G/AG/W/115 8 November 2013 (13-6235) Page: 1/30 Committee on

G/AG/W/115

8 November 2013

(13-6235) Page: 1/30

Committee on Agriculture

RESPONSES TO POINTS RAISED BY MEMBERS UNDER THE REVIEW PROCESS

COMPILATION OF RESPONSES TO QUESTIONS RAISED DURING THE COMMITTEE ON AGRICULTURE MEETING ON 26 SEPTEMBER 20131

The present document compiles responses received in writing by the Secretariat to the questions raised in document G/AG/W/114 as well as follow-up comments made during the Review Process. This compilation will be revised after responses to all the questions have been received.

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1 This document has been prepared under the Secretariat's own responsibility and is without prejudice

to the positions of Members or to their rights or obligations under the WTO.

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TABLE OF CONTENTS

Contents

1 MATTERS RELEVANT TO THE IMPLEMENTATION OF COMMITMENTS: ARTICLE 18.6 ................................................................................................................... 4 1.1 Accession of Croatia to the European Union (AG-IMS ID 71025) ....................................... 4 1.1.1 Statement by the European Union ............................................................................. 4 1.2 Brazil's domestic support programmes .......................................................................... 4 1.2.1 Question by the United States of America (AG-IMS ID 71028) ....................................... 4 1.3 Brazil's trade and industry policy ................................................................................. 4 1.3.1 Question by Canada (AG-IMS ID 71014) .................................................................... 4 1.4 Canada's dairy policies ............................................................................................... 5 1.4.1 Question by New Zealand (AG-IMS ID 71012) ............................................................. 5 1.5 China's Cotton Domestic Support ................................................................................. 6 1.5.1 Question by the United States of America (AG-IMS ID 71029) ....................................... 6 1.6 Costa Rica's compliance with AMS commitments ............................................................ 7 1.6.1 Question by the United States of America (AG-IMS ID 71030) ....................................... 7 1.7 India's national food security bill .................................................................................. 8 1.7.1 Question by Canada (AG-IMS ID 71015) .................................................................... 8 1.8 Indonesia's stockholding programmes .......................................................................... 9 1.8.1 Question by the United States of America (AG-IMS ID 71044) ....................................... 9 1.9 The Republic of Korea's domestic support for pork and beef ............................................. 9 1.9.1 Question by Canada (AG-IMS ID 71016) .................................................................... 9 1.10 Saint Lucia's domestic purchase requirements for poultry and pork ................................ 10 1.10.1 Question by the United States of America (AG-IMS ID 71032) .................................... 10 1.11 Thailand's paddy pledging scheme ............................................................................. 11 1.11.1 Question by the United States of America (AG-IMS ID 71033) .................................... 11 1.11.2 Question by Canada (AG-IMS ID 71018).................................................................. 12 1.12 Turkey's destination of wheat flour sale ...................................................................... 13 1.12.1 Question by the United States of America (AG-IMS ID 71034) .................................... 13 1.13 Ukraine's state regulation of production and realization of sugar .................................... 13 1.13.1 Question by Canada (AG-IMS ID 71017).................................................................. 13 1.14 United States of America's Refined Sugar Re-export Program ........................................ 14 1.14.1 Question by Canada (AG-IMS ID 71019).................................................................. 14 2 POINTS RAISED IN CONNECTION WITH INDIVIDUAL NOTIFICATIONS .................... 15 2.1 IMPORTS UNDER TARIFF AND OTHER QUOTA COMMITMENTS (TABLE MA:2) ..................... 15 2.1.1 Chile (G/AG/N/CHL/42) .......................................................................................... 15 2.1.2 El Salvador (G/AG/N/SLV/38, G/AG/N/SLV/40, G/AG/N/SLV/41) .................................. 15 2.2 SPECIAL SAFEGUARDs (TABLES MA:3 to MA:5) ............................................................ 16 2.2.1 European Union (G/AG/N/EU/13) ............................................................................. 16

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2.3 DOMESTIC SUPPORT COMMITMENTS (TABLE DS:1) ....................................................... 16 2.3.1 Argentina (G/AG/N/ARG/31) ................................................................................... 16 2.3.2 Brazil (G/AG/N/BRA/30) ......................................................................................... 17 2.3.3 Chile (G/AG/N/CHL/40) .......................................................................................... 18 2.3.4 Indonesia (G/AG/N/IDN/34) .................................................................................... 19 2.3.5 Jamaica (G/AG/N/JAM/9, G/AG/N/JAM/10) ................................................................ 20 2.3.6 Nicaragua (G/AG/N/NIC/36) .................................................................................... 22 2.3.7 Saint Vincent and the Grenadines (G/AG/N/VCT/3) ..................................................... 23 2.3.8 Chinese Taipei (G/AG/N/TPKM/106) .......................................................................... 23 2.3.9 Zambia (G/AG/N/ZMB/8) ........................................................................................ 25 2.4 NEW OR MODIFIED DOMESTIC SUPPORT MEASURES (DS:2) .......................................... 25 2.4.1 Uruguay (G/AG/N/URY/52) ...................................................................................... 25 2.5 EXPORT SUBSIDY COMMITMENTS (TABLES ES:1, ES:2 AND ES:3 .................................... 27 2.5.1 European Union (G/AG/N/EU/14) ............................................................................. 27 2.5.2 Israel (G/AG/N/ISR/52) .......................................................................................... 28 3 OVERDUE NOTIFICATIONS ........................................................................................ 29 3.1 Viet Nam's delayed notifications ................................................................................. 29 ANNEX 1 ........................................................................................................................ 30

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1 MATTERS RELEVANT TO THE IMPLEMENTATION OF COMMITMENTS: ARTICLE 18.6

1.1 Accession of Croatia to the European Union (AG-IMS ID 71025)

1.1.1 Statement by the European Union

The European Union is proud to inform the WTO Membership that on 1 July 2013 Croatia became the 28th Member State of the European Union.

In the context of the review process in the Regular Committee on Agriculture, the European Union would like to inform Members about the arrangements concerning the relevant transparency obligations. These are applied in the same manner as for previous EU enlargements. Croatia will continue to notify on their own behalf the scheduled notifications for reporting periods up to 2012. As for MA:2 and ES notifications covering 2013, Croatia will notify for the reporting period covering 1 January to 30 June 2013. There will be EU-28 MA and ES notifications for reporting periods from 1 July 2013 onwards. As far as domestic support is concerned, Croatia will be included in the European Union's annual notification covering spending in the marketing year 2012/2013.

The Membership will be kept informed about arrangements concerning new and modified agricultural tariff rate quotas through the regular MA:1 notification. Apart from notifications of individual arrangements, the European Union intends to provide an overall MA:1 update including addenda after GATT Article XXIV negotiations have been concluded.

1.2 Brazil's domestic support programmes

1.2.1 Question by the United States of America (AG-IMS ID 71028)

The United States of America appreciated Brazil's response to a question on PEP at the June 2013 meeting of the Committee (G/AG/W/111, AG-IMS ID 70007). In its response, Brazil said that it was in the process of compiling the information requested by the United States of America on the quantities by commodity shipped to specific domestic destinations as well as the quantities by commodity exported under the programme.

a. Is Brazil prepared to provide the information now?

b. If not, when does Brazil expect to provide it?

Answer by Brazil

a. At this moment the information requested is still unavailable.

b. CONAB's control mechanism is under development. The Brazilian government expects to be able to provide the information requested soon, but cannot predict when it will be available. Nonetheless, it should be noted that the last PEP granted for wheat was in March 2012 and for rice in September 2011. Currently the programme is suspended and under reassessment by the government.

Follow-up: The United States of America was disappointed with Brazil's failure in providing the requested information once again. It thanked Brazil for sharing the information as to when the last PEP was granted for wheat and rice, and sought similar information on corn. Brazil responded that it would provide the information at a later stage.

1.3 Brazil's trade and industry policy

1.3.1 Question by Canada (AG-IMS ID 71014)

Canada has considered the responses provided at previous meetings of the Committee on Agriculture regarding its trade and industry policy for 2011-2014, called the Plano Brasil Maior ("Greater Brazil Plan") and seeks further clarification. As mentioned at earlier meetings of the Committee, one of the plan's elements is a temporary payroll tax exemption, where the 20% mandatory employer's social security contribution on payrolls (contribution to the Instituto Nacional do Seguro Social or "INSS") is

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substituted for a flat rate ranging between 1% and 2% on gross earnings, excluding gross revenue from exports. Canada understands that only employers for which 50% or more revenue derived from exports of the products covered are currently eligible to benefit from the measure, and that the new calculation methodology exempts entirely revenues derived from exports.

a. Could Brazil provide further details on the eligibility criteria that employers have to meet in order to be able to access this new methodology to calculate the social security contribution?

b. Will the application of this new methodology be broadened to include all employers currently contributing to the INSS?

c. Could Brazil elaborate on the changes brought by Plano Brasil Maior to the calculation methodology and how this new methodology helps to simplify and alleviate the administrative burden on eligible employers?

d. In light of the definition of a subsidy provided in Article 1.1 (a)(1)(ii); "government revenue that is otherwise due is foregone or not collected…" of the Agreement on Subsidies and Countervailing Measures (ASCM), could Brazil provide an assessment of the financial impact of the new methodology on the level of contributions collected by the INSS from employers?

e. Considering the provisions of Article 3.1 (a) and paragraph (e) of the Illustrative List provided in Annex 1 of the ASCM, could Brazil substantiate its claim that the new calculation methodology does not constitute an export subsidy prohibited by the ASCM?

