[Federal Register Volume 62, Number 174 (Tuesday, September 9, 1997)]
[Notices]
[Pages 47460-47470]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23850]


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DEPARTMENT OF COMMERCE

International Trade Administration
[C-122-404]


Live Swine From Canada; Preliminary Results of Countervailing 
Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of Preliminary Results of Countervailing Duty 
Administrative Review.

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SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the countervailing duty order on live swine 
from Canada for the period April 1, 1995 through March 31, 1996. For 
information on the net subsidy for all producers covered by this order, 
see the Preliminary Results of Review section of this notice. If the 
final results remain the same as these preliminary results of 
administrative review, we will instruct the U.S. Customs Service to 
assess countervailing duties as detailed in the Preliminary Results of 
Review section of this notice. Interested parties are invited to 
comment on these preliminary results. See Public Comment section of 
this notice.

EFFECTIVE DATE: September 9, 1997.

FOR FURTHER INFORMATION CONTACT: Gayle Longest or Lorenza Olivas, 
Office

[[Page 47461]]

CVD/AD Enforcement VI, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
2786.

SUPPLEMENTARY INFORMATION:

Background

    On August 15, 1985, the Department published in the Federal 
Register (50 FR 32880) the countervailing duty order on live swine from 
Canada. On August 12, 1996, the Department published a notice of 
``Opportunity to Request Administrative Review'' (61 FR 41768) of this 
countervailing duty order. We received timely requests for review and 
we initiated the review, covering the period April 1, 1995 through 
March 31, 1996, on September 17, 1996 (61 FR 48884).
    The Department has determined that it is not practicable to conduct 
a company-specific review of this order because a large number of 
producers and exporters requested the review. Therefore, pursuant to 
section 777A(e)(2)(B) of the Tariff Act of 1930, as amended (the Act), 
we are conducting a review of all producers and exporters of subject 
merchandise covered by this order on the basis of aggregate data. This 
review covers 26 programs.
    On April 28, 1997, we extended the period for completion of the 
preliminary results pursuant to section 751(a)(3) of the Act. See Live 
Swine from Canada; Extension of Time Limit for Countervailing Duty 
Administrative Review, 62 FR 23220. Therefore, the deadline for these 
preliminary results is no later than September 2, 1997, and the 
deadline for the final results of this review is no later than 120 days 
from the date on which these preliminary results are published in the 
Federal Register.

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions of the Tariff Act of 1930, as amended by 
the Uruguay Round Agreements Act (URAA) effective January 1, 1995 (the 
Act). The Department is conducting this administrative review in 
accordance with section 751(a) of the Act.

Scope of the Review

    The merchandise covered by this order is live swine, except U.S. 
Department of Agriculture (USDA) certified purebred breeding swine, 
slaughter sows and boars, and weanlings, (weanlings are swine weighing 
up to 27 kilograms or 59.5 pounds) from Canada. The merchandise subject 
to the order is classifiable under the Harmonized Tariff Schedule (HTS) 
item numbers 0103.91.00 and 0103.92.00. The HTS item numbers are 
provided for convenience and U.S. Customs Service (Customs) purposes. 
The written description of the scope remains dispositive.

Verification

    As provided in section 782(i) of the Act, we verified information 
submitted by the Government of Canada (GOC) and the Government of 
Quebec (GOQ) related to their claim for ``green box'' treatment 
pursuant to section 771(5B)(F) of the Act, of the programs covered by 
the Canada/Quebec Subsidiary Agreement on Agri-Food Development (Agri-
Food) (see discussion under ``Analysis of Programs'' section below). We 
followed standard verification procedures, including meeting with 
government officials and examining relevant accounting and financial 
records and other original source documents. Our verification results 
are outlined in the public version of the Verification Report, dated 
August 27, 1997, which is on file in the Central Records Unit (Room B-
099 of the Main Commerce Building).

Analysis of Programs

Allocation Methodology

    In British Steel plc. v. United States, 879 F. Supp. 1254 (February 
9, 1995) (British Steel), the U.S. Court of International Trade (the 
Court) ruled against the allocation period methodology for non-
recurring subsidies that the Department has employed for the past 
decade, a methodology that was articulated in the Final Affirmative 
Countervailing Duty Determination: Certain Steel Products from Austria 
(General Issues Appendix), 58 FR 37217, 37226 (July 9, 1993) (General 
Issues Appendix). In accordance with the Court's decision on remand, 
the Department determined that the most reasonable method of deriving 
the allocation period for non-recurring subsidies is a company-specific 
average useful life (AUL). This remand determination was affirmed by 
the Court on June 4, 1996. British Steel, 929 F. Supp. 426, 439 (CIT 
1996). Accordingly, the Department has decided to acquiesce to the 
British Steel decision where reasonable and practicable. In Live Swine 
from Canada; Preliminary Results of Countervailing Duty Administrative 
Review (62 FR 52426; October 7, 1996) and Live Swine from Canada; Final 
Results of Countervailing Duty Administrative Review (62 FR 18087; 
April 14, 1997) (Swine Tenth Review Results), the Department determined 
that it is not reasonable and practicable to allocate non-recurring 
subsidies using company-specific AUL data because it is not possible to 
apply a company-specific AUL in an aggregate case (such as the case at 
hand). Accordingly, in this review, the Department has continued to use 
as the allocation period the average useful life of depreciable assets 
used in the swine industry, as set forth in the U.S. Internal Revenue 
Service (IRS) Class Life Asset Depreciation Range System (see Swine 
Tenth Review Results). We invite the parties to comment on the 
selection of this methodology and to provide any other reasonable and 
practicable approaches for complying with the Court's ruling.

Calculation Methodology for Assessment and Cash Deposit Purposes

    For the period of review (POR), we calculated the net subsidy on a 
country-wide basis by determining the subsidy rate for each program 
subject to the administrative review in the following manner. We first 
calculated the subsidy rate on a province by province basis; we then 
weight-averaged the rate received by each province using the province's 
share of total Canadian exports to the United States of market hogs 
(which excludes slaughter sows and boars). We then summed the 
individual provinces' weight-averaged rates to determine the subsidy 
rate of each program. To obtain the country-wide rate, we then summed 
the subsidy rates from all programs.

Respondents' Claim for ``Green Box'' Treatment of the Canada/Quebec 
Subsidiary Agreement on Agri-Food Development (Agri-Food Agreement)

    On November 5, 1996, the GOQ made a submission pursuant to section 
771(5B)(F) of the Act claiming that the Agri-Food Agreement met the 
criteria for ``green box'' treatment under Annex 2 of the Agreement on 
Agriculture of the World Trade Organization (WTO). On January 21, 1997, 
the GOQ indicated that the GOC also supported the green box claim.
    Under section 771(5B)(F) of the Act, the domestic support measures 
provided with respect to the agricultural products listed in Annex 1 to 
the 1994 WTO Agreement on Agriculture shall be treated as non-
countervailable if the Department determines that the measures conform 
fully with the provisions of Annex 2. Accordingly, the GOQ and the GOC 
posited that funding under the Agri-Food Agreement should be 
noncountervailable pursuant to section 771(5B)(F) of the Act.

