats, rice, wheat, 
soybeans, sunflower seed, canola, crambo, rap eseed, safflower, sesame seed, flaxseed, mustard 
seed, and cellulosic crops, such as switch grass a nd short rotation trees, grown on farms for the 
purpose of producing ethanol and/or bio diesel , or any other commodity or commodity by-
product, as determined and announced by CCC u sed in ethanol and biodiesel production.  Can 
the US confirm that support under this program me was not provided for any other products?  
Confirmed.  Payment records are mainta ined by the USDA Farm Service Agency, 
which reported payments by commodity. 
C. U
NITED STATES  - G/AG/N/USA/60/R EV.1 
1. Crop Disaster Payments (2005) 
16. Questions by Canada: It is not clear on what  grounds the United States claims all Crop 
Disaster Payments for 2005 under P.L. 108-324 as "Green".  
(a) The notification indicates that “assistance was provided to crop producers 
suffering from production losses of at least 30 per cent”.   Can the United States 
confirm that P.L. 108-324 assistance accounted for within the US$378 million 
refers to assistance provided only  to those crop producers suffering from 
production losses that exceeded 30 per cent, and not from any smaller 
production losses?  Where in its notifica tion does the United States report the 
P.L. 108-324 assistance provided to crop producers suffering from production 
losses up to 30 per cent?  
 The United States confirms that assistance was provided only to crop 
producers suffering from production losses exceeding 30 per cent.   
(b) Paragraph 8(a) of Annex 2 requires pro duction losses to be measured with 
reference to the average production in the preceding three years or an "Olympic" five-year average of producti on.  From what average levels of 
production are the production losses measured that give rise to payments under P.L. 108-324?  Where in its notification does the United States report any Crop 
Disaster Payments under P.L. 108-324 that are not established with reference to 
the production averages stipulated in paragraph 8(a)?  G/AG/R/54 
 Page 31 
 
 
   Payments are made based on “approved yields ," which are calculated based 
on the producer's actual production hi story (APH), the farm's operative 
production history.  The approved yields are computed in accordance with the Federal Crop Insurance Corporation's (FCIC) Actual Production History Program.  The approved APH yield is calculated from a database containing a 
minimum of 4 years and a maximum of 10 years, and is updated every year.   
(c) The United States also reports that “ additional payments ” were authorized under 
a different legislation than P.L. 108-324, viz. P.L. 110-28, for " crop quantity 
losses ". There is no indication of any 30%  threshold at all with regard to these 
“additional payments”. It appears the amount for “Crop Disaster Payments” 
($378 million) also encompasses these “addi tional payments”.  With regard to 
assistance under P.L. 110-28, the above qu estions are repeated, with P.L.108-324 
being replaced by P.L. 110-28. 
  Same as above. 
(d) The United States reports that the “ additional payments ” were authorized under 
P.L. 110-28 for “ crop quantity losses incurred for 2005, 2006, or 2007 ”.  How 
much of the $378 million derives from Cr op Disaster Payments authorized 
under P.L. 110-28 for 2005?  In G/AG/N/USA/36, which covered 1998, the “multi-year crop disaster payments ” was notified as non-product-specific AMS, 
referring to “payments conditional on having experienced multi-year losses ”. Why 
are payments under P.L. 110-28 for losses incurred for 2005, 2006 and 2007 not 
similarly reported as non-product-specific AMS?    
 The available data does not separate crop disaster payments by authorizing 
legislation. Total payments for 2005 crops were $378 million, which includes 
payments made under both programmes. Payments under P.L. 110-28 are not 
for multi-year losses.  Producers are required to indicate for which single year 
they are claiming losses when applying for the programme. The 1998 
programme was a one-time ad hoc  program, unlike the Crop Disaster 
Payments Program that has operated for many years under the same criteria.  The multi-year disaster payments in 1998 did not meet the 30 per cent loss threshold.  Payments were a top-off of insurance payments.  
(e) It appears that the notified $378 million of 2005 support is authorized under two 
separate laws (P.L. 108-324 and P.L. 110-28).  Paragraph 8(c) of Annex 2 
stipulates that payments shall compensate  for not more than the total cost of 
replacing certain losses.  Paragraph 8(e) of Annex 2 stipulates that the total of payments under Paragraphs 7 and 8 of A nnex 2 shall be less than 100 per cent of 
the producer's total loss.  What rules a nd procedures did the United States apply 
to ensure that the total payments to a producer under P.L. 108-324 and P.L. 110-
28 and claimed under paragraph 8 did no t exceed the producer's total loss (we 
note that no support is claimed under paragraph 7)? 
  USDA regulations for the Crop Insurance Pr ogram stipulate that eligible producers 
cannot receive payments exceeding 100 per cent of the total loss from disaster payments and crop insurance.  The Risk Management Agency and the Farm Service 
Agency enforce these limits. 
 G/AG/R/54 
Page 32  
 
  (f) In view of the fact that Crop Disaster Payments have been authorized under a 
succession of laws, the programme may have undergone modifications over time. We are unable to find any Table DS:2 notification corresponding to these 
payments.  Such notification would have provided a comprehensive explanation of how a programme claimed as Green m eets the criteria of Annex 2.  When 
does the United States plan to submit  Table DS:2 notifications for any 
modifications of the Crop Disaster Payments Program?    
  The Crop Disaster Payment Program was originally notified in the US Schedule of 
commitments for the Uruguay Round (Schedul e XX, Part IV: Agricultural Products).  
Payments under the original and accompanying  legislation have been made in most 
years since 1995, the first year of domestic support notifications, following the same 
general parameters. Therefore, the Unite d States has never submitted a Table DS.2 
because the programme has not fundamentally changed since the original base period 
notification. 
 