Answer by Brazil

a. The methodology to calculate the social security contribution under Law 12.546 does not constitute a tax exemption, as stated in Brazil's previous replies to Canada. The said methodology applies for companies that produce any of the goods listed in the Annex of Law 12.546, independent of export performance.

b. The extension of those simplified calculation procedures to other sectors is currently under evaluation by the Brazilian government.

c. The effects of the measure are still being assessed by the Brazilian government. The imposition of a flat rate is meant to spare employers from calculating their due social security contribution on a per employee basis. Moreover, the new methodology makes it easier for the government to control and audit the collection of revenues arising from the social security contribution.

d. The financial impact of the measure is under on-going assessment. However, given its terms, the Brazilian government expects it to be neutral or even to increase the revenue collected from the social security contribution, as tax evasion is reduced.

e. Brazil reiterates that the measure does not constitute a tax exemption; rather it imposes a different calculation methodology aimed at simplifying administrative procedures and curtailing tax evasion. Furthermore, the measure does not apply export performance requirements.

1.4 Canada's dairy policies

1.4.1 Question by New Zealand (AG-IMS ID 71012)

According to notified information, Canada has used nearly its entire revenue outlays for "incorporated products" and "other milk products" each year since 2003. New Zealand has recently seen Canadian media reports describing the development of a new dairy manufacturing plant in Scarborough, Ontario. New Zealand understands from those reports that the company's focus will be on exporting the plant's manufacturing output, and that the Canadian government may have granted both an export permit, and access to a supply of subsidised inputs for further processing via a Special Milk Class 5(b) Permit.

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Could Canada please confirm:

a. Whether the Canadian Dairy Commission has granted the plant access to dairy ingredient inputs via a Special Milk Class?

b. Whether exports from this plant that incorporate dairy products supplied under a Special Milk Class will be included in Canada's total revenue outlays and volume limits for export subsidies reported to the WTO?

c. Whether Canada is intending to provide export subsidies up to its full entitlement this year, and in subsequent years for dairy exports through using supply managed inputs?

Answer by Canada

Under Class 5(a), (b) and (c) (Special Milk Class (SMC) Permit Program), among other domestic milk classes, milk is made available for use in dairy products and products containing dairy ingredients at prices which vary according to end use. As mentioned at the 49th session of the Committee of Agriculture, Canada is of the view that except for SMC 5 (d), which was found to provide export subsidies under Article 9.1(c) of the Agreement on Agriculture, none of the Special Milk Classes constitute export subsidies within the scope of the Agreement on Agriculture. Therefore, Canada does not include sales under SMC 5 (a), (b) and (c) in its calculation of total budgetary outlays and quantity limits for export subsidies reported to the World Trade Organization. Regarding the provision of export subsidies, the use of export subsidies for dairy products in terms of budgetary outlays and quantity is consistent with Canada's WTO rights and obligations. Canada remains nonetheless committed to the Doha Round and, in conjunction with other WTO Members, to the elimination of export subsidies.

Follow-up: New Zealand welcomed Canada's positive affirmations in respect of full elimination of export subsidies. New Zealand noted that, as stated by Canada in its response, special milk classes were made available to commercial parties at administered prices that varied according to their end use, i.e. in the course of production with the domestic market price. In New Zealand's opinion, since these inputs were provided to commercial entities that might have the intention to export, the details of that action were of particular interest to this Committee. Therefore, New Zealand sought Canada's response on whether the factory in Scarborough had been provided with access to dairy inputs via a Special Milk Class, given Canada had not addressed this part of the original question. Canada provided a preliminary response as follows: "Milk Class 5(b) is available for dairy products other than cheese that are used as ingredients for further processing for the domestic and export markets. As part of the Special Milk Class Permit Program, the Canadian Dairy Commission issues 102 permits for dairy products in this Class ". The United States of America flagged interest in this question. New Zealand restated its continuing interest in this issue and looked forward to receive further information from Canada.

1.5 China's Cotton Domestic Support


The United States of America notes that China's last domestic support notification (from 13 October 2011 - G/AG/N/CHN/21) provided information through 2008. In that submission, China reported cotton-specific support (seeds, reserves, transportation) accounting for RMB 2.8 billion or 2.5% of the value of cotton production in 2008. Since then, China has added a price support programme for cotton to those pre-existing subsidy policies noted above. China's support price for cotton is substantially higher than world market prices; with China's fixed external reference price for cotton, the estimated price gap in 2013 is over RMB 6,000 per metric ton. Moreover, during these recent four years, China has engaged in significant stock-building for cotton, which has affected the global supply equation, leading to generally higher than expected world prices and strong Chinese end-user preference for more economically priced imported cotton. Given the significant attention around the world on China's cotton policies:

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a. When does China intend to notify domestic support notifications on recent years, in particular for years when cotton price support was applied?

b. Can China provide the Committee information on various subsidy measures associated with price support as well as accumulation, maintenance, and distribution of cotton stocks?

c. Can China provide the Committee with any information on how it will manage its sizable cotton stocks in a manner that avoids negative effects on the world cotton market?

Answer by China

a. Currently, the domestic support notification for 2009-2010 is being prepared and will be submitted to the Committee shortly. After that, China will start working on the notification for the year 2011 to 2012.

b. China began stocking cotton in 2011. The purchase takes place between September and March the following year during the harvest season. All the relevant information is posted on the official website of China's Development and Reform Commission.2

c. Cotton stocks are distributed in the domestic market and are not for export. The Chinese government will distribute the stocks according to domestic market variables. The stocks bear no negative effects on the world market.

Follow-up: The United States of America looked forward to China's forthcoming notifications and indicated its intention to raise follow-up questions. In its view, the large amount of cotton stock could have an impact in the world market even if China intended to distribute it domestically. Australia thanked China for its enhanced transparency in the Committee on Agriculture. As China is Australia's largest agriculture export market and Australia's most important export market for cotton, Australia welcomed the opportunity to hear further details of China's domestic cotton policies. In this respect, Australia would prepare follow-up questions, including questions on policies to reinforce market confidence and mitigate risks of excessive volatility due to the public stock held by China.

1.6 Costa Rica's compliance with AMS commitments


The United States of America thanks Costa Rica for notifying the WTO on 29 May 2013 (G/AG/GEN/110) that the price support mechanism for rice will be eliminated 1 March 2014 per decree No. 37699-MEIC (20 May 2013) titled, "Elimination of the price fixing mechanism for rice and transition towards an alternative mechanism". Given the important implication of this decision to bring Costa Rica back into compliance with its domestic support commitments, a continued update on relevant developments will be appreciated.

a. Please provide the status/details of the new policy including steps taken toward its implementation

b. Specifically, what will be the role of the Government of Costa Rica, particularly in comparison to other organizations' role, in conducting the new rice policy?

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

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

2 www.sdpc.gov.cn

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Answer by Costa Rica

As announced at the last meeting of this Committee and in communication G/AG/GEN/110 dated 31 May 2013, the Government of Costa Rica has decided to eliminate the price support mechanism for rice as of 1 March 2014.

Once price ‑ setting for rice has been eliminated, private actors will be responsible for determining prices and other variables relating to the purchasing and selling of domestic rice (form of payment, place of payment, grades, etc.).

As always, the Government of Costa Rica will notify this Committee of any element of future policies on rice or other agricultural products, in compliance with its notification and transparency obligations.

Follow-up: Pakistan, the United States of America and Uruguay acknowledged Costa Rica's efforts in transparency. The United States of America registered continued interest in the implementation of the new policy, for example, whether producer organization was involved in setting rice prices, whether the authority gave producer organizations that right, and whether the consumers provided inputs into that process. As a major player in the Costa Rican market, Uruguay shared the US interest. The United States of America further thanked Costa Rica for the opportunity to informally hear more details on Costa Rica's policy.

1.7 India's national food security bill


Canada notes that there have been many reports in the Indian media as well as the international media regarding the National Food Security Bill, 2013.

a. Could India please clarify where the National Food Security Bill, 2013 is in India's legislative process and what are the next steps with respect to its implementation?

b. Could India please elaborate on the expected implications of the National Food Security Bill, 2013 on India's public stockholding programmes including on levels of procurement and spending?

c. Canada understands that the states and the federal government share responsibility for agriculture. Could India please describe the mechanisms that facilitate the interaction between the states and the federal government?

Answer by India

a. The National Food Security Act 2013 has completed the legislative process and it has been notified on 10 September 2013. The details are available on the website of Ministry of Consumers Affairs, Food and Public Distribution3.

b. It is premature to raise the issue at this stage when the act is yet to be implemented.

c. At the federal level, India has the Ministry of Agriculture and Ministry of Consumers Affairs, Food and Public Distribution. They coordinate with the respective state ministries on important issues relating to agriculture and food distribution.