[[Page 47462]]

    The initial Agri-Food Agreement was signed on February 17, 1987 and 
remained in effect from 1987 to 1991. On August 26, 1993, a new Agri-
Food Agreement was enacted by the governments of Canada and Quebec 
covering the period April 1, 1993 through March 31, 1998. Funding for 
this agreement is shared 50/50 by the federal and provincial 
governments. Through this Agreement, grants are made to private 
businesses and academic organizations to fund projects under the 
following program areas:
    (1) Research: The purpose of this program area is to increase and 
diversify scientific and technical expertise, in both the area of 
industrial production and in university-based studies. Specific areas 
of expertise to be covered include: food production, processing, 
storage and marketing.
    (2) Technology Innovation: The purpose of this program area is to 
speed up the rate of adoption and dissemination of technologies and 
innovation and the development of new products. This program operates 
through awarding financial assistance and technical support to groups 
wishing to carry out testing projects or develop new technologies to 
promote agri-food development.
    (3) Support for Strategic Alliances: The purpose of this program 
area is to stimulate cooperation and promote strategic activities 
intended to improve competitiveness in domestic and foreign markets. 
Funding for projects is made available to an ``industry network'' 
(which includes all stakeholders in an agri-food industry, from the 
producer of the raw material to the final processor), through an 
application and approval process.
    The Department has previously examined each of the three components 
under the Agri-Food Agreement (Research, Technology Innovation, and 
Support for Strategic Alliances) as three separate programs. See Swine 
Tenth Review Results (62 FR 52433). No new information or evidence of 
changed circumstances has been submitted in this proceeding to warrant 
reconsideration of that finding.
    With regard to the GOQ's and the GOC's claim from green box 
treatment, we preliminarily determine that it is not necessary to reach 
a decision on whether the Agri-Food Agreement and its component 
programs qualify for green box status, and are, therefore, non-
countervailable because none of the component programs has any impact 
on the overall subsidy rate attributable to the subject merchandise 
during the POR.
    Specifically, with regard to the Research program under the Agri-
Food Agreement, as discussed below in the section II. A., we have 
preliminarily determined that this program does not confer 
countervailable subsidies because the results of the research are 
publicly available. As such, there is no need to address whether it is 
non-countervailable in the context of section 771(5B)(F). Further, with 
regard to the Technology Innovation program, although we found this 
program to be specific in the last administrative review (see section 
I.A.2.c. below), the benefit under this program is so small (Can$ 0. 
00000045 per kilogram) that it has no impact on the overall subsidy 
rate calculated for this POR. Similarly, even though we have never made 
a decision with regard to the specificity of the Support for Strategic 
Alliance (SSA) program (see section II.B. below), any benefit to the 
subject merchandise under the SSA program would be so small (Can$ 
0.00000055 per kilogram) that there would be no impact on the overall 
subsidy rate. Because neither the Technology Innovations program nor 
the Support for Strategic Alliances program (either separately or 
collectively) affect the overall subsidy rate calculated for this 
review, there is no reason to consider whether these two programs meet 
the green box criteria pursuant to section 771(5B)(F).
    Under these circumstances, an analysis of whether the programs 
under the Agri-Food Agreement qualify for green box treatment is not 
warranted because any decision we would render would not change the 
overall subsidy rate. (See, e.g., Certain Carbon Steel Products from 
Sweden; Preliminary Results of Countervailing Duty Administrative 
Review (61 FR 64062, 64065; December 3, 1996) and Certain Carbon Steel 
Products from Sweden; Final Results of Countervailing Duty 
Administrative Review (62 FR 16549; April 7, 1997); Final Negative 
Countervailing Duty Determination: Certain Laminated Hardwood Trailer 
Flooring (``LHF'') From Canada (62 FR 5201; February 4, 1997); 
Industrial Phosphoric Acid From Israel; Preliminary Results of 
Countervailing Duty Administrative Review (61 FR 28845; June 6, 1996) 
and Industrial Phosphoric Acid From Israel; Final Results of 
Countervailing Duty Administrative Review (61 FR 53351; October 11, 
1996).

I. Programs Conferring Subsidies

A. Programs Previously Determined to Confer Subsidies

1. Federal Program: Feed Freight Assistance Program
    The Feed Freight Assistance Program (FFA) is administered by the 
Livestock Feed Board of Canada (the Board) under the Livestock Feed 
Assistance Act of 1966 (LFA). The Board acts to ensure: (1) The 
availability of feed grain to meet the needs of livestock feeders; (2) 
the availability of adequate storage space in Eastern Canada to meet 
the needs of livestock feeders; (3) reasonable stability in the price 
of feed grain in Eastern Canada to meet the needs of livestock feeders; 
and (4) equalization of feed grain prices to livestock feeders in 
Eastern Canada, British Columbia, the Yukon Territory and the Northwest 
Territories. Although this program is clearly designed to benefit 
livestock feeders, FFA payments are also made to grain mills that 
transform the feed grain into livestock feed whenever these mills are 
the first purchasers of this grain. The Board makes payments related to 
the cost of feed grain storage in Eastern Canada, and payments related 
to the cost of feed grain transportation to, or for the benefit of, 
livestock feeders in Eastern Canada, British Columbia, the Yukon 
Territory and the Northwest Territories, in accordance with the 
regulations of the LFA.
    In Live Swine from Canada; Preliminary Results of Countervailing 
Duty Administrative Review (55 FR 20812; May 21, 1990) and Live Swine 
from Canada; Final Results of Countervailing Duty Administrative Review 
(56 FR 10410; March 12, 1991) (Swine Second and Third Review Results), 
the Department found this program de jure specific, and thus 
countervailable, because, based on the language of the LFA, benefits 
are only available to a specific group of enterprises or industries 
(livestock feeders and feed mills). Subsequently, a U.S.-Canada Free 
Trade Agreement binational panel (see In the Matter of Live Swine From 
Canada, USA-91-1904-03 (June 11, 1993) at 33-36) affirmed the 
Department's determination in Live Swine from Canada; Preliminary 
Results of Countervailing Duty Administrative Review (56 FR 29224; June 
26, 1991), and Live Swine from Canada; Final Results of Countervailing 
Duty Administrative Review (56 FR 50560; October 7, 1991) (Swine Fifth 
Review Results), regarding the countervailability of this program. No 
new information or evidence of changed

[[Page 47463]]

