compilation of responses to questions raised during the wto committee on agriculture meeting on 21...

7/21/2019 Compilation of Responses to Questions Raised During the Wto Committee on Agriculture Meeting on 21 March 2014

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Committee on Agriculture

RESPONSES TO POINTS RAISED BY MEMBERS UNDER THE REVIEW PROCESS

COMPILATION OF RESPONSES TO QUESTIONS RAISED DURING THE COMMITTEEON AGRICULTURE MEETING ON 21 MARCH 20141

The present document compiles responses received in writing by the Secretariat to the questionsraised in document G/AG/W/119 as well as follow-up comments made during the Review Process.

Outstanding responses will be circulated in addenda to this document as soon as they are providedby Members. A comprehensive version of the present compilation will be issued thereafter.

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TABLE OF CONTENTS1 MATTERS RELEVANT TO THE IMPLEMENTATION OF COMMITMENTS: ARTICLE18.6 ................................................................................................................................. 4

1.1 Article 18.4 of the Agreement on Agriculture ................................................................. 4

1.1.1 Statement by Canada (AG-IMS ID 73069) .................................................................. 4

1.2 Brazil's domestic support programmes .......................................................................... 5

1.2.1 Question by United States of America (AG-IMS ID 73026) ............................................ 5

1.3 Canada's proposed changes to tariff schedule ................................................................ 6


1.4 Canada's dairy policies ............................................................................................... 8

1.4.1 Question by New Zealand (AG-IMS ID 73001) ............................................................. 8


1.5 China's Cotton Domestic Support ................................................................................. 9


1.6 Costa Rica's compliance with AMS commitments ........................................................... 10

1.6.1 Question by Canada (AG-IMS ID 73002) ................................................................... 10

1.6.2 Question by United States of America (AG-IMS ID 73037) ........................................... 11

1.7 Ecuador's domestic purchase requirements .................................................................. 12


1.8 India's market support price for rice ............................................................................ 12

1.8.1 Question by Pakistan (AG-IMS ID 73053) .................................................................. 12

1.9 India's national food security bill ................................................................................. 13


1.10 India's sugar export subsidies ................................................................................... 14

1.10.1 Question by Australia and Colombia (AG-IMS ID 73036 and AG-IMS ID 73067) ............. 14

1.10.2 Question by Brazil (AG-IMS ID 73068) .................................................................... 16

1.10.3 Question by European Union (AG-IMS ID 73055) ...................................................... 16

1.11 India's wheat stocks and exports .............................................................................. 17

1.11.1 Question by Canada (AG-IMS ID 73003).................................................................. 17

1.11.2 Question by United States of America (AG-IMS ID 73039).......................................... 17


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1.16.1 Question by Indonesia (AG-IMS ID 73043) .............................................................. 22

2 POINTS RAISED IN CONNECTION WITH INDIVIDUAL NOTIFICATIONS .................... 26

2.1 ADMINISTRATION OF TARIFF AND OTHER QUOTA COMMITMENTS (TABLE MA:1) ............... 26

2.1.1 Russian Federation (G/AG/N/RUS/2) ......................................................................... 26

2.2 IMPORTS UNDER TARIFF AND OTHER QUOTA COMMITMENTS (TABLE MA:2) ..................... 27

2.2.1 Ecuador (G/AG/N/ECU/38) ...................................................................................... 27

2.2.2 Norway (G/AG/N/NOR/74) ...................................................................................... 27

2.2.3 Tunisia (G/AG/N/TUN/44) ....................................................................................... 28

2.3 DOMESTIC SUPPORT COMMITMENTS (TABLE DS:1) ....................................................... 28

2.3.1 Botswana (G/AG/N/BWA/19) ................................................................................... 28

2.3.2 Brazil (G/AG/N/BRA/32) ......................................................................................... 28

2.3.3 European Union (G/AG/N/EU/10/REV.1, G/AG/N/EU/17) ............................................. 32

2.3.4 Guatemala (G/AG/N/GTM/45) .................................................................................. 36

2.3.5 India (G/AG/N/IND/7) ............................................................................................ 37

2.3.6 Indonesia (G/AG/N/IDN/30, G/AG/N/IDN/34) ............................................................ 38

2.3.7 Jordan (G/AG/N/JOR/16) ........................................................................................ 39

2.3.8 Norway (G/AG/N/NOR/73) ...................................................................................... 40

2.3.9 Ukraine (G/AG/N/UKR/18) ...................................................................................... 40

2.3.10 United States of America (G/AG/N/USA/80/REV.1, G/AG/N/USA/89/REV.1,G/AG/N/USA/93) ............................................................................................................. 42

2.4 EXPORT SUBSIDY COMMITMENTS (TABLES ES:1, ES:2 AND ES:3) .................................. 44

2.4.1 Brazil (G/AG/N/BRA/33) ......................................................................................... 44

2.4.2 European Union (G/AG/N/EU/18) ............................................................................. 44

ANNEX 1 ........................................................................................................................ 46

ANNEX 2 ........................................................................................................................ 47

ANNEX 3 ........................................................................................................................ 48


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1 MATTERS RELEVANT TO THE IMPLEMENTATION OF COMMITMENTS: ARTICLE 18.6

1.1 Article 18.4 of the Agreement on Agriculture

1.1.1 Statement by Canada (AG-IMS ID 73069)

The paper G/AG/W/122, which presents best practices in notification relating to Article 18.4, isintended as a practical contribution to help strengthen the review process by promoting greatertransparency in notifications and more effective and consistent questions and answers fromMembers.

Canada's interest in Article 18.4 stems from an observation that Members' notification practicesand the resulting questions and answers relating to this issue have been rather inconsistent. Attimes, this has resulted in less transparency in the review process. A history of notifications andrelated questions and answers pertaining to Article 18.4 can be found in RD/AG/18/Add.1/Rev.1.

Since last June, Canada has organized four plurilateral meetings on this issue. Members have alsodiscussed the issue during three informal meetings of the Committee on Agriculture.

Each time Canada invited all interested Members to contact Canada and share their views. Thisresulted in several bilateral exchanges and in an expansion of participation in the plurilateralmeetings. Canada is very pleased with the level of engagement from Members.

In particular, Canada would like to thank the co-sponsors, as well as all Members who participatedvery constructively in consultations on this issue.

Before summarizing some key points, it should be underlined at the outset that the paper iswithout prejudice to Members' rights and obligations under Article 18.4 and the review processmore broadly, including notification obligations. This is not a legal exercise. This point is made veryexplicitly in paragraph 1.2 of the paper.

Paragraphs 2.1 and 2.2 of the paper attempt to spell out very clearly what Article 18.4 says and

does not say.Article 18.4 does not create a right for Members to violate domestic support commitments, tomodify such commitments or to unilaterally adjust notifications to account for the influence ofexcessive rates inflation.

Rather, Article 18.4 creates space in the Committee to discuss the effects of excessive inflation onthe ability of any Member to abide by its commitments and creates an obligation for Members togive "due consideration" to these effects in the review process.

However, the article is entirely silent on the procedural aspects of how this process should work.

This lack of specific guidance reinforces the value of improving Members' notifications through theidentification of best practices.