17. Canada indicated that it would study the res ponses supplied by the United States in detail and 
follow-up with requests for further clarification, as appropriate.  
2. Non-product-specific AMS   
18. Question by Switzerland - One of the biggest  amounts of non-product-specific support 
in the last years was paid under the Crop a nd Revenue Insurance Programme.  How is this 
support calculated? Does the pr emium rate remain constant? What amount of the premium is 
subsidized? 
The method for calculating the crop insura nce net indemnities takes the annual grand 
total of premiums collected, subtracts the grand total of premium subsidies provided, 
and then compares the remaining premium total with the grand total of indemnities 
paid.  The result is the net indemnities reported as non-product-specific AMS support.  
Data come from the Risk Management Agency of USDA.  Premiums and the level of 
subsidy provided vary with the level of  coverage and type of policy.   
D. U
NITED STATES  -  G/AG/N/USA/66 
1. Domestic food aid 
19. Question by Japan: The amount of expendi tures under “domestic food aid” seems to 
have increased substantially. Could the United Stat es explain the reason for such an increase?     
Increased expenditures for the Food Stamp and Child Nutrition programs account for 
most of the increases in domestic food aid  - US$33 billion and US$12 billion in 2005 compared to US$35 billion and US$13 b illion in 2007, accounting for US$3 billion 
of the US$4 billion increase. The demand for domestic food pr ogrammes increases 
during times of economic distress, which began to affect citizens in 2007.   
20. Questions by Turkey: What are the reasons behind the increase in domestic food aid in 
the year 2007 compared to previous years?  Coul d the United States specify the domestic food 
aid on product basis?  Which criteria are taken into account for the payments? 
See response supplied above in relation to th e question posed by Japan.  Furthermore, 
it should be noted that most domestic food ai d is not provided on the basis of specific 
products. For example, the Food Stamp Program (FSP) provides participants with a  G/AG/R/54 
 Page 33 
 
 
  cash voucher, which they can use to purch ase food in places like grocery stores.  
Grocery store shelves contain food from many origins and therefore the voucher may be used on both domestic and imported products. Child Nutrition Programs (CNP) include several different programs, the main one being the school lunch and breakfast programme. All food aid programmes have lo w-income eligibility standards specified 
in programme regulations.
1   
2. Decoupled Income Support - Direct Payments 
21. Question by Australia: Australia notes that under Section 1106 of the Farm Security 
and Rural Investment Act of 2002, the provision of direct payments was conditional upon the non-production of fruit, vegetables and wild ri ce on base acres.  In this respect, Australia recalls 
that: 
(a) In United States – Subsidies on Upland Cotton , the Appellate Body (AB) found 
that these planting flexibility limitations meant that the amount of the payments was related to the type of production  undertaken by a producer after the base 
period, within the meaning of paragraph 6(b) of Annex 2.  Accordingly, the AB 
upheld “the Panel's finding … in paragraphs 7. 413 and 7.414 of the Panel Report, 
that production flexibility contract payments and direct payments are not 
‘decoupled income support' within the meaning of paragraph 6, [and] are not green box measures exempt from the reduction commitments by virtue of Annex 2”
2.   
(b) At its meeting on 21 March 2005, the Dispute Settlement Body adopted the AB 
report and the panel report, as modified by the AB report.   
(c) Article 3 of the Understanding on Rules and Procedures Governing the 
Settlement of Disputes provides that the “dispute settlement system of the WTO … 
serves to preserve the rights and obligations of Members under the covered agreements, and to clarify the existing provisions of those agreements in 
accordance with customary rules of public international law ”.   
(d) Given that the WTO dispute settlement system has clarified that direct 
payments “ are not “decoupled income support ” within the meaning of paragraph 
6” of Annex 2, on what basis does the United States assert that “ the payments 
meet the criteria for decoupled income support in paragraph 6 of Annex 2 ”?
3 
 The United States believe that the paym ents meet the criteria for decoupled 
income support in paragraph 6 as well as paragraph 1 of Annex 2. 
22. Question by Brazil: How is the classification of direct payments as decoupled income 
support under paragraph 6 of Annex 2 consistent with the AB findings in the United States – 
Subsidies on Upland Cotton case ? 
We believe that the payments meet the criteria for decoupled income support in 
paragraph 1 and paragr aph 6 of Annex 2. 
                                                      
1 See http://www.fns.usda.gov/fns/ for links to websites providing full eligibility information. 
2 Paragraph 342 of the Appellate Body report. 
3 See the US response to Australia's questions at the 21 November 2007 m eeting of the Committee on 
Agriculture, G/AG/R/50, paragraph 6 of Annex 1, refers. G/AG/R/54 
Page 34  
 