circumstances has been submitted in this proceeding to warrant 
reconsideration of this finding.
    To determine the FFA benefit in the POR, we first calculated a 
benefit per kilogram of live swine within each province eligible for 
FFA assistance using each province's total production. Next, we 
adjusted each province's rate per kilogram based on each province's 
share of total Canadian exports of market hogs to the United States 
during the POR. Finally, these individual provincial rates were summed 
to obtain a total rate for the FFA program. On this basis, we 
preliminarily determine the net subsidy for this program to be less 
than Can$0.0001 per kilogram for the POR.
    The FAA was terminated effective January 9, 1996. The last date for 
which a producer could claim benefits was February 15, 1996, and the 
last date by which payments could be received was March 31, 1996. 
Therefore, we consider this program terminated. Moreover, there is no 
evidence on the record which would indicate that residual benefits are 
being bestowed or that a substitute program has been implemented. 
Accordingly, because of this program-wide change, the cash deposit rate 
will be adjusted to zero for this program. See e.g., Swine Tenth Review 
Results at 18098 and Final Affirmative Countervailing Duty 
Determination: Certain Pasta from Turkey, 61 FR 30366, 30370; June 14, 
1996 (Pasta from Turkey).
2. Federal/Provincial Programs
a. National Tripartite Stabilization Scheme for Hogs
    The National Tripartite Stabilization Program (NTSP) was created in 
1985 by an amendment to the Agricultural Stabilization Act (ASA). This 
amendment, codified at section 10.1 of the ASA, provides for the 
introduction of cost-sharing tripartite or bipartite stabilization 
schemes involving the producer, the federal government, and the 
provinces. Pursuant to this amendment, federal and provincial ministers 
signed NTSP agreements covering specific commodities.
    The general terms of the NTSP for Hogs are as follows: all 
participating hog producers receive the same level of support per 
market-hog unit; the cost of the scheme is shared equally between the 
federal government, the provincial government, and the producers; 
producer participation in the scheme is voluntary; the provinces may 
not offer separate stabilization plans or other ad hoc assistance for 
hogs (with the exception of Quebec's Farm Income Stabilization 
Insurance Program); the federal government may not offer compensation 
to swine producers in a province not party to an agreement; and the 
scheme must operate at a level that limits losses but does not 
stimulate over-production.
    Stabilization payments are made when the market price falls below 
the calculated support price. The difference between the support price 
and the market price is the amount of the stabilization payment. Hogs 
eligible for stabilization payments under NTSP must index above 80 on a 
hog carcass grading scale.
    In Live Swine From Canada; Preliminary Results of Countervailing 
Duty Administrative Review (58 FR 54112; October 20, 1993 ) and Live 
Swine From Canada; Final Results of Countervailing Duty Administrative 
Review (59 FR 12243; March 16, 1994) (Swine Sixth Review Results), the 
Department determined that NTSP was de facto specific. No new 
information or evidence of changed circumstances has been submitted in 
this proceeding to warrant reconsideration of this finding.
    NTSP Agreement Amendment No. 3 terminated the plan as of July 2, 
1994, but allowed provinces to terminate their participation in the 
plan effective April 2, 1994. The plan ended with a surplus. Under the 
terms of the NTSP, this surplus was to be distributed in equal shares 
(33.3 percent) among the federal and provincial governments and the 
producers, because each was to have contributed one-third of the funds.
    In Swine Tenth Review Results, we examined the NTSP--Hogs Schedule 
of Operations (Schedule of Operations) which showed the federal and 
provincial governments' and the producers' contributions to the NTSP 
Hog Plan for the period January 1986 through May 29, 1996. This 
Schedule of Operations showed that the federal government contributed 
36.6 percent and the producers and provinces contributed 31.7 percent 
each, of the total tripartite contributions during this ten-year 
period. Thus, the producers received a share of the surplus which is in 
excess of their actual contributions to the plan.
    Accordingly, the Department found that the retroactive surplus 
payments constitute a benefit conferred under NTSP in the form of a 
grant to producers in the amount of the difference between what the 
producers actually are receiving, 33.3 percent of the surplus, and what 
they should have received, 31.7 percent of the surplus (the percentage 
producers actually contributed to NTSP). No new information or evidence 
of changed circumstances has been submitted in this proceeding to 
warrant reconsideration of this finding. During the POR, producers 
received NTSP surplus payments in the following provinces which 
exported live swine: Alberta, Manitoba, and Quebec.
    To calculate the subsidy, we used the methodology applied in Swine 
Tenth Review Results (61 FR 52426). We subtracted the amount that the 
producer should have received (31.7 percent) from the amount that they 
actually received (33.3 percent). The difference is the amount of the 
grant. The Department's policy with respect to grants is (1) to expense 
recurring grants in the year of receipt, or (2) to allocate non-
recurring grants over the average useful life of assets in the 
industry, unless the sum of grants provided under a particular program 
is less than 0.50 percent of a firm's total or export sales (depending 
on whether the program is a domestic or export subsidy) in the year in 
which the grants were received. (See General Issues Appendix at 37226). 
In determining whether a grant is recurring or non-recurring, we apply 
a test set out in the General Issues Appendix at 37226. We consider 
grants to be non-recurring if the benefits are exceptional, the 
recipient cannot expect to receive benefits on an ongoing basis from 
POR to POR, and the provision of funds by the government must be 
approved every year. In Swine Tenth Review Results, the Department 
found that this grant is non-recurring because the benefit is 
exceptional, and the recipient cannot expect to receive benefits on an 
ongoing basis. No new information or evidence of changed circumstances 
has been submitted in this proceeding to warrant reconsideration of 
this finding.
    During this review, the benefit received from this program was less 
than 0.50 percent of the value of total live swine sales in those 
provinces receiving benefits under this program. On this basis, we are 
allocating the benefit to the year of receipt (See General Issues 
Appendix 58 FR 37226). We divided each province's benefit by the total 
weight of market hogs produced in that province. We used only the 
weight of market hogs because only market hogs were eligible to receive 
NTSP payments. We then weight-averaged the benefits by each province's 
share of total Canadian exports of market hogs to the United States 
during the POR and then summed the weighted averages. On this basis, we 
preliminarily determine the net subsidy for this program to be less 
than Can$0.0001 per kilogram for the POR. Because the NTSP program has 
been

[[Page 47464]]

