RESTRICTEDWORLD TRADE
ORGANIZATIONG/AG/R/34
15 May 2003
(03-2584)
Committee on Agriculture
SUMMARY REPORT OF THE MEETING HELD ON 27 MARCH 2003
Note by the Secretariat1
1. The Committee on Agriculture held its thirty-fourth regular meeting on 27 March 2003 under
the chairmanship of Dr. Magdi Farahat of Egypt.   The agenda of the meeting as contained in
WTO/AIR/2054 was adopted with the addition of three matters raised under Article 18.6 of the
Agreement: (i) New Zealand – United States:  Subsidized sales of skimmed milk powder (SMP) by
the United States;  (ii) Thailand – United States:  Domestic support payments to rice – violation of thePeace Clause;  and (iii) Thailand – India:  Domestic and export subsidies on rice.
P
ART I:  T HE REVIEW PROCESS
A. M ATTERS RELEVANT TO THE IMPLEMENTATION OF COMMITMENTS UNDER THE REFORM
PROGRAMME :  ARTICLE 18.6
(a) Argentina:  European Communities – Payments under production-limiting programmes
2. Argentina recalled that, at the September 2002 Committee meeting, it had requested
clarification from the European Communities concerning the consistency of the compensatory
payments granted to producers with an area not larger than required to produce 92 tonnes of grains, to
whom the obligation to set aside land was not applied, with a production-limiting programme and the
provisions of Article 6.5 of the Agreement.  The European Communities had responded that the
production limitation was effective since there was a limit on payments based on a fixed area, and thepayments were estimated on a regional basis which ensured the limitation of such payments
(G/AG/R/32, page 27).
3. Argentina sought further clarification in relation to Regulation 1765/92:
(i) Could the EC state to what extent the production of products subject to payments
referred to in Article 6.5 of the Agreement had been limited since 1992.  The ECresponded that production for the period under review had been limited by legislation
decided in 1992 providing all conditions that allowed the respect of Article 6.5(a) of
the Agreement.  The legislation decided in 1992 became fully implemented as from
the marketing year 1995/96 (Regulatio ns 1765/92, 1766/92, 2066/92 and 2069/92
refer).
                                                     
1 This document has been prepared under the Secret ariat's own responsibility and is without prejudice
to the positions of Members or to their rights or obligations under the WTO.G/AG/R/34
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Arable crops
(ii) Could the EC advise of the number of hectares that had benefited from the
compensatory payments established under Regulation 1765/92 or Regulation
1251/1999, as appropriate, since 1992;  the number of hectares that had benefited
from the "general scheme" and the "simplified scheme" (Article 2, paragraph 5 ofRegulation 1765/92) since 1992,  and whether the maximum limit of hectares that
could benefit from these direct payments had been modified since 1992.  In response,
the EC provided a table (see Attachment on page 46) and noted that the base area had
been reduced in stages from 53.561 to 53.522 million hectares.
(iii) Could the EC state the maximum limit with respect to hectares benefiting from
payments and the measures that had been adopted during the implementation period
of the Agreement to verify that no payments had been made under these tworegulations in excess of the regional base areas.  The EC responded that it applied an
integrated control system established by Council Regulation 3508/92, in which every
beneficiary and all eligible areas were individually identified.  The integrated control
system had been applied throughout the implementation period of the Agreement.
(iv) Could the EC state the regional base yields, on which compensatory payments per
hectare of Council Regulations 1765/92 and Regulation 1251/1999 were based.  The
EC responded that the regional yields were initially fixed in Regulation 1237/95.
These were then reviewed in Annex IV of Commission Regulation 2316/99.
(v) With respect to the "general scheme" of Council Regulation 1765/92 and Council
Regulation 1251/1999 (land set-aside), could the EC state the area cultivated withcereals, oilseeds and protein crops, respectively, that had been used as a basis for
establishing the 15 per cent minimum reduction foreseen in Article 7, paragraph 1 of
Regulation 1765/92.  The EC responded that the set-aside was applied as a proportion
of the area under arable crops and for which a claim was made, pursuant to
Regulation 1765/92.  It applied to the arable area, not to specific crops.
(vi) Could the EC state the area in fallow since the 1993-1994 marketing year.  In
response the EC provided a table (see Attachment on page 46).
(vii) Could the EC state the effective control systems that had been implemented to ensure
that the area that was in temporary fallow and that its use was not intended for human
or animal consumption (Article 7, paragraph 4 of said Regulation).  The EC referred
to Regulations 334/94, 1586/97 and 2461/99 which laid down detailed implementing
rules for the use of set-aside land for the provision of materials for the manufacturewithin the EC of products not primarily intended for human or animal consumption.
(viii) Could the EC state how the requirement in Article 6.5(a)(ii) of the Agreement was
met in the light of Article 6, paragraph 1 of the Council Regulation 1251/1999 which
had reduced the land set-aside rate to 10 per cent.  The EC responded that Article
6.5(a)(ii) did not apply in this case.  Could the EC explain the consistency of theauthorization to modify the percentage of land set-aside referred to in Article 11 of
Regulation 1251/1999 with the requirement in Article 6.5(a)(ii) of the Agreement?  In
response, the EC referred to its previous answer.
(ix) Could the EC state with respect to Council Regulation 1765/92 which established the
mandatory withdrawal of a crop from a percentage of land determined beforehand tobenefit from the compensatory payments of the general scheme, how these paymentsG/AG/R/34
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were consistent with a production-limiting programme given that the small producers
benefiting from the "simplified scheme" were not obliged to set aside land and the
cereal compensatory payment was made for the whole area, notwithstanding the
cultivated crop.  Could the EC state whether the "simplified system" was still in force.
The EC responded that the payments were based on a fixed regional area and fixedyields.  The simplified system had been replaced by the arrangements of Article 6.7
of Regulation 1251/99.
Livestock
(x) Could the EC advise of the number of units of each kind of livestock on which direct
payments under Article 6.5 of the Agreement were based and have these numbers
been modified since 1992?  In response the EC provided a table (see Attachment on
page 46).
4. Argentina preliminarily noted in relation to response 3(i) above that it did not share the EC's
view that just by complying with Article 6.5(a) th e payments could be deemed to limit production and
therefore it was seeking data on production levels.  The EC responded that the relevant parameters
were area and yield, not the actual levels of production.
(b) Australia:  European Communities – Details concerning sugar policy
5. Australia sought clarification from the EC regarding its export subsidy notifications  with
respect to sugar (Tables ES:1 and ES:2 of G/ AG/N/EEC/5/Rev.1, 11, 20, 23, 32, and 36), as follows:
(i) direct export subsidies paid annually (column 2 of Table ES:1) on the total quantities notified in
column 3 of Table ES:2;  (ii) annual monetary outlays on EC sugar (as listed in paragraph 6 to the
Annex of product descriptions in the EC Schedule) additional to the outlays notified in Column 3 ofTable ES:l;  (iii) quantities and monetary outlays on sugar added to products falling within Chapter 20
of the HS Code (Paragraph 6 of the Annex to the Schedule refers);  (iv) the quantity and monetary
outlays on products incorporating sugar covered by paragraph 19 of the Annex;  (v) annual quantities
and monetary outlays on  EC sugar exported equivalent to imports from the ACP c ountries and India;
(vi) annual quantities imported from the ACP countries and India (in white sugar equivalent); (vii)with respect to the annual quantities imported from the ACP countries, a breakdown of the quantities
imported under the Special Preferential and Preferential arrangements prescribed in Articles 35 and 39
of Council Regulation (EC) No 1260/2001; (viii) a breakdown of the annual monetary outlays on
export refunds for the equivalent of sugar imported under the arrangements prescribed in Articles 35
and 39 of Council Regulation (EC) No 1260/2001; (ix) internal transport and freight subsidies
provided to C sugar and to A and B quota sugar respectively, including subsidies provided for the
equivalent of ACP and India imports  (Column 6 of Table ES:1);  and (x) international transport and
freight subsidies provided to A and B quota and for C sugar.
6. The EC responded that all export subsidies had been notified in the relevant tables of the
notifications indicated by Australia in full respect of the EC reduction commitments. With respect to
question (vi) the EC responded that imports from the ACP countries and India amounted to
approximately 1.6 million tonnes annually.  With respect to question (vii), the EC referred Australiato footnote (1) in Part IV, Section II of Schedule CXL
7. Australia sought clarification regarding the EC's tariff quotas and related notifications
G/AG/N/EEC/1/Add.2, 3, 4, 8,16, 22, 27, 29, and 34, as foll ows:  (i) annual quantities of sugar (in
white sugar equivalent) imported from ACP countries and India respectively under (a) the tariff
quotas covered by tariff item number 1701 (cane or beet sugar) and (b) 1701 11 10 (raw cane sugar,for refining).  The EC responded that the imports had been notified in the relevant Table MA:2
notifications.  The EC recalled  that the quota quantities were 1,304,700 tonnes for HS 1701 (cane orG/AG/R/34
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beet sugar) and 85,463 tonnes for HS 1701 11 10 (raw cane sugar for refining).  These quotas had
been fully utilized (see also G/AG/N/EEC/42).  10,000 tonnes were imported from India under the TQ
referred to under part (a) of the question, the rest under this TQ came from ACP countries.  Within the
TQ referred to under part (b) of the question, none of the imports came from India or ACP countries.
8. Australia also sought clarification in regard to the product-specific AMS in the  domestic
support notifications  G/AG/N/EEC/12, 16, 26, 30, 38, specific ally whether the notifications in
Supporting Tables 2 and 3 included support for sugar with respect to the equivalent of imports from
the ACP countries and India.  The EC responded that  in general terms the support given to the sugar
sector was notified based on a price gap calculation covering the internally produced A and B sugar;
C sugar was not subsidized and therefore not included in the notification.
(c) Canada and the United States:  Mexico – Ban on imports of dry beans
9. Canada stated that on 23 January 2003 Mexico had suspended imports of dry, edible beans
from Canada.  When the suspension went into effect, six loads of beans were en route to Mexico,
which had arrived and were held at the border.  Mexico had made no provision for shipments en
route.  Canada considered Mexico's ban, which had now been in effect for 1 1/2 months, to be
arbitrary and inconsistent with Mexico's trade obligations and sought clarification as to:  (i) Mexico's
rationale for the suspension of imports of dry edible beans from Canada;  (ii) why Mexico hadprovided no prior notification for the suspension of imports;  (iii) how Mexico justified the suspension
with respect to its WTO obligations;  and (iv) when Mexico would be removing the suspension.
Canada requested immediate release of the shipments being held and assurances that shipments could
resume.  Canada was also reviewing its WTO options.
10. The United States stated that on 22 January 2003, the Government of Mexico had banned US
imports of dry beans.  Although assurances had be en received from the Mexican Government officials
on 25 February 2003 that the ban would be immediately lifted, US dry bean shipments were still held
at the border incurring demurrage charges while awaiting entry.  The United States requested the
Government of Mexico to immediately lift th e unjustified ban on imports of US dry beans.
11. Nicaragua stated that, without prejudice to the procedures initiated by the Government of
Nicaragua in accordance with the WTO Understanding on Rules and Procedures Governing the
Settlement of Disputes, it supported the statements by the United States and Canada.  Nicaragua noted
that the problems regarding access to the Mexican market dated back to August 2001 when
Nicaragua's exports to Mexico were suspended.  Ni caragua considered Mexico's action to be arbitrary
and discriminatory.
12. In line with the issues raised in its request  for formal dispute settlement consultations
(WT/DS284/1), Nicaragua stated that with respect to the administration of the procedures set out inOfficial Standard 006-FITO-95, published in the Diario Oficial de la Federación (Official Journal) on
26 February 1996, in force since 27 February 1996 and duly notified to the SPS Committee on
4 September 1995 as document G/SPS/N/MEX/68, it was particularly concerned about the refusal of
the Mexican authorities to furnish importers with the SPS requirements for the importation of black
beans. Nicaragua was also concerned about the more favourable treatment in the administration ofthese procedures accorded by the relevant Mexican authorities to like products originating in countries
other than Nicaragua;  the failure to publish the specific SPS requirements for the importation of black
beans from Nicaragua;  and, the failure to publish the rules, requirements and procedures concerning
the auctioning of the tariff quota for beans from Nicaragua.  Nicaragua considered that these measures
had entailed the nullification and impairment of Nicaragua's rights as a Member of the WTO andrequested the relevant Mexican authorities to meet their obligations to resolve this problem, which
had adversely affected Nicaragua's producers and the development of this important sector in
Nicaragua.G/AG/R/34
Page 5
13. Mexico regretted that it was unable to respond at this stage but undertook to provide a
response as soon as possible.
(d) European Communities:  United States – Support under the 2003 Omnibus Appropriations
Bill
14. The EC stated that it was concerned about th e inclusion in the 2003 Omnibus Appropriations
Bill of an amount of US$3.1 billion as supplementary support for the agricultural sector in the United
States.  This support was in clear contradiction with statements made in the past in defence of the
Farm Bill to the effect that it would put an end to ad hoc emergency packages.  In relation to the
package decided, the EC sought clarification from the United States as follows:
(i) Crop disaster payments  (section 202):  Could the US state how this support would be
notified;  what specific disasters entitled farmers to receive a compensation for their losses in
the framework of this package;  the criteria for declaring disaster areas;  the estimated size ofthe area declared as disaster area in relation to the total agricultural area;  to what extent the
beneficiaries of the current disaster payments were also beneficiaries of disaster payments in
previous years; whether the sum of market return and governmental payments, including
decoupled payments, of producers in disaster areas exceeded the producers' usual return based
on their production history;  and the reasons why the United States compensated farmers forlosses beyond the risk that farmers themselves were willing to take as expressed in their crop
insurance policies.