Regarding best practices, the co-sponsors offer the following suggestions to Members seekingconsideration as provided for in Article 18.4, which are reflected in paragraph 3.2 and 3.3 of thepaper:

submit a domestic support notification with data that has not been adjusted for inflation;d


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Canada's view that Article 18.4 did not provide for Members to unilaterally adjust domestic support

notifications. Argentina and the United States of America underlined "excessive rates of inflation"as the precondition for Members seeking recourse to Article 18.4. Considering Article 18.4 did notspecifically define the word "excessive", the United States of America suggested Members to agreeon some criteria. New Zealand, Norway, and the United States of America pointed out that theCommittee could only consider the effects of excessive inflation on a Member's ability to abide byits AMS commitment if sufficient information was provided in its domestic support notification.Indonesia, supported by India, stated that inflation is unavoidable especially in developingcountries where according to data from the World Bank or IMF the rates of inflation are higherthan in developed ones. In Indonesia's view, excessive rate of inflation had undermined theimplementation of government policies including those addressing food security issues. Like some

previous speakers, Indonesia recognized that Members had yet reached consensus on issues suchas the meaning of "excessive rate of inflation" and "due consideration" and how "dueconsideration" should be reflected in Members' notifications to help Members comply with AMScommitments. In its view, that Article 18.4 did not provide for Members to self-adjust thenotification, as stated by some Members, was only one interpretation of the Article, and theremight be other interpretations on which further discussions were needed. As a developing Memberwho faced negative impact of inflation when complying with AMS commitment, Indonesia wascommitted to find permanent solutions for those issues. Indonesia further drew Members'attention to the non-paper proposed by G-33 on 3 October 2013 in this regard and suggested

discussions be taken place in the special session of the Committee on Agriculture. Norwayreminded Members not to read more into the paper as it was merely a reference document for theCommittee's future work. The paper did not contain guidelines for future work and Norwaybelieved that discussions should continue in this respect. The Republic of Korea proposed a morecomprehensive and fundamental approach for discussions. It highlighted the twelve notificationsthat were previously submitted that applied Article 18.4 and suggested the Committee to base itsdiscussions on those notifications. Like Indonesia, India made reference to the G-33 proposal andstated that this exercise should by no means prejudge the final decision on this issue. Chinaechoed India's statement and suggested the Committee not to adopt any formal decision on thismatter. In its view, the issue of excessive rate of inflation was related to the permanent solution in

implementing the ministerial decision on food security.

1.2 Brazil's domestic support programmes

1.2.1 Question by United States of America (AG-IMS ID 73026)

The United States of America appreciates Brazil's response to the question on Prmiopara Escoamento do Produto (PEP) and Prmio de Equalizao pago ao Produtor(PEPRO) from the January 2014 Committee on Agriculture meeting, including data on

PEPRO (AG-IMS ID 72051).a.

The United States of America has repeatedly requested information on thequantities of product shipped to specific destinations, including both domesticand export destinations. The United States of America is disappointed thatBrazil has not been able to compile this data to date. When specifically mightthe United States of America expect to receive this data?


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e.

Given the similarity between PEP and PEPRO, was PEPRO also reassessed? If

so, what was concluded? If not, why was this programme not reassessed?

Answer by Brazil

a.

Brazil cannot estimate when the requested data will be available.

b. At this moment, the requested information is unavailable.

c.

The programme was reassessed to address concerns regarding its control mechanism, inorder to prevent irregularities.

d.

The reassessment is still in progress, and the programme remains suspended.

e.

No, because under the PEPRO the subsidy is paid directly to the producers (requiring asimpler control mechanism), and not indirectly to processors/traders as is the caseunder the PEP.

Follow-up: The United States of America expressed disappointment with Brazil's continued failureto provide the requested data. As PEP was suspended, PEPRO remained of interest to the United

States of America. The United States of America was also interested in the trade trends of someagriculture products such as feed grains. The European Union flagged interest and supported thequestion.

1.3 Canada's proposed changes to tariff schedule


The United States of America appreciates Canada's response to question

AG-IMS ID 72049 regarding an amendment to Canada's Customs Tariff Scheduleaffecting pizza food preparation products. Recognizing that Canada did not have enoughtime to prepare a complete response to U.S. questions, the United States of Americarepeats the following questions from January:

a.

Please provide information on historical imports of the product(s) affected bySupplementary Note 2 to Chapter 16 (referenced in AG-IMS 72049), and whatthe impact of the Parliamentary motion has been on imports of these products.

b. By using an effective date that is retroactive, the measure appears to have

already impacted trade negatively without any stakeholders' input. What is thepurpose, if any, for using a retroactive date? What is the intended effect ofretroactive implementation?

c.

Is Canada currently enforcing Supplementary Note 2 to Chapter 16? If yes,please describe how it is being enforced, i.e., how is Canada verifying theseparate classification of the components of a food preparation in instances


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within Canada of the classification determination that resulted in the higher

tariffs? Please provide details on the application of the higher tariff rate onaffected products, including the products covered and volume of tradeconcerned.

f. Are there any further proposals to amend Canada's tariff schedule in a similarmanner in the area of food preparations or other goods? If the answer is yes,please identify and describe in detail those proposals. Are there any proposalsto amend the supplementary notes of any other chapter of Canada's tariffschedule to target cheese and/or dairy products in a similar fashion? If theanswer is yes, please identify and describe in detail those proposals.

g. U.S. traders have raised concerns with the timing of the application of themeasure. Would Canada consider revoking or delaying application ofSupplementary Note 2?

Additionally, the United States of America requests a response to the followingquestions.

h.

The House of Commons Budget 2014 dated 11 February 2014 confirms the

Canadian Government's intention to proceed with the Ways and Means motionto amend Canada's Customs Tariff Schedule to add a supplementary note toChapter 16. What are the specific legislative steps required to give the motionmeasure legal effect and when does Canada anticipate initiating those steps?

i. Canada Border Services Agency issued Customs Notice 13-021 as of29 November 2013, stating "the Canada Border Services Agency (CBSA) wishesto advise of an amendment to the Departmental Consolidation of the CustomsTariff effective November 29, 2013". The Notice contains the same language asthe Ways and Means motion to add the supplementary note. The Notice furtherdirects traders to "an amended version of the Departmental Consolidation ofthe Customs Tariff, reflecting this change" on the CBSA Web site. What legaleffect does CBSA Customs Notice 13-021 have? What legal effect does theamended Customs Tariff schedule of Canada have?

Answer by Canada

It is impossible to single out specific products in Canada's trade statistics for any given tariffitem and, in any case, it is too early to determine how the measure in question will impact

trade in affected products. Changes to trade patterns in the future could be influenced byvarious factors. As such, it is impossible to assess the impact of the measure. This measurewas not implemented on a retroactive basis.

The measure was introduced through the tabling of a Notice of Ways and Means Motion on22 November 2013 with an effective date of 29 November 2013. The tabling of a Notice ofWays and Means Motion is a standard parliamentary procedure to give effect to domestic


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through the addition of a new Supplementary Note to Chapter 16, to formally codify the

Notice of Ways and Means Motion tabled on 22 November 2013. Generally, legislativeamendments are made through legislation, which must be adopted by Parliament. Thelegislation is introduced and then debated by both the House of Commons and the Senate.Once the legislation has been passed by both chambers, it is presented for Royal Assent,after which it becomes law. The specific legislative vehicle for implementing this amendmenthas yet to be confirmed. Canada can provide more details as they become available.

Supplementary Note 2 to Chapter 16 of Canada's Customs Tariff clarifies that the individualcomponents of certain food preparations that include cheese are to be classified separately,regardless of their packaging, in order to ensure consistent application of the law.

Specifically, this clarification addresses a gap whereby certain imported goods werepackaged in a specific, deliberate manner solely to circumvent Canada's tariff structure(e.g. significant imports of a "pizza toppings" product containing 79% shredded mozzarellacheese and 21% sliced pepperoni, packaged together in a single plastic bag and separatedby a sheet of wax paper to qualify as a "food preparation" in Chapter 16). All rates of duty inCanada's Customs Tariff remain unchanged. No other such proposals are being consideredat this time.

Follow-up: Supported by New Zealand, the United States of America questioned Canadas

statement that the measure was not implemented on a retroactive basis. The United States wasconcerned that stakeholders input was not taken into account. The United States of Americadisagreed with Canada's assertion that some packaging practices circumvented Canada's the tariffstructure and considered these practices reflected the incentives created by Canada's TRQs. NewZealand flagged the concern that the move to amend Canada's customs tariff schedule to add asupplementary note affecting certain commercial "food preparations" would impose a newprohibitively high tariff on what was previously zero duty rate.

1.4 Canada's dairy policies

1.4.1 Question by New Zealand (AG-IMS ID 73001)

In February, the Canadian Dairy Commission released programme guidelines for thePlanned Export Program for Cheese (PEPC). The purpose of the programme is describedas a mechanism to "encourage and support Canadian cheese manufacturers andexporters in developing long term export markets for Canadian cheese". Given thatCanada uses nearly its entire export subsidy revenue outlays for "incorporatedproducts" and "other milk products" each year, could Canada please indicate whetherthis will have an effect on other existing export programmes that use special milk

Class 5(d) permits?Answer by Canada

The use of export subsidies for dairy products in terms of budgetary outlays and quantity isconsistent with Canada's WTO rights and obligations. In 2010-2011, Canada used 100% ofits annual outlay commitment levels for skim milk powder, other milk products andincorporated products while it was not fully utilized for cheese and butter Canada remains


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notifications to the WTO Committee on Agriculture, in particular with regard to exports

of cheese. Please explain these discrepancies and how the dairy export subsidies inCanada's notifications are calculated.