terminated, there is no evidence on the record which would indicate 
that residual benefits continue to be provided or received, and there 
is no evidence that a substitute program has been implemented, the cash 
deposit rate will continue to be zero for this program.
b. National Transition Scheme for Hogs
    After termination of the NTSP for Hogs in July 1994, hog producers 
became eligible to participate in the National Transition Scheme for 
Hogs (Transition Scheme), which provided for one-time payments to 
producers of hogs marketed between April 3, 1994 through December 31, 
1994. The Transition Scheme provided payments to hog producers of 
Can$1.50 per hog from the federal government and a matching Can$1.50 
from the provincial government.
    In Swine Tenth Review Results, the Department found this program to 
be de jure specific, and thus countervailable, because the Transition 
Scheme Agreement expressly limits its availability to a specific 
industry (swine). We determined that the amounts provided by both the 
federal and provincial governments to the hog producers during the POR 
under the Transition Scheme represent a grant. No new information or 
evidence of changed circumstances has been submitted in this proceeding 
to warrant reconsideration of this finding.
    During the POR, the following provinces received benefits under 
this program: Alberta, Manitoba, New Brunswick, Ontario, Quebec, and 
Saskatchewan. In Swine Tenth Review Results, the Department found that 
these grants are non-recurring because the transitional payments are 
exceptional, the recipient cannot expect to receive benefits on an 
ongoing basis from POR to POR, and the government has approved funding 
under the Transition Scheme for one year only. During this review, the 
amount received under this program by live swine producers was greater 
than 0.50 percent of the value of total live swine sales in the 
provinces receiving benefits under this program. On this basis, we 
allocated the benefit from this grant over three years, which is the 
average useful life of depreciable assets used in the swine industry, 
as set out in the IRS Class Life Asset Depreciation Range System. For 
purposes of this review, we are continuing to calculate the discount 
rate using the same methodology applied in Swine 7,8,9 Review Results. 
We used, as a discount rate, the simple average of the monthly medium-
term corporate bond rates (for the eleventh POR, during which the 
write-off occurred) from the Bank of Canada Review Autumn (1996), 
published by the Bank of Canada. We applied our standard grant 
methodology to calculate each province's benefit. We then calculated 
each province's total weight of market hogs produced, and calculated a 
benefit per kilogram for each province. We used only the weight of 
market hogs because only market hogs were eligible to receive NTSP 
benefits. We then weight averaged the benefits by each province's share 
of total Canadian exports of market hogs to the United States during 
the POR and summed the weighted averages. On this basis, we 
preliminarily determine the net subsidy for this program to be 
Can$0.0047 per kilogram for the POR.
    For the province of Quebec, both the GOC and the GOQ paid the 
portion of the benefits accrued under the National Transition Scheme 
for Quebec producers enrolled in FISI to the Regie des Assurances 
Agricoles du Quebec (Regie) , as instructed by the producers. The GOC 
also paid the portion of the benefits accrued to producers not enrolled 
in FISI directly to the producers. The payments to the Regie involved 
monies that were due to producers according to the provisions of the 
NTSP agreement (See Questionnaire Response of the GOC (December 23, 
1996), Appendix 27). As the record indicates, the producers simply 
chose to devolve these payments directly to the Regie rather than 
receive cash payments. Therefore, we have countervailed these payments 
as payments attributable to producers.
    The Transition Scheme program has been terminated. This termination 
does not constitute a program-wide change, however, because residual 
benefits may continue to accrue. Therefore, the cash deposit rate will 
not be adjusted as a result of the termination of this program.
c. Technology Innovation Program Under the Agri-Food Agreement
    In Swine Tenth Review Results, we determined that the federal 
contributions to this program are specific because this assistance is 
provided to industries located within a designated geographical region 
of Canada (i.e., Quebec). No new information or evidence of changed 
circumstances has been submitted in this proceeding to warrant 
reconsideration of this finding.
    In Swine Tenth Review Results, we also determined that the grants 
received under this program are non-recurring because they are 
exceptional, the government must approve the grants every year, and the 
recipient cannot expect to receive benefits on an ongoing basis. 
However, because the amount received by live swine producers in this 
POR is less than 0.50 percent of the value of live swine sales in this 
province, we are allocating the benefit to the year of receipt (See 
General Issues Appendix 58 FR 37226). We divided the total grant amount 
provided to swine producers during the POR by the total weight of live 
swine produced in Quebec during the POR. We then weight-averaged the 
results by Quebec's share of Canadian exports of market hogs to the 
United States during the POR. On this basis, we preliminarily determine 
that the subsidy rate is less than Can$0.0001 per kilogram for this 
program for the POR.
3. Provincial Income Stabilization Programs
a. Saskatchewan Hog Assured Returns Program (SHARP)
    SHARP was established in 1976, pursuant to the Saskatchewan 
Agricultural Returns Stabilization Act which authorized provincial 
governments to establish stabilization plans for any agricultural 
commodity. SHARP provided income stabilization payments to hog 
producers in Saskatchewan when market prices fell below a designated 
``floor price,'' calculated quarterly. The program was administered by 
the Saskatchewan Pork Producers' Marketing Board (the Board) on behalf 
of the Saskatchewan Department of Agriculture. The program was funded 
by levies from participating producers on the sale of hogs and were 
matched by the provincial government. When the balance in the SHARP 
account was insufficient to cover payments to producers, the provincial 
government provided financing on commercial terms. The principal and 
interest on these loans was to be repaid by the Board from the producer 
and provincial contributions. After the NTSP for Hogs was implemented 
on July 1, 1986, SHARP payments were reduced by the amount of the NTSP 
payments.
    In Live Swine From Canada; Preliminary Results of Countervailing 
Duty Administrative Review (53 FR 22192; June 14, 1988) and Live Swine 
From Canada; Final Results of Countervailing Duty Administrative Review 
(54 FR 651; January 9, 1989) (Swine First Review Results), the 
Department found the SHARP program to be de jure specific, and thus 
countervailable, because the legislation expressly made the program 
available only to a single industry (hog producers). No new information 
or

[[Page 47465]]

evidence of changed circumstances has been submitted in this proceeding 
to warrant reconsideration of this finding.
    In accordance with the NTSP agreement, SHARP was terminated on 
March 31, 1991. At the time of termination, the SHARP fund had a 
sizeable deficit because of the cumulation over the operating years of 
loans from the provincial government. During the 1993-94 POR, the 
government canceled the outstanding SHARP deficit. To calculate the 
benefit from the loan forgiveness, we treated one-half of the amount 
written off, plus interest accrued during the 1993-94 POR, as a grant. 
See Swine 7,8,9 Review Results (61 FR 26879, 26884; May 29, 1996). We 
took into account only half of the amount because this was the share of 
the outstanding loans that the producers were responsible for repaying.
    In Swine 7,8,9 Review Results, the Department determined that the 
write-off of the SHARP deficit is a non-recurring grant because debt 
forgiveness is exceptional, and it is a one-time event. On this basis, 
we allocated the benefit from this grant over three years, which is the 
average useful life of depreciable assets used in the swine industry, 
as set out in the IRS Class Life Asset Depreciation Range System. We 
used, as a discount rate, the simple average of the monthly medium-term 
corporate bond rates (for the ninth POR, the POR during which the 
write-off occurred) from the Bank of Canada Review (1993-1994), 
published by the Bank of Canada.
    To calculate the benefit for the POR, we divided the benefit amount 
allocated to the POR under the grant allocation methodology by the 
total weight of market hogs produced in Saskatchewan during the POR to 
obtain the average benefit per kilogram. We then weight averaged the 
per kilogram benefit by Saskatchewan's share of total Canadian exports 
of market hogs to the United States during the POR. On this basis, we 
preliminarily determine the net subsidy to be Can$0.0015 per kilogram 
for the POR.
    Because the SHARP program has been terminated, there is no evidence 
on the record which would indicate that residual benefits continue to 
be provided or received, and there is no evidence that a substitute 
program has been implemented, the cash deposit rate will continue to be 
zero for this program. (See Swine Tenth Review Results).
b. Quebec Farm Income Stabilization Insurance Program (FISI)
    FISI was established in 1976 under the ``Loi sur l'assurance-
stabilisation des revenues agricoles.'' The program is administered by 
the Regie. The purpose of the program is to guarantee a positive net 
annual income to participants when their income falls below the 
stabilized net annual income. Since Quebec joined the federal 
government's NTSP for Hogs in February 1989, the FISI scheme for hogs 
has been covering only the difference between payments made under the 
NTSP for Hogs and what FISI payments would have been in the absence of 
the NTSP. There are two FISI schemes which provide payments to the 
subject merchandise, the FISI scheme for Hogs and the FISI scheme for 
Piglets.
    Two-thirds of the funding for the FISI program is provided by the 
provincial government and one-third by producer assessments. 
Participation in FISI is voluntary. However, once enrolled in the 
program, a producer must make a five-year commitment. Each farmer may 
insure a maximum of 5,000 feeder hogs and 400 sows. Whenever the 
balance in the FISI account is insufficient to make payments to 
participants, the provincial government lends the needed funds to the 
program at market rates. The principal and interest on these loans are 
repaid by the Regie using the producer and provincial contributions.
    In Swine Sixth Review Results (58 FR 54112), we determined FISI to 
be de facto specific, and thus countervailable. Moreover, in Swine 
7,8,9 Review Results, we found that the FISI program is not integrally 
linked to the crop insurance and supply management programs. No new 
information or evidence of changed circumstances has been submitted in 
this proceeding to warrant reconsideration of these findings.
    During the POR, the GOQ contributed additional funds to the FISI 
program for the swine plans. The GOQ did not stipulate any conditions 
of repayment regarding these funds. This additional infusion of funds 
by the GOQ changes the two-to-one provincial to producer ratio of the 
contribution of funds to the FISI program. Therefore, any future 
payouts to producers from the FISI program for the hog sector will 
reflect a provincial contribution of more than two thirds. We 
preliminarily determine that this additional infusion of funds to the 
FISI program by the GOQ is a grant and is de jure specific, and thus 
countervailable, because benefits are only available to a specific 
group of enterprises or industries (swine producers). Furthermore, we 
preliminarily determine that it is a non-recurring grant because the 
availability of these additional provincial funds to FISI is 
exceptional, and it is a one-time event. (See General Issues Appendix 
at 37226.) Since this amount was greater than 0.50 percent of the value 
of total live swine sales in Quebec during the POR, we are allocating 
the benefit from this grant over three years, which is the average 
useful life of depreciable assets used in the swine industry, as set 
out in the IRS Class Life Asset Depreciation Range System. We used, as 
a discount rate, the simple average of the monthly medium-term 
corporate bond rates (for the eleventh POR, during which the write-off 
occurred) from the Bank of Canada Review Autumn (1996), published by 
the Bank of Canada.
    Using our standard grant methodology, we calculated the benefit 
amount from this grant during the POR. To this amount, we added the 
benefit received by swine producers from standard FISI payments during 
the POR. To calculate the benefit from standard FISI payments, we used 
the methodology applied in Swine Sixth Review Results and subsequent 
reviews. We multiplied the total payments made under both the piglet 
and feeder hog schemes during the POR by two thirds (representing the 
provincial contribution). We then divided the total benefit amount by 
the total weight of market hogs and sows produced in Quebec during the 
POR, to get the average benefit per kilogram. We then weight-averaged 
the benefit by Quebec's share of total Canadian exports of market hogs 
to the United States during the POR. On this basis, we preliminarily 
determine the benefit from this program to be Can$0.0008 per kilogram 
for the POR.
4. Other Provincial Programs
a. Alberta Crow Benefit Offset Program (ACBOP)
    This program, administered by the Alberta Department of 
Agriculture, is designed to compensate producers and users of feed 
grain for market distortions in feed grain prices, created by the 
federal government's policy on grain transportation. Assistance is 
provided for feed grain produced in Alberta, feed grain produced 
outside Alberta but sold in Alberta, and feed grain produced in Alberta 
to be fed to livestock on the same farm. The government provides ``A'' 
certificates to registered feed grain users and ``B'' certificates to 
registered feed grain merchants to use as partial payments for grain 
purchased from grain producers. Feed grain producers who feed their 
grain to their own