  23. Questions by Japan: In spite of the fact that the AB in US – Subsidies on Upland Cotton 
found that the Direct Payments Program was not a Green Box measure, the United States seems 
to notify it as such. The AB determined that the planting flexibility limitations do not fully 
conform to paragraph 6(b) of Annex 2.  Has the related regulation been amended?  If not, could 
the United States explain how the Direct Paymen ts Program meets the requirement contained in 
paragraph 6(b) of Annex 2?    
 Same response as above. 
24. South Africa wondered whether the United States could elaborate further on the way the 
Direct Payments Program met each cr iteria of paragraph 6 of Annex 2. 
25. Question by Australia: Australia notes that : 
(a) direct payments continue to be notified as decoupled income support. Under 
Section 1101(a) of the Farm Security and Rural Investment Act of 2002, 
producers were allowed to elect to update  their historical base acres used to 
determine direct payments. This would, prima facie , appear to contravene the 
requirements for decoupled support in  paragraph 6(a) of Annex 2 which 
stipulate that eligibility for such payments should be determined in a defined 
and fixed base period.   
(b) in response to a question from Australia at the November 2007 meeting of the 
Committee on Agriculture, the United States stated that the historical bases and yields are fixed and unchanging for the life of the programme. This explanation 
appears to be based on production flexibility contract (PFC) payments and direct payments being separate programmes. While the payment rate for PFC 
payments declined over time and the paym ent rate for direct payments has been 
fixed, direct payments appear to be fu ndamentally the same programme as PFC 
payments with a simple name change.   
(c) Could the US explain the distinguishing features of these programmes which 
justify the interpretation of direct payments being a separate programme from 
PFC payments? 
 The PFC Program and the Direct Pa yment Program were authorized under 
two completely different pieces of legislation.  The parameters for each were established under different regulations. The payment rates for the programmes were different.  The elig ible land to establish the fixed and 
unchanging bases and yields for the lif e of the programmes differed, as did 
eligible commodities.  (For exampl e, base acres for soybeans can be 
established for direct payments, but could not have been for PFCs.)   
 In any event, for both programmes the criteria for the base period for area and 
yields were specific and clearly defined; and the historical bases and yields were fixed and unchanging for the life of the programme, consistent with 
paragraph 6(a) of Annex 2. 
3. Crop Disaster Payments (2006 and 2007) 
26. Questions by Canada: Three different Acts and an unspecified number of additional 
Acts are listed in the notification (hereafter “ listed Acts ”). The United States indicates, 
presumably with reference to these listed Acts, that “Assistance could be provided when there  G/AG/R/54 
 Page 35 
 
 
  were production losses of at least 30 per cent ”, a statement which says nothing that would 
support the Green box claim for the full US$798 m illion.  The United States also refers to 2006  
disaster payments being authorized under P.L. 110-28 but does not provide any information on how these payments meet the Green box criteria.   
(a) Can the United States confirm that th e assistance accounted for within the 
US$798 million refers to assistance under the listed Acts and that P.L. 110-28 
payments were provided only
 to those crop producers suffering from production 
losses that exceed 30 per cent, and not from any smaller production losses?  Where in its notification does the United  States report assistance under the listed 
Acts and P.L. 110-28 provided to crop producers suffering from production 
losses up to 30 per cent?  
Same response as under para. 16(a) above.   
(b) Paragraph 8(a) of Annex 2 requires pro duction losses to be measured with 
reference to the average production in the preceding three years or an "Olympic" five-year average of producti on.  From what average levels of 
production are the production losses measured that give rise to Crop Disaster 
Payments under the listed Acts and P.L.  110-28?  Where in its notification does 
the United States report any Crop Disaster Payments under the listed Acts and P.L. 110-28 that are not established with reference to the production averages stipulated in paragraph 8(a)? 
Same response as under para. 16(b) above.   
 
27. Questions by Canada:  
(a) Same questions as above, relating to the 2007
 disaster payments being 
authorized under P.L. 110-28.   
The same answers as under paras. 16(a) and 16(b) were provided by the United 
States. 
 
(b) The reference to “ crop year 2006 disaster payments ” should presumably refer to 
crop year 2007 disaster payments? 
Yes, this was a typographical error, a corrigendum will be issued in due course.  
4. Conservation Program Technical Assistance   
28. Question by Australia: This programme is listed in Supporting Table DS:1 under " (a) 
General services".   In the context of providing extension, advisory and training services under 
this programme, what is meant by “ help install  approved practices”?   
The Natural Resource Conservation Service (NRCS) provides technical assistance to 
help clients apply and main tain planned conservation practices. NRCS technical 
assistance for applying the conservation practices and systems may include: design, 
layout, and evaluation of conservation pr actices;  development of management 
alternatives and cultural practices needed to  establish and maintain vegetation;  and 
planning for the construction and maintena nce of other conservation practices needed 
to protect and enhance natural resources. G/AG/R/54 
Page 36  
 