The United States responded that no decisions had been made as yet on the classification of
these programmes for notification purposes.  Proposed measures to implement this newstatutory authority were under consideration within the Executive Branch of the US
Government.  Except as provided in the statute, criteria were being developed in the
implementation process.  The disaster counties accounted for over two-thirds of total US
counties.  A list of the counties that had been declared as primary disaster counties in 2001 or
2002 were listed at:  http://disaster.fsa.usda.gov/usdaprimarydes0319.pdf.  The beneficiarieswould not be known until the programme had been implemented.  Under the Agricultural
Assistance Act of 2003, a producer's disast er payments plus crop insurance and NAP
payments could not exceed 95 per cent of what the producer would have received in the
absence of a crop loss.  The Agricultural Assistance Act of 2003 provided assistance to
producers who had suffered losses due to weather-related disasters or other emergency
conditions  (see also http://disaster.fsa.usda.gov/disasact03.pdf).
(ii) Livestock assistance  (section 203): Could the United States state how this support
would  be notified; whether the Livestock Compensation Program was extended to support
farmers in counties that had not applied for a disaster designation by the original cut-off date;
and in regard to the Livestock Assistance Program how the grazing loss per farmer was
established.
The United States responded that no decisions had been made as yet on the classification of
these programmes for notification purposes. In section 203(d)(1), the statute specified that the
date of enactment was the ending date for designation as a "disaster county".   With respect to
the question relating to the grazing loss, this would be determined in the implementation of
the statute.
(iii) Emergency Surplus Removal, Tobacco payments (section 204, section 205):  Could
the US inform how this support would be notified.  The United States responded that no
decisions had been made as yet on the classification of these programmes for notificationpurposes.G/AG/R/34
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15. The EC noted that it would pursue this issue as more information as well as the relevant
legislation became available. It also sought further clarification as to why the list of drought-affected
states included all states, except Wisconsin.  Argentina, Australia, Brazil, Canada, Chile and Chinese
Taipei expressed their interest in receiving additional information on this matter.
(e) New Zealand:  United States - Food aid - Consistency with Article 10.4 of the Agreement
16. New Zealand stated that the United States had announced in December 2002 its intention to
donate over 24,000 tonnes of non-fat dried milk from its non-commercial stockpile as food aid to
Central and South America.  New Zealand sought clarification as to:  (i) how the United States had
ensured that this food aid did not displace normal commercial transactions, including both imports of
non-fat dried milk and domestic production in those markets;  (ii) the consistency of these donations
with the requirements in Article 10.4 of the Agreement, including the calculation of the Usual
Marketing Requirements in those markets and the actual quantities allocated to each market;  and (iii)how the donations conformed with the other 'Pri nciples of Surplus Disposal and Consultative
Obligations' of the FAO.
17. The United States responded that this donation was consistent with the requirements of
Article 10.4 of the Agreement.  This transaction was a grant and not tied to any commercial exports of
US exports.  The United States intended to submit an ex-post notification of this transaction throughthe CSSD, meeting the notification requirement for tr ansactions with private charitable institutions.
The establishment of Usual Marketing Requirements was not appropriate as defined in the CSSD for
this transaction.  This donation was consistent with CSSD principles in that it would not affect local
production.  Nor would it affect commercial market s because the commodities would be provided to
recipients that did not have the means to buy commercially.  This donation was fully consistent withthe principle of "additional consumption".
18. New Zealand recalled that the United States had notified in the Federal Register in
October 2002 that it was making available 200,000 tonnes of non-fat dried milk for food aid in
calendar year 2003.  New Zealand requested an update from the United States on the share of the total
quantity that it had allocated to date or intended to allocate as food aid in the coming year, and towhich markets.  The United States responded that it had announced in October 2002 that
200,000 tonnes of non-fat dry milk was available for food aid.  To date the United States had
allocated about 66,000 tonnes.  The total allocation included the donation of 24,000 tonnes discussed
above.
19. New Zealand expressed its concerns that commitments were not circumvented and noted that
this was an issue of importance for the current negotiations.  Australia and the EC endorsed New
Zealand's statement.  Argentina requested information concerning the destination of the food aidshipments totalling 66,000 tonnes referred to above.  The United States undertook to provide a
response.
(f) United States:  India – Fixed reference price for vegetable oils
20. The United States stated that on 2 September 2002 India had introduced a base import
valuation scheme on imports of soy bean oil.  Under this scheme, India had set a base import value ofUS$542 per tonne.  On 3 December 2002, India had raised the base import value for soy bean oil to
US$600 per tonne, which exceeded the current CIF value.  To that CIF value India applied its bound
tariff level of 45 per cent, resulting in an imputed tariff rate that currently exceeded the bound rate.  In
light of the fact that India had raised the soy bean oil minimum import value from US$542 to US$600
per tonne between September and December 2002, th e United States considered that India had
established some valuation review criteria.  However, since December 2002, world soy bean oil prices
had decreased without a commensurate reduction in India's soy bean oil minimum import value.  TheG/AG/R/34
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United States sought clarification with respect to the operation of the soy bean oil price valuation
scheme, including:  (i) the price series for soy bean oil, freight, and insurance used by the Indian
Government to calculate the minimum CIF values;  (i i) the valuation review interval;  (iii) the review
process used to assure that India's imputed tariff  did not exceed its 45 per cent bound rate;  and (iv)
any other criteria used to make and announce a final determination of a change in the minimumimport value.
21. India responded that the base import value for soyabean oil was determined on the basis of
the trend of the international prices reported in journa ls of international repute so as to generally even
out rampant price fluctuations of the spot prices.  Moreover, the base import value was amended
upwards or downwards from time to time consistent with the movements in international prices of
soyabean oil and could not be termed as "minimum import value".  The trends in international prices
were reviewed on a weekly basis.  The applied rate of duty on imports of soyabean oil was 45 per centand India was not aware of the methodology used by the United States to arrive at the conclusion that
the applied rate exceeded the tariff binding of 45 per cent on soy bean oil.
(g) New Zealand – United States: Subsidized sales of skimmed milk powder (SMP) by the
United States
22. New Zealand stated that the United States had designed a new scheme to reduce the stockpile
of skimmed milk powder (non-fat dried milk).  New Zealand understood that as part of the
Commodity Credit Corporation's (CCC) payments for cheese for school lunch programmes, the CCC
used a "reverse sale" for SMP.  SMP purchased by the CCC at US$0.80/lb. was sold to the cheese
suppliers at US$0.40-0.50/lb. as part of the payment for cheese.  The SMP involved could be used in
the manufacture of cheese or sold on either the domestic or international markets.  New Zealandsought clarification as to the details of this programme and how this programme would be notified to
the Committee.  Given the late notice of these questions, the United States undertook to provide a
response at a later stage.
(h) Thailand – United States: Domestic support payments to rice – violation of the Peace Clause
23. Thailand recalled that it had raised under Article 18.6 an implementation matter concerning
domestic support payments to rice by the United States in violation of the Peace Clause at the
November 2002 meeting of the Committee (see G/AG/R/33, paragraph 19 and attachment thereto).
Specifically, Thailand sought clarification from the United States as to whether it would reduce the
level of domestic support payments for rice at leas t to the 1992 level.  Thailand also raised the
question of whether the US Secretary of Agriculture  was authorized by the new Farm Security and
Rural Investment Act of 2002 to implement such plan.
24. The United States responded that support for rice was set in the 2002 Farm Bill, with the
actual level of support depending on market conditions.  The United States was committed to meeting
its WTO obligations.  The United States acknowledged that programmes notified in the Amber Box
were, by definition, trade-distorting.  This underlined the importance of reaching an agricultural
agreement in the Doha Development Agenda that provided ambitious and harmonizing results in the
current negotiations.
(i) Thailand – India: Domestic and export subsidies on rice
25. Thailand also recalled that it had raised an Article 18.6 matter concerning domestic support
and export subsidies provided by India at the September 2002 meeting of the Committee (see
G/AG/R/32, paragraph 26).  Thailand urged India to  provide a response to Thailand's questions as
soon as possible.G/AG/R/34
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26. In response to the Thai question on rice subsidies raised in the 32nd session of the Committee,
India indicated that it would provide the reply as soon as it was received from the capital.
B. R EVIEW OF NOTIFICATIONS
(a) Notifications in respect of which questions have been raised  in advance of the issuance of the
convening airgram
27. The Committee reviewed the following notifications as listed in the agenda:
(i) on the administration of tariff and other quota commitments (Table MA:1):  from
El Salvador (SLV/16) and Thailand (THA/45);
(ii) relating to imports under tariff and other quota commitments (Table MA:2):  from
Barbados (BRB/8), European Communiti es (EEC/42), New Zealand (NZL/32),
Norway (NOR/38), South Africa (ZAF/ 46) and United States (USA/42);
(iii) relating to domestic support commitments (Table DS:1):  from Australia
(AUS/41/Rev.1), Barbados (BRB/7 and BRB/11), Canada (CAN/49), Cyprus
(CYP/12), Czech Republic (CZE/45), Indi a (IND/2), South Africa (ZAF/44) and
United States (USA/43);
(iv) relating to new or modified domestic support measures exempt from reduction
(Table DS:2):  from Canada (CAN/50 ), Czech Republic (CZE/46), European
Communities (EEC/39 and EEC/41), Slovak Republic (SVK/36) and Slovenia
(SVN/24);  and
(v) relating to export subsidy commitments  (Tables ES:1 to ES:3):  from Norway
(NOR/40).
28. Specific points raised with respect to the notifications listed above and the responses thereto
are summarized in Part I of the Annex to this report.
(b) Notifications subject to review in respect of which no questions have been raised in advance
29. The Committee took note of the following notifications, which had been circulated in advance
of the date on which the notice convening the present meeting was issued but in respect of which no
questions had been raised by that date under the Committee's Working Procedures:
(i) on the administration of tariff and other quota commitments (Table MA:1):  from
Poland (POL/55), South Africa (ZAF/ 45), Switzerland (CHE/13/Add.4) and
United States (USA/45);
(ii) relating to imports under tariff and other quota commitments (Table MA:2):  from
Czech Republic (CZE/47);
(iii) in the context of the special safeguard (Tables MA:3 to MA:5):  from Czech Republic
(CZE/44), Guatemala (GTM/24), Japan (JPN /80), New Zealand (N ZL/31), Nicaragua
(NIC/9), Thailand (THA/44) and United States (USA/44);
(iv) in the context of domestic support commitments (Table DS:1):  from Argentina
(ARG/20), Hong Kong, China (HKG/15) , Macao, China (MAC/13), New ZealandG/AG/R/34
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(NZL/33), Norway (NOR/36/Corr.1 and NOR /41), Poland (POL/46/Corr.1), Slovak
Republic (SVK/35/Rev.1) and Slovenia (SVN/21/Rev.1);
(v) relating to new or modified domestic support measures exempt from reduction
(Table DS:2):  from Argentina (A RG/19) and New Zealand (NZL/34);
(vi) on export subsidy commitments (Tables ES:1 to ES:3):  from Bulgaria (BGR/6),
Cuba (CUB/20 and CUB/21), Estonia (EST /9), Guatemala (GTM/23), Hong Kong,
China (HKG/14), Macao, China (MAC/ 12), New Zealand (NZL/35), Nicaragua
(NIC/10) and Thailand (THA/43).
(c) Notifications circulated or made available after the notice convening the meeting was issued
30. The following notifications were subject to prelim inary review and are to be reverted to at the
next meeting for substantive review in accordance with paragraph 9 of the Committee's WorkingProcedures (G/AG/1):
(i) on the administration of tariff and other quota commitments (Table MA:1):  from
Israel (ISR/27);
(ii) in the context of the special safeguard (Tables MA:3 to MA:5):  from Israel (ISR/28);
(iii) on domestic support commitments (Tables DS:1 and DS:2):  from Bulgaria (BGR/7);
(iv) on export subsidy commitments (Tables ES :1 to ES:3):  from Trinidad and Tobago
(TTO/3);  and
(v) on export prohibitions and restrictions (Table ER:1):  from Moldova (MOL/2).
(d) Points concerning notifications raised at previous meetings
31. There was no discussion under this agenda item.
(e) Counter notifications under Article 18.7 of the Agreement
32. The Committee took note that no counter-notifications had been received under Article 18.7
of the Agreement.
(f) Deferred replies to questions raised under the Review Process
33. The deferred replies received from China regarding its Table MA:1 notification (CHN/1) and
from Tunisia regarding its export subsidy notifica tion (TUN/25) are summarized in Part II of the
Annex to this report.
(g) Overdue notifications
34. The Committee took note of the room document, dated 26 March 2003, made available by the
Secretariat showing the current status of compliance with the notification obligations.
(h) Addenda to Table MA:1 notifications
35. The Chairman recalled that the WTO Ministerial Conference had endorsed the
recommendation that the Committee keep under review the implementation of the December 2000G/AG/R/34
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Decision of the General Council on the administration of tariff quotas (WT/L/384, paragraph 1.1,
refers).  The understanding was that this decision should not place undue new burdens on developing
countries (WT/GC/M/62, paragraph 14, refers).