Follow-up: Understanding that the national security bill was yet to be implemented, Canada proposed to discuss bilaterally with India the time for implementation. Canada thanked India for the information on the coordination between the states and federal governments, which Canada had some familiarity with given Canada's similar structure of agriculture departments. The United States of America also flagged its particular interest in this topic. Supported by the United States of America, Pakistan raised two follow-up questions: (1) although rice support price was announced in the beginning of this year, ahead of the sowing season, there was no procurement target on the website of the Ministry of Consumers Affairs, Food and Public Distribution for the upcoming harvest season of rice. Could India please indicate the target for the harvest season starting from October 2013?; (2) According to Pakistan's information, India may

3 http://fcamin.nic.in/

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have to liquidate some of the rice reserve to ensure storage is available for the new harvest. Could India please also identify the quantity of rice which is likely to be released in the market before the new harvest season?

1.8 Indonesia's stockholding programmes


The United States of America has additional questions related to questions under this topic resubmitted under the review of notifications below. Please provide updated information regarding new stockpiling programmes in Indonesia, e.g. for soybeans. Does Indonesia plan to expand these programmes further? If so, please provide information.

Answer by Indonesia

With regard to soybeans, Indonesia does not have any stockpiling programme in place. The existing regulation on soybeans is intended to ensure the efficient distribution (from farmers to consumers) and reasonable pricing of soybeans based on market forces. In recent months the price of soybeans in Indonesia increased by 30% from around IDR 8,000 to IDR 10,600. At present, Indonesia does not intend to expand this programme on soybeans to other agricultural products.

Follow-up: The United States of America recorded its likely intention of following up at a later stage with questions. Canada registered its interest on the programme.

1.9 The Republic of Korea's domestic support for pork and beef


Canada understands that in late 2012 the Ministry for Food, Agriculture, Forestry & Fisheries (MIFAFF) announced its intention to purchase about 2,000 tonnes of pork as part of a policy to support the price of pork. In addition, Canada understands that in approximately the same period MIFAFF announced its intention to provide a financial incentive to farmers to reduce the size of the Korean cattle herd in order to support the price of cattle.

As the Republic of Korea's most recent annual domestic support notification is for the period 2005‑2008 (G/AG/N/KOR/43) Canada seeks additional information on these measures.

a. Canada would ask the Republic of Korea to provide information as to the approximate cost of the measures for pork and beef.

b. Subsequent to this measure in the Korean pork market, has there been another policy by the Government of the Republic of Korea to support the price of pork? If so, Canada asks the Republic of Korea to provide details of this measure and its approximate cost.

c. Subsequent to the initial action in the Korean beef/cattle market, has there been another one by the Government of the Republic of Korea to support the price of beef? If so, Canada asks the Republic of Korea to provide details of this measure and its approximate cost.

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Answer by the Republic of Korea

In 2010 and 2011, due to the outbreak of foot-and-mouth disease (FMD), the Korean government was forced to eliminate 33.6% of domestic pigs and 4.2% of domestic cattle.

In response to the event, the Korean government introduced some temporary measures. However, the Republic of Korea finds that Canada's point that "the Korean government announced its intention to purchase about 2,000 tonnes of pork as part of a policy to support the price of pork" is not factual. The government did not undertake intervention purchases and rather implemented a temporary support programme for private pork processors to refrain from marketing their pork products.

Under the programme, the Korean government supported those private processors complying with the programme. This programme was implemented in late 2012 and early 2013, and was terminated when the pork market showed signs of stabilization.

Regarding cattle, the Korean government introduced a temporary programme to stabilize the price of cows in early 2012 and terminated it in mid-2013.

a. The approximate cost of the measure for pork was about 1 billion won. For cattle, the cost was 23.6 billion won.

b. and c. The Republic of Korea confirms that there has been no additional support programmes for pork and beef since then.

Finally, Korea will notify these measures to the WTO via notifications on domestic support in due course.

Follow-up: Canada informed the Committee of the fruitful bilateral discussion with the Republic of Korea.

1.10 Saint Lucia's domestic purchase requirements for poultry and pork


The United States of America resubmits its questions to Saint Lucia since no response has been received to date from questions posed at the March 2013 meeting. The United States of America has modified question e.

The United States of America understands, as indicated by industry sources, that Saint Lucia's domestic purchase requirements for poultry increased on 29 October 2012 from 25% to 33%. The United States of America also understands that there is a domestic purchase requirement of almost 67% for pork.

a. Please identify where these requirements are documented and published.

b. What is the legal basis (i.e., citing Saint Lucia's laws and regulations) for these domestic purchase requirements?

c. What is the legal basis (i.e., citing Saint Lucia's laws and regulations) for the increased domestic purchase requirement for poultry that was notified by letter to poultry importers on 29 October 2012?

d. Where was the domestic notification publicly published?

e. Does Saint-Lucia intend to submit notifications to the WTO related to poultry or pork market arrangements, domestic purchase requirements and/or import licensing requirements?

Answer by Saint Lucia

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

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1.11 Thailand's paddy pledging scheme


The United States of America regrets the continued non-response regarding questions on Thailand's Paddy Pledging Scheme, which were posed at the March and June 2013 Committee on Agriculture meeting (G/AG/W/109, AG-IMS ID 69031 and 69032 and G/AG/W/111, AG‑IMS ID 70011). The United States of America resubmits the questions and looks forward to holding an informal meeting in advance of the 26 September Committee on Agriculture in order to explore this issue more substantively.

a. When does Thailand expect to provide updated Table DS:1 and DS:2 notifications that include information regarding the paddy pledging scheme to the WTO?

b. Thailand previously stated that official information on rice pledging scheme could be found on the website of the Department of Internal Trade, Ministry of Commerce. The United States of America notes, however, that the Department of Internal Trade has, since 8 October 2012, discontinued the online publication of rice exports. The Government of Thailand also discontinued publishing the rice pledging programme progress report online. Please indicate when this function will be restored. The United States of America notes that the Bank for Agriculture and Agricultural Cooperatives (BAAC) reported revenue of 72 billion baht during 2012 from the Ministry of Commerce through sales of government-owned rice stocks. This revenue figure appears to indicate much larger sales than previously reported.

c. Is this a result of significant increase in sales between September and the end of the year? If not, what other factors resulted in the increased revenue?

d. Please confirm whether the Government of Thailand places any requirements or preferences on stocks that are released for either export or domestic use. If so, when and how does the Government of Thailand determine if sales are for export or the domestic market? What laws or regulations oversee/implement government practices in this area?

e. Regarding Thailand's response about its rice intervention price (G/AG/W/106, paragraph 18):

i. Please provide more details on how the intervention price is determined, including information explaining the meaning of an "appropriate profit reflecting farmer living cost."

ii. In 2012, what were the total expenditures on benefits to millers?

f. The United States of America appreciates Thailand's detailed response regarding the areas that are cultivated and harvested (G/AG/W/106, paragraph 20). The United States of America understands that high prices have encouraged farmers, particularly in irrigated areas, to shorten their growing season for each crop, so that multiple rice crops (using lower quality varieties) can be harvested.

i. Please describe further the trend in the number of crops per year farmers are harvesting and the types/quality of rice being planted.

ii. Please provide the quantities of rice procured by variety for crop years 2011 and 2012.

Answer by Thailand

a. The government of Thailand is now coordinating with all relevant agencies to verify data and information for accuracy. Once the process is completed, the up-to-date notifications will be submitted accordingly.

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b. General information (in Thai) on the rice pledging scheme is still available on the Department of Internal Trade's website.4 Detailed information on export and import of rice is available on the website of the Customs Department5 and that of the Thai Rice Exporters Association.

c. In principle, the government will release its stock during off-harvest season during the time of the highest world price so that there will be the minimum impact on the market. Such period normally lasts from August until October. In any case, at this point, Thailand cannot confirm the figures asserted by the United States of America.

d. Release of rice in the government's stock is governed by the government's rice release strategy framework. The cabinet of the Committee of the Rice National Policy is the authority determining a release of the government's stock of rice, which will be approved as a cabinet resolution. The determination is based on different factors, including current market situation, and production.

e. i. In determining the rice intervention price, the authority mainly considers income of

farmers, which is much lower than the minimum wage of other professions. This consideration follows the object and purpose of the scheme, that is, to help raise the living standard of farmers to maintain a sustainable livelihood.

ii. Thailand is uncertain about what the United States of America means by the term "benefits". Nevertheless, under the scheme, the government only compensates millers for operational costs in milling rice according to the Cabinet's resolution. Those operational costs cover quality inspection, milling expense, etc.

f. i. Thailand fully understands the US concerns. However, Thailand affirms that since the

Rice Pledging Scheme was first implemented, the production of Thai rice has not significantly changed. The average number of crops per year remains at two crops per year. This is because Thailand has its own resource limits, including cultivated land, irrigation, and labour.

ii. Thailand has a wide variety of geographies and local and traditional knowledge in each geography, as well as the research and development for rice varieties. As a result, there are more than 30 varieties of rice and some are grown in areas of small communities. The government currently does not collect information for quantities procured by variety.


Canada regrets that its questions to Thailand on its Paddy Pledging Scheme from the March 2013 meeting (G/AG/W/109, AG-IMS ID 69031) and the June 2013 meeting (G/AG/W/111, AG ‑ IMS ‑ ID 70017) remain unanswered. Canada re-submits the questions and looks forward to Thailand's expeditious response.

a. Could Thailand please provide additional details on this proposed programme?

b. How will Thailand manage its domestic support commitments while providing what Canada assumes to be significant amounts of domestic support to producers of rice?