[[Page 47466]]

livestock submit a Farm Fed Claim directly to the government for 
payment.
    Hog producers receive benefits in one of three ways: hog producers 
who do not grow any of their own feed grain receive ``A'' certificates 
which are used to cover part of the cost of purchasing grain; hog 
producers who grow all of their own grain submit a Farm Fed Claim to 
the government of Alberta for direct payment; and hog producers who 
grow part of their own grain but also purchase grain receive both ``A'' 
certificates and direct payments.
    In Swine Second and Third Review Results (56 FR 10412), the 
Department found this program to be de jure specific, and thus 
countervailable, because the legislation expressly makes it available 
only to a specific group of enterprises or industries (producers and 
users of feed grain). No new information or evidence of changed 
circumstances has been submitted in this proceeding to warrant 
reconsideration of this finding.
    To determine the benefit to swine producers from this program, we 
followed the methodology used in Swine Tenth Review Results. Using the 
Alberta Supply and Disposition Tables, we first estimated the quantity 
of grain consumed by livestock in Alberta during the POR. Then we 
multiplied the number of swine produced in Alberta during the POR by 
the estimated average grain consumption per hog, and divided the result 
by the amount of total grains used to feed livestock during the POR. We 
thus calculated the percentage of total livestock consumption of all 
grains in Alberta attributable to live swine during the POR. We then 
multiplied this percentage by the total value of ``A'' certificates and 
farm-fed claim payments received by producers during the POR. We 
divided this amount by the total weight of live swine produced in 
Alberta during the POR. We then weight-averaged this per-kilo benefit 
by Alberta's share of total Canadian exports of market hogs to the 
United States. On this basis, we preliminarily determine the benefit to 
be less than Can$0.0001 per kilogram for the POR.
    ACBOP was terminated on March 31, 1994. Benefits for ``A'' 
certificates had to be claimed by June 30, 1994, and benefits tied to 
farm-fed grains had to be claimed by August 31, 1994. The original 
deadline for any payment of benefits under the program was March 31, 
1996, however, producers could receive payments until May 17, 1996. 
Since no payments could be received after the publication of these 
preliminary results, we consider this program terminated. Moreover, 
there is no evidence on the record which would indicate that residual 
benefits are being provided or received or that a substitute program 
has been implemented. Accordingly, because of this program-wide change, 
the cash deposit rate will be adjusted to zero for this program.
b. Ontario Livestock and Poultry and Honeybee Compensation Program
    This program, administered by the Farm Assistance Programs Branch 
of the Ontario Ministry of Agriculture, Food, and Rural Affairs, 
provides assistance in the form of grants which compensate producers 
for livestock and poultry injured or killed by wolves, coyotes, or 
dogs. Swine producers apply for and receive compensation through the 
local municipal government. The Ontario Ministry of Agriculture, Food, 
and Rural Affairs reimburses the municipality.
    In Swine Fifth Review Results (56 FR 29227), the Department found 
this program to be de jure specific, and thus countervailable, because 
the legislation expressly makes it available only to a specific group 
of enterprises or industries (livestock, poultry farmers, and 
beekeepers). No new information or evidence of changed circumstances 
has been submitted in this proceeding to warrant reconsideration of 
this finding.
    To calculate the benefit, we used the methodology applied in Swine 
Sixth Review Results (58 FR 54119) and subsequent reviews. We divided 
the total payment to hog producers during the POR by the total weight 
of live swine produced in Ontario. We then weight-averaged the result 
by Ontario's share of Canadian exports of market hogs to the United 
States during the POR. On this basis, we preliminarily determine the 
benefit from this program to be less than Can$0.0001 per kilogram for 
the POR.
c. Ontario Bear Damage to Livestock Compensation Program
    This program, administered by the Farm Assistance Programs Branch 
of the Ontario Ministry of Agriculture, Food, and Rural Affairs, 
provides compensation for the destruction of, or injury to, certain 
types of livestock by bears. Swine producers apply for compensation 
through their local Ontario Ministry of Agriculture, Food, and Rural 
Affairs office. Local personnel then evaluate the damage and prepare a 
report. Based on this report and the farmer's application, the 
Livestock Commissioner may pay a grant to compensate for the amount of 
damage. Grants for damage to live swine cannot exceed Can$200 per head.
    In Swine Tenth Review Results, we found this program to be de jure 
specific, and thus countervailable, because the legislation expressly 
makes it available only to livestock producers, a specific group of 
enterprises or industries (cattle, goats, horses, sheep, swine, and 
poultry). No new information or evidence of changed circumstances has 
been submitted in this proceeding to warrant reconsideration of this 
finding.
    To calculate the benefit, we divided the total payment to hog 
producers during the POR by the total weight of live swine produced in 
Ontario. We then weight-averaged the result by Ontario's share of 
Canadian exports of market hogs to the United States during the POR. On 
this basis, we preliminarily determine the benefit from this program to 
be less than Can$0.0001 per kilogram for the POR.
d. Saskatchewan Livestock Investment Tax Credit
    Saskatchewan's 1984 Livestock Tax Credit Act provides tax credits 
to individuals, partnerships, cooperatives, and corporations who owned 
and fed livestock marketed or slaughtered by December 31, 1989. 
Claimants had to be residents of Saskatchewan and pay Saskatchewan 
income taxes. Eligible claimants received credits of Can$3 for each 
hog. Although this program was terminated on December 31, 1989, tax 
credits are carried forward for up to seven years. In Swine First 
Review Results (53 FR 22198), the Department found this program to be 
de jure specific, and thus countervailable, because the program's 
legislation expressly made it available only to livestock producers. No 
new information or evidence of changed circumstances has been submitted 
in this proceeding to warrant reconsideration of this finding.
    To calculate the benefit for the POR, we used the methodology 
applied in Swine Sixth Review Results (58 FR 54120) and subsequent 
reviews (see Swine Tenth Review Results). In the questionnaire 
responses, the GOC provided estimates of the amount of tax credits used 
by hog producers in Saskatchewan during the POR, since the actual 
amounts cannot be determined. We divided the amount of benefit by the 
total weight of live swine produced in Saskatchewan during the POR. We 
then weight-averaged the result by Saskatchewan's share of total 
exports of market hogs to the United States. On this basis, we 
preliminarily determine the benefit from this program to be Can$0.0001 
per kilogram for the POR.
    The Saskatchewan Livestock Investment Tax Credit was terminated on 
December 31, 1989 and the last year for disbursement of benefits was 
fiscal year 1996 ( that is, April 1, 1995 through