36. The Committee took note that the following Members administering tariff quotas had
submitted the requisite Table MA:1 Addenda:  Australia (G/AG/N/AUS/1/Add.1);  Canada(G/AG/N/CAN/ 2/Add.2, 6/Add.1, 10/Add.1, 19/Add.1 and 45);  Czech Republic
(G/AG/N/CZE/Rev.1/Add.1);  European Communities (G/AG/N/EEC/1/Add.2, 3/Add.1, 14/Add.1
and 15/Add.1);  Hungary (G/AG/N/HUN/1/Add.1, 5/ Add.1, 8/Add.1, 13/Add.1 and 18/Add.1);  Japan
(G/AG/N/JPN/1/Add.1, 8/Add.1, 23/ Add.2 and 57/Add.1);  Latv ia (G/AG/N/LVA/1/Add.1);
New Zealand (G/AG/ N/NZL/1/Add.1); Norway (G /AG/N/NOR/1/Add.1); Slovenia
(G/AG/N/SVN/1/Add.1);  Switzerland (G/AG/N/CHE/13/Add.4); Thailand
(G/AG/N/THA/38/Add.1);  and the United St ates (G/AG/N/USA/2/ Add.3 and 34/Add.1).
37. The Chairman urged those Members administering tariff quotas which had not yet done so to
provide Addenda to their Table MA:1 notifications in accordance with the General Council Decision
in WT/L/384.
38. The Chairman emphasized the need for timely submissions of Table MA:1 notifications for
Members administering tariff quotas.  There had been Table MA:1 notifications advising of theopening of quotas or changes to the administration months after they have been introduced.  For
notifications to be useful and in accordance with the requirements set out in G/AG/2, in the case of
initial notifications, they should normally be made in advance of the opening of the quota but in any
event not later than 30 days following that date or in the case of ad hoc notifications, prior to the
change being made but in any event not later than 30 days following the change.
P
ART II:  O THER MATTERS WITHIN THE PURVIEW OF THE COMMITTEE
A. I MPLEMENTATION OF ARTICLE 10.2 OF THE AGREEMENT ON AGRICULTURE , ON THE
DEVELOPMENT OF INTERNATIONALLY AGREED DISCIPLINES TO GOVERN THE PROVISION OF
EXPORT CREDITS , EXPORT GUARANTEES OF INSURANCE PROGRAMMES , TAKING INTO
ACCOUNT THE PROVISIONS OF PARAGRAPH 4 OF THE MARRAKESH NFIDC DECISION
39. The Chairman recalled that at the June 2002 meeting a questionnaire on export credits and
related facilities was distributed on the basis that those Members who were in a position to do so were
encouraged to complete and return the questionnaire to the Secretariat.  The Secretariat had circulated
document G/AG/W/56 dated 27 October 2002 and Add.1 dated 3 February 2003 which contained the
completed questionnaires which had been received to that date.  There was no discussion under thisagenda item.
B. M
ARRAKESH MINISTERIAL DECISION ON MEASURES CONCERNING THE POSSIBLE NEGATIVE
EFFECTS OF THE REFORM PROGRAMME ON LEAST -DEVEOPED AND NET FOOD -IMPORTING
DEVELOPING COUNTRIES (MARRAKESH NFIDC D ECISION )
(a) Proposal for follow-up to the recommendation of the Inter-Agency Panel on examining the
feasibility of the revolving fund operating as an ex-ante financing mechanism
40. The Chairman stated that this agenda item concerned the recommendation in
paragraph 168(b) of the report by the Inter-Agency Panel regarding the question of the feasibility ofan ex-ante financing mechanism aimed at food importers. The General Council had instructed the
Committee on Agriculture to pursue this issue and provide a progress report following the
March 2003 meeting of the Committee.  On 28 October 2002 a proposal for the establishment of an
ex-ante financing mechanism had been submitted by  Bangladesh, Cuba, Egypt, Jordan, Kenya, andG/AG/R/34
Page 11
Sri Lanka on behalf of  the WTO Net Food-Importin g Developing Countries and the Least-Developed
Countries (G/AG/W/58 and Corr.1).
41. The Chairman stated further that he had since convened a series of informal consultations to
discuss the proposal, in the course of which the NFIDC sponsors provided written answers to 21
questions from donor countries.  The proposal was also discussed at the last Committee meeting inNovember.  While the consultations were useful in exploring and clarifying technical details of the
proposed ex-ante financing facility, they also made it clear that wide differences of opinion remained
between the donor Members and the sponsors of the proposal.  In particular, donor countries were not
convinced that the ex-ante revolving fund financing idea was a viable option for addressing the
potential future short-term financing needs of LDCs and NFIDCs.  These countries suggested that
they were prepared to consider alternatives other than the ex-ante revolving fund.  For their part, the
NFIDCs expressed frustration over the pace and direction of the consultations.
42. On the basis of his informal consultations, it was clear that to date there was no donor support
for the establishment of an ex-ante financing facility.  Given such state of affairs, the Chairman
proposed to the Committee on Agriculture to consider the idea of continuing and broadening the
search for options and solutions within the framework of the Marrakesh NFIDC Decision, building on
the work previously undertaken in this respect.  This process might allow the Committee to identifynew avenues that might be worth exploring.
43. On the basis of the proposal by the Chairman, the Committee agreed to convene a roundtable
in mid-May with the following mandate:
(i) to explore, in the context of the Marrakesh NFIDC Decision, the need for a safety net
to be established to assist the LDCs and NFIDCs during the reform process leading to greaterliberalization of trade in agriculture, including an examination of objective criteria and trigger
mechanisms to determine a need;
(ii) to identify, in the light of (i) above, appropriate mechanisms within the framework of
the Marrakesh NFIDC Decision, taking into account their technical feasibility, as well as their
financial and institutional implications on potential donors and beneficiaries.
44. The following organizations would be invited to nominate experts to participate in the
Roundtable:  FAO, International Fund for Agricult ural Development (IFAD), International Grains
Council, IMF, UNCTAD, WFP and the World Bank. Interested Members would also be invited to
participate in the Roundtable.
45. The Committee authorized the Chairman to provide a short and factual progress report on this
issue to the General Council at its next meeting scheduled for 15-16 May.
(b) Review of the WTO List of Net Food-Importing Developing Countries
46. The Committee noted that paragraph 3 of the Committee's November 1995 decision on the
establishment of a WTO List of Net Food-Importing Developing Countries for the purposes of the
Marrakesh NFIDC Decision provided that the list shall be reviewed by the Committee at its regular
March meetings (G/AG/3, refers).  In this regard, an application had been received from Namibia.The relevant statistical data, submitted by Namibia in line with paragraph 2 of the Committee's
decision on the establishment of the list, was available for consultation in the Agriculture and
Commodities Division.  The Committee agreed to include Namibia in the WTO List of Net Food-
Importing Developing Count ries (G/AG/5/Rev.6).G/AG/R/34
Page 12
C. M ATTERS RAISED UNDER "OTHER BUSINESS "
(a) Measures implemented by the Czech Republic on imports of pigmeat from Poland
47. Under "other business" Poland drew attention to the application by the Czech Republic of
restrictions on imports of pigmeat from Poland, effective 25 March 2003 (see also G/AG/GEN/59
dated 23 April 2003).  According to the decision by the Government of the Czech Republic,shipments of pigmeat from Poland with a declared value of lower than, or equal to, 36 CZK/kg
(approximately 1,240 US$/kg) were subject to additional ad valorem  duties of 50 per cent or specific
duties of 23 CZK/kg, whichever was higher.  The current bound tariff for pigmeat in the Schedule of
the Czech Republic was 38.5 per cent.  Poland noted that no consultations had taken place and no
explanations had been given regarding the reason or nature of the measure prior to implementation.
Poland urged the Czech Republic to  immediately withdraw the trade restrictions and bring its import
measures into conformity with its WTO obligations.
48. The Czech Republic confirmed the application of the trade remedy measure referred to by
Poland in the form of an additional duty on imports  of meat of swine originating in Poland.   The
measure was applied in accordance with the provisions of CEFTA which provided the legal
justification for the action and explained the reason for applying the measures to one country only.
The Czech Republic had exercised its right under CEFTA to address a situation where imports maycause serious disturbances to the Czech market.   In this case, the measure was taken in reaction to a
surge of imports and evidence of the likelihood of further significant imports of pork from Poland.
The Czech Republic reassured Poland that the Czech Government would spare no effort in clarifying
the situation and seeking a mutually-acceptable solution with Poland.
49. While Poland recognized the importance of preferential trade for trade relations, in the
circumstances, Poland expected that priority should  be given to immediate restoration of MFN trading
conditions according to WTO rules.
(b) Date of Next Meeting
50. The next regular meeting of the Committee on Agriculture will be held on 30 June 2003.  The
airgram convening the meeting and containing the draft agenda will be issued onFriday, 20 June 2003.
(b) Election of Chairperson
51. The Committee re-elected, by acclamation, Dr. Magdi Farahat of Egypt, as Chairman of the
Committee to hold office until the end of the first meeting in the year 2004, under Rule 12 of the
Committee's Rules of Procedure (G/L/142).G/AG/R/34
Page 13
ANNEX
Page
Part I Review of notifications by the Comm ittee on Agriculture on 27 March 2003
(i) administration of tariff and other quota commitments (Table MA:1): El Salvador
(SLV/16) and Thailand (THA/45)14
(ii) relating to imports under tariff and other quota commitments (Table MA:2):
Barbados (BRB/8), European Communiti es (EEC/42), New Zealand (NZL/32),
Norway (NOR/38), South Africa (ZAF /46) and United States (USA/42)15
(iii) domestic support commitments (Table DS:1): Australia (AUS/41/Rev.1),
Barbados (BRB/7 and BRB/11), Canada (CAN/49), Cyprus (CYP/12), Czech
Republic (CZE/45), India (IND/2), South Africa (Z AF/44) and United States
(USA/43)18
(iv) new or modified domestic suppor t measures exempt from reduction
(Table DS:2): Canada (CAN/50), Czech Republic (CZE/46), European
Communities (EEC/39 and EEC/41), Slovak Republic (SVK/36) and Slovenia
(SVN/24)36
(v) export subsidy commitments (Tables ES:1 to ES:3):  Norway (NOR/40) 41
Part II Deferred replies to questions raised at previous meetings
(i) relating to tariff quota admi nistration:  CHN/1  (G/AG/R/ 33, pages 13-14 refer) 42
(ii) relating to export subsidy commitments:  TUN/25  (G/AG/R/ 30, page 41 refers) 45
Attachment
Data provided by the EC under Article 18.6 of the Agreement concerning the
matter of Argentina:  European Communities – Payments under production-
limiting programmes46G/AG/R/34
Page 14
ANNEX – PART I
Review of notifications by the Committee on Agriculture on 27 March 2003
Summary of specific points raised and responses thereto
Table MA:1 Notifications
El Salvador     G/AG/N/SLV/16 Tariff Quota Administration   (Table MA:1)
Points raised by other Member s Response by Notifying Member
New Zealand – Clarification sought as to how the use
of public auctioning as a means to allocate quotas is
justified under WTO rules, including GATT Article
II and whether an auction fee is charged and howmuch that fee may be.  Information sought as to whatefforts are being made to remove the domesticpurchasing requirements in the allocation of thecheese quota, i.e. a requirement that those receiving
quota must purchase at least 10,000 bottles a day of
the national milk supply.
Recalled that New Zealand had raised similar
questions at the June 2002 CoA meeting regardingG/AG/N/SLV/10 (concerning the administration ofthe cheese tariff quota in the 2002 calendar year) and
has been awaiting a response to these questions.
Noted that El Salvador had not submitted
Table MA:2 notifications since 1997 and soughtcomments regarding the effect that the use ofauctioning and domestic purchase requirements has
had on TQ fill.El Salvador undertook to provide a response as soon
as possible.
Thailand     G/AG/N/THA/45 Tariff Quota Administration   (Table MA:1)
Points raised by other Member s Response by Notifying Member
EC – Noted with respect to the milk and cream TQ
that 10,870 tonnes (5,400 tonnes + 5,470 tonnes) outof 73,000 tonnes were allocated to "juristic personsmanufacturing for export".  Clarification soughtwhether this means that 10,870 tonnes of the
allocations under this TQ never really enter the Thai
market.The 10,870 tonnes of skim milk allocated to juristic
persons were used as inputs for processing intoproducts such as biscuits, ice cream and other snacksand was thus part of the TQ and did enter the Thaimarket.
Thailand's TQ commitment in skim milk in the year
2002 was 52,777.78 tonnes, but Thailand actually
imported 73,000 tonnes, over 20,000 tonnes in excess
of the commitment.
Follow-up comment by the EC – Inquired whether
there was an obligation to re-export.Thailand undertook to provide a response.G/AG/R/34
Page 15
Table MA:2 Notifications
Barbados    G/AG/N/BRB/8     Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
United States – Noted that several products, namely
birds' eggs, in shell, fresh, excluding hatching eggs(0407ex), okras (0709.00.3), sweet potatoes(0714.20), and paw-paws (0807.20) had considerableunderfill and that in-quota duties were high for theseproducts.  Information sought whether Barbados is
considering a change in the administration of these
TQs or reducing their in-quota tariffs.The answer to the question is "no".