  The Conservation Technical Assistance Program administered by NRCS does not 
include financial or cost-share assistance to producers.  It can help producers develop 
conservation plans, which may serve as a b asis for them to enter into financial 
assistance and conservation programmes provided by other programmes. 
5. Structural adjustment through investment  aids: Farm Service Agency (FSA) Farm 
Credit Programs 
29. Questions by Australia: Farm Credit Programs provide loans and guarantees to “ owner-
operators ” of farms in “ situations of structural disadvantage ”.  One Farm Credit Program, the 
“Direct Loan Program ” (DLP), provides funding for persons who will own or operate a farm 
once the loan is repaid. Monies loaned are ava ilable to, amongst other things, purchase land. 
(a) Does this programme provide funding to  persons who are not yet agricultural 
producers to purchase land for farming?  If  so, how is someone who is not yet a 
producer at a structural disadvantage within the meaning of paragraph 11 (a), Annex 2, Agreement on Agriculture?   
 To qualify for a Farm Ownership loan  – which could facilitate, though not 
necessitate, the purchase of land - under the DLP, the applicant must have 
participated in the operation of a farm or  ranch in preceding years.  [at least 3 
of the last 10 years ]. 
(b) To be eligible under the program, the recipient must be unable to obtain credit 
elsewhere.  In cases of joint financing, (i.e. between the FSA and a third party lender), how is the inability to obtain finance still applicable when credit is 
available from a third party lender, and what is the structural disadvantage that 
such recipients are subject to? 
The FSA provides direct and guaranteed loans to farmers and ranchers who 
are unable to obtain financing from commercial credit sources.  The FSA guaranteed loans provide lenders (e.g., banks, Farm Credit System 
institutions, credit unions) with a guarantee of up to 95 percent of the loss of 
principal and interest on a loan. Farmers and ranchers apply to an agricultural 
lender, which then arranges for the guarantee. The FSA guarantee permits lenders to make agricultural credit available to farmers who do not meet the lender's normal underwriting criteria.  The existence of joint financing 
demonstrates that FSA financing was necessary for the recipient to obtain 
credit.  Due to economies of scale, it is difficult producers who are not well 
capitalized to transition from less viable operations to more viable operations, which often require significant capital to develop and sustain. 
6. Structural adjustment through investment aids: State Mediation Grants  
30. Question by Australia: Can the United States explain the structural disadvantage that 
justifies the provision of funding under the State Mediation Grants programme?  
While initially this programme primarily pr ovided mediation related to farm credit 
programs and often for producers that were  typically under represented, it has since 
come to encompass mediation for a wide range of farm service and conservation 
programmes.  Upon closer review, the pr ogramme should appropriately be notified 
under the " General Services " rubric of  Supporting Table DS:1.  G/AG/R/54 
 Page 37 
 
 
  7. Environmental payments 
(a) General  
31. Question by Japan: The amount of expenditures under “environmental payments” 
seems to have increased substantially. Could the United States explain the reason for such an 
increase?     
The US$400 million increase in Environmental Payments are split among CRP 
(+US$100 million), CSP (+US$200 million), and EQIP (+US$150 million). (There 
were decreases also in some programmes).  Environmental payment levels reflect 
both additional funding being made availa ble and increased participation rates. 
(b) Ground and Surface Water  
32. Questions by Australia:  Producers are en couraged to conserve ground and surface 
water through, inter alia , "incentive payments ". How much are the incentive payments? What 
are the criteria for eligibility? How is the amount of each incentive calculated?  
The Ground and Surface Water Program is part of the Environmental Quality 
Incentives Program (EQIP).  The programme uses a combination of cost-share and 
incentive payments to encourage producers to conserve ground and surface water.  
Incentive payments vary in size depending on the type specific management practice 
and the location.  The criteria for elig ibility follows closely along the lines of the 
EQIP.   
Resource priorities (net reductions of gr ound and surface water used; reduction in 
non-point source pollution; reduction in em issions; reduction in soil erosion; and 
promotion of at-risk species). State Conservationists, with advice from their State Technical Committee, then identify the priori ty concerns in the State, decides how 
funds will be allocated, what practices will be  offered, what the cost-share rates and 
incentive payments will be, the ranking pro cess used to prioritize contracts, and 
which of these authorities will be delegated to the local level.   
In many case, incentive payments are simply a flat rate based on the estimated costs 
of an activity. Cost-share and incentive paym ents will vary by State but reflect the 
costs and income forgone related to the practice in question.  
(c) Conservation Security Program (CSP)
  
33. Questions by Australia: The CSP provid es payments for structural and land 
management practices that address resource concerns.   
(a) Could the United States provide examples of what sort of actions constitute 
"structural and land management practices "?  
 A structural practice is a conservation practice that primarily involves the 
establishment, construction, or insta llation of a site-specific measure to 
conserve, protect from degradation, or im prove soil, water, or related natural 
resources in the most cost-effective manner. Examples include, but are not limited to, filter strips, grassed waterw ays, tail-water pits, livestock watering 
facilities, and capping of abandoned wells (well decommissioning). 
 Management practices include conservation practices that primarily require 
site-specific management techniques a nd methods to conserve, protect from G/AG/R/54 
Page 38  
 