[[Page 47467]]

March 31, 1996). Therefore, we consider this program terminated. 
Moreover, there is no evidence on the record which would indicate that 
residual benefits are being provided or received or that a substitute 
program has been implemented. Accordingly, because of this program-wide 
change, the cash deposit rate will be adjusted to zero for this 
program.
e. Saskatchewan Livestock Facilities Tax Credit
    This program, which was terminated on December 31, 1989, provided 
tax credits to livestock producers based on their investments in 
livestock production facilities. The tax credits can only be used to 
offset provincial taxes and may be carried forward for up to seven 
years or until no later than fiscal year 1996 (that is, April 1, 1995 
through March 31, 1996). Livestock covered by this program includes 
cattle, horses, sheep, swine, goats, poultry, bees, fur-bearing animals 
raised in captivity, or any other designated animals; covered livestock 
can be raised for either breeding or slaughter. Investments covered 
under the program include new buildings, improvements to existing 
livestock facilities, and any stationary equipment related to livestock 
facilities. The program pays 15 percent of 95 percent of project costs, 
or 14.25 percent of total costs.
    In Swine Second and Third Review Results (55 FR 20820), the 
Department found this program to be de jure specific, and thus 
countervailable, because the program's legislation expressly made it 
available only to livestock producers. No new information or evidence 
of changed circumstances has been submitted in this proceeding to 
warrant reconsideration of this finding.
    To calculate the benefit, we used the methodology applied in Swine 
Sixth Review Results (58 FR 54121) and subsequent reviews (see Swine 
Tenth Review Results). In the questionnaire responses, the GOC provided 
estimates of the amount of tax credits used by hog producers in 
Saskatchewan, since the actual amounts cannot be determined. We divided 
the amount of benefit by the total weight of live swine produced in 
Saskatchewan during the POR. We then weight-averaged the result by 
Saskatchewan's share of total exports of market hogs to the United 
States. On this basis, we preliminarily determine the benefit from this 
program to be less than Can$0.0001 per kilogram for the POR.
    The Saskatchewan Livestock Facilities Tax Credit was terminated on 
December 31, 1989 and the last year for use of tax credits was fiscal 
year 1996 (that is, April 1, 1995 through March 31, 1996). Therefore, 
we consider this program terminated. Moreover, there is no evidence on 
the record which would indicate that residual benefits are being 
provided or received or that a substitute program has been implemented. 
Accordingly, because of this program-wide change, the cash deposit rate 
will be adjusted to zero for this program.
f. New Brunswick Livestock Incentives Program
    This program, which operates under the Livestock Incentives Act, 
provides loan guarantees to livestock producers purchasing cattle, 
sheep, swine, foxes, and mink for breeding purposes, and for feeding 
and finishing livestock for slaughter. Loans, in amounts ranging from 
Can$1,000 to Can$90,000, are granted by commercial banks or credit 
unions and guaranteed by the Government of New Brunswick (GONB) to an 
individual, partnership, corporation or incorporated co-operative 
association engaged in farming in New Brunswick. Swine producers submit 
an application for a loan under this program to a bank. The bank 
evaluates the loan application based upon standard loan criteria and 
either approves or rejects the application. A consideration for 
obtaining the loan is the presentation to the GONB of a farm plan 
established at the time the loan is taken out. For loans given for the 
purchase of animals for breeding purposes, the term of the loan is not 
more than seven years and the first payment of the principal is due two 
years after the date on which the loan was given. For loans given for 
the purchase of animals for feeding purposes, the loan is due when the 
animals have been sold which shall not exceed a period of eighteen 
months. The interest rate for these loans is set at the prime rate plus 
one percentage point.
    At the end of three years after loans are issued, the GONB may give 
20 percent of the loan amount to the farmer in the form of a grant. To 
be eligible for this grant, the farmer had to have implemented, in a 
satisfactory manner, the farm plan established at the time the loan was 
taken out. The grant portion of this program was terminated for loans 
issued after July 15, 1992. However, grants were still being provided 
during the POR.
    In Swine Second and Third Review Results (55 FR 20817), the 
Department found this program to be de jure specific, and therefore 
countervailable, because the program's legislation expressly made it 
available only to livestock producers. No new information or evidence 
of changed circumstances has been submitted in this proceeding to 
warrant reconsideration of this finding.
    In accordance with section 771(5)(E)(iii) of the Act, a benefit 
from a loan obtained with a government guarantee shall normally be 
treated as conferred ``if there is a difference, after adjusting for 
any difference in guarantee fees, between the amount the recipient of 
the guarantee pays on the guaranteed loan and the amount the recipient 
would pay for a comparable commercial loan if there were no guarantee 
by the authority.'' While there are no guarantee fees, the recipients 
are paying interest at the rate of prime rate plus one percentage 
point. In Swine Tenth Review Results, we found that the predominant 
lending rates in Canada for comparable long-term variable-rate loans 
are based on the prime rate plus a one or two-point spread. Therefore, 
in accordance with the Swine Tenth Review Results methodology, as our 
benchmark during the POR, we used the prime rate as published by the 
Bank of Canada in the Bank of Canada Review Autumn, (1996) plus one and 
one-half percentage points. This rate represents the simple average of 
the spread above prime charged by commercial banks on comparable loans. 
Comparing the benchmark interest rate to the interest rate charged on 
these loans, we preliminarily determine that the amount the recipient 
paid on these loans is less than the recipient would have paid on a 
comparable commercial loan.
    We calculated the benefit from the loan portion of this program as 
follows. For loans outstanding during the POR, either without 
repayments or paid off during the POR, we followed the methodology 
outlined in Swine Tenth Review Results. Specifically, for loans 
outstanding during the POR, we determined the amount of the benefit 
attributable to the POR by calculating the difference between what the 
recipient paid during the POR under loans guaranteed by the GONB and 
what the recipient would have paid during the POR under the benchmark 
loan. We divided the benefit from all outstanding loans and loans paid 
off during the POR by the total weight of live swine produced in New 
Brunswick during the POR. We then weight-averaged the benefit by New 
Brunswick's share of Canadian exports of market hogs to the United 
States during the POR.
    During the POR, loans to live swine producers were written-off by 
the GONB under this program. We have added to the total amount of 
written-off loans, the amount of interest accrued from the beginning of 
the POR until the date on