European Communities     G/AG/N/EEC/42     Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
Australia – Noted low fill rates (less than 10 %) for a
range of commodities, including cheese, meat, eggs
and the zero fill rate on durum wheat and oats.
Explanation sought for such low fill rates. Has theEC considered whether it is necessary to retain atariff quota on these items?
Follow-up comment by Australia – Stressed that
Australia's questions regarding low fill rates to anumber of countries highlighted the importanceAustralia attached to this issue in the context ofagriculture negotiations.  Noted that transparency wasimportant as there might be many reasons why fill
rates were low.The low fill rates for cheese are the result of a lack of
interest of importers.  For meat and eggs the reasons
can be either sufficient supply at attractive prices on
the internal market or a lack of required qualities insupplier countries.  For durum wheat and oats thereasons are zero out-of-quota rates for the periodconcerned.
Tariff quotas were agreed in the Uruguay Round and
the EC intends to continue to operate them.  Theyprovide attractive market access possibilities.
In response, the EC noted that its quotas were
transparent and reasons for underfill were givenabove.  The EC agreed that this was an importantissue in the context of the negotiations.
New Zealand     G/AG/N/NZL/32      Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
United States – Explanation sought for the low TQ
fill for whole hop cones.The current fill rate for whole hop cones entirely
reflects import decisions taken by individual tradersin the market place.  The applied tariff rate is zero for
all hops products, and no quantitative limits are
imposed on individuals or companies wishing toimport hops.  In other words, the TQ is operated as atariff-only regime.  New Zealand is a net exporter of
hops products.G/AG/R/34
Page 16
Norway     G/AG/N/NOR/38      Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
United States – Explanation sought for low TQ fill
for various products, including frozen swine meat;meat of fowl, turkey, and poultry;  butter;  eggs;  and
cabbage.In general, the actual import figures reflect the
commercial interest in the different products, and itseems like the market conditions in 2001 did notfavour quota use for all of the products.  Initially anumber of private importers showed interest in
buying quotas, but the domestic market conditions,
including the demand situation, changed.Consequently the importers did not seem to find itcommercially interesting to utilise their quota shares.
Follow-up question by United States – Inquiredwhether Norway had considered lowering thein-quota tariffs as a measure to increase the tariff fill
rate.In-quota tariffs for the minimum access quotas are at
present one third of the bound out-of-quota tariffs.From 1 July 2003, Norway will autonomously reduce
the in-quota tariffs with 25% of the previous in-quota
tariffs (exceptions being made for the sheep meatquota and the cabbage quotas).
South Africa     G/AG/N/ZAF/46      Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
Australia/EC/United States – Explanation sought for
the underfill of the TQs for fresh milk and cream and
for eggs.Fresh milk and cream.   There are no quotas
administered for these products as the applied tariff iszero.
Eggs  (tariff lines 04.07 and 04.08).  The tariff for the
tariff line 04.07 is zero and there was no need to opena quota.  However, a tariff is applicable for the tariffline 04.08 and quota arrangements wereimplemented.  No applications were received for
imports for this product in 2001.
Australia/EC – Explanation sought for the underfillof the TQ for potatoes.The applied tariff is lower than the in-quota tariff rate
and there is therefore no administration of the tariff
quota for potatoes.
Australia/United States – Explanation sought for theunderfill of the TQ for dried vegetables.Only few applications were received from importers.
Administrative procedures did not prohibit imports.Currency fluctuations might have been the cause of
the low levels of imports.
EC/New Zealand – Explanation sought for the
underfill of the TQ for milk powder, butter and
cheese.Permits for the full quota amount were issued to
prospective importers but were not utilized.
According to importers, currency fluctuations were
the main reasons for low imports under the quota.
EC/United States – Explanation sought for theunderfill of the TQ for maize.Permits for the full quota amount were issued to
prospective importers but were not utilized due tohigh production and lower prices in 2001.
Australia/United States – Explanation sought for theunderfill of the TQ for malt extracts.There were few applications received from importers.
Administrative procedures did not prohibit imports.As with dried vegetables, currency fluctuations might
have been the cause of the low level of imports.G/AG/R/34
Page 17
South Africa     G/AG/N/ZAF/46      Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
United States – Explanation sought for the underfill
of the TQs for sunflower seeds, molasses, vinegar,and bovine meat.Sunflower Seeds.   No quota is being administered for
sunflower seeds as the applied tariff equals the in-quota tariff.
Molasses.   The applied tariff is equal to zero and
therefore no quota is administered.
Vinegar.   The applied tariff is lower than the in-quota
tariff and no quota is administered.
Bovine meat.   Permits for the full quota amount were
issued to prospective importers but not utilized.
According to importers, currency fluctuations werethe main reason for the low rate of utilisation.
Follow-up comment by Australia – CommendedSouth Africa for providing the information productby product which was very transparent, and hopedthat this approach would be adopted by other
Members in answering this type of question.
United States     G/AG/N/USA/42      Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
Australia – Noted low fill rates (less than 10 %) for a
range of commodities in both years reported,
including dried cream, green dried olives and cotton
products.  Explanation sought for such low fill rates.Has the United  States considered whether it isnecessary to retain a tariff quota on these items?Market access opportunities for these products were
made available during the period in question.  Since
there are no measures in place to restrict imports, and
since most of these products are imported on a first-come, first-served basis, under-utilization of thosequotas is related to market conditions.  Some itemsthat have minimal or no in-quota imports, such ascotton waste, have a zero in-quota duty and one item,
green ripe olives, has an out-of-quota duty that is
lower than the in-quota duty.  The US and otherMembers may have an opportunity to considerexpanding or removing unfilled quotas once the new
negotiated modalities are agreed.
Japan – The amount of in-quota imports of each
product from Mexico under NAFTA is provided in
Addendum 1.  However, some data in Addendum 1
are aggregate figures of product groups (e.g. "butter"in Addendum 1 consists of "butter", "dried cream"and "butter oil/substitutes" which are listed separatelyin the main table of Table MA:1).  This preventsJapan from assessing accurate fill rates of such
products.  Requested that the US provide product-
specific data for in-quota imports of each product inAddendum 1.The US does not have readily-available import data
broken out by product as requested by Japan because
the tariff quotas for Mexico are operated by product
group. Import data for the TQs for Mexico are onlycollected by product group.  The product descriptionsin Table MA:2 notifications provide an indication of
the products that fall under each product grouping.G/AG/R/34
Page 18
Table DS:1 Notifications
Australia   G/AG/N/AUS/41/Rev.1      Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
EC – Support for sugar
Noted that Australia notified $A213.57 million of
Current AMS, of which support of $A16.13 millionfor sugar in the form of grants was eliminated underthe product-specific de minimis  rule.   Information
sought regarding what specific grants are included in
this figure.The Commonwealth announced on 1 September 2000
a package of measures to address a uniquecombination of adverse circumstances faced by sugargrowers over recent years, including the impacts oflow world prices caused in part by high support andprotection policies in other countries and damage to
crops caused by cyclones and flooding, rust disease
and rat plagues.  Two grants are included here.  First,under the Sugar Industry Assistance Package(Canegrowers) - Interest Rate Subsidy Component, agrant was provided to canegrowers in the form of
short-term interest rate subsidies on loans of up to
A$50,000 for replanting sugar cane in the 2000 and2001 planting seasons.  Australia acknowledges thatthis grant is not fully decoupled because a producerhas to produce to be eligible for a payment.However, the support is short-term and targeted
unlike on-going, systemic and high-value payments
usually above de minimis  levels provided in high
support countries and which farmers take intoaccount as part of regular farm income.  Second,under the South Johnson Mill loan arrangement, aloan was provided to help ensure the continued
operation of South Johnson Sugar Mill.  Growers
were repaying the loan via a 5 % deduction fromtheir gross cane receipts.  Finally, as set out in thenotification, the grants represented in total 2.4 % ofthe gross value of sugar production in 2000 and 2001
and is therefore well below the product-specific de
minimis  level.
Barbados   G/AG/N/BRB/7 & 11      Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
United States – Sugar bonds
At both the  December 2001 and March 2002 CoA,
the United States asked questions concerningdomestic support for the sugar industry as notified inTable DS:1 notification G/AG/N/BRB/7, but no
response has been received to date.  Explanation
sought with respect to two notifications (Table DS:1in G/AG/N/BRB/11 and Table DS:1 inG/AG/N/BRB/7) as to how the support for the out-of-crop activities of the sugar industry, given by way ofsugar bonds guaranteed by the Government, meets
the criteria of Annex 2, paragraph 2.The term 'sugar bonds' is a misnomer since the
monies therefrom benefit agriculture in general, notjust sugar.  It is more a historical term rather than onereflective of the main beneficiary of the funds. TheBarbados Agricultural Marketing Corporation
("BAMC") is involved in both sugar and non-sugar
activities.  The bonds support the out-of-cropactivities of the BAMC, which as the name implies,is concerned with the activities outside the sugarcrop.  Thus, the bonds support the BAMC's R&Dactivities such as variety testing, the diversification
programme and cotton development and, in
conformity with Annex 2, paragraph 2, qualify forinclusion in general services.G/AG/R/34
Page 19
Barbados   G/AG/N/BRB/7 & 11      Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
United States (cont'd) Specific activities include:
Research – in conformity with Annex 2, Paragraph
2(a) and 2(b)
The main aspect of research is conducted by the
Agronomic Research and Variety Testing Unit(ARVTU), located at Grooves, St. George.  Researchis conducted on various sugar cane varieties and theirsuitability, with the view to selecting the best
varieties with respect to properties such as yield,
sucrose content and suitability for mechanicalharvesting.  The Unit also conducts fertiliser trialsresearch to ascertain the most effective methods andthe performance of various fertilisers under differentconditions.  The Sugar Cane Testing Research Unit
(STRU) also conducts cane testing.
Within the context of the diversification programme,
the BAMC is actively engaged in research activity in
relation to a number of non-sugar crops.  The BAMC
grows cotton and has a collaborative programme withthe Ministry of Agriculture looking at yields,cropping density and pest and disease control.  Anactive collaboration programme is also conductedwith CARDI which looks at sugar cane pests and
diseases, concentrating on sugar cane smut disease
and the sugar root borer.
A collaborative programme is also conducted withthe UWI on white Lisbon yam.  Anthracnose hasbeen an acute problem in yams in Barbados.  Assuch, the focus of this collaborative effort is thecontrol of this disease and the production of disease-free planting material. The development of
anthracnose resistant strains has also been
investigated.  About 90% of the material producedfrom this programme is planted by the BAMC.  TheBAMC also conducts two collaborative researchprogrammes with the Ministry of Agriculture on
onions and sweet potatoes, which looks at the
performance and selection of disease-resistantvarieties.
Training – Annex 2, Paragraph 2 (c)
The Agronomic Research and Variety Testing Unit(ARVTU) is also integrally involved in conductingtraining programmes to managers of independentestates through seminars and workshops.  These
training sessions seek to highlight some of the
findings of the research of the Unit and how suchfindings can be implemented on an on-farm basis.There is also a small holders unit which isspecifically responsible for developing trainingprogrammes for small holders.G/AG/R/34
Page 20
Barbados   G/AG/N/BRB/7 & 11      Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
United States (cont'd) Extension and advisory services – in conformity with
Annex 2, Paragraph 2(d)
Research from the ARVTU is made available to all
independents and small holders, and includes
advisory services on new/improved methods.  The
small holder unit provides important extension andadvisory services to small holders.
Inspection – Paragraph 2(e)
The BAMC undertakes inspection of independentestates for purposes of administering the canereplanting incentive scheme.  Officers are responsiblefor visiting and inspecting fields to verify the acreageand that management of the acreage is up to therequisite standard to facilitate payment of this
incentive.
Marketing and Promotion Activities – Paragraph 2(f)
The BAMC is responsible for the marketing of all
sugar produced in Barbados.  The BAMC is involvedin market research to identify alternative uses of the
sugar cane, its by-products and alternative products
to sugar that can rebound to the benefit of all thoseinvolved in sugar cane.
The funds also assist in supporting estate agriculture,
and meet the criteria of Article 6.2 as measures thatcontribute to rural development.  Given the range of
activities conducted by the BAMC and the
accounting systems, it is difficult to itemize theamounts benefiting each crop as, for example, estateworkers who harvest the sugar crop during the cropseason may concentrate on cotton or root cropsduring the out-of-crop season.
Barbados accounts for a minimal percentage of the
global trade for sugar.  Based on the scale ofproduction in Barbados, the sugar bonds do not haveany production- or trade-distorting effects.G/AG/R/34
Page 21
Canada     G/AG/N/CAN/49       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Green Box
Australia – Agricultural Income Disaster Programme
Clarification sought  as to whether income insurance
payments from private insurance schemes form partof allowable revenue or are considered off-farmincome and excluded from allowable revenue.  If notincluded in allowable revenue, what is the rationale
for its exclusion?
Follow-up comment by Australia – In some cases,
private commodity insurance was included as part ofallowable revenue and some concerning asset losseswere not.  Stressed that there was a need to look atthis issue (including in the context of negotiations) as
it appeared, given Canada's response, that private
insurers could top up the compensation provided bythe government (limited to 70%) and this top-upmight make the producer far in excess of 70% or
even in excess of 100% of the loss.Payments from private commodity insurance (i.e.
livestock, hail, and crop insurance payments) formpart of allowable revenue.  Payments from privateinsurance for asset losses (e.g. home, farm structures,machinery) are considered non-allowable revenue for
programme purposes.