  degradation, or improve soil, water, or  related natural resources in the most 
cost-effective manner.  Management pr actices include, but are not limited to, 
nutrient management, integrated pest management, strip-cropping, contour farming, grazing management, and wildlife habitat management.  
Management practices have a life span of one year. 
(b) What, if any, environmental benefits flow from this programme? 
 CSP helps producers maintain con servation stewardship and implement 
additional conservation practices th at provide added environmental 
enhancement, while creating powerful incentives for other producers to meet 
those same standards of conser vation performance. The priority 
environmental benefits are reduction of non-point pollution, reduction of 
emissions to improve air quality, reduc tion in soil erosion and sedimentation, 
and promotion of at-risk species habitat conservation. 
8. Current AMS 
34. Questions by Japan:  
(a) Could the United States explain the reason why the Total Current AMS in 2006 
and 2007 markedly decreased compared wi th that in 2005, especially for cotton 
and corn? What does the United States think about the prospects for AMS and 
CCPs in 2008?   
  High commodity prices reduced expenditur es under the marketing loan program.  
Corn marketing loan program benefits in  2005 totalled US$1.5 billion compared to 
US$3 million in 2006 and US$17 million in 2007, and cotton marketing loan program 
benefits fell from US$1.3 billion and US$1 billion in 2005 and 2006 to US$207 million in 2007.  Although it is too early to  speculate about US notifications for 2008, 
especially given the new US farm legislati on, commodity prices have remained high 
in 2008 and early 2009. 
(b) Market price support for dairy:  Could the US provide detailed information on 
programmes classified for this support? Are the three dairy programmes, i.e. the 
Milk Income Loss Contract Program (MILCP), the Dairy Price Support 
Program (DPSP) and the Federal Milk Marketing Orders (FMMO) all included 
in the calculations? Is any other programm e also included? If not, what is the 
justification for not including such programme(s) in the calculations?   
  The United States calculates market price support using a price gap methodology.  
The legislated applied administered price for milk of US$9.90/cwt (expressed in metric terms as US$218.258/ton) is compar ed to the 1986-88 world reference price 
and the difference is multiplied by the volu me of milk produced during the marketing 
year. The MILCP payments are reported as non-exempt direct payments.  These are 
the two main elements of dairy support.  FMMOs are not included in the calculation 
of dairy support.  Federal orders establish minimum prices that are based on actual 
market prices.  They do not guarantee a fi xed price and they fluctuate with market 
conditions.  They provide neither price support, nor result in any budget outlay.   
 
(c) What are the prospects fo r the market price support for dairy in 2008 and the 
underlying factors? In particular, are any changes in the dairy-specific AMS 
expected to result from the setting of  the minimum support price for cheese,  G/AG/R/54 
 Page 39 
 
 
  butter and non-fat dry milk, rather than  for milk, under the DPSP? With this 
change, how will milk price support be calculated? 
  The United States has not yet prepared its domestic support notifications for 2008.  
Where applied administered prices still operate, the United States would use a price 
gap methodology, and any budgetary support wo uld also be appropriately notified. 
9. Non-product-specific AMS 
(a) Irrigation on Bureau of Reclamation Projects in 17 Western States  
35. Questions by Australia: Can the United States provide figures on the outstanding 
unpaid balance of the capital investment? What interest rate has been used to determine the 
level of the subsidy?  In 2005, the actual unpaid balance was US$4.8 billion.  The interest rate used is the 30 year long-term Treasury interest rate for the applicable time period.  Could the 
United States explain why the 2005 estimate has been used for 2006 and for 2007?  
The latest data available are for 2005. Esti mates for 2006 and 2007 have not yet been 
made available. 
(b) State credit programmes  
 
36. Questions by Australia:  
(a) Do the words “ the last estimate was made in 1994”  mean that the figure used in 
the 2006 and 2007 notifications, i.e. US $48.806 million, is based on estimates 
from 1994? If the figure is from 1994, why is this so?  
 The figure reported for 2006 and 2007 is  based on survey data from 1994, 
which has been consistent for all notif ications since that year. The Economic 
Research Service (ERS) conducted a survey of State credit programs from 
1989 to 1994. The survey was discontinued after 1994, so the data from that 
final survey have been reported for succeeding years without change.  
 According to an article describing the results of the initial 1989 survey4, most 
of the State credit programmes were initiated in response to the farm 
financial crisis of the mid-1980s and occurred earliest and were most active 
in those regions hardest hit by that crisis.  No follow-up research has been 
attempted since the survey ended to determine whether these programmes continue to operate. 
(b) Why is information available for the St ate programs for agriculture that are 
notified under the Green Box, but not for the State credit programs listed under non-product-specific support? 
 The data source for State programs for agriculture is different from the data 
source for State credit programs.  State programs for agriculture have been reported by the Bureau of Census in "State Government Finances Relating to 
Agriculture,"  which is based on their Census  of Governments and Surveys of 
Government Finances.     
                                                     
 
4 "State Credit Subsidy Programs for Agriculture" , a survey by G.B. Wallace et al.  in Agricultural 
Income and Finance Situation and Outlook Report , ERS/USDA, December 1990, pp. 10-14. G/AG/R/54 
Page 40  
 
   The Census reported state agricultural expenditures from their classification 
code for agriculture (54), which included such expenditures as “ support and 
promotion of agricultural associations, fairs, livestock and poultry shows, 
and the like; agricultural boards and advisory commissions; provision of 
agricultural extension services; agricu ltural experiment stations and other 
research activities; promotion, improvem ent, and control of farm products; 
promotion of the sale or consumption of agricultural goods; regulation of the 
quality, safety, and handling of agricultu ral products, such as inspection, 
licensing, and standardization; protecti on of crops and stocks from predatory 
animals and other natural hazards. ”  Data on State credit programs were not 
included. 
 The Census Bureau report on agricu lture-related expenditures was dropped 
after 2005, so we have used the 2005 figure for both 2006 and 2007.  We expect the agriculture-related expenditu res report will become available again 
in 2008. 
(c) Crop and Revenue Insurance Program (CRIP)
   