Answer by Thailand

a. The information is not available as the rice pledging scheme is not yet concluded.

b. Thailand is a major producer and exporter of rice. Thailand would like to emphasize that although the scheme aims to improve the living standard of farmers, the government always takes into account all the interested parties, including millers and exporters. Thailand has honoured and will continue to honour its commitments under the WTO obligations. With all the interest of the public, media, and other stakeholders, the

4 www.dit.go.th 5 http://www.customs.go.th

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government is now more than ever aware of the obligations under the WTO and tries to improve the work with regard to transparency of the scheme.

Follow-up: Canada regretted the non-availability of the requested information. Australia, Pakistan and the United States of America appreciated Thailand's commitment to transparency and openness to discussions in also informal settings. Australia noted its strong systemic and commercial interest in this issue and expressed concern on the impact of Thailand's stockpile on the international market. Therefore Australia reserved the right to follow up on how the stockpile would be drawn down and how the implementation of the paddy pledging scheme would continue. Pakistan shared Australia's concern. In its view, any price distortion in the international market caused by subsidized stocks would largely jeopardize the livelihood and the food security of millions of poor rice farmers in Pakistan whose lives depended on rice cultivation and exportation. In this connection, Thailand was encouraged to share continuously information regarding the position and releases of the rice stock. The European Union reiterated its concern about the operation of the Thai rice stock policies both from a systemic point of view and the market point of view. It further recalled the suggestion at the previous meetings that Thailand should prepare a draft notification.

1.12 Turkey's destination of wheat flour sale


The United States of America understands that the Turkish Grain Board (TMO) sells wheat to domestic flour mills below acquisition costs. Please provide information on the destination, whether for export and/or for the domestic market, of the flour made from such wheat sales.

Answer by Turkey

Turkey undertook to provide a response at a later stage.

Follow-up: The United States of America appreciated the opportunity to discuss the issue bilaterally with Turkey. Australia, the European Union and the Philippines expressed interest in Turkey's response and requested Turkey to share the data with the Membership. The Philippines reported to the Committee about the antidumping case on Turkish wheat flour it launched in its capital, which still remained as a technical process at this stage.

1.13 Ukraine's state regulation of production and realization of sugar


A news release dated 19 April 2013 from the Press Service of the Ministry of Agrarian Policy and Food of Ukraine notes that a draft law which, among other things, notes that "… minimal prices for sugar beets and A quota sugar will be abolished…".

a. Could Ukraine please provide the Committee with an update on the status of this new draft law?

b. Could Ukraine indicate if the removal of the administered prices for sugar beets and A quota sugar take effect immediately upon passage of the new law?

Answer by Ukraine

In accordance with the law of Ukraine "on state regulation of production and sale of sugar", domestic sugar production supplied to the domestic market in Ukraine is limited by quota "A".

In order to guarantee and ensure a stable domestic market of beet sugar from domestic production, it is proposed in the draft law to keep the quota "A" for the production and supply of sugar in the domestic market. Quota "A" is a governmental tool based on market principles with proper administration that allows regulating the domestic sugar market, by legalizing and disciplining behaviour of players in the domestic sugar market.

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The Ministry of Agrarian Policy of Ukraine has prepared the draft law of Ukraine "On Amending the Law of Ukraine 'On state regulation of production and sale of sugar' (the production and supply of sugar to the domestic market)" (registration number 2856 from 18 April 2013) (hereinafter - the Draft Law). The draft Law is aimed at:

− maintenance of the production capacity of the sugar industry;

− formation of pro-market investment, credit and pricing policies for factory beets and sugar;

− settlement of the question of sale of sugar produced over quota "A";

− preservation and improvement of the quoting mechanism for manufacturing and supplying on the domestic market of sugar (quota "A");

− abolition of minimum prices for sugar beets and sugar quotas "A".

The final provisions of the draft law provide that the law shall enter into force on the day following the day of its publication. With this, it is foreseen that within three months from the date of enactment of this draft law the Cabinet of Ministers of Ukraine will bring the relevant regulations into conformity with the law in force. Therefore, the enacted law will be implemented through the provisions of subordinate legislation issued by the Cabinet of Ministers of Ukraine.

1.14 United States of America's Refined Sugar Re-export Program


The United States Department of Agriculture (USDA) has recently undertaken several initiatives to avoid processors forfeiting sugar offered as collateral to USDA when securing loans under the sugar programme. Amongst these initiatives, the Farm Service Agency (FSA) modified the Refined Sugar Re-export Program (RSRP) which resulted in two tranches of sugar being purchased by the Commodity Credit Corporation (CCC) which was subsequently provided to RSRP participants in exchange for a minimum of 2.5 credits per metric tonne (MT) of sugar provided. There were also temporary waivers that permitted licensed refiners to transfer programme sugar from their license to another refiner's license through until 30 September 2013; that increased the license limit for cane sugar refiners from 50,000 MT of credits to 100,000 MT through until 31 December 2014; and that extended the timeframe to make required exports or sugar transfers from 90 days to 270 days. To date, these actions have resulted in approximately 106,742 MT of sugar being purchased by the CCC and then exchanged for 311,264 RSRP credits. USDA announced a third tranche of exchanges on 12 September 2013, for licensed refiners to exchange license credits under the RSRP for an additional 77,451 MT of CCC-owned sugar. Canada has concerns that the modifications to the RSRP appear to provide export subsidies on sugar prohibited under the Agreement on Agriculture.

a. Would the United States of America provide data on:

i. the current and expected sugar surplus in the United States of America;

ii. the amount of sugar outstanding under loans that could be forfeited;

iii. the amount of sugar currently held by CCC; and

iv. the total amount of debits and total amount of credits outstanding in licensee's accounts.

b. The RSRP normally has a neutral impact on the supply of sugar in the US market (i.e., one tonne of raw imports to 1 tonne of exports of refined sugar or equivalent in sugar-containing products). Would the United States of America explain how the changes to the RSRP, including the temporary waivers and increase to the exchange ratio:

i. has impacted volumes of raw sugar imports into the United States of America;

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ii. has impacted volumes of exports of refined sugar (or equivalent in sugar-containing products) from the United States of America;

iii. is expected to impact these volumes in the future?

c. How is the CCC compensated for the sugar it provides to RSRP participants?

Answer by the United States of America

a. i. While USDA does not publish an estimate of the sugar surplus, current projected US

sugar ending stock levels are sufficiently high to result in US sugar prices below support levels.

ii. As of 16 September 2013, the amount was 526, 529 MT. This amount changes daily.

iii. The amount is 77,451 MT (170,750,000 pounds) on 16 September 2013.

iv. As of 16 September 2013 the sum of debits and credits of the seven re-export licensees was approximately zero.

b. i. The exchanges of CCC sugar for Refined Sugar Re-export Program (RSRP) credits

may reduce potential RSRP imports, which might have occurred in the next 1 -2 years.

ii. The ten-year average for US exports of sugar is approximately 216,000 MT per year and the current estimate for 2012/13 is approximately 245,000 MT.

iii. The exchanges of CCC sugar for RSRP credits may reduce RSRP imports, which might have occurred in the next 1-2 years. Licensees are free to adjust their imports according to market conditions and the credits do not (i.e., never) expire, therefore it is not possible to specify how much imports in any specific year may be reduced.

c. In exchange for the sugar, CCC received RSRP credits.

Follow-up: Australia and the European Union registered their interest and intention to follow up on the questions.

2 POINTS RAISED IN CONNECTION WITH INDIVIDUAL NOTIFICATIONS

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

2.1.1 Chile (G/AG/N/CHL/42)

AG-IMS ID 71002: Question by Australia - Tariff quota fill

Further to a similar question in 2011 (paragraph 12 of G/AG/W/86 refers), Australia notes that Chile has notified there were no imports within its tariff quota for beet sugar or other sugar in 2012 (tariff lines 1701.9920 and 1701.9990). Could Chile provide advice as to whether its previous explanation continues to apply?

Answer by Chile

The previous explanation (AG-IMS ID 62010) continues to apply.

2.1.2 El Salvador (G/AG/N/SLV/38, G/AG/N/SLV/40, G/AG/N/SLV/41)

AG-IMS ID 71026: Question by the European Union - Transparency issues

The commitments of El Salvador comprise eleven bound tariff quotas, while the notification for 2011 and 2012 includes only one of them. The European Union would like to request El Salvador to include all bound tariff quotas in the notifications as a matter of transparency. This request was also raised at the 66th meeting of the Committee in June 2012 (paragraph 23 of G/AG/W/96 refers). The European Union would like to

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repeat this transparency related concern since the new notification under review also lacks information on ten bound tariff rate quotas.

Answer by El Salvador

El Salvador undertook to provide a response at a later stage.

AG-IMS ID 71003: Question by Australia - Tariff quota fill

Australia notes the fill rate for El Salvador's one operational TRQ (for cheddar, in blocks or in bars) was around 23% in 2012. Australia further notes this fill rate has remained low for a number of years. Could El Salvador please clarify the reasons for the low utilisation of this TRQ, especially given that the fill rate stood at over 83% in its 2006 notification (G/AG/N/SLV/27).