[[Page 47468]]

which the loans were written-off. (See Swine Tenth Review Results.) The 
Department determines that the amount written off and interest accrued 
during the POR is a non-recurring grant because debt forgiveness is 
exceptional, and it is a one-time event. (See General Issues Appendix, 
58 FR at 37226 and Swine Tenth Review Results).
    In addition, swine producers received grants under the grant 
portion of this program. We determine that the grants received under 
this program are non-recurring because the recipient cannot expect to 
receive benefits on an ongoing basis from year to year. (See General 
Issues Appendix at 37226 and Swine Tenth Review Results). We summed the 
amount of the written-off loans and the amount of the grants. Because 
the result is less than 0.50 percent of the value of live swine sales 
from this province, we are allocating the benefit to the year of 
receipt. (See General Issues Appendix at 37226.) Therefore, we divided 
the total amount of the grants and forgiven loans provided during the 
POR by the total weight of live swine sold in New Brunswick during the 
POR. We then weight-averaged the result by the New Brunswick's share of 
total exports of market hogs to the United States during the POR.
    To calculate the total benefit to live swine producers under this 
program, we summed the weight-averaged benefit calculated for the loans 
and grants. On this basis, we preliminarily determine the net subsidy 
from this program to be less than Can$0.0001 per kilogram.
h. New Brunswick Swine Industry Financial Restructuring and 
Agricultural Development Act--Swine Assistance Program
    The Swine Assistance program was established in fiscal year 1981-
82, by the Farm Adjustment Board, under the Farm Adjustment Act, to 
provide interest subsidies on medium-term loans to hog producers. The 
program was available only to hog producers who entered production or 
underwent expansion after 1979. In 1985, the Farm Adjustment Act 
changed to the Agricultural Development Act. In 1984-85, this program 
was combined with the Swine Industry Financial Restructuring program 
under the New Brunswick Regulation 85-19. At that time, all obligations 
and outstanding loans under the Swine Assistance program were rolled 
over into the Swine Industry Financial Restructuring program.
    The Swine Industry Financial Restructuring program was created by 
the Farm Adjustment Act (OC 85-98) and became effective April 1, 1985. 
Under this program the Government of New Brunswick granted hog 
producers indebted to the Board a rebate of the interest on that 
portion of their total debt (the residual debt) that, on March 31, 
1984, exceeded the ``standard debt load.'' The standard debt load is 
defined in the program's regulations as the amount of debt which the 
farmer, in the opinion of the Board, can reasonably be expected to 
service. The residual debt does not begin to accrue interest again 
until the debt load is no longer ``excessive.''
    In Swine Second and Third Review Results (55 FR 20816, 20817), the 
Department examined these two programs separately. The Department 
found: (1) The Swine Assistance program to be countervailable because 
loans were provided to a specific industry on terms inconsistent with 
commercial considerations, and (2) the New Brunswick Swine Industry 
Financial Restructuring program to be countervailable because it was 
limited to a specific industry and the government's rebate of interest 
and the interest repayment holiday were loan terms inconsistent with 
commercial considerations. No new information or evidence of changed 
circumstances has been submitted in this proceeding to warrant 
reconsideration of this finding.
    In Swine Tenth Review Results, we found that no new loans were 
provided for the past ten years, and that there was no recent activity 
on the outstanding loans. The loans given to producers were ``set 
aside'' in a provincial account and were not accruing any interest. The 
Department found that interest not accruing on the outstanding loan 
balance constituted a benefit to live swine producers. No changes to 
this program were reported in the instant review.
    To calculate the benefit from this program, we multiplied the total 
outstanding debt at the beginning of the POR by the benchmark interest 
rate. We used, as a benchmark interest rate, the prime rate, as 
published by the Bank of Canada in the Bank of Canada Review Autumn 
(1996), plus one and one-half percentage points. This rate represents 
the simple average of the commercially available rates for comparable 
loans. (See Swine Tenth Review Results). Next, we divided the benefit 
by the total weight of live swine produced in New Brunswick during the 
POR. We then weight-averaged the benefit by New Brunswick's share of 
Canadian exports of market hogs to the United States during the POR. On 
this basis, we preliminarily determine the benefit to be less than 
Can$0.0001 per kilogram for the POR.
i. New Brunswick Swine Assistance Policy on Boars
    The New Brunswick Swine Assistance Policy on Boars program is 
administered by the New Brunswick Department of Agriculture and Rural 
Development, Animal Industry Branch, for the purpose of encouraging 
breeding stock producers to produce quality boars at reasonable prices 
for use in commercial swine herds. This program provides assistance in 
the form of grants to swine producers for the purchases of boars. 
Eligible producers are entitled to receive up to Can$110 for the 
purchase of boars.
    In Swine Second and Third Review Results (55 FR 20817), the 
Department found this program to be specific. No new information or 
evidence of changed circumstances has been submitted in this proceeding 
to warrant reconsideration of this finding.
    To calculate the benefit, we used the grant methodology applied in 
Swine Sixth Review Results (58 FR 54119) and Swine Tenth Review Results 
(61 FR 52426). In Swine Tenth Review Results, the Department found that 
the grants received under this program are non-recurring because the 
recipient cannot expect to receive benefits on an ongoing basis from 
review period to review period. In the prior review, grants were less 
than 0.50 percent, therefore, they were allocated to the years of 
receipt. (See Swine Tenth Review Results) During this POR, the amount 
received by live swine producers is also less than 0.50 percent of the 
value of live swine sales in this province as such, we are allocating 
the grant to the year of receipt. (See General Issues Appendix at 
37226). We divided the total payment to hog producers during the POR by 
the total weight of live swine produced in New Brunswick during the 
POR. We then weight-averaged the result by New Brunswick's share of 
Canadian exports of market hogs to the United States during the POR. On 
this basis, we preliminarily determine the benefit from this program to 
be less than Can$0.0001 per kilogram for the POR.
j. Nova Scotia Improved Sire Policy
    This program is administered by the Nova Scotia Department of 
Agriculture and Marketing Livestock Services Branch, for the purpose of 
improving the quality of hog production. The program provides grants to 
purebred and commercial swine producers for the purchase of boars. 
Qualifying animals measure at least 90 on an Estimated Breeding Value 
Index (this index estimates growth, back fat thickness and days to 
market weight). Qualifying