37. Question by Switzerland – One of the biggest  amounts of non-product-specific support 
in the last years was paid under the CRIP.  Ho w is this support calculated? Does the premium 
rate remain constant? What amount of the premium is subsidized? 
Same response as provided to Switzerland w ith respect to  the US notification 
G/AG/N/USA/60/Rev.1 under paragraph 18 above.   
38. Questions by Australia: The total government  cost of the CRIP was US$3.462 billion in 
2006 and US$3.457 billion in 20075, and comprises: “ Delivery and Other Administrative 
Expenses ” (paid primarily to the private companies that provide the crop insurance) plus 
“Gross Indemnities ” plus “ Underwriting Gains ” (paid entirely to the private companies that 
provide the crop insurance) plus “ Administrative and Operating Expenses ” less “ Producer 
Premium and Administration Fees ”.   
(a) The United States notifies the “ Gross Indemnities ” component of its total outlays 
on the CRIP within the “ Non-product-specific budgetary outlay ” column of 
Supporting Table DS:9.  In 2007, “ Gross Indemnities ” constituted less than 
60 per cent of the total CRIP outlays.  Why does the United States exclude the other components of its total outlays on the CRIP from Supporting Table DS:9? 
 Countries report crop insurance differently, and for our programmes, our 
methodology best represents the amount of government support in favour of producers. These other components of the CRIP essentially pay the administrative costs and a share of the provider costs for operating the programme.  Those payments provide support to crop insurance providers, 
but not to commodity producers.   Administrative costs could reasonably be 
notified under General Services, Supporti ng Table DS:1, as we have for other 
agency expenditures. 
(b) Could the CRIP be delivered without incurring the cost of the “ Delivery and 
Other Administrative Expenses ”; “Underwriting Gains ”; and “ Administrative and 
Operating Expenses ”? 
                                                     
 
5 USDA Budget Summary and Annual Performance Plan for FY2008 and FY2009.  G/AG/R/54 
 Page 41 
 
 
    These costs are part of administering the CRIP.   
 
(c) Why aren't these costs considered to be “ domestic support provided in favour of 
agricultural producers”  within the meaning of Article 1(h) of the Agreement on 
Agriculture? 
  Costs of programs are not the same concept as support measures in favour of 
agricultural producers.  We believe our method of notifying crop insurance is appropriate to that concept. 
 
(d) Of the total amount of liabilities covered by the various CRIPs in 2007, 99.5 per 
cent were split between 94 individual commodities
6. The remainder was 
attributable to whole-farm policies.  Th e US government is able to provide, for 
each of these 94 commodities, the “ Total Premium ”, the “ Subsidy ”, and the 
“Indemnity ”, and could therefore calculate the “ Indemnity ” minus the difference 
between the “ Total Premium ” and the “ Subsidy ” (method of calculating domestic 
support used by the United States in it s notification of crop insurance).  Given 
that the overwhelming majority of crop insurance can be ascribed to specific 
agricultural products, and that the value of the domestic support can be calculated for each such product using the US method of calculation, why does 
the United States notify subsidized crop and revenue insurance as “ Non-Product-
Specific AMS ”? 
  The crop insurance provisions are generic and broadly available to a wide range of 
commodities.  Although insurance plans ar e written on a crop-specific basis, access to 
the program is not limited based on production of a specific commodity.  The premium subsidies are not product-specific but  apply equally to all products insured 
under a particular programme. Premium subsid ies vary by type of coverage, not by 
product.   
39. The EC noted that, in its responses, the United States had again referred to the generic 
character of crop insurance provisions, and fla gged its disagreement with that approach.   
(d) Countercyclical payments (CCPs) 
 
40. Questions by Australia: CCPs continue to be notified as non-product-specific support.  
Since CCPs are only available to US farmers wi th programme crop base acres, can the United 
States explain how CCPs constitute "support provided in favour of agricultural producers in 
general " in the sense of Article 1(a) of the Agreement on Agriculture? What percentage of total 
US farms are eligible for CCPs? 
Access to participate in the programme wa s not limited.  Potentially all producers 
were eligible to participate, and producer s or landowners made a decision whether to 
participate or not. It is not possible to identify the share of farms eligible for 
payments, but two-thirds (66.51 per cent) of US cropland is currently registered as 
base acres.   
41. Questions by Brazil: The AB ruled in United States – Subsidies on Upland Cotton  that a 
proportion of CCPs constitute support granted to a specific commodity, i.e. cotton. However, 
                                                      
6 Australia referred to the Federal Crop Insurance Corporation Crop Year Statistics  for 2007, retrieved 
from http://www3.rma.usda.gov/ apps/sob/current_week/crop200 7.pdf on 19 February 2009. G/AG/R/54 
Page 42  
 
  the United States has consistently classified a ll CCP payments as non-product-specific AMS.  
Explaining this classification, the United States has stated in November 2007 that: 
 “Countercyclical Payments (CCPs) are reporte d as non-product spec ific because payments 
are based on fixed historical area and yields (i.e., production), not current production.  Recipients are not required to produce any pr oduct to receive payments.  Recipients include 
producers of fruits and vegetables (whether bec ause of historical production, double-
cropping, or the availability of non-base-acres) . Because any eligible crop can be grown on 
the base acres, payments cannot be ascribed to a specific product.”
7 
 