Japan – Income insurance and income safety-net
programmes
Noted that the expenditure in 1999 on "income
insurance and income safety-net programmes"
increased significantly from the previous year.
Explanation sought regarding the reason for thisincrease.  Is it because producers' income declinedsignificantly as a whole; or because the number ofparticipants in the programme increased;  or because
there were some changes in the scheme such as the
levels of compensation?
Requested details regarding the list of products
subject to the payments, the average income losses ofproducers of each product, the number of
participating producers who received the payments
for each product, and the average ratio ofcompensation for each product.In 1998 the programmes notified under "income
insurance and income safety net programmes"
consisted of a federal/provincial programme offered
in two provinces and one provincial programme.  In1999, the programme notified under this headingconsists of Agricultural Income Disaster Assistance(AIDA) offered as a federal/provincial programme in
all ten provinces.
As explained in G/AG/N/CAN/36, AIDA is a whole
farm income safety net programme.  All producers inCanada are eligible to participate in this programme.
Because of the whole farm income nature of the
programme, the kind of data asked for are notcaptured.G/AG/R/34
Page 22
Canada     G/AG/N/CAN/49       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Amber Box
EC – Non-product-specific AMS:  Crop insurance
Noted C$158.2 million in crop insurance as non-
product-specific support.  Application of the de
minimis  rule subsequently eliminated this support
from Canada's current AMS.  On its web site(http://www.agr.gc.ca/progser/ci_e.phtml)
Agriculture and Agri-Food Canada informs that:
"Crop insurance is extended to a wide variety ofcrops across the country and virtually any farmer canbe covered by the programme.  Since crop insuranceis a provincially-delivered programme, coverage will
vary according to crops grown in that province".
Confirmation sought that "coverage will vary
according to crops".  Inquired whether Canada wouldcorrect its notification to include this expenditure
under the product-specific AMS.Crop insurance is a joint federal/provincial
programme that is administered by the provincialgovernments.  Coverage can vary according to cropsgrown in each province as not all of the same cropsare grown in each province.  Should the crop be
grown in a province, it could be covered.
EC – Non-product-specific AMS: Provincial
Programmes
Noted C$314.2 million of "Provincial Programmes"
in the non-product-specific Amber Box.  Thisspending subsequently disappeared under the de
minimis  rule.  Information sought about the type of
measures contained under this heading.The type of measures are those that are provided by
provinces to agricultural producers in general withintheir province, such as fuel tax exemptions, limestoneassistance, assistance to rural communities, drainageprogrammes, programmes for young farmers,
summer farm employment programmes.
EC – Non-product-specific AMS:  Grants and
Contributions under the CARD Fund
Noted C$41.4 million in the non-product-specific
Amber Box as "Grants and Contributions under theCanadian Adaptation and Rural Development Fund".
Information sought as to what type of grants and
contributions are made under this heading.The grants and contributions under the Canadian
Adaptation and Rural Development Fund supportschange by providing assist ance to adapt to structural
changes and to capture market opportunities.  The sixpriority areas include:  research and innovation;
human resource capacity-building;  capturing market
opportunities;  environmental sustainability;  foodsafety and quality;  and rural development.G/AG/R/34
Page 23
Canada     G/AG/N/CAN/49       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
EC – Non-product-specific AMS:  Federal Credit
Concessions and Provincial Credit Concessions
Noted C$22.5 million of negative support under the
non-product-specific AMS for "Federal CreditConcessions".  Explanation sought regarding the
operation of the "Federal Credit Concessions" and the
"Provincial Credit Concessions".The "Federal Credit Concessions" consists of three
measures:  (a) Farm Credit Corporation (FCC) loans;(b) Veterans Loans Administration (VLA);  and (c)Farm Improvement and Marketing CooperativeLoans Act (FIMCLA, previously called Farm
Improvement Loans Act in base period
documentation), a loan guarantee programme.Support under (a) and (b) is measured by multiplyingthe stock of debt by the gap between the weightedcommercial rate and the programme rate.  Supportunder (c) is measured as claims paid less producer
fees and recoveries.  These calculation methods are
the same as in AGST/CAN.
The "Provincial Credit Concessions" mainly consists
of provincial loan programmes applying the interest
rate gap method for support calculations.
Japan – Corn and soy beans
Compared with the previous year, Canada's Total
AMS in 1999 increased by nearly 20%.  Noted that
the increases in direct payments for corn and soy
beans were significant.  Explanation sought regardingthe reason for these increases.The increased expenditures for corn and soy beans
were due to increased levels of expenditures underthe Market Revenue Programme in Ontario and the
Farm Income Stabilisation Insurance Programme in
Québec.
Cyprus     G/AG/N/CYP/12       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Australia – Payments for relief from natural disasters
- Compensation paid to potato growers for the
enforcement of control against ring rot
Explanation sought as to how the programme meets
each of the sub-criteria (a)-(e) of paragraph 8 as isrequired in order to meet the fundamental Annex 2criteria of no or minimal production distortion.
Requested Table DS:2 notification for this
programme.Ring rot is a very serious quarantine disease of
potatoes.  Once introduced and spread into an area, it
has the potential to completely destroy potatoproduction and exports.  A localized outbreak of ringrot occurred in Cyprus in the spring of 2001.  Theinfection was identified to originate from a shipmentof German seed potatoes of a particular variety.  The
Quarantine Authority of Cyprus immediately took
drastic action to contain and eradicate the disease.Potato fields planted with the particular variety wereidentified and the crop was destroyed by the CyprusDepartment of Agriculture.  As provided under the
respective national legislation on the Prevention and
Control of Plant Pests and Diseases, farmers werepaid an area compensatio n to cover the loss of
income they suffered.  The loss of income wasestimated using established procedures developed by
the Department of Agriculture.G/AG/R/34
Page 24
Cyprus     G/AG/N/CYP/12       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Australia (cont'd) Following relevant standards recommended by
international organizations (EPPO) and the EU(directive 93/85/EEC), the Quarantine Authority ofCyprus also imposed restrictions with respect to thetypes of crops that can be planted on potentially
infected fields during the next 3 years after the year
of outbreak.  These include:
(a)  Fields planted with the particular variety ofpotatoes in 2001 (category A) were clearly markedand set-aside for 3 years.  During this period farmersare obliged to keep them fallow and to destroy, underthe supervision of the Department of Agriculture, anyresidual potato plants that may grow on them.  They
are to be paid an area compensation equal to the
standard gross margin of potato production in theparticular area.
(b)  Fields of the same farm planted with potatoes ofother varieties (category B) were also clearly marked
and set-aside for one year.  During the following two
years, such fields can be planted with crops notbelonging to the Solanacea family of plants, such as,for example, cereals.  The level of compensation willbe reduced accordingly.
In Cyprus' view quarantine measures of this naturemeet each of the sub-criteria (a) to (e) of paragraph 8,Annex 2.  A Table DS:2 will be submitted shortly.
This question relates to the regional assistanceprogramme in a disadvantaged region of Cyprus,
commonly known as the wine growing area.Australia – Regional assistance programmes -
Acreage payments to farmers in disadvantaged areas
Explanation sought as to how payments based on
production on an on-going basis meet the
fundamental Annex 2 criteria of having no or
minimal production distorting effect.This is a rather innovative question.  It makes use of
the term minimal production-distorting effect ratherthan minimal trade-distorting effect mentioned in theAgreement, and it contains an implicit statement thaton-going payments related to production, no matterhow, violate the fundamental Annex 2 criteria.  In our
view this is not a correct interpretation of the
Agreement.  But even if we were to accept it ascorrect, there is no problem with the paymentsapplied by Cyprus. First, they have not distortedproduction.  Production went down by 50% in 15years in the particular region.  Second, they do not
apply only to one type of production, although the
growing of vines is a traditional mono-culture in thisregion.  Equivalent payments are made to other typesof production such as almonds and olives.  Third,payments are not based on or related to the type or
volume of production undertaken after the base
period.  The volume of production is constantlydecreasing.  Fourth, payments are generally availableto all producers in the particular region, but not to
landowners who are neither farmers nor producers.G/AG/R/34
Page 25
Cyprus     G/AG/N/CYP/12       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Australia (cont'd)
Explanation sought as to how this programme meets
the criteria of degressive rates of payments in sub-
paragraph 13(e).Cyprus has not set a formal threshold, because the
farms are extremely small in that region.
Czech Republic     G/AG/N/CZE/45       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Regarding the "Renewal of vineyards, hop gardens
and orchards", this programme is part of the
restructuring which the agricultural sector has to
undergo within the transformation process.According to the government programme, designedto assist the financial restructuring of a producersoperation, this programme will continue until the
restructuring process is completed.Australia – Renewal of vineyards, hop gardens and
orchards and Support for dairy cows
Recalled that in the September 1998 meeting
(G/AG/R/16), the Czech Republic indicated that theduration of each of the Annex 2:11 programmes waslimited to one year.  Noted that both programmes
were on-going. Explanation sought as to how long
the programmes are expected to run.  Explanationsought as to how these programmes are consistentwith the requirement in Annex 2:11(b) that paymentsshould not be based on the type of production.  In
other words, how were payments made to producers
in the base year and in subsequent years?The land under perennial crops, i.e. orchards,
vineyards and hop gardens substantially declined in
the Czech Republic during the transformationprocess.  The purpose of this programme is not toincrease these areas. The support provided coverspart of the associated costs for restructuring of the
area in question, which represents about 20% of the
total costs.  Payment is granted per hectare ofrestructured area and only in the first year ofrestructuring.  In the following years, the farmer doesnot receive payments for the same parcel.
As to the Programme "Support for dairy cows" this
scheme was terminated in 2001.
The scheme was not aimed to support production.  Itwas designed to enhance the genetic potential to thelevel of the advanced breeders in other countries.The granting of payments was restricted to the givencriteria, which were tightened every year of
application of this programme.  The programme
helped breeders in the Czech Republic to undergo asubstantial restructuring of cattle farming aimed atincreasing their competitiveness.  During thisrestructuring, cattle numbers decreased substantially.The number of cows decreased from 1,250,000 cows
in 1989 by 54% to 580,000 cows in 2001.G/AG/R/34
Page 26
India     G/AG/N/IND/2       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
United States - India notifies its domestic support in
US dollars, even though its domestic supportcommitments and most of its supporting tables are inRupees.  Requested that where India notifies in USdollars it also submit a corresponding notification in
Rupees.The exchange rate between the Indian Rupee and the
US dollars is determined by market forces and thenotification in US dollars reflects the actual domesticsupport provided after comparing international prices
and domestic prices in the same currency.
United States – Development Programmes
Regarding Supporting Table DS:2, item (b),
explanation sought as to what criteria are used to
define low-income or resource-poor producers, how
the programme funds are distributed and whether thepayments are made in cash, credit, physicalequipment, or some combination thereof.In Supporting Table DS:2 low-income or resource-
poor farmers have been defined as those with landholdings of 10 hectares or less.  Direct or indirectgovernment measures of assistance undertaken toencourage agricultural and rural development havebeen duly taken into account in the calculation of the
domestic support under the provisions of Article 6.2
of the Agreement on Agriculture.
Regarding "Input subsidies to low-income orresource-poor producers", item (ii) includesfertilizers;  however, the United States understandthat subsidies are also given directly to the fertilizerindustry.  Clarification sought as to where the
fertilizer subsidies given to the fertilizer industry are
notified.India invites reference to the replies already given in
this regard in the Committee on Subsidies andCountervailing measures in G/SCM/Q2/IND/13 of1 November 2002.
United States – AMS Calculation
In Supporting Table DS:5, noted that India notifiedcoarse cereals in one category even though itssupporting table calculations were made for bajra,
jowar, maize, and barley.In Supporting Table DS:4, coarse cereals taken into
account are bajra, jowar, maize and barley.  This has
been duly clarified in Supporting Table DS:5.
Explanation sought regarding the methodology for
converting the applied administered price for paddy
rice to the equivalent price for rice.  Noted that a
coefficient of 1.5 was used for the conversion.Clarification sought whether this is a milling or someother coefficient.The Government of India announces the administered
price for paddy and not for rice.  The commonly
accepted conversion ratio of 1.5:1 (when paddy is
converted into rice) is used  to derive the administered
price for rice from the administered price for paddy.It is a coefficient indicating the quantity of paddy
used to produce rice in the process of hulling.G/AG/R/34
Page 27
South Africa     G/AG/N/ZAF/44       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
United States – Explanation sought regarding the
eligibility criteria used to distinguish producers inundeveloped and disadvantaged areas.The main eligibility criterion South Africa uses to
distinguish producers in underdeveloped anddisadvantaged areas is that farmers should be frompreviously disadvantaged communities.  Usuallythese farmers are in the former "homeland" areas,
producing at subsistence level for household
consumption and local markets.
The main objective for payments under these
programmes is food security and as such is not linked
to domestic or international prices.
United States     G/AG/N/USA/43       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Green Box
Argentina – General services:  Animal & Plant
Health Inspection Service (APHIS)
Which were the pests and diseases that led to the
animal and vegetable protection and control during
1999?The Animal and Plant Health Inspection Service
(APHIS) is the US agency dedicated solely tohandling the eradication and prevention on acontinuing basis of all destructive pests and diseasesthat arise in the agriculture industry.  Some examplesof pests and diseases include cattle fever ticks, foot
and mouth disease, and fruit flies.