Answer by Canada

The use of export subsidies for dairy products in terms of budgetary outlays and quantity isconsistent with Canada's WTO rights and obligations. In 2010-2011, Canada used 100% ofits annual outlay commitment levels for skim milk powder, other milk products andincorporated products, while it was not fully utilized for cheese and butter. Discrepanciesbetween Canada's export subsidy notifications and trade statistics can be explained by the

use of different data sources. Volumes of subsidized exports are reported by the CanadianDairy Commission, whereas total exports are reported by Statistics Canada. StatisticsCanada may revise its data up to four years after they were initially reported. Canada's totalexports also include exports of dairy products made from milk and/or other dairy ingredientsimported under re-export programmes, such as the Import for Re-Export Program (IREP),and other exports that do not benefit from export subsidies.

Follow-up: New Zealand welcomed the assurance that Canada would continue to remain within itsexport subsidy commitments, particularly since the new planned export programme for cheeseappeared to apply to products for which Canada used nearly its entire export subsidy revenue

outlays. New Zealand therefore continued to take an interest in this programme and whether itwould have an effect on other existing export programmes that used special milk class 5(d)permits. New Zealand was also interested in the increasing discrepancies between the exportnumbers of the Canadian Dairy Commission and the export numbers supplied by Statistics Canadain the export notifications, which was noted by the United States of America in its question. TheUnited States of America flagged interest. The European Union continued to be concerned in the

operation of Canadian milk classes in general.

1.5 China's Cotton Domestic Support


Is China in a position to respond to the questions asked by the United States of Americain AG-IMS ID 72052 regarding China's cotton support programme?

a. China noted in its last response that it would be notifying domestic supportshortly. Please provide an update on the intended timeframe for China to notifydomestic support notifications for recent years, in particular for years whencotton price support was applied.

b. Please provide the Committee with specific information from its officialwebsite(s) on various subsidy measures associated with price support,including the legal mechanisms by which they are implemented, as well asupdated data on the accumulation, maintenance, and distribution of cottonstocks since the program's inception?


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b. All information regarding cotton reserve can be found on the website of National

Development and Reform Commission. The legal documents for the mechanism are NoticeNo.5 issued in 2011, No. 3 in 2012 and No. 20 in 2013. In 2011, the purchase price ofcotton reserve was 19,800 RMB per tonne. In 2012 and 2013, due to the increase of marketprice, the purchase price increased to 20,400 RMB. The purchase, maintenance anddistribution of the reserve are carried out by China National Cotton Reserves Corporation.The company buys and sells cotton through open trade in the national cotton exchange.Profits or losses are possible depending on the fluctuating market prices.

c. China's cotton reserve has limited impacts on the world cotton market. The governmentmanages the reserve to safeguard farmers' interests. China purchases a certain amount of

cotton and sells some old reserve every year. The purchase begins after the harvest. Thegovernment avoids bulk purchase within a short period of time, in order to preventinterrupting the market by avoiding supply shortage. Neither does the government dumplarge quantities of reserves on the market which would lead to price decreases.

Since China initiated the cotton reserve mechanism, China's cotton imports have beensteadily increasing while at the same time China has almost no exports. In 2011, China'scotton import was 3.4 million tonnes, which increased to 5.1 million in 2012. In 2013, Chinaimported 4.1 million tonnes of cotton. The import price stayed around US$2 to US$3 per kilo

for all those years. China's trade is not interrupted by the reserve mechanism and Chinadoes not export cotton to distort international supply.

From a world outlook, China also does not see any major impacts caused by China's cottonreserve. According to the cotton report issued by USTR in March 2014, the world cottonproduction remains at around 26 million tonnes while the world consumption maintains ataround 23 million tonnes in the recent years. Chinese national consumption stayed ataround 8 million tonnes. The world price slowly increased without much fluctuation. China isnot convinced that China's reserve polices have major and direct economic impacts on theworld cotton production, consumption, or prices and therefore does not consider that these

is an impact on the world market.

Annex 1 contains a monthly chart of average cotton prices in two years.

Follow-up: The European Union looked forward to receiving Chinas upcoming notification.

1.6 Costa Rica's compliance with AMS commitments

1.6.1 Question by Canada (AG-IMS ID 73002)

At the last meeting of the Committee on Agriculture, Costa Rica indicated that the dateof the elimination of the price support mechanism for rice is postponed to 1 March 2015,as the rice sector needs more time to finalize its definition of the alternative mechanismthat is to replace the current price support mechanism. Canada takes this opportunity toagain thank Costa Rica for its commitment to transparency and willingness to engageopenly with Members.


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The United States of America thanks Costa Rica for regularly updating this Committee onits rice policies over the past several years during which time Costa Rica has notified anAggregate Measurement of Support (AMS) in excess of its bound commitments. TheUnited States of America appreciates the transparency provided in Costa Rica'snotification G/AG/GEN/116, but is disappointed to learn that the elimination of CostaRica's price support mechanism for rice has been postponed until 1 March 2015. It is theU.S. understanding that Costa Rica's Law 8285, which established the National RiceCorporation (CONARROZ), allows the Minister of Agriculture and Livestock (MAG) andthe Minister of Economy, Industry and Commerce (MEIC) representation on

CONARROZ's General Assembly and Board of Directors. The United States of Americaalso notes the leading role the General Assembly and Board of Directors takes inCONARROZ's policy creation, approval, and implementation. Article 7 of Law 8285 andits Regulations states that CONARROZ "shall suggest the price of rough rice and itsbyproducts to the MEIC with the financial value the agro-industrialist must pay toproducers, as well as the prices consumers must pay for milled rice". The United Statesof America also understands from Article 20, paragraph o that a responsibility of theBoard of Directors is to "approve, the recommendation for chaff and milled price pricesthrough technical studies, which shall be notified to the MEIC".

a.

Please describe in more detail the role of the CONARROZ's General Assemblyand Board of Directors in price determination.

b. Will these policies continue after the adoption of Executive DecreeNo. 38093-MEIC in March 1, 2015? With respect to the alternative mechanismthat the United States of America understands is to be introduced, the UnitedStates of America repeats two questions asked in September 2013(AG-IMS ID 71030) and in January 2014 (AG-IMS ID 72050):

i.

Will producers be able to sell outside of the new system?

ii.

What is Costa Rica's timeline for publishing these new policies and fornotifying them to the WTO?

Answer by Costa Rica

The role played by the Governing Board of the National Rice Growers Corporation(CONARROZ) in setting the price of rice is limited to making a non-binding recommendationto the Ministry of the Economy, Industry and Trade. The General Assembly of CONARROZ,which brings together all producers and industrialists in the sector, does not take part assuch in the recommendation formulation process.

Pursuant to Law No. 7472 on the Promotion of Competition and Effective ConsumerProtection and its implementing regulations, the authority to set the price of rice lies solelywith the Executive, and specifically the Ministry of the Economy, Industry and Trade, whichis under no obligation to endorse the recommendation made by CONARROZ


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1.7 Ecuador's domestic purchase requirements


Industry reports that the government of Ecuador is requiring importers to source aspecified percentage of products domestically, based on agreements signed betweenEcuador's Ministry of Agriculture, Ministry of Industries, and importers.

a.

Please explain the legal basis for these new domestic purchase requirementsand how they are consistent with Ecuador's WTO obligations.

b.

Does Ecuador intend to submit notifications to the WTO related to marketarrangements for agricultural products that include procurement of a domesticproduct as a requisite for importing?

Answer by Ecuador

As regards the first question of the United States of America, Ecuador does not requestimporters specifically to source a percentage of products domestically. What Ecuador isdriving and promoting is a change to its production matrix based for the most part on thedevelopment of human knowledge and talent.