(a) Could the United States explain why it has classified all CCP payments as non-
product-specific AMS and how this classifica tion 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 di stinct target prices for the different 
programme commodities? 
 The United States confirms, and reiterates, the statement it made in 
November 2007, as reflected above. 
(b) Could the United States specify the CCPs 2006 and 2007 budgetary outlays, in 
US dollars, allocated to cotton? In N ovember 2007, the United States has said 
that “the data requested are not relevant to the U.S. notification but are publicly 
available at http://www.fsa.usda.gov/Internet/FSA_File/
”. However, bearing in 
mind that cotton subsidies classified as non-product-specific support can 
produce serious distortions in world pr ices and major development impacts on 
cotton producing developing countries, part icularly those in Africa, Brazil would 
like to have an accurate estimate of budgetary outlays for that commodity. 
  Because any eligible crop can be gr own on the base acres, payments cannot be 
ascribed to a specific product.  The entire amount of acreage which received CCP 
payments based on historical cotton acreage, could have been planted to other crops 
entirely, or not planted at all.  Brazil can locate the payments to eligible base acres by 
commodity from the website above. 
 
(c) According to the FSA Budget Division8, total CCPs amounted to US$4.35 billion 
in 2006 (of which US$1.41 billion related to cotton and US$2.51 to corn) and 
US$3.15 billion in 2007 (of which US$1.28 billion related to cotton and US$1.62 billion to corn). Could the United Stat es indicate how the FSA numbers relate to 
the 2006 and 2007 WTO notifications?  
  CCP payments are reported on a crop-year basis in our notifications.  These data are 
available from the FSA Budget Division " Total Cash Commodity Payments " (Detail) 
(Output 50B) for the FY 2009 Mid-Session Review.
9   The data cited by Brazil are on 
a fiscal year basis and do not correspond to the marketing year data.  
                                                      
7 See G/AG/R/50, paragraph 15 of Annex 1. 
8 See the report " Total Cash Commodity Payments Summary for FY 2009 ", Mid-Session Review, in 
www.fsa.usda.gov. 
9 Crop year data can be fo und in https://www .ccc2.net/ccc2app/2 009MSR/MSR_2009.htm   
  G/AG/R/54 
 Page 43 
 
 
  42. In its follow-up comments, Brazil sought conf irmation as to whether all CCPs had been 
allocated to cotton in 2007, in view of the level of international prices in 2006 and 2007, and given the 
applicable reference prices to cotton and other co mmodities.  The United States stated that it would 
have to double-check before providing figures or appropriate reference material.  The United States 
recalled that payments were not made to cotton per se , but to cotton base acres. 
43. The EC flagged its fundamental disagreement with the US classification of CCPs as non-
product-specific support. 
44. Question by Japan: It is possible to calculat e the amount of support for each eligible 
product. Could the United States notify the amo unt of CCP support for each eligible product? 
Could this be done not only for 2006 and 2007, but also before 2005? 
CCPs are received based on fixed historical area and yields (i.e., past production), not 
current production. Because any eligible  crop can be grown on the base acres, 
payments cannot be ascribed to a specific product.  If desired, one can locate the 
payments to eligible base acres by commod ity from the website already mentioned in 
response to Brazil's question above. Howeve r, that website reports payments by 
historic  commodity, not by the commodity actually produced. The United States does 
not normally collect statistical data on co mmodities actually produced on base acres, 
although it could be derived from reports by individual producers.  
45. Question by Turkey: How does the United Stat es calculate the payment rate and target 
price for products covered under the CCPs? 
CCP payment rates and target prices are set in legislation.  CCPs are available for 
producers with eligible historic acreage of  covered commodities whenever effective 
price is less than the target price.  The effective price is equal to the sum of:  higher of the national average farm price for the marketing year or the national commodity program loan rate, plus the direct payment rate for the commodity. The payment 
amount equals the product of payment rate , payment acres, and payment yield.  
46. Both the EC and South Africa thanked the Me mbers who have submitted questions during the 
review of this particular notification, as we ll as the United States for providing such extensive 
explanation and references.  South Africa observed th at the number of questions raised reflected the 
complex nature of the domestic support notification of the United States.  South Africa underlined that smaller delegations would ha ve been unable to go into such a detailed examination but had 
nevertheless benefited from their exposure to the exchange of questions and answers during this 
Review Process. 
V. EXPORT SUBSIDY COMMITMENTS  - TABLES ES:1 TO ES:3 
A. E
UROPEAN COMMUNITIES  - G/AG/N/EEC/57 
47. In its introductory comments, Australia  noted that EC had started applying 
unilaterally-determined budgetary outlay and qua ntity reduction commitment levels.  The 
relevant footnotes indicate that the notification concerns "EC-25 before 1 January 2007 and EC-
27 after 1 January 2007 ", and that the maximum annual budgetary outlay and quantity 
reduction commitment levels were " EC-25 commitment levels following Article XXIV:6 
negotiations for the EU enlargement of 2004 ."   
48. In this respect, Australia made the following observations: G/AG/R/54 
Page 44  
 