If this relates to arrangements under free trade agreements, Australia would be grateful if El Salvador could explain what percentage of its total imports of the relevant products in 2012 were covered by concessionary treatment under a free trade agreement arrangement.

Answer by El Salvador

El Salvador undertook to provide a response at a later stage.

2.2 SPECIAL SAFEGUARDs (TABLES MA:3 to MA:5)

2.2.1 European Union (G/AG/N/EU/13)

AG-IMS ID 71004: Question by Australia - Transparency issues

Could the European Union confirm whether any SSGs were invoked during marketing year 2011/2012. Australia notes that this question is primarily in the interests of enhanced transparency. To this same end, Australia requests the European Union clearly indicate where an SSG was invoked by filling in columns 3 and 4 of the relevant notification.

Answer by the European Union

The European Union thanks Australia for this suggestion on enhanced transparency. The European Union is willing to engage in transparency related discussions where this issue can be addressed among others.

As indicated in the notification: the SSG based on volume was calculated but not made operational on fruit and vegetables; the SSG based on price for sugar, poultry and eggs was operational and the additional duty was applied as relevant according to the value of the product imported.

2.3 DOMESTIC SUPPORT COMMITMENTS (TABLE DS:1)

2.3.1 Argentina (G/AG/N/ARG/31)

AG-IMS ID 71005: Question by Australia - General services: infrastructural services

Can Argentina confirm that its spending on infrastructure services excludes the provision of on-farm facilities?

Answer by Argentina

Argentina confirms that the general infrastructure services notified in document G/AG/N/ARG/31 for the agricultural years 2006/2007, 2007/2008 and 2008/2009 fully comply with paragraph 2(g) of Annex 2 of the Agreement on Agriculture. The outlays

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notified in that document represent expenditure for the provision or construction of capital works only, which excludes the provision of on‑farm goods or services.

The three programmes corresponding to the Special Fund for Tobacco have the following objectives:

i. to disperse hail clouds in the southern part of the province of Jujuy following their detection by radars located at the operations centre;

ii. to improve the municipal effluent system in the provinces of Misiones, Chaco, Corrientes, Tucumán and Jujuy; and

iii. to reduce the environmental impact of production activities in above‑mentioned provinces through the use of appropriate practices.

The programme for the rehabilitation of irrigation and drainage systems in Chaco, Chubut, Mendoza, Neuquén and Tucumán forms part of the Provincial Agricultural Services Programme (PROSAP). The programme seeks to overcome development constraints in these provinces and, in particular, improve the management of provincial irrigation and drainage systems through the rehabilitation of channels and the construction of drainage networks, etc.

2.3.2 Brazil (G/AG/N/BRA/30)

AG-IMS ID 71037: Question by the United States of America - Transparency issues (including Table DS:2)

The United States of America notes that Brazil indicated that its domestic food aid programme was modified in 2009 under Law 11,947 of 16 June 2009 and resulted in the expansion of the programme (and expenditures) (G/AG/W/111, AG-IMS ID 70053). The United States of America notes that Brazil has not provided a Table DS:2 for this modified exempt programme. Does Brazil intend to provide a Table DS:2 for this programme and any other modified or new exempted programmes?

Answer by Brazil

Brazil will soon provide a Table DS:2 notification for this programme.

Follow-up: The United States of America was pleased to hear that a Table DS:2 notification would be submitted.

AG-IMS ID 71036: Question by the United States of America - Public stockholding for food security purposes

The United States of America notes that Brazil indicated (G/AG/W/111, AG-IMS ID 70057 and 70001) that the large increase in expenditures for the PAA was due to the "incorporation of data of the Ministry of Social Development".

a. Please explain if there was a change in the programme in 2009/10 that resulted in this new data or if the programme remains unchanged, but with more accurate budgetary figures?

b. If the latter, does Brazil plan to amend its past notifications?

Answer by Brazil

a. The programme remains unchanged. The new data presented simply constitutes more accurate budgetary figures.

b. Brazil does not plan to amend its past notifications, since the figures notified were correct. The 2009/2010 notification merely included a budgetary source which was not available before.

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2.3.3 Chile (G/AG/N/CHL/40)

AG-IMS ID 71020: Question by Canada - General services: research

Canada notes that there was a 33% increase in expenditures under "research and development centres" from Ch$10,763,377,000 in 2010 (G/AG/N/CHL/37) to Ch$14,320,521,000 in 2011. Could Chile elaborate on the reasons for this substantial increase in support to "Research and development centres"?

Answer by Chile

First, it should be noted that notifications are made in each year's currency; therefore, to make a comparison with the 2010 amount, an inflation correction factor issued by the treasury department must be applied. In this particular case, the factor is an increase of 3.3%.

Upon applying this correction, the 2012 budget effectively increased by 8.2%. During implementation for the year 2011, as per ANNEX 1 of this document, a budget amendment was made whereby $1,674,337 thousand was added to the initial budget to finance mandatory retirements in the institution. This resulted in a transfer of $14,320,521 thousand.

AG-IMS ID 71009: Question by Australia - General services: extension and advisory services

Could Chile please confirm that its support for irrigation and energy efficiency pre-investment programmes does not involve direct payments to producers or processors?

Answer by Chile

The payments referred to in Chile's notification are not made directly to the producers or processors since they concern payment for advisory services which goes directly to the consultant concerned.

Thus, these are direct financing programmes for advisory services which are considered to fall within the Green Box, in accordance with the provisions of the Agreement on Agriculture.

AG-IMS ID 71038: Question by the United States of America - Classification of measures

The United States of America appreciates Chile's consistent and timely submission of domestic support notifications to the Committee. Similar to Chile's 2010 Table DS:1 notification (G/AG/N/CHL/37), Chile notified its agricultural insurance programme through Measure Type 2.56 direct payment to producers (G/AG/N/CHL/40). In Chile's response to a question (AG-IMS ID 66047 of G/AG/N/CHL/37) about this notification from the European Union, it stated that "Chile considers agricultural insurance to be consistent with the considerations in paragraph 5 of Annex 2, in particular the criteria set forth in paragraph 6(b) to (e)".

a. Please confirm that as in paragraph 6(e), "no production shall be required in order to receive such payments" (i.e., farmers would receive payment for insurance premiums regardless of whether or not anything is produced).

b. Please confirm how the subsidy benefit is transferred to the producer (i.e., a direct payment to the producer or indirectly via payments to insurance companies to reduce the premium rate for producers).

c. Please provide information on the level of production or income loss required for a producer to receive an insurance payment.

d. Further, please explain how the income loss is calculated?

6 Paragraph 5 of Annex 2 under the Agreement on Agriculture

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Answer by Chile

e. In the event of loss covered by the agricultural insurance policy, farmers will recover their direct production costs, i.e. the working capital invested in fruit growing or production. This insurance affords farmers greater financial stability and solvency, boosts their access to credit, and enables them to pursue their farming activities, while protecting their work and families.

Agricultural insurance provides coverage against adverse weather conditions that most frequently cause damage to annual crops and fruit production in Chile, such as drought in rain‑fed areas, excessive and unseasonable rainfall, frost, high winds, snow and hail.

f. Subsidy conditions

The general subsidy will cover 50% of the net premium, plus a fixed amount of UF 1.50 per policy up to a ceiling of UF 80 per farmer per crop year.

Until 30 June 2013, a special subsidy will be granted for cereal crops (rice, oats, barley, rye, maize, wheat, and triticale), equivalent to 75% of the net premium, plus a fixed amount of UF 0.60 per policy up to the same ceiling of UF 80 per farmer per crop year.

Insurance companies undertake to issue the respective invoices and credit notes in the policyholder's name for the full premium, including the subsidized part thereof.

g. This is an insurance that provides climate‑risk coverage in the event of production loss. The insurance company evaluates the adverse weather event, certifies that it did indeed occur, and determines which insured area has been affected.

Under no circumstances is the insurance linked to the policyholder's loss of income.

h. The insurance does not cover loss of income but rather the damage caused by an event affecting an insured crop. Farmers will recover their direct production costs, that is, the working capital invested in fruit growing or production.

Follow-up: The United States of America enquired whether Chile would classify this programme under paragraph 8 (payments for relief from natural disasters) of Annex 2 in the Agreement on Agriculture.

2.3.4 Indonesia (G/AG/N/IDN/34)

AG-IMS ID 71039: Question by the United States of America - General services: other

The United States of America resubmits its questions to Indonesia since no response has been received to date from questions posed at the June 2013 meeting (G/AG/W/111, AG-IMS ID 70025). In the years covered by Indonesia's prior notifications (G/AG/N/IDN/30 and G/AG/N/IDN/34), what programmes has Indonesia administered that subsidize loans taken out by farm producers (for instance, the Kredit Ketahanan Pangan—Food Security Credit)?

a. What was the amount of government spending to subsidize the loans? How many farmers received the loans?

b. Have any of the loans been forgiven?

c. Please indicate how such measures are accounted for in Indonesia's recent notifications.

Answer by Indonesia

In 2012, the amount of government spending to subsidize the loans was IDR 601 billion or equivalent to USD 52.4 million. These loans are given to farmers with the aim of ensuring food and energy security while at the same time improving farmers' welfare. At present, no loans have been forgiven.