There is no law, regulation or stipulation requiring importers or domestic traders to purchasea percentage of products domestically. The signed agreements to which the United States ofAmerica refers are technical cooperation agreements drawn up at the wish and request ofthe import/production sectors themselves that have a vested interest in the nationalproduction promotion policy and are seeking activities to improve the production chain.

In order to be implemented, these production promotion agreements, which are fullyconsistent with the WTO provisions, require - given Ecuador's production structure - the

import of capital goods and inputs. The conditions of competition for imports are thus not inany way affected.

Moreover, these agreements are open to any interested production sector, which means thatthere is no discrimination regarding their approval, and they are not contingent uponmeeting performance or absorption of domestic production requirements.

Follow-up: Canada flagged its interest.

1.8 India's market support price for rice

1.8.1 Question by Pakistan (AG-IMS ID 73053)

Pakistan appreciates the response provided by India regarding exports of rice in the lasttwo years (AG-IMS ID 72059). It appears that Indian rice exports increased 41% fromyear 2011-2012 to 2012-2013. The exports of non-Basmati increased by 67%.


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Table 1. RICE AMS (only market price support, other product specific rice AMS is notincluded) (billion US$)

Commodity 2011-12 2012-13Calculated on the basis of procured quantity as eligible production 2.64 3.28

Calculated on the basis of total production as eligible production 7.99 8.54

Source: Indian Economic Survey 2012-13, Directorate of Economics and Statistics, Department of Agricultureand Cooperation, Ministry of Agriculture India. State Bank of India.

Answer by India

India appreciates Pakistan's keen interest and efforts to help India work out its market pricesupport for rice. Pakistan may like to compare the figures with India's notifications for therelevant years, which are under preparation.

Follow-up: Noting that Indias last domestic support notification was submitted for 2003 and only6 months of 2004, Pakistan requested India to provide a timeline as regards when India wouldprovide its next notification. India replied that they were working on the notification but there wereconstraints in the work.

1.9 India's national food security bill


According to India's Finance Minister, the estimate for India's food subsidy bill in2014-2015 is Rs 115,000 crore (US$18.8 billion; note crore = 10 million) in the interimbudget. According to India's National Sample Survey Office the poverty gap per its latestConsumption Expenditure Survey is Rs 55,744 crore (US$9.1 billion) in 2011-2012. Inother words, the cost of India's food subsidy bill is approximately twice the amount itwould cost to provide all below poverty households with enough cash to cross the

poverty line. The significant cost of the food subsidy bill compared to the poverty gap inIndia highlights the large costs the government incurs in procuring, storing, anddistributing food grains that could otherwise be more effectively used to alleviatepoverty in India. The United States of America understands that the Finance Minister hasalso capped the Food Corporation of India's reimbursements for costs incurred inoperating the food subsidy programme at the aforementioned Rs 115,000 crore(US$18.8 billion).

a.

Besides limiting expenditures, what steps is the government of India taking tomore efficiently implement its current policies? Further, does the

recently-passed National Food Security Act 2013 include any specific languageto address these concerns?

b.

Given that the National Food Security Act 2013 directly impacts measuresreported under Annex 2 of the Agreement on Agriculture, when does India planto submit a DS:2 notification?


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The Act also provides for measures for reforms in TPDS. These include the following:

doorstep delivery of food grains to TPDS outlets;

application of information and communication technology tools including end-to-endcomputerisation in order to ensure transparent recording of transactions at all levels,and to prevent diversion;

leveraging ''aadhaar'' for unique identification, with biometric information of entitledbeneficiaries for proper targeting of benefits under this Act;

full transparency of records;

preference to public institutions or public bodies such as Panchayats, self-help groups,co-operatives, in licensing of fair price shops and management of fair price shops bywomen or their collectives;

diversification of commodities distributed under the Public Distribution System over aperiod of time;

support to local public distribution models and grain banks;

introducing schemes, such as cash transfer and food coupons to the targetedbeneficiaries in order to ensure their food grain entitlements.

The amount mentioned in the Budget for 2014-15 are budget estimates and no cap as suchon food subsidy has been imposed.

Follow-up: Canada, the European Union and the United States of America requested India to

provide a Table DS:2 notification. India responded that the notification was still under preparation.Pakistan was of the view that the bill provided a very big production incentive to farmers becauseall procurements were achieved at administered prices that were set by the government. Pakistanwould like India to notify the programme properly according to Indias WTO commitments underthe Agreement on Agriculture. India considered Pakistans concern unwarranted at this stage asthe government had not published any information regarding how the public procurement wouldbe carried out.

1.10 India's sugar export subsidies

1.10.1 Question by Australia and Colombia (AG-IMS ID 73036 and AG-IMS ID 73067)

Australia understands that the Indian government decided to provide incentivepayments to Indian sugar exporters upon the export of sugar, as per The Gazette ofIndia, dated 28 February.

a. Can India explain the legal basis for this export subsidy, given that India has


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f.

Can India provide the latest available average cost of production figures (on aper metric tonne basis) for those Indian raw sugar producers that havereceived incentive payments for the export of like product?

g. For the same like product, can India provide the average domestic price (on aper metric tonne basis)?

h.

Part (4) of paragraph 2 of the Sugar Development Fund (Amendment) Rules,2014 states that the incentive payment will be recalculated every two monthsafter March 2014 taking into account the average exchange rate of the Indianrupee vis--vis U.S. dollars. Under this bi-monthly review, is it possible for

India to terminate the incentive payment for reasons other than movement inthe average exchange rate?

i.

Can India provide the anticipated total value of the incentive payments overthe expected duration of the scheme?

j.

Under the scheme, is there a maximum cap applicable to the per metric tonneincentive payment?

k.

In accordance with the Bali 2013 Ministerial Declaration, can India explainwhat, if any, steps it took to exercise utmost restraint with regard to itsdecision to implement the incentive payments?

l.

Can India indicate when an export subsidy notification covering this schemewill be issued?

Answer by India

As one of the numerous steps contemplated/undertaken by the central government as wellas various state governments in the country to tackle arrears payments by sugar mills toIndian sugarcane farmers, it was decided to promote product diversification in the Indiansugar industry by incentivizing raw sugar production, since the industry traditionallyproduces white sugar.

The model of the Indian sugar industry is quite different from the models in many othercountries. The sugar mills in the country neither own the sugarcane fields nor undertakecontractual cultivation. The raw material for the sugar industry, sugarcane, is cultivated byestimated 5 million farmer families on individual land holdings which are extremely small

and scattered and in general range from 0.5 to 2 hectares.

The interventions by the government aim to infuse additional liquidity in the severelystretched sector and are linked to cane payments to farmers by the sugar mills.

c.

The intervention is effective from 28 February 2014. The current incentive levels areexpected to be reviewed before the commencement of 2014-15 sugar season or even


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l.

The scheme will be covered in the notification for the relevant year, which is underpreparation.

1.10.2 Question by Brazil (AG-IMS ID 73068)

Brazil is concerned with the impact in the world market and with the potential adverseeffects to the interests of other Members caused by subsidized sugar exports from India.

According to India's Official Gazette, dated 28th February 2014, raw sugar exportersfrom India are entitled to export subsidies amounting to 3,300 Rupees per metric ton forFebruary and March, 2014. These subsidies will be subject to recalculation every two

months taking into account the average exchange rate of the Rupee vis--vis theUS Dollar.

In this regard, Brazil would like to raise the following questions:

a.

Could India confirm whether these export subsidies for sugar have beenapproved?

b.

Could India indicate the amount of export subsidies it will grant in budgetaryoutlays and subsidized quantities?

c.

Given that there has been to date no legally-binding decision by the WTO toextend the application of Article 9.4 of the Agreement of Agriculture, whatwould be the legal basis for the provision of these export subsidies?

d. Could India confirm whether these subsidies are intended to reduce marketingand/or transportation costs? If yes, how the actual costs incurred in themarketing and/or transportation of exported sugar impact the provision of thesubsidy?

e.

Could India explain:

i.

the rationale for increasing so significantly the provision of export subsidiesfor sugar; and

ii. the steps it took to ensure compliance with the Ministerial Declarationadopted in MC-9 according to which Members shall exercise utmost restraintwith regard to any recourse to all forms of export subsidies?