[[Page 47469]]

animals must be used for breeding stock purposes. Producers file an 
application on prescribed forms with the Department of Agriculture and 
Marketing. The boars are then inspected and, if approved, assistance is 
provided in the form of a premium. The higher the Estimated Breeding 
Value Index, the higher the premium. In Swine Second and Third Review 
Results (55 FR 20817), the Department found this program to be 
countervailable because this program is limited to a specific industry. 
No new information or evidence of changed circumstances has been 
submitted in this proceeding to warrant reconsideration of this 
finding.
    To calculate the benefit, we divided the total payment to hog 
producers during the POR by the total weight of live swine produced in 
Nova Scotia. We then weight-averaged the result by Nova Scotia's share 
of Canadian exports of market hogs to the United States during the POR. 
On this basis, we preliminarily determine the benefit from this program 
to be less than Can$0.0001 per kilogram for the POR.
k. Nova Scotia Swine Herd Health Policy
    The Nova Scotia Department of Agriculture and Marketing administers 
a herd health program whereby it reimburses veterinarians for house 
calls made to producers of commercial and purebred breeding livestock. 
The purpose of this program is to upgrade herd health through the use 
of herd inspection, prevention and eradication techniques. All farmers 
registered under the Farm Registration Act may participate in the 
program. Once approved for the program, farmers are required to follow 
specified health practices and to maintain health records of all their 
hogs. The government designates a veterinarian to oversee the enrolled 
herd and the veterinarian is responsible for making at least six visits 
annually, performing any and all necessary examinations and informing 
the farmers of their findings. The veterinarian is paid by the farmer 
for each visit, and also receives payment from the government. During 
the POR, veterinarians were paid by the government for services 
provided under the program.
    In Swine Second and Third Review Results (55 FR 20817), the 
Department found this program not to be countervailable because this 
program is limited to producers of commercial and/or purebred breeding 
livestock. At that time, we determined that breeding livestock were not 
covered by the order on live swine. Since these reviews, the scope of 
the order has been clarified to exclude only USDA-certified purebred 
breeding swine (See, e.g., Swine Tenth Review Results.) Commercial 
breeding swine are covered by the order.
    During the POR, producers of the subject merchandise used this 
program. Because the legislation for this program indicates that it is 
only available to live swine producers, we preliminarily determine this 
program to be de jure specific within the meaning of section 
771(5A)(D)(i) of the Act.
    To calculate the benefit, we divided the total payment to hog 
producers during the POR by the total weight of live swine produced in 
Nova Scotia. We then weight-averaged the result by Nova Scotia's share 
of Canadian exports of market hogs to the United States during the POR. 
On this basis, we preliminarily determine the benefit from this program 
to be less than Can$0.0001 per kilogram for the POR.
    The Nova Scotia Swine Herd Health Policy was terminated on March 
31, 1996, however, benefits under the program will continue until March 
31, 1998. Because benefits will continue to be bestowed under this 
program, the cash deposit rate will not be adjusted.

II. Programs Preliminarily Determined Not To Confer Subsidies

A. Research Program Under the Agri-Food Agreement

    In Swine Tenth Review Results, we found that none of the research 
projects funded under this program had been completed. We were 
therefore unable to determine whether or not the results of the 
research were publicly available due to their incomplete status. At 
verification, we found that five projects related to live swine were 
completed during the POR. We examined official documentation from the 
GOQ that indicates that the results of these research projects were 
made publicly available. (See Verification Report, dated August 27, 
1997). Because the research results are publicly available, we 
preliminarily determine that the Research program did not confer 
countervailable subsidies to live swine during the POR. (See e.g., 
Certain Cut-to-Length Carbon Steel Plate from Sweden; Preliminary 
Results of Countervailing Duty Administrative Review, 62 FR 51683 
(October 3, 1996) at 51683 and Certain Cut-to-Length Carbon Steel Plate 
from Sweden; Final Results of Countervailing Duty Administrative 
Review, 62 FR 16551 (April 7, 1997).

B. Support for Strategic Alliances Program Under the Agri-Food 
Agreement

    The Support for Strategic Alliances (SSA) program is administered 
by the GOC. The objective of this program is to stimulate cooperation 
and strategic alliance among the various stakeholders in an agri-food 
``industry network'' through activities intended to improve efficiency 
and competitiveness in domestic and foreign markets. The GOC indicated 
in its questionnaire response that no payments were made to producers 
under this program (See Response of the Government of Canada, May 13, 
1997, at p. 16). However, we found at verification that some payments 
had been made under this program during the POR for projects that 
benefitted the swine industry as a whole (See Verification Report, 
(August 27, 1997) at p. 6). Therefore, we have determined that this 
program was used during the POR. However, we preliminarily determine 
that any benefit provided by this program during the POR is so small as 
to have no measurable impact on the overall subsidy rate for the POR. 
Therefore, we need not reach a decision on the countervailability of 
this program in this review.

III. Programs Preliminarily Determined To Be Not Used

    We also examined the following programs and preliminarily 
determined that the producers and/or exporters of the subject 
merchandise did not apply for or receive benefits under these programs 
during the POR:
    A. Western Diversification Program;
    B. Federal Atlantic Livestock Feed Initiative;
    C. Agricultural Products Board Program;
    D. Ontario Export Sales Aid Program;
    E. Ontario Rabies Indemnification Program;
    F. Ontario Swine Sales Assistance Policy;
    G. Newfoundland Hog Price Support Program;
    H. Newfoundland Weanling Bonus Incentive Policy;
    I. Newfoundland Hog Price Stabilization Program.

IV. Programs Preliminarily Determined To Be Terminated

    We have examined the following programs and preliminarily determine 
they were terminated prior to the beginning of the POR (April 1, 1995), 
and there is no evidence on the record which would indicate that 
residual benefits are being bestowed or that a

[[Page 47470]]

substitute program has been implemented:
    A. Prince Edward Island Hog Price Stabilization Program
    B. Canada/British Columbia Agri-Food Regional Development 
Subsidiary Agreement;
    C. Canada/Manitoba Agri-Food Development Agreement;
    D. New Brunswick Agricultural Development Act-Swine Assistance 
Program.

Preliminary Results of Review

    We preliminarily determine the total net subsidy on live swine from 
Canada to be Can$0.0071 per kilogram for the period April 1, 1995 
through March 31, 1996. If the final results of this review remain the 
same as these preliminary results, the Department intends to instruct 
the Customs to assess countervailing duties as indicated above.
    Due to the program-wide changes noted above, the cash deposit rate 
will be Can$0.0055 per kilogram which is de minimis. Accordingly, for 
all shipments of the subject merchandise from Canada, entered, or 
withdrawn from warehouse, for consumption on or after the date of 
publication of the final results of this review, the cash deposits of 
estimated countervailing duties will be zero.

Public Comment

    Parties to the proceeding may request disclosure of the calculation 
methodology and interested parties may request a hearing not later than 
10 days after the date of publication of this notice. Interested 
parties may submit written arguments in case briefs on these 
preliminary results within 30 days of the date of publication. Rebuttal 
briefs, limited to arguments raised in case briefs, may be submitted 
seven days after the time limit for filing the case brief. Parties who 
submit argument in this proceeding are requested to submit with the 
argument (1) a statement of the issue and (2) a brief summary of the 
argument. Any hearing, if requested, will be held seven days after the 
scheduled date for submission of rebuttal briefs. Copies of case briefs 
and rebuttal briefs must be served on interested parties in accordance 
with 19 CFR 355.38.
    Representatives of parties to the proceeding may request disclosure 
of proprietary information under administrative protective order no 
later than 10 days after the representative's client or employer 
becomes a party to the proceeding, but in no event later than the date 
the case briefs, under 19 CFR 355.38, are due. The Department will 
publish the final results of this administrative review, including the 
results of its analysis of issues raised in any case or rebuttal brief 
or at a hearing.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)).

    Dated: September 2, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 97-23850 Filed 9-8-97; 8:45 am]
BILLING CODE 3510-DS-P