Argentina – General services:  State programs for
agriculture
Do those measures involved in the State Programs for
Agriculture devoted to provide general services ofextension, marketing and research included inparagraph 2, Annex 2 imply direct payments to
producers?Payments under Annex 2, paragraph 2 do not involve
direct payments to producers.
Argentina – General services:  Payments for relief
from natural disasters
Which are the natural disasters that led to a totalassistance of US$1,635 million during 1999? Which
are the zones and crops that were specially affected?There was assistance due to flooding in fiscal year
1998 and due to dro ught conditions in 1999.
In which way is a loss above 30% in production
verified for the purposes of collecting the payments
and including them in the Green Box, taking into
account that there is an Amber Box programme thatgrants direct payments to those producers registeringlosses below 30%.  Does the USDA ensure that aproducer that benefits from the Green Boxemergency programme (more than 30% production
loss) does not receive direct payments under the
Amber Box emergency programme (less than 30%production loss)?There is no Green Box outlay aimed at granting
disaster subsidies when the loss is less than 30%.
Notification classification decisions are based on
published WTO criteria and regulations for eachprogramme.  The entire programme is either notifiedas Green or Amber.G/AG/R/34
Page 28
United States     G/AG/N/USA/43       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Australia – General services:  Payments for relief
from natural disasters - Emergency Feed Program
and Flood Compensation Program
Why does the year 1999 include a large increase in
payments to livestock producers for feed crop
disasters and for loss of use of cropland or
pastureland due to flooding?The payments were to compensate for the poor
pasture conditions that existed in 1999 throughout
much of the United States.
In the footnote concerning the payments to livestock
producers for feed crop disasters it is stated that the"value of subsidy on feed distributed under thescheme is unavailable".  Does this mean that it cannot
be calculated?As indicated in the notification, this programme was
suspended from 1997 through 2002.  As a result, itwould have no impact on the 1999 notification.
Why do payments need to be made separately under
the flood and feed crop schemes, when large
payments are also made under the crop disasterpayments scheme?These are different programmes with different
requirements. Not all producers automatically qualify
for both types, so payments need to be madeseparately.
Can a producer double up on payments under bothschemes and if so how many qualified and were paid
under both schemes?USDA regulations, found in the Risk Management
Agency regulations on Common Crop Insurance
Provisions, state that an eligible recipient can receive
benefits under both crop insurance (notified asAmber Box payments) and another programme forthe same loss (a Green Box disaster programme),unless specifically limited by the crop insurancecontract or by law.  Nevertheless, the total amount
received from all such programmes may not exceed
the amount of the actual loss.  USDA's Farm ServiceAgency ensures compliance with this provision.
Argentina - Structural adjustment assistance provided
through investment aids
What are the eligibility criteria as well as the
structural disadvantages that led to the assistance
being included under paragraph 11, Annex 2?Eligibility requirements are available on the Farm
Services Agency website at:http://www.fsa.usda.gov/dafl/guaranteed  and
http://www.fsa.usda.gov/dafl/directloans
Those related to structural disadvantages can be
summarized as follows:  Direct and Guaranteed Loanapplicants must be operator or tenant operator of a
family farm and unable to obtain credit elsewhere.
Beginning Farmer and Rancher Loans applicantsmust have participated in operations of a farm or
ranch for less than 10 years and be unable to obtainfinancing from commercial credit sources.
Loans to Socially Disadvantaged Farmers/Ranchers
applicants must be one of a group whose membershave been subjected to racial, ethnic, or gender
prejudice because of their identity as members of the
group without regard to their individual qualities.This includes women, African Americans, AmericanIndians, Alaskan Natives, Hispanics, Asians, and
Pacific Islanders.G/AG/R/34
Page 29
United States     G/AG/N/USA/43       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Argentina (cont'd) Eligibility requirements for these loan programmes
used for the 1986-88 base period come fromregulations revised as of 1 January 1991 from CFR 7
Agriculture, Parts 1950 to 1999:
See "ownership loans," page 275-292. Paragraph
1943.1 states that the loans may be made to eligible
farmers "that will manage and operate not larger thanfamily farms."  The basic objective in paragraph1943.2 is to assist farmers "to become owner-operators of family-sized farms or to continue suchoperations when credit is not available elsewhere."
Through this assistance farmers can improve their
financial situation so then can eventually obtaincredit elsewhere.
Family farms, as defined in paragraph 1943.4, arelarge enough to provide the agricultural income forthe family and for operating expenses and yet smallenough that a substantial amount of the labour
requirements are provided by the operator and family
members, except that a reasonable amount of full-time hired labour and seasonal labour may be usedduring peak periods.  Limited resource farmers areidentified for special co nsideration in terms of
interest rates and other assistance.
Paragraph 1943.6 requires the applicant to certify in
writing that adequate credit is not elsewhere availableto meet the applicant's needs at reasonable rates andterms.
See operating loans on pages 102-116.  The samebasic objectives and definitions are used for these as
for ownership loans.
See emergency loans on page 636-669.  The
objective is to assist eligible farmers to cover actuallosses to physical property essential to the operationof the farm or for the loss in production which
exceeds 30% of normal per acre or per animal
production.  The intent is to enable farmers to returnto normal operations follo wing a declared/designated
disaster.  Applicant farmers must certify that they areunable to obtain credit elsewhere (paragraph1945.156) and they must be a family farm (paragraph
1945.162).  These loans are not authorized for losses
to crops in areas where FCIC crop insurance isavailable (paragraph 1945.167).G/AG/R/34
Page 30
United States     G/AG/N/USA/43       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Product-specific AMS
Argentina/Australia/Japan – Could the US explain
which measures caused the increase in product-specific AMS support for soy beans, sunflower, rice,
wheat, corn, sorghum, cotton and tobacco?
Australia - Are these payments expected to continueat such high levels and if so how will these paymentsassist the US achieve its aims of helping producers to
become more competitive and more market-oriented?Increased loan deficiency payments and marketing
loan gains resulted in the bulk of increased supportfor the products listed.  Oilseed payments alsoincreased the soy bean support. The tobacco figureincreased because of large forfeiture benefits relatedto damaged tobacco placed under loan with the
Commodity Credit Corporation and market loss
payments related to reduced tobacco quotas.
Benefit flows will depend on future market
conditions.
Argentina - Could the US inform about the measures
authorizing AMS support for products such as apples,
cranberries and tobacco that had not received any
such support according to G/AG/N/USA/36?The United States provided information in footnote
numbers 1, 2, 13, 14, and 15 in Supporting Table
DS:6 of the notification.
Argentina – De minimis
Could the US provide the prices and quantities used
for the calculation of the de minimis  threshold for
each product?For many products, the de minimis threshold is
calculated using value of production data from theNational Agricultural Statistics Service (NASS).NASS sources of data on production, prices and
value of production are found on the following web
pages and in the following reports:
http://www.usda.gov/nass/pubs/estindx.htmMeat Animals Production, Disposition, and Income
(http://usda.mannlib.cornell.edu/reports/nassr/livestoc
k/zma-bb/meat0401.pdf)
Milk Production Disposition and Income(http://jan.mannlib.cornell.edu/reports/nassr/dairy/pm
p-bbm/milk2001.pdf)
Wool and Mohair
(http://usda.mannlib.cornell.edu/reports/nassr/livestoc
k/pgg-bbw/wlmh0100.pdf)
Honey
(http://usda.mannlib.cornell.edu/reports/nassr/other/z
ho-bb/hony0201.pdf)
Poultry production and Value(http://usda.mannlib.cornell.edu/reports/nassr/poultry
/pbh-bbp/plva0401.pdf)
Crop Values
(http://usda.mannlib.cornell.edu/reports/nassr/price/z
cv-bb/cpvl0201.txt)G/AG/R/34
Page 31
United States     G/AG/N/USA/43       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Argentina (cont'd) These publications include the prices used for
calculating values of production. The prices areestimated farm level prices, or the estimated averagevalue per unit received by all producers over theentire crop year.  For commodities for which NASS
value of production reports are not available, the
value of cash receipts from farm marketings is used.Cash receipts are also estimated using average farmlevel prices. See the ERS cash receipts tables for the
United States and by States at
http://www.ers.usda.gov/data/farmincome.finfidmu.
htm
Cash receipts are used in the case of vegetables, fruits
and nuts, horses and mules, and other products.
The total value of production notified in SupportingTable DS:4 for 1999 wa s $184,734.554 million. In
addition to the specific AMS commodities listed inthe notified Supporting Table DS:4, which had a
value of production of US$110,390.074 million, there
were also non-AMS commodities included in thetotal, which had values totalling US$74,344.480million in 1999.  These commodities include broilers,hay, other vegetables, other fruit and nuts, eggs,
turkeys among other products.
Could the US state the criteria to select or estimate
the prices for the calculation of the de minimis
threshold?The United States uses public information noted in
the US response to the previous question to make itscalculation.
EC – In Supporting Table DS:5 the US notify anapplied administered price for sugar of 18 cents per
lb., which is the announced loan rate for cane sugar,
less one cent per lb. penalty that must be paid if sugar
is actually forfeited.  How does this appliedadministered price take account of price supportgiven to beet sugar for which the loan rate is higher at
22.9 cents per lb?The loan rates for raw cane sugar and refined beet
sugar are set based on the difference in processingcosts between the two products.  The refined beet
sugar price, set at approximately 4.9 % above the raw
cane sugar price, reflects what would be thedifference between these two prices in an unregulatedmarket.  The 18-cent raw cane sugar price is also theappropriate price for comparison with the external
reference price, which is a market price for raw cane
sugar.
It appears that the one cent penalty in case offorfeitures is deducted for the whole productionconsidered in the price gap calculation.  Is this
observation correct? Should not just the penaltyamount for the actually forfeited production be
deducted?Because of the forfeiture regulation that guarantees
only 17 cents should a forfeiture occur, the targetmarket price level needed to avoid forfeitures isactually one cent less than it would be without the
penalty.
EC - In Supporting Table DS:6 under tobacco the US
report US$933 million of support.  Does this figure
include the allocations of so-called "Phase II funds"
that are made available to tobacco producers?The figure does not include Phase II payments.  At
this time, the United States is evaluating whetherpayments that were not funded by taxpayers, but bycorporations under a legal settlement withparticipating states, should be notified. Once the
question has been decided, any resulting adjustments
will be notified.G/AG/R/34
Page 32
United States     G/AG/N/USA/43       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Japan - According to FAOSTAT, the export volumes
of the US, as well as the ratio of exported volume to
total domestic production of each product mentionedabove in 1999 and 2000 were largely maintained atthe level of those in 1998, except for cotton. Could
this be attributed to the increase in such payments as
loan deficiency payments, marketing loan gains andemergency assistance for specific products.Loan deficiency payments, marketing loan gains, and
market loss assistance payments have been notifiedas Amber Box programmes.
Follow-up comment by Japan – Japan considered thatthe large payment notified under the Amber Boxenabled the US farmers to maintain the level ofexports of the commodities in question at the samelevel as in previous years and stressed that this issue
needed to be discussed in the ongoing negotiations.
Non-product-specific AMS
New Zealand – Noted the dramatic rise in US
agriculture subsidies in recent years. For example, in1999 the US notified spending on non-product-specific support exceeding US$7 billion, which ismore than seven times greater than in the 1986-88
base period.  Noted that non-product-specific support
has increased during a period of declining US valueof production and considered that much of thissupport is in fact not non-product-specific. Could theUS explain how the support is non-product-specific
when much of it is based on the market prices for
specific products and is limited to the producers ofonly a few crops.The Market Loss Assistance payments were notified
as Amber Box, rather than Green Box, because theywere considered to be related to current prices.However, payments are not coupled to currentproduction of any specific commodity, but rather are
based on historical fixed base acreage and yields.
While the US claims these subsidies are within US
commitments, it clearly demonstrates the counter-cyclical nature of US agriculture support policywhich has now become institutionalized in the 2002Farm Bill.  Could the US please explain what steps it
is taking to avoid US producers becoming reliant on
subsidies especially given the reductions in domesticsupport entitlements, which will result from the Doha
negotiations?The United States is fully committed to further
reform in world agricultural trade.  The United Stateshas submitted a proposal to the WTO agriculturalnegotiations under the Doha Development Agendathat provides detailed information about its vision for
eliminating trade-distorting subsidies including
export and domestic subsidies and for eliminatingbarriers that impede the flow of goods across
international borders.
Australia – Crop and revenue insurance
Why have crop insurance payments increased sharply
between 1997 and 1999?Crop insurance payments increased as a result of
increased premium subsidies, increased participation,and increased crop production losses.
Given that these payments coincide with recordlevels of crop disaster payments, what percentage offarm income is derived from these payments?The percentage of farm income derived from these
payments is 0.8% given that crop and revenueinsurance benefits were US$1.5 billion (Amber Box)and total crop disaster payments US$1.2 billion
(Green Box) for a total value of production for the
crop marketing year 1999 of US$184. 7 billion
(Supporting Table DS:4).G/AG/R/34
Page 33
United States     G/AG/N/USA/43       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Australia (cont'd)
Does the US anticipate that these payments will
remain high in years when natural disasters are not
experienced?The crop insurance programmes and the emergency
crop disaster programmes are designed to provide
benefits only in the event of natural disasters.