Answer by India

See above.

1.10.3 Question by European Union (AG-IMS ID 73055)

According to media reports Indian Cabinet of Ministers approved on 12 February 2014


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policy had the potential to seriously disrupt the world price for sugar, which had been already verylow. Australia was strongly concerned that such measure would not be consistent with the recentBali ministerial declaration to exercise the utmost restraint with regard to any forms of exportsubsidies and all export measures with equivalent effect, and also constituted a breach of India'sWTO obligations. Australia was particularly interested in a response from India to one questionthat had not been answered - the legal basis of this export subsidy. As producers and exporters ofsugar, Colombia, El Salvador and Paraguay shared Australias concern. Colombia stated that thissubsidy not only had given rise to concern to some of Colombias sugar producers but also couldhave a negative impact on the world sugar market. Brazil noted that points c, d and e of theirquestions to India remained unanswered. Canada, the European Union, New Zealand, Pakistan,Thailand and the United States of America registered concern. Pakistan joined Australia and Brazil

in demanding India to respond to unanswered questions.

1.11 India's wheat stocks and exports


Canada thanks India for its responses and would like to follow-up on questions posed atthe January meeting of the Committee on Agriculture. India confirmed that 2 millionmetric tonnes of wheat were indeed approved for exports in August 2013 at US$300 per

tonne and that, in keeping with market trends, the base price was lowered to US$260per tonne. India also indicated that lowering the base price does not necessarily implythat product will be sold at that price, and that so far, export prices were betweenFOB US$279.52 and US$289.90 per tonne. Canada understands that the FoodCorporation of India, which according to India is holding stocks of 28 million metrictonnes as of January 2014, purchases its wheat from producers at administered pricesthrough a minimum support price mechanism.

a.

Could India elaborate on the specific elements considered under the ambit ofmarket trends when determining base price for wheat exports?

b.

Could India elaborate on the process whereby its government determines whatvolume of wheat stocks will be approved for export and what factors areconsidered when determining timing of the export tenders?

c. Could India indicate what costs in addition to those related to market trendsare taken into consideration in determining an export price for wheat, forexample, transportation costs, storage costs?

d.

Could India indicate if there is any intention to approve more exports of wheatat the base price of US$260 per tonne once the 2 million metric tonnes havebeen exported?

Answer by India

a and c. See answer to AG-IMS ID 73039.


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Further, the Food Corporation of India has published that the total economic cost of theacquisition and distribution of wheat in 2013/2014 was US$316.79 per tonne, wellabove the noted tender prices.

The United States of America resubmits its January 2014 Committee on Agriculturequestion to India:

The United States of America is concerned that India is exporting wheat at prices wellbelow acquisition costs. For example, India's Commission on Agricultural Costs andPrices in its discussion paper no 2 estimated that the cost of storing, handling, anddistributing wheat purchased by the government's Food Corporation of India equals40% of the acquisition cost. For example, if India procured wheat in 2013/2014 at

13,500 rupees per tonne or US$221 per tonne (US$1 = 61 rupees), the United States ofAmerica calculates a cost to port of US$310 per tonne. An export price of US$260 pertonne is well below this cost to the India government.

a.

Please provide figures on the cost to the Indian government of wheat at exportports named in export tender documents published by the State TradingCorporation of India Limited (STC), Minerals and Metals Trading Company(MMTC), Project and Equipment Corporation of India (PEC), and any other suchentity; broken down by acquisition cost, storage cost, transport cost, othercost.

b. Please also provide the winning bids on wheat export tenders for MMTC, STCand PEC via this port.

Answer by India

The inferences drawn by the United States of America in the chapeau to the resubmittedquestion are unwarranted.

a.

The acquisition cost and incidental charges for 2 million tonnes of wheat exports fromthe Central Pool stocks of FCI during 2013-2014 (December 2013 February 2014period) include pooled cost of grains to FCI, handling charges, gunny cost,administrative charges, statutory taxes and storage charges for a period of six months.

b. Details of the bids cannot be provided because of commercial considerations.

Follow-up: Australia, Pakistan and Ukraine shared Canada's and U.S. interest in India's exportpolicies on wheat. In view of the large number of questions raised to India, the United States ofAmerica considered a plurilateral meeting as suggested by India useful to address some of theissues. With respect to India's notifications, the United States of America sought clarificationregarding the timeline for submission. Pakistan and Ukraine supported the U.S. request. India

clarified that it had not proposed a plurilateral meeting but would consider it based on Members'suggestions. India reiterated the challenges involved in the process of preparing notifications fordeveloping countries.

1 12 Saint Lucia's domestic purchase requirements for poultry and pork


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a.

Please state whether an order establishing that an importer must purchasedomestic product in order to receive an import license for chicken or pork waspublished, and if so, where.

b. Additionally, please explain how Saint Lucia's domestic purchase requirementsfor poultry and pork are consistent with Saint Lucia's WTO obligations,including Article 4.2 of the Agreement on Agriculture and Article III:4 ofthe GATT 1994.

c.

When will Saint Lucia respond fully to the questions asked by the United Statesof America during COA meetings in September 2013 (AG-IMS 71032) and

January 2014 (AG-IMS 72055)?

Answer by Saint Lucia

Saint Lucia undertook to provide a response at a later stage.

1.13 Thailand's paddy pledging scheme


Canada appreciates Thailand's participation in informal consultations on this issue.However, Canada regrets that its questions to Thailand on its Paddy Pledging Schemesince the November 2012 meeting remain unanswered.

a. Could Thailand indicate whether it intends to answer these questions in thenear future? If so, could Thailand provide information on the timelines forproviding the requested information?

b.

While the Committee is still expecting Thailand's domestic support notifications

for 2007 and subsequent years, could Thailand please provide an estimate ofgovernment expenditures related to the purchase of rice under the PaddyPledging Scheme?

Preliminary Answer by Thailand

b. Under the current paddy pledging scheme, the government operates the scheme mainlywith revolving funds in the procurement. The government expenditures accordingly willcover the payment of different rates of interests, administrative cost, and other fixed cost in

operation. Because of the nature of the programme, Thailand will not be able to know theexact expenditure until the closing of account for each year.


There have been a number of press reports regarding Thailand's rice policy recently.These reports have indicated that Thailand may suspend or end its current rice policy.


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c.

Please provide data to confirm the volume and price of these and othertenders.

d. What steps will Thailand take to ensure export prices remain in line with itsWTO commitments?

The United States of America also resubmits its question from the January Committeemeeting:

e. The United States of America notes that Thai rice prices have declineddramatically in 2013. Further, Thailand has gone from the highest-pricedsupplier to one of the lowest over the past two years. In AG-IMS ID 71033,Thailand indicated that it was taking measures to minimize the impact onmarkets of its release of government rice stocks. Press reports in Thailand havealso indicated that Thailand has sold rice at below market prices.

i.

What factors have contributed to this dramatic decline in Thailand's exportprices?

ii.

Has Thailand evaluated whether it needs to take any additional steps tominimize the impact of its stock releases on markets, including displacing

exports of other countries due to its low prices?

f. Press reports in Thailand note that even at these low prices, Thailand is findingit difficult to find buyers for its rice and is simultaneously under pressure to sellstocks in order to fund its rice subsidy programme, which is currently late inmaking payments to its producers. Given the current situation, what, if any,changes does Thailand plan to make to its rice pledging scheme to addressthese concerns?

g.

Please provide an update on the following aspects of Thailand's rice pledgingscheme.

i. How much rice has been procured by the government in the current cropyear?

ii. How much rice does Thailand currently have in government stocks?

iii. What is the current support price for rice in Thailand?

iv.

What is the support price for the upcoming rice crop year?

h.

Thailand last made a domestic support notification for the year 2007.Thailand's rice domestic support has undergone several reforms since that timeand is much different today than it was seven years ago. The United States ofAmerica notes this significant delay in notifications and requests an update on


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As for the current pledging scheme, as explained previously, Thailand is gatheringinformation and data from the provinces and the final expenditures will be notified

when Thailand closes the account for the scheme.

e.

i. In 2013 world prices of rice fell overall due to the increasing volume of rice in theworld market, and Thai rice price was no exception. In any case, according todifferent statistics, Thailand's rice export volume has decreased for the past fewyears and so has Thailand's export share in the world market. When compared withother countries rice prices at the equivalent quality, Thai rice prices are still

relatively high.