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AG-IMS ID 71031: Question by the United States of America- Public stockholding for food security purposes

The United States of America notes that Indonesia states that stocks are procured at administered prices, which take market prices into account (G/AG/W/111, AG-IMS ID 70026). The United States of America also notes that Indonesia has not provided a Supporting Table DS:4 or Supporting Table DS:5 to account for the use of administered prices per footnote 5 of paragraph 3 of Annex 2 of the Agreement on Agriculture. Further, the United States of America understands Indonesia's response to part (b) of AG-IMS ID 70031 to state that no administered price was reported after 2001 due to Indonesia's procurement being for buffer stock operations. This appears to be inconsistent with the aforementioned footnote. Please explain and clarify these policies and notifications.

Answer by Indonesia

Indonesia is in the process of preparing the Supporting Table DS:4 and Supporting Table DS:5 and these will be notified in due time.

With regards to administered priced during 2001-2004, Indonesia will submit a revision to its notification in due time.

AG-IMS ID 71040: Question by the United States of America- Direct payments: payments for relief from natural disasters

The United States of America notes that the measure reported as a direct payment for relief from a natural disaster, as described in response to AG-IMS ID 70029 and 70071 in G/AG/W/111 compensates producers for a production loss due to a natural disaster with payments-in-kind (rice). Further, such payments have no specific conditions for payment.

a. How does this measure meet the criteria set out in paragraph 8(a) of the Annex 2 of the Agreement on Agriculture, which requires producers to sustain a loss of more than 30% to receive payment?

b. Are payments limited to agricultural producers or available to all residents in the affected disaster area?

c. If the latter, could Indonesia explain why this measure is not notified as a domestic food aid programme?

Answer by Indonesia

At present, Indonesia is in the process of formulating the specific regulation with regards to payment for relief from a natural disaster given to producers. Indonesia will ensure that this regulation is consistent with its WTO obligations.

With regards to eligibility, the payments are available to all residents in the affected disaster area and this measure will be notified as domestic food aid programme.

2.3.5 Jamaica (G/AG/N/JAM/9, G/AG/N/JAM/10)

AG-IMS ID 71027: Question by the European Union - General services: extension and advisory services

a. Jamaica's expenses for general services "extension and advisory services" have decreased by more than 40% according to the 2009 notification compared to the previous notification for 2008/09. Could Jamaica explain the reasons behind this major decrease?

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b. In 2009 Jamaica discontinued to notify for fiscal years and commenced to notify for calendar years.

i. Could Jamaica explain the reasons behind this change of periods?

ii. How has the risk of double counting been solved?

Answer by Jamaica

Two revised domestic support notifications were circulated on 28 October: G/AG/N/JAM/9/Rev.1 that covers fiscal years 2007/2008 and 2008/2009 and G/AG/N/JAM/10/Rev.1 that covers fiscal years 2009/2010, 2010/2011 and 2011/2012.

a. With regard to the 40% reduction in the figure for "extension and advisory services" for 2009/2010 relative to the notification for the 2008/2009 period, this was due to an error in the process of tabulation from the Budget of Expenditure for the 2009/2010 fiscal year. This error has been corrected and is reflected in the revised notification. For ease of reference, the correct figures are as follows:

2008/2009 - US$22.7 million 2009/2010 - US$19.2 million

The exchange rates for the period 2007/2008 and 2008/2009 were also incorrect and these too have been corrected and are reflected in the revised notification.

b. i. All figures are taken from the Ministry of Agriculture and Fisheries' budget of

expenditure which is based on the fiscal period 1 April to 31 March each year. The figures in the notification are therefore based on the fiscal period and not the calendar year. To report the notifications for the periods 2009/2010, 2010/2011 and 2011/2012 as calendar years was therefore an unfortunate error. The figures have been corrected in the revised notifications.

ii. The Ministry of Agriculture and Fisheries is mindful of the possibility of double counting in the tabulation of the data for preparation of the relevant notifications. Every effort is therefore made to prevent such an occurrence. In the latest review exercise, checks were again made to ensure there was no incidence of double counting.

AG-IMS ID 71041: Question by the United States of America - General services: inspection services

The United States of America appreciates Jamaica's notification to update the Committee on the relevant applied domestic support policies of Jamaica. In Supporting Table DS:1 (G/AG/N/JAM/9 and G/AG/N/JAM/10), it is noted that expenses related to plant quarantine nearly doubled in 2008/2009 as compared to all other years notified.

a. Please provide information about changes in plant quarantine programmes that caused this budgetary increase.

b. Additionally, is there a rationale for not providing the general DS:1 table characterizing the level of non-exempt support?

Answer by Jamaica

a. The figure enumerated for "Plant Quarantine" for the 2008/2009 fiscal year was an error which was due to incorrect tabulation of the figures from the Budget of Expenditure for that fiscal year, as well as the use of the incorrect exchange rate. These errors have been corrected and reflected in the revised notification G/AG/N/JAM/9/Rev.1.

b. It should be noted that Jamaica does not have any non-exempt support measures in place and Jamaica did not include any of these measures in the Schedule of Commitments. Consequently, only Green Box measures are undertaken by Jamaica.

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Follow-up: The United States of America thanked Jamaica for submitting the original notification in order to give Members an opportunity to review it. Supported by the European Union, the United States of America further praised Jamaica's willingness to revise the notification. With respect to the question AG-IMS ID 71041, the United States of America clarified that the purpose of raising the question was to encourage Jamaica to supply a Table DS:1.

2.3.6 Nicaragua (G/AG/N/NIC/36)

AG-IMS ID 71042: Question by the United States of America - Classification of measures

The United States of America appreciates Nicaragua's notification (G/AG/N/NIC/36) to update the Committee on the relevant applied domestic support policies. The United States of America notes that Nicaragua has previously stated (AG-IMS ID 69067) that the general objective of the Food Production Program (PPA) is to eradicate hunger, chronic malnutrition, extreme poverty, and unemployment in poor rural households through a quantitative and qualitative increase in production and consumption proteins. This is accomplished through the issuance of vouchers, which the government supplies animals, on-farm infrastructure, seeds, plants and plant materials for both animal and human consumption and training/technical assistance. The programme appears to have multiple dimensions, which include input subsidization and training/extension services for poverty-stricken households that are captured across a variety of exempt domestic support categories with the ultimate consequence being increased food consumption, but not the direct provision of food for consumption or direct subsidization of food purchases.

a. Could Nicaragua explain why this programme may not be better captured under paragraph 2 of Annex 2 and/or under Article 6.2 of the Agreement on Agriculture?

b. Additionally, the cover note to this notification explains that during the reporting year in question all support is of the exempted character. Is there a rationale for not providing the general DS:1 table characterizing the level of non-exempt support?

Answer by Nicaragua

a. Since January 2007, Nicaragua has been notifying the Food Production Programme (PPA) under Supporting Table DS:1 – Domestic food aid. The main purpose of the programme is to eradicate hunger, chronic malnutrition, extreme poverty and unemployment by means of a quantitative and qualitative increase in production and the consumption of protein foods.

Nicaragua considers that the PPA meets the basic criteria set out in Annex 2, paragraph 1(a) and (b), to the Agreement on Agriculture. In Annex 2, the programme has been classified under Government Service Programmes, paragraph 4 – Domestic food aid, which specifies that the provision of domestic food aid to sections of the population must be linked to nutritional objectives, in the form of direct provision of food or the provision of means to allow the recipients to buy food.

The PPA grants means of production to be managed and reproduced by the beneficiaries, namely women. It does not directly involve food for consumption. Instead, the beneficiaries receive a package of goods designed to enable them to produce food for their families in a sustainable manner. They are also given technical assistance in various areas including gender, animal health and feed, cooperative associations, environment and marketing.

In view of the foregoing, Nicaragua considers that the most appropriate provision for notifying the programme is paragraph 4, and not either of the subparagraphs of paragraph 2 – General Services, of Annex 2.

As regards the concern that Nicaragua might notify the PPA under Article 6.2 – Domestic Support Commitments of the Agreement on Agriculture, Nicaragua emphasizes once again that the main purpose of the programme is not to provide assistance to encourage agricultural and rural development in general, but to eradicate hunger, and combat

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chronic malnutrition, extreme poverty and unemployment in poor rural households through an increase in protein foods. Therefore, it is not necessary to notify the PPA under Article 6.2.

b. Nicaragua does not consider it necessary to provide the DS:1 Table according to document G/AG/2, page 11 of the English version, the last paragraph of which specifies that "[w]here no support exists, a statement to this effect should be made". This indicates the consistency of paragraph 2 of notification G/AG/N/NIC/36, which reports that the only domestic support measure applied by Nicaragua is classified in the exempt category.

2.3.7 Saint Vincent and the Grenadines (G/AG/N/VCT/3)

AG-IMS ID 71043: Question by the United States of America - Transparency issues (including Table DS:2)

The United States of America appreciates St. Vincent and the Grenadines' recent domestic support notification updating the Committee on the relevant applied agricultural policies. The provision of the type of "investment" support outlined in Supporting Table DS:1 can represent important policy steps toward strengthening infrastructure for agricultural producers, which is increasingly being highlighted as essential to expanding any domestic agricultural system's capacity to produce more and/or more efficiently.

a. Please provide the total value of agricultural production relative to the notified support.

b. Also, the cover note to this notification explains that during the two years in question all support is of the exempted character. Is there a rationale for not providing the general DS:1 table characterizing the level of non-exempt support?