EC - Crop and revenue insurance
The US notify under Crop and Revenue Insurance
subsidized by the FCIC an amount of US$1,514.094
million.  Does this figure concern the total
government subsidy in the premium? Data on theRisk Management Agency web-site(http://www.rma.usda.gov/data/) match the datanotified concerning the producer paid share of theinsurance premiums.  On the contrary the
government subsidies reported there do not match the
figures notified.  Explanation sought regarding thedifferences between the notification and the data
available on the RMA website.The United States makes crop insurance calculations
based on the following:  the benefit to producers for
the notification is defined on a cash-flow basis. It is
the difference between the actual indemnitiesreceived by producers and the actual insurance policypremiums paid by the producers. The publishedpremium subsidy is not the notified WTO subsidyitself, but it is subtracted from the total published
premium that would have to be charged to cover all
expected indemnities, based on accepted actuarialconcepts for insurance policies. The resulting netpremium is the amount paid by producers. The resultfrom 5 June 2002 was notified for marketing year
1999:
Total premium =   US$2,309,708,607Premium subsidy =  US$1,391,611,406
Producer premium =  US$918,097,201
Then in million dollars:
Indemnities paid =   US$2,432.191
Producer premium =  US$918.097
Net producer benefit =  US$1,514.094 (notified)
The latest data from Risk Management Agency willbe slightly different from these data because newinformation continues to be recorded in the RMAaccounts.  The subsidy is now shown asUS$1,391.886 million, and the net producer benefit
amounts to US$1,516.468 million, US$2 million
above the notified amount.  See the last four columnsof the participation data for 1999 (the last column isthe "loss ratio") at:
http://www.rma.usda.gov/FTP/Reports/Summary_of_
Business/99stcrpG/AG/R/34
Page 34
United States     G/AG/N/USA/43       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
EC (cont'd)
On the Risk Management Agency web-site
considerable detail is pr ovided concerning producer
premium payments, government subsidies andindemnities for crop insurance per individual product.
There is a section on this web-site entitled "crop
policies" (http://www.rma.usda.gov/policies/). Morespecifically for the year notified we noted theexistence of a heading "1999 current policyendorsements and crop provisions"(http://www.rma.usda.gov/policies/1999policy.html).
Can the US explain how, against the background of
the extended crop-specific data availability and theobviously crop-specific policy provisions reported onthis web-site, it can maintain its practice to notifyCrop Insurance as non-product-specific in Supporting
Table DS:9?The basic programme provisions are generic - they
are equally available to a broad array of commoditiesaround the country. Once coverage level and policytype have been determined, administration of the
programme, by necessity, becomes crop-specific, but
all guidelines and regulations remain generic andnon-product-specific.
Follow-up comment by the EC – With respect to the
question concerning "crop policies", the US spoke
about the basic concept being generic but thenexplained that the way it was actually administratedand managed was done in a crop-specific way.  Thereseems to be a contradiction in terms and the EC will
need to study the answer closely.
Australia – Crop market loss assistance payments
Why is this support notified as non-product-specific
and not included as product-specific and thusincluded in the AMS for 1999. It seems clearly linkedto specific commodity production as the paymentsare calculated from individual commodity bases for
the various programme crops.These payments were notified as Amber Box, rather
than Green Box, because they were considered to berelated to current prices. However, payments are notcoupled to current production of any specificcommodity, but rather are based on historical fixed
base acreage and yields.
Canada – Crop market loss assistance payments
In replying to Canada's earlier question (G/AG/R/28)
about MLA payments being classified as non-product-specific, the United States indicates thatpayment rates are crop-specific.  Such payment ratesare established for only seven crops, while US
agricultural producers in general produce a much
larger number of agricultural products.  Could theUnited States explain how support providedexclusively to recent producers of only seven cropscould be claimed as support provided in favour of US
"agricultural producers in general" (Article 1 (a))?Market Loss Assistance payments are not coupled to
current production of any specific commodity, butrather are based on historical fixed base acreage andyields.  These payments could, in fact, go toproducers of a wide range of crops, not just the
original seven on which the historical area is based.G/AG/R/34
Page 35
United States     G/AG/N/USA/43       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Follow-up question by Canada – Canada's question
concerns the provision of support exclusively torecent producers of only seven crops.  In this regard,
information prepared by the USDA suggests that not
all US farms have historically produced feed grains,wheat, rice or cotton.  In 2001 only about 21% of USfarms operated acreage either currently or formerlydevoted to these crops.  Less than half of UScommercial farms (which constituted about 10% of
all farms) were recipients of production flexibility
contract payments in 2001.  These findings wouldsuggest that 1999 MLA payments could be providedto, at the most, 21% of US agricultural producers.Could the United States explain the reason forclaiming that these payments were provided to US
agricultural producers in general?  (Reference:
"Decoupled Payments: Household Income andIncome Transfers in Contemporary US Agriculture",Market and Trade Economics Division, EconomicResearch Service, US Department of Agriculture,Agricultural Economic Report No. 822, February
2003, Mary E. Burfisher and Jeffrey Hopkins,
editors).
Follow-up comment by Brazil – In Brazil's view, theMLAs are contingent upon commodity priceperformance and consequently they were correctlynotified under the Amber Box.  Nevertheless, Brazilhas doubts as to their clas sification as non-product-
specific payment.  Although the Agreement does not
set out specific criteria for the distinction betweenproduct-specific and non-product-specific payments,in Article 1 of the Agreement, a reference is made tonon-product-specific support as being provided infavour of agricultural producers in general.  In this
case the MLAs were paid in favour of a few
programme crops and constituted only a fraction ofUS agricultural production.  This is an importantmatter and Brazil will be pursuing it in the
agricultural negotiations.
Follow-up comment by Australia – Concerning
whether certain commodity support payments are
eligible to be included in the US non-product-specific
de minimis  category, Australia shares Brazil's view
and considers that MLA payments were made inproportion to production flexibility contract paymentswhich in turn were distributed to farmers on the basis
of their area and yield bases.  Such bases were
commodity-specific.  Hence, it seems that MLAs arecommodity-specific.  Regarding the administration ofpayments, although they are being provided as apackage to farm programme crop producers, inreality they are based on specific crops (e.g. wheat,
corn, etc.) in programme crop areas.G/AG/R/34
Page 36
Table DS:2 Notifications
Canada G/AG/N/CAN/50    New or Modified Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
Australia – Conservation Cover Programme
(Saskatchewan)
Australia recognizes the small value of payments and
the effective total payment limit for this scheme butquestions the claim that no industry would be theprimary beneficiary of this scheme.  As grazing inSaskatchewan is predominantly cattle grazing for
beef production, how can a scheme designed to
convert crop land to pasture not mainly benefit thebeef industry in Saskatchewan?The programme is to promote land stewardship and
help address issues related to soil conservation,
protecting water resources, reducing greenhouse gasemissions, and conserving Saskatchewan's bio-diversity.  The main beneficiaries of the programme
are the general public.
Japan – Conservation Cover Programme
(Saskatchewan) and Prime-Vert
Explanation sought as to how these programmes meet
the criteria specified in Annex 2, paragraph 12 and
what exactly are the "specific conditions under the
government programme, including conditions relatedto production methods or inputs" in the context ofthese programmes.  What steps are taken to limit thepayments to "the extra costs or loss of incomeinvolved in complying with the government
programme" in these programmes?The specific conditions under the Conservation
Cover Programme are that producers convert annualcrop land to perennial cover.  The programmefunding of $15 per acre represents about one-quarter
of the cost of converting the land.
Under Prime-Vert producers are to meet programme
objectives, including meeting new regulations set outby the Department of the Environment under theEnvironment Quality Act.   Financial assistancecovers 50-90% of the eligible costs up to a certain
maximum depending on the project.
United States – Conservation Cover Programme
Information sought as to what specific types of
perennial cover the cropland is converted.The Conservation Cover Programme specifies that
producers must use a perennial crop.  There is no
restriction on the species to be established.  However,seed must meet the minimum standard of CanadaCommon No. 1 or better.  If producers are using theirown seed, they must supply a seed certification reportfrom an accredited seed laboratory.  Bi-annuals are
not accepted.
Czech Republic G/AG/N/CZE/46    New or Modified Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
Australia – Set-aside programme
Explanation sought regarding the size of the payment
per farmer; whether the land is set aside on anindividual farm basis or on a regional basis; thescheme is implemented on a regional basis, how isthe regional set-aside adjusted if farmers do not set
aside land; and, the compliance mechanism to ensure
land set-aside is for non-food use.The amount of payments for individual farmers
varies depending on the area of set-aside land and the
type of crops grown for non-food uses.  The land isput into set-aside on an individual farm basis, not ona regional basis.  The condition that the crops grownunder this programme shall be used only for non-
food purposes is laid down in Government Decree
No. 86/2001 Coll., which stipulates an obligation tosubmit a certificate that  the crop was used for non-food purposes.  The payment is not granted where
this obligation is not met.G/AG/R/34
Page 37
Czech Republic G/AG/N/CZE/46    New or Modified Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
New Zealand – Set-aside programme
Explanation sought as to how the "Set-aside
programme" complies with Article 6.5 of theAgreement.  While this programme appears to
contain the requirement to set aside a fixed area of
land – the land set aside in such a way is then usedfor agricultural production of other kind.  As such theprogramme does not appear to be production-limiting.  Rather, as part of this programme there is a
production shift for a proportion of land.This programme complies with Article 6.5 of the
Agreement on Agriculture.  The objective of theprogramme is to reduce the area for the production offoodstuffs keeping the set-aside areas cultivated by
sowing them with crops for technical or energy uses
(i.e. oilseed rape, sorrel, evening primrose), or cropsused as green fertilization (i.e. mixtures of legumes,oilseeds, annual ryegrass, lupine and mustard).  Theset-aside land should not be degraded and infestedwith weeds or scrub because otherwise it would
require additional restoration costs.  As such, this
programme limits the production of agriculturalproducts for food purposes.
Follow-up comment by New Zealand  – Article 6.5 isdesigned to limit total production and relates to thetotal incentive that the farmer receives as a result ofany government subsidies.  The farmer would not
distinguish between whether or not the payment is for
food or non-food crops.
Australia – Programme of assistance in less-favoured
areas
Information sought concerning the factors that haveled to the areas eligible for this programme being
designated as "less favoured"; how does the per
hectare payment meet the requirements of Annex 2paragraphs 13(e) and 13(f), which require thatpayments linked to production be made at adegressive rate above a threshold level of the factorconcerned, and be limited to the extra costs or loss of
income suffered by these producers, and, how do
such payments based on production and paid on anon-going basis meet the fundamental Annex 2 criteriaof having no or minimal production-distorting effect.The factors used to designate an area as a
less-favoured area (LFA) include elevation, slope,productivity of natural environment (soil fertility),subsidence as a result of mining, low precipitation
and location within a large-scale nature conservation
area (national parks and protected landscape areas).
Individual LFAs are classified on the basis of their
soil and climatic conditions and digressive rates ofpayment are provided above a threshold level,depending on these conditions in a given category.
The payments are also restricted to the additional
costs that are associated with the farming of land inthese areas.  The payments under this programmemeet the fundamental criteria laid down in Annex 2to the Agreement of Agriculture, as they have nodistorting effect on production.  The payments are
made only with respect to the areas under permanent
grassland, to preserve employment in these areas andprevent their depopulation.G/AG/R/34
Page 38
European Communities   G/AG/N/EEC/39 New or Modified Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
United States – Vineyard restructuring and
conversion programme
Since there is an explicit requirement in the EC
regulation to produce grapes from a specified list ofacceptable varieties ("positive list"), is the EC willingto properly re-notify this programme as Amber Box
support?  If so, when will the EC re-notify the
vineyard restructuring and conversion programme asan Amber Box programme? In the alternative, couldthe EC justify the apparent incongruity betweenAnnex 2, paragraph 11(e) criteria, and the vineyardrestructuring programme criteria requiring production
of grapes from a specified list of acceptable varieties?The EC do not consider the free choice of a producer
between economically viable grape varieties as a
"designation of agricultural products to be produced".
Therefore we do not agree that there is an apparentincongruity with the paragraph 11(e) criteria.  Inaddition the EC recall the title of paragraph 11 ofAnnex 2: "Structural adjustment assistance providedthrough investment aids".  The EC maintain that this
is exactly what the measure achieves. The measure
helps producers to convert away from surplusproduction towards products for which there ismarket demand.
Follow-up comment by the United States – It isdifficult to see how, given that the EC maintains a
"positive list", that this is not affecting production.
European Communities   G/AG/N/EEC/41 New or Modified Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
Australia/Canada – Compensatory payments for rice
producers
With respect to per hectare compensatory payment
for rice producers, Australia is disappointed at the
non-transparent way in which the EC notifies itsprogrammes.  Explanation sought regarding the
change to this measure.
The EC seeks to exempt support to rice producers
from commitments.  However, the notification
EEC/41 does not demonstrate how the support meetsthe relevant criteria.  Explanation sought as to thegrounds on which this measure might be consideredto meet the criteria of Article 6.5(a)(i); what is thefixed area and what are the fixed yields; and, what is
the significance of referring to "fixed references of
the past" rather than "fixed area and yields".The "fixed references of the past" are:
• a fixed national base area
• a fixed compensatory payment per hectare based
on the reduction of the administered price andrelevant yields from representative periods in thepast.