Follow-up: The United States of America raised concern on press reports about Thailand selling730,000 tonnes of rice stocks at US$380 per tonne, which implied huge losses given the value ofthe stock per tonne was considerably higher than the sale price. The European Union and Pakistanshared the concern. Canada and the European Union welcomed Thailand's upcoming domesticsupport notification for 2008. Uruguay indicated interest in the issue.

1.14 Turkey's domestic support and export subsidies

1.14.1 Question by European Union (AG-IMS ID 73056)

a.

Given that Turkey has not submitted domestic support (DS:1) and export subsidies(ES:1) notifications to the Committee on Agriculture since 2001 and 2000respectively, could Turkey please indicate when it intends to submit these overduenotifications to the WTO?

b.

In the meantime, could Turkey please confirm that since 2001 its budgetary outlaysand eligible quantities of subsidized exports, including for citrus fruits, have

remained within its commitments?

c.

Could Turkey please confirm that its AMS has remained since 2002 below its deminimis level?

Answer by Turkey

The Relevant Turkish institutions, mainly the Ministry of Economy and the Ministry of Food,Agriculture and Livestock have been working on Turkey's overdue notifications. However,

the process is still ongoing and has not been completed yet. Therefore, Turkey will be ableto submit the notifications only after the work is finalized.

Follow-up: The European Union reiterated its request for Turkey to update its notifications, andsought Turkey' specific reply to the question on citrus fruits. The Philippines registered continuedinterest in this issue.


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Turkey also states that "TMO currently does not make wheat purchases as partof inward processing schemes".

b. Does TMO sell wheat to domestic mills specifically for the export of flour? If so,please provide the volume of TMO wheat sold to millers specifically for exportfor the past three years. Please also include data listing the quantity of branexported and nationalized against the inward processing system for wheatflour exports.

c.

Please share data for the last three years listing the quantity and quality ofwheat imported and quantity and quality of flour exported under Turkey's

inward processing system.

Answer by Turkey

a.

TMO is a fully autonomous entity in its commercial activities and the same applies to theresponsibility of TMO's Board of Directors in its management activities. Responsibility forthe management of TMO is in line with the principles specified in related legislation. Asan autonomous entity, TMO operates both its commercial and management activitiesaccording to the requirements of the economy.

b.

TMO carries out both purchasing of grain directly from producers and selling of grain todomestic users by only taking stock adequacy, climate, production, world prices,domestic market conditions, profitability and efficiency into account.

c.

See Annex 2.

Follow-up: Taking note of Turkey's response to the previous question that it was preparingoutstanding notifications, the United State of America believed that those notifications mightprovide answers to some of the U.S. questions. The Russian Federation as an exporter of wheat

and wheat flour and the Philippines expressed interest in the issue. The European Union flagged itscontinued concern.

1.16 U.S. Farm Bill

1.16.1 Question by Indonesia (AG-IMS ID 73043)

On 7 February 2014, a new Farm Bill (the Agriculture Act of 2014) was signed into law.The cost of the Act is estimated at US$956 billion. The Bill is issued in an environment of

high farm income. As one of the biggest agriculture spenders in absolute and per capitaterms, any policy related to subsidy in the United States of America always has anoutsized impact on global food security prospect.

United States of America is one of Indonesia's main trading partners especially onagriculture. Any policy change in the United States of America will have direct influenceon the agriculture market and on the fate of large portion of vulnerable farmers in


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i.

Could the United States of America explain the eligibility criteria for theproducers to enrol in the two schemes?

ii. How does the Price Loss Coverage operate?

iii.

How does Agricultural Risk Coverage operate?

iv. What is the difference between Agricultural Risk Coverage based uponcounty and individual revenue level?

d.

Relating to Price Loss Coverage, the United States of America sets "reference

prices" for all programme crops, among others: wheat, corn, rice, soybean,other oilseeds, peanuts, dry peas, grain sorghum, barley, oats, lentils, smallchickpeas, large chickpeas.

i. How are "reference prices" calculated for such products?

ii. What elements are taken into account in setting the "reference price"?

iii. What is the relation between "reference prices" and market prices for the

crops under the programme?

iv. Will the "reference prices" be adapted?

e.

It seems that the crop insurance becomes the foundation of the Farm Bill andthe primary safety net for producers. The federal crop insurance programmemakes available subsidized crop insurance to agriculture producers. More than100 crops are insurable. The Bill increases funding for crop insurance relativeto baseline levels by an additional US$5.7 billion over 10 years. Could theUnited States of America explain the reason of the huge increase in cropinsurance?

f. The Agricultural Risk Coverage will provide payment if actual crop revenue fallsbelow established revenue guarantee.

i.

How is the threshold amount for the revenue guarantee set?

ii.

What factors are taken into account in establishing such threshold?

iii.

How are insurable yields established?

iv.

Will the production history determine the revenue guarantee threshold?

v. Can the United States of America explain rice margin insurance?


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j.

Can the United States of America guarantee that the implementation of theFarm Bill will comply with the U.S. commitments in WTO?

Answer by United States of America

The United States of America appreciates Indonesia's interest in the Agricultural Act of 2014(2014 Farm Bill). The 2014 Farm Bill does make some major changes to U.S. food and farmpolicy. With respect to spending, it reduces estimated spending by US$17 billion a year.Further, around 80% of spending in the 2014 Farm Bill (US$756 billion over 10 years) isprojected for nutrition assistance for low-income and food insecure households for thepurchase of any food product, domestic or imported.

a.

Most U.S. states have considered Low-Income Home Energy Assistance Program(LIHEAP) payments in their calculation of SNAP benefits. Close to one-third of stateshave issued nominal LIHEAP payments (typically US$1 to US$5 dollars per year) toincrease SNAP benefits. The 2014 Farm Bill amends how LIHEAP payments are treated inthe calculation of SNAP benefits, which is expected to reduce SNAP benefits andaccounts for most of the estimated cuts in SNAP.

b.

The 2014 Farm Bill does not end income-support programmes in favour of price supportprogrammes for producers. The Bill does end the direct and countercyclical paymentprogrammes and the Average Crop Revenue Election programme. Most producers whoparticipated in the repealed programmes may choose to enrol in either the Price LossCoverage (PLC) programme, a new counter-cyclical type programme, or the AgricultureRisk Coverage (ARC) programme, a revenue-loss programme. There are no new pricesupport programmes under the 2014 Farm Bill and the market price support programmefor dairy products is eliminated.

c.

i.

The 2014 Farm Bill has not yet been fully implemented. As a result, theadministrative provisions for these and other programmes have not yet beenestablished. The text of the 2014 Farm Bill states that "actively engaged producers ona farm" are permitted to enrol in these programmes. However, the 2014 Farm Billleaves this term to be defined by the Secretary of Agriculture. The 2014 Farm Billalso places a limit on eligibility to receive farm programme benefits based on income.Under the new bill, an individual with an annual adjusted gross income (AGI) aboveUS$900,000 (including nonfarm income) is ineligible to receive payments from theseand other commodity and conservation programmes. The 2014 Farm Bill also limits

total payments from PLC, ARC, and the marketing assistance loan programme toUS$125,000 for each individual actively engaged in farming. A spouse may receive upto an additional US$125,000.

ii.

The Price Loss Coverage (PLC) programme is a new countercyclical price programmethat makes payments to producers when market prices fall below the legislatedreference price. The PLC programme is decoupled from production and is based on


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For producers choosing county-based ARC, payments are provided to producerswith historical "base" acres when county crop revenue (actual average county

yield times national farm price) drops below 86% of the county benchmarkrevenue (5-year Olympic average county yield times 5-year Olympic average ofnational price or the loan ratewhichever is higher for each year). For eachcovered commodity enrolled on the farm, the county ARC payment amount is thedifference between the per-acre guarantee (as calculated above) and actual per-acre revenue, times 85% of base acres of the commodity.