Answer by Saint Vincent and the Grenadines

Saint Vincent and the Grenadines undertook to provide a response at a later stage.

2.3.8 Chinese Taipei (G/AG/N/TPKM/106)

AG-IMS ID 71006: Question by Australia - General services: infrastructural services

Chinese Taipei's spending on "Infrastructural services: Planning and construction of irrigation/drainage facilities and rural roads, land consolidation for agricultural sector and establishment of rural community" increased from NT$9,119.81 million in 2008 to NT$16,856.92 million in 2010. Can Chinese Taipei please confirm that this expenditure relates to capital works only, especially that component described as for the "establishment of rural community". Can Chinese Taipei also please confirm that these payments do not extend to subsidized provision of on-farm facilities.

Answer by Chinese Taipei

The increase in spending on infrastructural services from 2008 to 2010 can be attributed to reconstruction works after the damage caused by Typhoon Morakot in August 2009, and public infrastructure works needed for the inauguration of the Taipei International Flora Exhibition in November 2010.

These expenditures, which included hydraulic and drainage facilities, water and soil conservation and prevention, urgent repairs to rural roads, market facilities, and infrastructure works associated with environmental programmes, were on capital works only, and did not include subsidies for on-farm facilities.

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AG-IMS ID 71021: Question by Canada - General services: infrastructural services

Under the general services category, payments for infrastructural services have increased significantly from year to year, from NT$ 9,119.81 million in 2008 to NT$13,265.68 in 2009 to NT$16,856.92 million in 2010, in other words, 45% and 27%, respectively. Could Chinese Taipei elaborate on the reasons for these increases each year?


The increases in spending on infrastructural services from 2008 to 2010 are mainly attributable to reconstruction works after the damage caused by Typhoon Morakot in August 2009. These expenditures, which included hydraulic drainage facilities, water and soil conservation and prevention, urgent repairs to rural roads, debris flow control engineering in the disaster areas, and market facilities and infrastructure works associated with environmental programmes, were on capital work only, and did not include subsidies for on-farm facilities, and continued until 2011.

Expenditures on soil and water conservation and prevention outside the disaster areas were also higher during the period. Furthermore, substantial public infrastructure works were needed in association with the inauguration of the Taipei International Flora Exhibition in November 2010.

AG-IMS ID 71007: Question by Australia - Market price support

With regard to its domestic support commitments notified in Supporting Table DS:5, can Chinese Taipei please advise how and when its planned purchase of rice is notified each year in support of its approach in calculating market price support on the basis of actual purchases rather than total value of production?


According to paragraph 8 of Annex 3 in Agreement on Agriculture, the domestic support for rice is calculated using the gap between a fixed external reference price and the applied administered price multiplied by the quantity of production eligible to receive the applied administered price.

Regarding the quantity of production eligible to receive the applied administered price, the planned purchases of rice are made only from farmers in certain areas, and the rice has to be of a certain specified quality. Those farmers not qualified or whose quality of rice does not meet the set criteria are not eligible to join the programme.

Follow-up: Given Chinese Taipei's response that rice was purchased from certain areas and of a particular quality, Australia questioned Chinese Taipei if this criteria was published somewhere.

AG-IMS ID 71023: Question by Canada - Non-product-specific AMS

Canada notes that in each year a substantial amount of the non-product specific support reported was attributed to payments under the "Agricultural Fertilizer Price Difference Subsidy" which makes its first appearance in 2008.

a. Could Chinese Taipei provide more details regarding the methodology used to determine the preferential price for fertilizer for agricultural use?

b. Is this preferential price for fertilizer for agricultural use determined on an annual basis?


The preferential price of buying fertilizer for farmers is determined by the difference between the ex-factory price and the subsidy by the government. The ex-factory price is in accordance with the international price of raw materials, and the ex-factory price in

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September 2004 is used as the baseline. Part of the rise in the ex-factory price from the baseline is subsidised by the government.

2.3.9 Zambia (G/AG/N/ZMB/8)

AG-IMS ID 71008: Question by Australia - Public stockholding for food security purposes

Can Zambia please confirm that its government food security stockholdings for purposes are made at market prices?

Answer by Zambia

Zambia undertook to provide a response at a later stage.

2.4 NEW OR MODIFIED DOMESTIC SUPPORT MEASURES (DS:2)

2.4.1 Uruguay (G/AG/N/URY/52)

AG-IMS ID 71010: Question by Australia - Direct payments: payments under environmental programmes

In relation to the "development and climate change project", Australia seeks further advice about the basis of Uruguay's classification of this programme, particularly in relation to financial assistance to encourage investment in production systems. What are the specific conditions that are required to be met under the government programme and what measures are in place to ensure that payment is limited to the extra costs in complying with the government programme?

Answer by Uruguay

The development and climate change adaptation project is a domestic support measure that will not have, or will have at most minimal, trade-distorting effects or effects on production. It is a publicly funded government programme financed by a World Bank loan to the Uruguayan Government. It will not have the effect of providing price support to producers. The project was classified as a "payment under environmental programmes" since it meets the following criteria laid down in Annex 2 to the WTO Agreement on Agriculture: "(a) Eligibility for such payments shall be determined as part of a clearly-defined government environmental or conservation programme and be dependent on the fulfilment of specific conditions under the government programme, including conditions related to production methods or inputs. (b) The amount of payment shall be limited to the extra costs or loss of income involved in complying with the government programme".

The development objective of the project (ODP) is to support Uruguay's efforts aimed at encouraging producers to adopt improved environmentally sustainable and climate-smart agricultural practices. This objective will be achieved by developing and implementing instruments that provide producers with critical and timely information for the adoption of improved on-farm natural resource management. Producers will also receive technical and financial assistance to encourage investment in their production systems, so as to reduce risks and make them more resilient to extreme climatic events. In a strategy aimed at producing triple wins for the country, the Ministry of Agriculture, Livestock and Fisheries' (MGAP) leadership is promoting an innovative approach to the management of natural resources and reduction of the impact of climate variability in agriculture while improving agricultural competitiveness. Without such an integrated approach, climate change and the anthropogenic consequences for the country's natural resources could result in accelerated degradation. In this context, the MGAP has requested World Bank assistance to prepare and implement the proposed project in order to contribute to its climate change adaptation and mitigation priorities. The project intends to make agriculture in Uruguay more productive and more sustainable as a key to taking the first steps along the "green growth" path. The proposed components will support policies and actions geared towards making the environment a potential source of growth on the basis of efficiency, innovation and resilience to climate variability and change. In addition, the proposed project will support the

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deployment of a climate-smart agriculture approach, which is a core component of such growth, by promoting agricultural systems that can enhance productivity, increase sustainable development and resilience, and support low-carbon growth. This represents one element of an integrated results-oriented approach that the Bank has developed through its partnership with the MGAP, as described below.

Component 1 will establish a system to integrate, synthesize, and generate critical and timely information in relation to natural resource management, short- and medium-term climate forecasts, and potential long-term changes and impacts. This includes: (a) facilitating the integration of dispersed agricultural production, natural resource management and new climate-related information in an online state-of-the-art platform tailored to the needs of different users including producers, advisory service providers, rural insurance and agricultural research and policy institutions; (b) improving the methodologies and spatial resolution of seasonal climate forecasts and establishing climate early warning systems; (c) improving real time monitoring of climate, vegetation and other variables relevant to agriculture; (d) simulating and evaluating the expected impacts of introducing different adaptation technologies and policies; (e) organizing training programmes for staff of the General Directorate for Renewable Natural Resources (RENARE), the National Institute of Agricultural Research (INIA) and the National Meteorological Directorate (DNM), producers and advisory service providers on the use of the agriculture information and decision-making support system; and (f) providing feedback and recommendations to improve the targeting of MGAP assistance to producers, in particular for the investments financed by subprojects.

This Component seeks to achieve key outcomes such as: (a) a public integrated agriculture information and decision-making support system accessible to users from the public and private sectors; (b) expanded overall information on the sector to enable the MGAP to improve the targeting of its future programmes, including activities financed under Component 2 of the project; (c) identification of vulnerabilities and potential opportunities ensuing from climate variability for natural resource management and agricultural production systems; (d) wider use of insurance to cover climatic risks; and (e) more extensive exchange of Uruguayan experiences relating to climate change mitigation and adaptation measures with other countries (mainly through South-South exchanges).

The MGAP Directorate-General of Rural Development (DGDR) will implement and provide finance for the implementation of Component 2 projects including demand-driven subprojects consisting of investments and technical assistance to: (i) reduce farm vulnerability to extreme climatic events; (ii) improve farm productivity and sustainability; (iii) increase the availability of water resources for irrigation and livestock consumption; (iv) promote the adoption of an integrated approach to natural resource management practices in agriculture and livestock production systems, including improved water use efficiency and generation of biodiversity benefits in natural pastures; and (v) promote the adoption of energy efficiency measures and the generation of cost-effective and clean biomass energy in the agricultural sector. Investment proposals will be submitted by individual producers or groups of producers and producers' organizations.