These periods, used for the yield calculation, were:
• the average of the period 1990/91 to 1994/95
while eliminating the highest and the lowest
or
• the average of 1992/93, 1993/94 and 1994/95.G/AG/R/34
Page 39
Slovak Republic   G/AG/N/SVK/36 New or Modified Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
New Zealand – Countervailing payments in crop
production
Clarification sought whether this is a one-off measure
or if it is still in effect and how this programme meets
the fundamental requirements that measures have no
or at most minimal trade-distorting effects or effectson production.  The payments described in thisnotification appear to be related to production andNew Zealand therefore suggests that this measure be
moved into an appropriate Amber Box category.According to the preliminary bill of domestic support
titles for 2002, the payments in question were made
again and probably will be retained in coming years.
There is a difference between compensation
payments and countervailing payments.Compensation payments which are included in theAmber Box, are linked to sales. Countervailingpayments are provided in order to maintain a
diversity of crop production. This package of
payments is granted for growing many crop species.The total sums of individual payments are not verysubstantial, e.g. up to US$370/ha or US$37/tonne.
Follow-up comment by New Zealand – New Zealandstill considered that these payments had the effect ofproviding price support to the individual crop and
should be in the Amber Box.In response, the Slovak Republic stated that it could
consider reclassification of this programme.
Slovenia   G/AG/N/SVN/24 New or Modified Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
Australia – Prevention of overgrowing by forest
Explanation sought as to how these payments are
made, and how the measure is consistent with each of
the sub-criteria (a) to (f) of paragraph 13 of Annex 2.The less-favoured area payments scheme is based on
the calculations to compensate the additional costs of
production or loss of income for the farmers who
produce under unfavourable production conditions(steep slopes, altitude, vegetation period, strongwind, soil characteristics etc.).  The support isavailable to all producers which meet the criteria of
the less-favoured areas set out in the Decree on
criteria for determining areas with restrictedagricultural possibilities (OJ RS 62/2000). Accordingto the above-mentioned decree there are three
different kinds of payments for:
• mountainous regions and farms on steep slopes
(79.9 EUR/ha),
• hilly, karst and other regions with limiting
production factors (53.7 EUR/ha),
• mountainous pastures (39.0 EUR/ha).
The less-favoured area payments are area-based
payments, paid out on a hectare basis regardless ofwhat is produced.  In this respect, they are completely
decoupled payments and not related to any type or
volume of production. Total amount of thosepayments amounted to 21,046,690 EUR in the year2002.G/AG/R/34
Page 40
Slovenia   G/AG/N/SVN/24 New or Modified Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
Australia (cont'd) In addition, the following six local communities
(Destrnik, Gorenja vas – Poljane, Mirna pe č,
Škocjan, Zagorje ob Savi in Železniki) paid the totalamount of 66,060 EUR for the prevention of
overgrowing by forests. Eligibility for these
payments was limited to producers in disadvantagedregions as defined in the Regulation on criteria fordefining less-favoured areas (OJ RS 62/2000).Payments were made on an area basis (paid perhectare) and were not related to, or based on, the type
or volume of production but are intended only to
prevent the overgrowing of agricultural areas byforests.G/AG/R/34
Page 41
Tables ES:1 to ES:3 Notifications
Norway   G/AG/N/NOR/40     Export Subsidies (Tables ES:1, ES:2 and ES:3)
Points raised by other Member s Response by Notifying Member
Argentina – Explanation sought as to how Norway
ensures that 3,240 tonnes (19,394 tonnes in ES:2
minus 16,154.2 tonnes in ES:1) of cheese exported in2000 have not been granted any export subsidy.The export prices of the 3,240 tonnes of cheese in
question equal the prices for corresponding products
sold on the domestic market.  Furthermore, theseexports have not received any other kind of subsidiesas defined in the Agreement.  This is ensured throughcompulsory reporting of all exports, includingquantities and prices, to the Norwegian Agricultural
Authority, which carries out audits to ensure that the
information provided by exporters is correct and incompliance with Norway's commitments under theAgreement.G/AG/R/34
Page 42
ANNEX – PART II
Deferred Replies to Questions Raised at Previous Meetings
Table MA:1 Notifications
China   G/AG/N/CHN/1     Tariff Quota Administration (Table MA:1)
(G/AG/R/33, pages 13-14 refer)
Points raised by other Member s Response by Notifying Member
Canada - Information requested regarding the criteria
for applicants to be considered "being under soundfinancial conditions"."Being under sound financial condition" refers to the
applicant which should have normal and reasonable
financial resources, can maintain normal production and
marketing, and should not have unreasonable debts.
Explanation sought as to what the annual enterprise
review is, and whether this applies to state and non-
state enterprises.The annual enterprise review means that the State
Administration of Industry and Commerce reviews theperformance of all of the enterprises which haveregistered with the SAIC according to the relevant rules,and checks whether the enterprise does its businessunlawfully.  This applies to all enterprises including thestate and non-state enterprises.
Under point (b)(iii) in the notification, the "import
tariff quota for general trade shall be allocated withreference to the volumes for which applicants have
applied, previous import performance and
production, or other applicable commercial standards,or under the principle of first-come, first-served".What determines which approach is used for aspecific application?  If a different method is used for
each TQ, what are the specific criteria used to
allocate each TQ?The SDPC informs about the approach and specific
criteria before allocating different product tariff quotasin the form of the SDPC Circular.  The SDPC releasedits 4
th and 6th Circulars on 30 September 2002.  The
SDPC Circular 4 was entitled the "Implementing Rulesfor Allocation of Important Agricultural Products TariffQuotas in 2003", and the SDPC Circular 6 was entitledthe "Implementing Rules for Administration of Wooland Tops Tariff Quotas in 2003."
In the notification of TQ allocation procedures for
2003 from the State Development PlanningCommission (Notice No. 4, 2002),  China has againspecified the subdivision of its TQs into Category A
(volumes for domestic consumption) and Category B
(volumes for processing and re-export).  Reasonswhy this is not reported in this notification underpoint (c), specifically by TQ?  What is themethodology employed for dividing quota volumesbetween domestic use and processing/re-export?  Has
China considered alternatives to the allocation
procedures for processing and re-export such asissuing supplementary import permits, to ensure aminimum predictable level of market access?The Category B TQs for different products for 2002 is
as follows:  wheat 250,000 tonnes;  corn200,000 tonnes; rice 150,000 tonnes;  soy bean oil200,000 tonnes; palm oil 100,000 tonnes; rape-seed oil100,000 tonnes;  sugar 600,000 tonnes; cotton 500,000tonnes;  wool 84,500 tonnes;  and tops 32,000 tonnes.
The quantity maintained in advance for the Category B
TQs for different products was set by the SDPCreferring to the actually imported quantity of theproducts for processing and re-export in previous years.The approach for China to divide the TQ into twocategories is reasonable.  We have no plan to change the
current procedure for allocation of Category B TQs.
EC - Could China, in the spirit of the request of the
General Council (WT/L/384 refers), provide an
addendum to the Table MA:1 notification containinginformation with references to relevant legislation orcontaining copies of this legislation per individual
TQ?China has no legislation per individual TQ for every
kind of product.G/AG/R/34
Page 43
China   G/AG/N/CHN/1     Tariff Quota Administration (Table MA:1)
(G/AG/R/33, pages 13-14 refer)
Points raised by other Member s Response by Notifying Member
Japan - With regard to imports of rice and wheat in
2002, information requested regarding the quantity,by countries of origin, contracted by 15 September(breakdown of this information requested by
short/medium grain rice and long grain rice).By the end of October 2002, imports of rice
amounted to 165,000 tonnes and wheat to 64,000tonnes.  Rice mainly comes from Thailand and wheatcomes from Canada, the US and Australia, etc.
Imported rice is all long grain rice.
Regarding the imports under tariff quotas, couldChina provide information on quantities contracted
this year by state trade enterprises and privateimporters respectively by 15 September for eachproduct?  Could China also indicate quota fill ratesimported by state trade enterprises and private
importers, respectively?By 15 September 2002, the quantities contracted this
year by state trading enterprises were as follows:
wheat 15,000 tonnes; corn no contract; rice 20,000tonnes; soy bean oil 126,000 tonnes, rape-seed oil4,500 tonnes; palm oil 220,000 tonnes; sugar 600,000tonnes;  cotton 33,400 tonnes (reallocation of theunused portion of tariff quotas which have been
returned to SDPC, to non-state trading enterprises
70,000 tonnes).  There is no information to indicatequota fill rates imported by state trading enterprises
and private importers, respectively.
According to China's Schedule, if a quota-holder hasnot contracted for all the quantity by 15 September, it
shall return the unused portion of the tariff quota tothe SDPC (State Development and PlanningCommission), so that the SDPC can reallocate themby 1 October.  Information requested regarding
reallocated quantities to date?The quantities of reallocated tariff quotas by
products:  wheat 112,600 tonnes;  rice 62,100 tonnes;
soy bean oil 334,000 tonnes, rape-seed oil 85,000tonnes;  cotton 26,750 tonnes.  There are no returnedtariff quotas for sugar and palm oil.
Reasons why information on soy bean oil, which issubject to a tariff quota commitment in the Schedule,does not appear in the Table MA: 1 notification.Soy bean oil should be included in the Table MA:1
notification.G/AG/R/34
Page 44
China   G/AG/N/CHN/1     Tariff Quota Administration (Table MA:1)
(G/AG/R/33, pages 13-14 refer)
Points raised by other Member s Response by Notifying Member
United States - Reasons why soy oil is not included
in the notification?Soy bean oil should be included in the Table MA:1
notification.
Update requested on the TQ license applicationprocess?  Will the trade have access to China'sagricultural TQs from the first day of the 2003 TQ
year?The procedure for TQ application is as follows:
applicants for Category A quotas should fill outCategory A Forms of Application for TQ ofAgricultural Product Importation, which is available
at the agencies authorized by SDPC (or can be
downloaded from the relevant website).  The relevantdocuments should be prepared in accordance with theArticle 3 of SDPC Circular 2002-4.  Such documentsand the forms of application should be submitted tothe competent local agencies as authorized by SDPC
during the period of 15-31 October 2002.
Applicants for Category B quotas should first submit
their processing trade contracts to MOFTEC forapproval, and then apply for quota against theProcessing Trade Business Certificates as issued by
MOFTEC or its local agencies.
The tariff quotas for 2003 will be implemented
starting 1 January 2003.
The Table MA:1 notification does not specificallyrefer to any requirement that China has set aside aportion of the TQ for entities that further process
and/or re-export product imported under that TQ,
even though such requirements have been in place.Does China continue to require processing and/or re-export of specified TQ quantities in its current TQ
administration?The tariff quota covers all kinds of imported products
and includes processed products.  Therefore theSDPC will still retain a certain quantity of the
processed product tariff quota in advance in 2003 and
the tariff quota will be allocated on a "first-come,first-served" basis.G/AG/R/34
Page 45
Tables ES:1 to ES:3 Notifications
Tunisia   G/AG/N/TUN/25   Export Subsidies    (Tables ES:1 to ES:3)
(G/AG/R/30, page 41 refers)
Points raised by other Member s Response by Notifying Member
Canada: Cost reduction measures - Explanation of
how the support is provided in each case (e.g., per
unit freight subsidy?); how is the direct paymentdetermined.The payments indicated in the second column of
Supporting Table ES:2 concerning export subsidies
granted by developing countries to reduce themarketing costs of agricultural and agri-foodproducts are:
- For transport and freight.  In this case, they take the
form of a lump sum grant, meeting part of the cost of
air freight.  They are granted upon presentation of an
invoice.
- To account for the difference between the prices
agreed upon with the purchasers and the product
processing costs.G/AG/R/34
Page 46
Attachment
Data provided by the EC under Article 18.6 of the Agreement concerning the matter of
Argentina:  European Communities – Paym ents under production-limiting programmes
Answer to question (ii)
Hectare 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01
Base area 53.561.000 53.561.000 53.548. 000 53.545.000 53.529.000 53.522.000
Of which:
Small farmers 13.797.000 13.374.000 12. 553.000 10.140.000 9.951.000 12.513.000
Commercial
farmers37.055.000 38.743.000 39.925.000 40.626.000 40.644.000 38.531.000
Answer to question (vi): Data from the first year of full implementation of the measures decided in 1992
Hectare 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01
Set aside and
five year setaside7.259.000 5.761.000 3.978.000 4.212.000 5.742.000 5.586.000
Answer to question (x):  Data from the first year of full implementation of the measures decided in 1992
Head 1995 1996 1997 1998 1999 2000
Suckler cows
potential rights11.458.933 11.458.933 11.458.933 11.458.933 11.458.933 11.458.933
Premium paid 9.626.499 9.980.386 10.339. 416 10.517.015 10.289.957 9.951.555
Male bovines
potential rights11.203.948 11.203.948 9.037.582 9.037.582 9.037.582 9.278.208
Premium paid
first period*8.956.569 8.896.684 8.215.499 8.095.381 7.923.134 8.349.960
Premium paid
second period*3.055.410 3.218.142 2.166.365 2.152.183 2.215.552 2.235.896
Ewe premium
potential rights79.164.000 79.164.000 79.164.000 79.164.000 79.164.000 79.164.000
Premium paid 71.874.000 73.919.000 78.98 3.000 78.876.000 78.544.000 76.555.000
* One animal can benefit of a maximum of 2 payments.  Most are slaughtered before the required age for the
second payment.
__________