Individual Coverage

For producers choosing individual ARC coverage, payments are based on thedifference between an individual farm guarantee and actual individual farmrevenues. The farm's individual ARC guarantee equals 86% of the farm'sindividual benchmark guarantee, defined as the ARC guarantee price (the 5-yearOlympic average of national price or the loan ratewhichever is higher for eachyear) times the 5-year Olympic average individual yield, summing across allcrops on the farm and weighting by plantings. The payment amount is theindividual farm payment rate (the difference between the individual farmguarantee and actual individual farm revenue, but no greater than 10% of thefarm's benchmark revenue) times 65% of base acres for all covered commodities

for the individual farm.

iv. See response to how ARC operates.

d.

i. Reference prices were determined by Congress and fixed for the duration of the 2014Farm Bill.

ii.

A variety of factors were used to determine the reference prices, including but notlimited to market conditions, market outlooks/forecasts, and policy implications.

iii.

The difference between the reference price and the annual national-average marketprice is used to determine the payment rate in the PLC programme.

iv.

The reference prices are fixed for the life of the 2014 Farm Bill.

e. Most of the funding increase stems from two new insurance products, the Stacked

Income Protection Plan (STAX) and the Supplemental Coverage Option (SCO).

f.

i. The ARC revenue guarantee is set at 86% of historical revenue at either the countyor farm level. ARC payments are limited to no more than 10% of the benchmarkrevenue The programme was designed to provide payments only for losses not


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v.

The 2014 Farm Bill mandates the U.S. Department of Agriculture Risk ManagementAgency (RMA) to develop and approve a margin coverage policy for rice producers

for the 2015 crop year, but is not related to the ARC programme. RMA has not yetdeveloped this policy, but as with other crop insurance products, it will be developedas an actuarially sound programme.

g. The Supplemental Coverage Option (SCO) offers producers additional area-basedinsurance coverage in combination with coverage by traditional crop insurance policies.The SCO offers producers the opportunity to purchase revenue coverage based oncounty average yield or revenue. SCO coverage is not available to producers who electto participate in the ARC programme or Stacked Income Protection Plan (STAX).

h.

i.

The Livestock Indemnity Program (LIP) provide compensation to eligible livestockproducers who have suffered livestock death losses in excess of normal mortality dueto adverse weather and attacks by animals reintroduced into the wild by federalgovernment or protected by federal law.

ii.

LIP payments are equal to 75% of the market value of the applicable livestock on theday before the date of death. Individuals are limited to a total of US$125,000annually in payments under the LIP, LFP, and ELAP programmes.

i.

The United States of America continues to advocate for reform in agriculture andminimizing government interventions in markets. The 2014 Farm Bill reduced overallagricultural spending and has further reduced the U.S. government's direct interventionsin agricultural markets with the elimination of the Dairy Product Price Support Programand the Dairy Export Incentive Program. Further, the United States of America believesthat all Members are permitted to provide domestic support that is within theircommitments. The United States of America repeatedly advocates for Members to make

reforms that will ensure their compliance with WTO rules. The 2014 Farm Bill remainsfully within U.S. WTO obligations.

j.

Compliance with WTO obligations was one of the key objectives of the Congress whendeveloping this Farm Bill. The Farm Bill is expected to keep support levels well below theWTO maximum allowed level.

Follow-up: Argentina and Pakistan voiced appreciation for the U.S. presentation at the informalsession and requested the presentation to be circulated to the whole Membership. Argentina

wished to continue monitoring U.S. compliance with its WTO commitments and with the frameworkof Doha Round negotiations regarding substantial reduction of domestic support and exportsubsidies. Canada indicated interest and reserved the right to follow up on this matter. Noting thatthe new bill resulted in a decrease in Amber Box programmes but at the same time shifted someGreen Box measures to Amber Box measures even though the shift depended on prices, Pakistanintended to monitor the impact of the bill. Pakistan further suggested other Members to conductsimilar exercises if new bills were adopted.


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The Russian Federation thanks Australia for this question and would like to confirm thatthere was a typographical error in the above mentioned notification. The Russian Federation

would like to draw Members' attention to the Corrigendum of the notification(G/AG/N/RUS/2/Corr.1) which has been circulated to Members.

2.2 IMPORTS UNDER TARIFF AND OTHER QUOTA COMMITMENTS (TABLE MA:2)

2.2.1 Ecuador (G/AG/N/ECU/38)

AG-IMS ID 73044: Question by United States of America - Transparency issues

The United States of America notes that in the footnotes of G/AG/N/ECU/38, Ecuadorstates that "no in-quota imports were recorded given that the tariffs in force in 2012were below the maximum in-quota rate. The exception is subheading 02071400, thetariff level of which was higher than that of the quota, but no imports were requested".

a.

What is the official process for requesting imports of 02071400?

b. Where can importers and exporters find information about the requestprocedure?

Answer by Ecuador

a.

This tariff heading is subject to automatic import licensing, and the relevant sanitaryrequirements must be met before an import licence can be issued.

b.

Importers and exporters can obtain information on import procedures from the nationalnotification bodies.

Follow-up: The United States of America sought clarification regarding whether import licenseswould automatically be given to importers once sanitary requirements were met. Ecuadorconfirmed this in its written response.

2.2.2 Norway (G/AG/N/NOR/74)

AG-IMS ID 73058: Question by European Union - Transparency issues

The commitments of Norway comprise more than 230 bound tariff quotas, while thenotification includes only about 20 of them. The European Union would once again liketo request Norway to include all bound tariff quotas in the notification as a matter oftransparency.

Answer by Norway

The notification of imports under TRQs for the calendar year 2001 (G/AG/N/NOR/38) wasthe first notification in which Norway did not include TRQs for which a tariff only regimeapplies. In accordance with the Norwegian schedule, the in-quota tariff rates for the majorityof the current access quotas have been at the level of the bound MFN tariff for the

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2.2.3 Tunisia (G/AG/N/TUN/44)

AG-IMS ID 73057: Question by European Union - Tariff quota fill

Tunisia notified that it imported 1,831 tonnes of cheese under a TRQ of 1,500 tonnes incalendar year 2012. Could Tunisia please clarify why it notified imports beyond theTRQ volume?

Answer by Tunisia

Tunisia undertook to provide a response at a later stage.

2.3 DOMESTIC SUPPORT COMMITMENTS (TABLE DS:1)

2.3.1 Botswana (G/AG/N/BWA/19)

AG-IMS ID 73045: Question by United States of America - Transparency issues(including Table DS:2)

Compared to Botswana's previous domestic support notification, Botswana hasintroduced several new programmes including "Agricultural Research", "Disease andPest Control", "National Master Plan for Arable Agriculture and Dairy Development",

"Cattle Identification" and "Foot and Mouth Disease Compensation". According toArticle 18.3 of the Agreement on Agriculture, it appears that these newly notifiedprogrammes should have corresponding Table DS:2 notifications. Is Botswana planningto provide these notifications?

Answer by Botswana

All the programmes referred to (except NAMPAADD) were introduced before 1995(i.e. before G/AG/2 came into force, a document which instructs all Members to notify newmeasures) and therefore, were not considered to be new. These programmes have been

included in every notification except those years when no support was provided. NAMPAADDwas introduced in 2002 and has also been included in Botswana's previous notifications(G/AG/N/BWA/10 and G/AG/N/BWA/13) except when no support was provided. Botswanaregrets the lack of the corresponding Table DS:2 notification that is clearly an oversight andBotswana will do all that is necessary to make sure that it will be submitted in due course.

AG-IMS ID 73046: Question by United States of America - Investment subsidiesgenerally available to agriculture

Botswana notifies a transport subsidy under "investment subsides generally available toagriculture" as per Article 6.2. Please provide details with regards to how thetransportation subsidy is implemented.

Answer by Botswana

The transportation subsidy is administered by a state agency, Botswana AgriculturalMarketing Board (BAMB) BAMB was set up to provide alternative market for cereal crops

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Debt rescheduling was reported under those two tables because it encompasses therescheduling of both (i) production credit for agricultural inputs available to family farmers

and investment credit generally available to producers, falling under Art 6.2; and (ii)production credit available to all producers (excluding family farmers), which is included inBrazil's non-product-specific AMS.

AG-IMS ID 73032: Question by United States of America - Transparency issues(including Table DS:2)

a.