The key outcomes of this Component are: (i) the adoption of integrated natural resource management practices and adaptation measures, with particular emphasis on increased on-farm availability of water and improved water resources management, so as to achieve greater long-term sustainability of production systems and improve their resilience to extreme climatic events; and (ii) the implementation of pilot investments aimed at mitigating emissions and increasing the use of biomass for energy generation.

Component 3 will finance activities to strengthen the capacity of: (a) agricultural producers (regardless of farm size) and technical staff of advisory service providers to adopt integrated natural resource and water management practices; and (b) the MGAP, specifically RENARE, to implement its natural resource management programmes and climate change strategy in the agricultural sector, including: (i) the development of the MGAP's online services relating to land and water use, conservation and management; (ii) the updating of RENARE's soil mapping and cartography; (iii) the provision of technical assistance to improve Uruguay's legal and policy framework and strengthen RENARE's operational capacity in managing water and grasslands resources; and (iv) the provision of technical assistance to MGAP staff in the dissemination of experiences, organization of conferences and participation in international events relating to climate change.

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Key outcomes of this Component are: (a) the development of modern cartographic information integrated with climate and agriculture information and decision-making support systems accessible to different users; (b) the updating of the country's soil use maps; (c) the improvement of RENARE's current Geographic Information System (GIS) – a critical element of the Integrated Safeguards Data Sheet (ISDS) – and its integration with the cartography and soil information to be developed; (d) the adoption of modern methods for the planning of land use at farm level; (e) the development of an improved policy framework for water and grassland resource management; and (f) a comprehensive training programme for producers and service providers on sustainable techniques for better soil and water management.

Component 4 will provide the funds required for: (a) supporting the operation of the Project Management Unit in efficiently coordinating and managing the project; (b) supporting the operation of a monitoring and evaluation system for the project; (c) coordinating and supervising the implementation of the training activities described under Component 3; and (d) assisting with the design and implementation of a communication strategy to disseminate results and lessons learned within the country and the region. The proposed project management team will be structured around the resources of the existing Project Implementation Unit established under the on-going Bank-financed Integrated Natural Resources and Biodiversity Management Project (Loan 7305-UY, locally known as Proyecto Producción Responsable (PPR) and key MGAP staff.

AG-IMS ID 71022: Question by Canada - Classification of measures

Canada thanks Uruguay for submitting a Table DS:2 notification describing the new measure development and climate change adaptation project (Proyecto de Desarrollo y Adaptación al Cambio Climático, DACC).

Paragraph 3(b) describes the objectives of measures that will be employed to assist farmers to mitigate and/or adapt to the effects of climate change. One such objective is identified as increasing production.

a. Firstly, could Uruguay clarify under which category of exempt support, e.g. Annex 2, Article 6.2 or Article 6.5 of the Agreement on Agriculture that the development and climate change adaptation project is being notified?

b. If the development and climate change adaptation project is being notified under Annex 2, then could Uruguay please elaborate on paragraph 3(b) which includes as one of the objectives as being to increase production in individual farm holdings as Annex 2 is clear that payments must not be linked to production?

Answer by Uruguay

See above.

2.5 EXPORT SUBSIDY COMMITMENTS (TABLES ES:1, ES:2 AND ES:3

2.5.1 European Union (G/AG/N/EU/14)


Following on from Australia's question at the 68th Committee on Agriculture meeting in November 2012 (paragraph 8 of G/AG/W/106 refers), and on-going concerns about the European Union's compliance with its sugar export subsidy obligations, Australia asks the European Union to please confirm its physical volume of out-of-quota sugar exports on a year‑to‑year basis and then follow-up as soon as the data is available on physical exports for the whole marketing year. Can the European Union also confirm its actual and planned licences issued for the 2012/13 marketing year?

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Export licences for out-of-quota sugar for the marketing year 2012/13 have been issued for the whole quantity of 1.35 million tonnes. Regarding the physical exports, data will become available around 2-3 months after the end of the marketing year (30 September 2013).

AG-IMS ID 71024: Question by Brazil - Transparency issues

Brazil understands that the European Union is still notifying under Table ES:1 the total of subsidized exports on the basis of licenses issued and not on the basis of the actual exports in a given market year. This is an issue of concern to Brazil, already highlighted in previous Committee on Agriculture meetings and in the General Council. Brazil firmly believes that the European Union's WTO obligations are not complied with by simply guaranteeing that the number of export licenses issued with reference to a particular year is not above the European Union's scheduled commitments. Brazil considers that the actual exports of a Member in any given year should not be in excess of its WTO schedule commitments. Members should not lose sight that it is the actual export of subsidized products that affect the international markets. As a matter of fact, Brazil knows that for MY 2011-2012 the European Union's exports of out-of-quota sugar were above the European Union's reduction commitments. In light of the information above, Brazil would encourage the European Union to bring their current practice into conformity with its WTO obligations and ask whether actual exports of out-of-quota sugar may exceed again the European Union's export subsidies commitments in MY 2012-2013 and 2013-2014.


The European Union complies with its scheduled commitments, including on export subsidies. The European Union has always respected its export subsidy commitments for sugar and will continue to do so in the future.

Follow-up: Australia requested the European Union to explain how the European Union had complied with its commitments on export subsidies when it had exported nearly 1.4 million tonnes of out-of-quota sugar. The European Union responded by reiterating that export licences for out-of-quota sugar for the marketing year 2012/13 had been issued for the whole quantity of 1.35 million tonnes and the European Union notified subsidized exports based on licenses issued. Brazil invited the European Union to comment on its action of notifying the total subsidized exports in Table ES:1 on the basis of export licences but not on actual exports and the European Union confirmed that this accurately reflected their notification practice.

2.5.2 Israel (G/AG/N/ISR/52)


Australia acknowledges the considerable reductions Israel has made to its use of export subsidies on vegetables and fruits, and also the elimination of export subsidies on citrus fruits. Could Israel please explain its current policy regarding export subsidies and possible domestic consideration or discussion about eliminating the use of all forms of export subsidies? Israel notified the use of export subsidies in 2011/12 but in its latest trade policy review (8 May 2013) it was stated that Israel does not use export subsidies for agricultural products.

Answer by Israel

The total export subsidies allocated to fruit and vegetable producers during the past three export seasons was much lower than the commitment outlay and quantities. The support varies according to specific export policy considerations and the budget available in the notified periods.

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Israel will consider its future policy depending on the export subsidy commitments and the contribution of other Members to the process. However, this policy tool was always used very carefully by Israel, and only to provide limited relief to the domestic producers in specific situations.

3 OVERDUE NOTIFICATIONS

3.1 Viet Nam's delayed notifications

AG-IMS ID 71035: Question by the United States of America

Vietnam has not submitted domestic support notifications to the Committee on Agriculture since acceding to the WTO in 2007. Could Vietnam please indicate when it intends to submit these overdue notifications to the WTO?

Answer by Viet Nam

As a very recently acceded Member, Viet Nam fully shares the Membership's determination to strengthen transparency. Looking at the Secretariat Document G/AG/GEN/86/Rev.15, Viet Nam highly appreciates Members who fully complied with their notification obligations. However, Viet Nam also recognizes that a significant number have not implemented their obligation for many years.

With regard to Viet Nam's notification obligation, as may be known, it has been delayed due to unexpected complexity of the gathering of information, especially at the provincial level, as well as heavy workloads of capital officials who are in charge of notifications. With great support from the Secretariat, the delegation of Viet Nam would like to report to the Committee that it shall complete and notify domestic support for 2007 and 2008 in coming days.

Follow-up: The United States of America felt encouraged to hear Viet Nam's announcement of the forthcoming notification and the cooperation with the Secretariat in preparing the notification. Supported by Switzerland, the United States of America took the opportunity to compliment the work of the Secretariat in adding the charts that gave an overview of outstanding notifications in the compliance document (G/AG/GEN/86/Rev.15). The United States of America found those charts to be very useful and somewhat alarming, especially in relation to the high proportion of overdue notifications in certain categories. Switzerland found it interesting to see a large number of overdue notifications and observed that for quite a high number of years notifications were missing. Switzerland and the United States of America further encouraged all Members who had outstanding notifications to increase their efforts to transparency. Finally the United States of America announced its upcoming Table DS:1 notification.

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ANNEX 1

G/AG/N/CHL/40

(AG-IMS ID 71020)

GENERAL SERVICES: RESEARCH

Content of 2011 expansion

High‑impact transfer and extension to enhance the competitiveness of the sector

Technological Transfer and Extension Centre (CTE)

Areas of activity: Production systems (PS) Transfer of technology and know‑how Specialization

Operating units: Specialized work units focusing on priority territories and issues Decentralized Interact with environment; dynamic.

Strategy for transferring results Training Technology‑transfer activities

Field days Demonstration plots Advisory services

Institutionalize private advisory services provided by INIA researchers and officials Small producers - SAT INDAP Medium‑sized and large producers Businesses (subsidiary firms, limited companies, intellectual property)

Promote profitable activities Study of activities with problems, investment needs

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Documents

G/AG/W/115 8 November 2013 (13-6235) Page: 1/30 Committee on