  (a) Any modification of domestic support and export subsidy commitments 
contained in Part IV of a Member's Schedule resulting from enlargement of the European Union cannot be negotiated b ilaterally under GATT Articles XXIV:6 
and XXVIII.  These articles do not appl y to agriculture export subsidy and 
domestic support commitments.  Modifi cation of tariff concessions under these 
articles as a result of bilateral negotiations with interested Members is a 
completely separate process from modifi cation of the multilateral commitments 
contained in Part IV of a Member's Schedule. 
(b) The EC's decision to apply unilaterally-determined " EC-25 commitment levels " 
is contrary to EC's previous indicati ons to the Committee on Agriculture and 
the Committee on Regional Trade Agreements in 2005 and 2006 that it would 
continue to apply the EC-15 (CXL) Sche dule to the EC-25 and EC-27 pending a 
WTO approval process.
10  To date, no draft EC Schedule relating to the EC-25 
(or the EC-27) had been submitted to the Membership. 
49. Questions by Australia: Could the EC advise (i) when it might be in a position to submit 
a draft Schedule relating to the EC-25 (and EC-27)? (ii) why it is using " EC-25 commitment 
levels"  when it has previously indicated that it  would continue to apply EC-15 Part IV 
commitment levels? (iii) how it could determine export subsidy commitment levels for the EC-
25? 
The EC moved to using EC-25 commitm ent levels after concluding the GATT 
Article XXIV:6 negotiations, also with Au stralia, in which process information on 
export subsidy commitments has been pr ovided to negotiating partners. The EC 
followed the method that it applied earlier at  the time of enlargement to EC-15. An 
information paper with the resulting EC-25 commitment levels was given to the Committee on Agriculture at the previous meeting in November 2008.
11 The EC is 
currently in the process of working out its Draft EC-25 Schedule, which unfortunately 
still has to be done on the basis of an uncer tified EC-15 Schedule. In due course, after 
conclusion of the GATT Article XXIV:6 nego tiations, the EC will also present an 
EC-27 Schedule. 
50. Brazil indicated that it shared Australia's concerns. 
51. Question by Canada - Could the EC explain the starred footnotes on page 3 of the 
2005/06 notification, and on page 10 of the 2006/07 notification?  
The starred footnotes on page 3 indicate that the 2005/06 notification includes export 
subsidies provided by EC-25 but within  EC-15 commitment levels. The starred 
footnotes on page 10 indicate that the no tification for 2006/07 concern EC-25 before 
1 January 2007 and EC-27 after 1 January 2007 within the EC-25 commitment levels. 
52. Question by New Zealand -  In 2005-2006, why was the total quantity of export subsidies 
for butter and butter oil (295,400 tonnes) larger than the total quantity of exports (245,800 
tonnes) for butter and butter oil for the same year?  
For butter and butter oil, the notification for subsidized exports is in butter equivalent 
(which for butter oil means: product weight multiplied by a coefficient of 1.22), while 
for total exports it is in product weight. 
                                                      
10 See, for example, G/AG/R/44, paragraph 3,  and G/AG/R/47, paragraph 16.   
11 See Annexes 1-4 of G/AG/R/53.  G/AG/R/54 
 Page 45 
 
 
  53. Questions by the United States - There has been an ongoing discussion regarding 
general issues associated with EU enlargements.  At this point in time, we would like to focus on 
technical issues associated with these tables, without prejudice to those more general ongoing 
discussions.   
(a) Tables ES:1 and ES:2: Could the EC conf irm that the Harmonized System scope 
for each product category is the same as those used in the EU-12 Uruguay 
Round Schedule, with the only adjust ments being to accommodate HS2002 
changes? Confirmed. 
(b) Tables ES:1 and ES:3: 2005 was the last year in which the EC notified food aid.  
What is the reason for the delay?  When does the EC intend to notify food aid 
again?  
 The EC are aware of the delays regarding the notification of Table ES:3 and 
intend to provide outstanding notifications in 2009. G/AG/R/54 
Page 46  
 
  Annex 6 
 
Notifications subject to review in respect  of which no questions have been raised
 
in advance of the issuance of the convening airgram  
 
 
(i) administration of tariff and other quota commitments (Table MA:1) 
- Japan G/AG/N/JPN/143 
- Korea G/AG/N/KOR/21/Corr.1 - Ukraine G/AG/N/UKR/1 
  
(ii) imports under tariff and other quota commitments (Table MA:2):   
- Canada G/AG/N/CAN/75 
- Korea G/AG/N/KOR/40 - Japan G/AG/N/JPN/142 
- Switzerland G/AG/N/CHE/36/Rev.1/Corr.1 
- Switzerland G/AG/N/CHE/40/Corr.1 
  
(iii) special safeguard (Tables MA:3 to MA:5):   
- Canada G/AG/N/CAN/76  
- Costa Rica G/AG/N/CRI/22 
- United States G/AG/N/USA/67 
 
(iv) domestic support commitments (Table DS:1):  
- European Communities G/AG/N/EEC/59 
- Honduras G/AG/N/HND/25 
 - Jamaica G/AG/N/JAM/5/Rev.1 
 - Jamaica G/AG/N/JAM/6 
 
(v) new or modified domestic support measur es exempt from reduction (Table DS:2) 
- European Communities G/AG/N/EEC/58 
- Canada G/AG/N/CAN/73 
- Honduras G/AG/N/HND/26 
 
(vi) in the context of export subsidy commitments (Tables ES:1 to ES:3): 
- Argentina G/AG/N/ARG/27 
- Canada G/AG/N/CAN/74 
- China G/AG/N/CHN/13 
 - Cuba G/AG/N/CUB/33  - Honduras G/AG/N/HND/27 - Hong Kong, China G/AG/N/HKG/25 - Japan G/AG/N/JPN/140 - Malaysia G/AG/N/MYS/22 
 
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