No support is reported for cotton and coffee, although programmes exist forthese products. Please explain why Brazil has not reported any support.

b.

No support for maize is reported in 2011 in Supporting Table DS:4, althoughsubstantial support (US$423 million) is reported in 2010. Please explain whysupport is not reported for 2011.

Answer by Brazil

a.

No such report was made because no effective support was granted in the coveredperiod for coffee and cotton.

b.

The amount of supported production varies according to market prices and the budgetavailable at the time.

AG-IMS ID 73006: Question by Canada - General services: research

Canada notes that in Calendar Year 2012 under General Services, Brazil has notified ameasure called "Agricultural research programme" with payments of US$224.9 million.

a.

As this measure has not been in previous notifications, could Brazil elaborateon the types of agricultural research projects that have received funding?

b.

As this appears to be a new measure, could Brazil indicate when it will submit aTable DS:2 notification to provide the Committee with more information?

Answer by Brazil

a. The programme encompasses all the regular research carried out by EMBRAPA, includingactivities related to particular products as well as environmental aspects.

b. The programme does not constitute a new measure, for it merely presents pre-existentactivities under a new title. However, Brazil will evaluate whether to submit a Table DS:2notification.

AG-IMS ID 73007: Question by Canada - General services: extension and advisoryservices

Canada notes nde e tension of ad iso se ices that the e pendit es elated to

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a.

The main types of equipment purchased are tractors, excavators, motor graders,compactors and trucks, given that the main extension service provided by Brazilian

municipalities is the maintenance of unpaved roads.

b. Usually the federal government signs agreements with the concerned municipalities attheir request.

c.

The requested information is not available at this moment.

AG-IMS ID 73008: Question by Canada - General services: extension and advisoryservices

Canada notes that payments related to "Extension services on rural development"increased from US$16.4 million in 2011 to almost US$190 million in 2012. Could Brazilelaborate as to the reasons for this phenomenal increase in expenditures over thecourse of a year?

Answer by Brazil

The increase was due to the importance of meeting public policy objectives through theseexpenditures, as well as to the greater availability of funds for them in the Federal Budgetfor the period in question.

AG-IMS ID 73028: Question by United States of America - General services: extensionand advisory services

Regarding Supporting Table DS:1 (1) (vi) Extension, the United States of Americanotes that spending on extension services in 2011 (US$1.6 billion) increased to almostdouble the level reported in 2009 (US$780 million). Please explain the substantialincrease.

Answer by Brazil

The increase was due to the importance of meeting public policy objectives through theseexpenditures, as well as to the greater availability of funds for them in the Federal Budgetfor the period in question.

AG-IMS ID 73009: Question by Canada - Public stockholding for food security purposes

Canada notes that under public stockholding for food security purposes expendituresrelated to "management of public stockholding program" decreased substantially fromUS$283 million in 2011 to US$0.38 million in 2012. Canada understands that

expenditures are for the management of the food supply system and pest and diseasecontrol related to public stocks. Could Brazil elaborate on the reasons for this change inexpenditures?

Answer by Brazil

As noted by Canada expenditures for the management of the food supply system used to

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Answer by Brazil

a.

The correct figure that should have been notified for 2011 is US$465.2 million. Acorrigendum will be submitted soon.

b.

In 2012, 390 different kinds of foodstuff were purchased under the programme. Theinformation on the products and the volumes acquired is not available at the moment.

AG-IMS ID 73029: Question by United States of America - Public stockholding for foodsecurity purposes

Regarding Supporting Table DS:1 (2) Public Stockholding, the United States ofAmerica notes that spending declined substantially in 2010 (US$304 million) and 2011(US$205 million) from the figure reported in 2009 (US$653 million). Please explain whyBrazil has moved away from this type of programme.

Answer by Brazil

The correct figure that should have been notified under the "Program of acquisition ofagricultural products from family farming" for 2011 is US$465.2 million. Accordingly, thecorrect figure for Public Stockholding for Food Security Purposes in 2011 should have beenUS$749.1 million. A corrigendum will be submitted soon.

The correct numbers in Supporting Table DS:1 (2) Public Stockholding for Food SecurityPurposes should be (values in million US dollars): 237 in 2008/2009, 653 in 2009/2010,749 in 2010/2011, and 205 in 2011/2012.

The expenditures under the programme decreased in 2012 due to the drought that occurredin the northeast of the country.

AG-IMS ID 73011: Question by Canada - Direct payments: payments for relief from

natural disasters

Canada notes that the expenditures related to the "Warranty-Crop Fund" (governmentsponsored agricultural insurance) increased significantly from US$77.7 million in 2011to US$302 million in 2012.

Could Brazil confirm that this programme meets the criteria of paragraph 8(a), Annex 2,more specifically, the production loss exceeds 30% in either: (a) the average productionin the preceding three-year period or (b) a three-year average based on the precedingfive-year period, excluding the highest and lowest entry.

Answer by Brazil

Brazil considers that the measure, which provides relief for natural disasters, complies withthe criteria set out in paragraph 8 of Annex 2 of the Agreement on Agriculture. The Ministryof Agrarian Development is in charge of the Warranty Crop Program, a social programmewhich granted R$640.00 in 2011 and R$680.00 in 2012 per family farmer applying for it

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Answer by Brazil

Yes. They are available for all producers and cooperatives under the same conditions.

AG-IMS ID 73033: Question by United States of America - Market price support

a.

Regarding Supporting Table DS:5, the United States of America notes that theminimum support price for wheat went down from US$329.05/tonne in2010/2011 to US$254.19/tonne in 2011/2012. Please explain why there wassuch a large decrease within one year.

b.

Please explain why total production is not used for the minimum support price

calculation if the wheat is grown in locations eligible to receive thegovernment's minimum support price.

Answer by Brazil

a.

The increase was due to the definition of the minimum price for the product at a lowerlevel in the 2011/2012 crop-year.

b. The total production is not used as a reference for the support because the benefited

production is actually limited and depends on the available budget outlays. Distinctprogrammes may apply for the same product, although with different beneficiaries, inthe same region and crop year. Similar situations occur regularly, as showed in Brazil'snotifications.

Follow-up: The United State of America indicated its intention to raise follow-up questions such aswhether "debt rescheduling" (AG-IMS ID 73031) reported in two supporting tables were differentprogrammes.

2.3.3 European Union (G/AG/N/EU/10/REV.1, G/AG/N/EU/17)

AG-IMS ID 73047: Question by United States of America - Market price support: Eligibleproduction

The United States of America notes that the revision to the European Union's domesticsupport notification for 2009/2010 now includes eligible production in SupportingTable DS:5 for barley. The result is an increase in the Total Aggregate Measurement ofSupport. The United States of America also notes that the European Union stated inAG-IMS ID 69053 that the Health Check of the CAP set the limit of buying of barley,

among other commodities, at "zero" as provided in Article 13.1(a) of Council Regulation(EC) 1234/2007 and therefore public intervention is not automatically available forthese products.

a.

Please confirm this was the result of a public intervention in 2009/2010.

b. What specific factors were used to determine the use of the public intervention

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AG-IMS ID 73012: Question by Canada - Other product-specific AMS/EMS

Canada appreciates the European Union providing a revised notification indicating achange from zero product specific support for both barley and sorghum toEUR 2,109.7 million and EUR 9.5 million, respectively. Could the European Unionelaborate on the reasons for revising these amounts in G/AG/N/EU/10/Rev.1?

Answer by European Union

See above.

AG-IMS ID 73015: Question by Canada - General services: infrastructural services

Canada notes that payments related to infrastructural services have increased fromEUR 1,866 million in 2009/2010 to EUR 2,311 million in 2010/2011. Could the EuropeanUnion elaborate on the reasons for this increase in spending?

Answer by European Union

Spending on rural development measures in the European Union takes place under the7-year programming framework on the basis of national/regional rural developmentprogrammes prepared by European Union member states. Within this period there arevariations in the level of spending from one year to another. The variations are related tothe rhythm of implementation and financial execution of the programmes in the memberstates. Payments may be delayed during the first years when the programmes have to bedrawn up, adopted and implemented. Also the financing of the

compilation of responses to questions raised during the wto committee on agriculture meeting on 21...

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