RESTRICTEDWORLD TRADE
ORGANIZATIONG/AG/R/33
7 January 2003
(03-0026)
Committee on Agriculture
SUMMARY REPORT OF THE MEETIN G HELD ON 21 NOVEMBER 2002
Note by the Secretariat1
1. The Committee on Agriculture held its thirty-third regular meeting on 21 November 2002
under the chairmanship of Dr. Magdi Farahat of Egypt.  The agenda of the meeting as contained in
WTO/AIR/1966 was adopted with the following additions:  an issue raised by Thailand under
Article 18.6 of the Agreement in relation to the Unites States' domestic support payments to rice and
the peace clause, and an Article 18.6 matter raised by Canada in relation to import licensing
procedures by Venezuela for a number of agricultural products.
PART I:  T HE REVIEW PROCESS
A. M ATTERS RELEVANT TO THE IMPLEMENTATION OF COMMITMENTS UNDER THE REFORM
PROGRAMME :  ARTICLE 18.6
(a) European Communities/New Zealand:  United States – Increase in Food Aid of Skimmed
Milk Powder (SMP)
2. The EC and New Zealand sought clarification from the United States regarding its planned
food aid donation of 200,000 tonnes of SMP.  These Members requested information as to how the
United States would ensure that the food aid in qu estion did not displace commercial shipments, given
that the trade in SMP was generally only around one million tonnes per year.
3. The United States responded that it had recently announced that it would accept applications
under its Section 416 (b) program which provided food aid in grant form.  Actual tonnages
programmed and shipped depended on the number of qualified proposals received as well as specific
information on the recipient country situation.  All proposals had to demonstrate that they would not
displace commercial trade nor local production.  In addition, the United States calculated Usual
Marketing Requirements (URMs) for each country  to  quantify the potential need for food aid, and did
not programme non-fat dried milk in situations where the URM did not support that product.   The
calculation of UMRs took into account local consumption, production and trade in the country for a
particular commodity, but not the volume of world trade.  Countries that were listed as eligible food
aid recipients under the Food Aid Convention received priority consideration for the Section 416 (b)
non-fat dried milk.  The USDA also gave priority consideration to proposals that used directdistribution to populations that were vulnerable  or unable to procure food through commercial
channels.  These countries were not on the list of historical commercial importers of non-fat dried
milk.
4. The EC also sought clarification as to whether the United States had received specific
requests for this food aid and as to whether or not these requests exceeded availabilities.  The
                                                     
1 This document has been prepared under the Secret ariat's own responsibility and is without prejudice
to the positions of Members or to their rights or obligations under the WTO.G/AG/R/33
Page 2
United States responded that it had announced the availability of non-fat dried milk on 31 October
2002 and all requests for use of the commodity were received from outside the US Government in the
form of food aid proposals.  Proposals, or requests, were usually received from non-government
organisations or from other governments.  The proposal deadline for the initial round of consideration
was 15 December 2002 but proposals could be submitted after this date.  The United States wouldknow by next summer if total proposals received exceeded the availability.
5. New Zealand requested clarification as to whether the United States intended to notify
shipments under this programme as subsidised exports since the allocation was related to the objective
of lowering the non-commercial stockpile of non-fat dried milk of approximately 519,000 tonnes.
The United States responded that the non-fat dried milk that was programmed under the Section 416
(b) program would be notified as food aid.  The Section 416 (b) program used commodities that were
in surplus to meet world-wide food aid demand.  Curr ently, the only commodity that was in surplus at
the US Commodity Credit Corporation (CCC) was non-fat dried milk.  The world-wide demand for
food aid had not abated and in keeping with in ternational humanitarian commitments, the United
States would use all available vehicles to combat hunger.
(b) European Communities:  United States – Donation of SMP for Animal Feed to Livestock
Producers
6. The EC sought clarification from the United States regarding its intended donation of
200,000 tonnes of SMP for animal feed to livestock producers, including information as to how this
measure would be reflected in the US domestic support notification.
7. The United States responded that it had established an emergency feed assistance to help
maintain herds for farmers and ranchers who were experiencing a lack of forage due to adverseweather conditions.  Reserves of non-fat dry milk were used to prevent severe disruptions in livestock
production in the four states designed as disaster areas.  The United States had committed
35,000 tonnes of non-fat dry milk that had been held in stock for longer than 24 months to this type of
assistance.  The United States was in the process of reviewing this programme with respect to
notification requirements.
(c) New Zealand:  United States – Possible Subsidy Element in SMP to Casein Programme
8. New Zealand reiterated its concerns expressed at previous meetings about heavily discounted
purchase prices from CCC stocks of SMP for conversion to casein or caseinates.  The programme
thereby provided a subsidy to producers of casein or caseinates, to compete with imported casein.
New Zealand noted that the CCC had made the first sale by tender of SMP from its burgeoning and
ageing stock of SMP for conversion to casein.  The successful bid was at a similar level to those of
previous tender rounds, in which the CCC had accepted no bids.  In all cases the purchase price andoffers were well below the CCC support prices of around 90 cents to 102 cents per pound, including
the successful bid at an average price of 28.8 cents per pound and the range of previous offers of
between ten cents to 30 cents per pound.  New Zealand requested clarification from the United States
regarding the criteria used for accepting and rejecting bids, including why bids that were rejected as
insufficient in previous tender rounds were now c onsidered sufficient.  New Zealand also sought an
indication from the United States under what WTO Agreement and provisions it would notify this
programme and the subsidy it provided.
9. The United States responded that the CCC accepted or rejected bid prices based on market
conditions at the time of sale.  The CCC had accepted prices in October 2002 at the prevailing market
prices for low quality stocks that had been held in reserve for longer than 24 months.  This was a newprogramme for which the US Government was in the process of determining a classification for
notification purposes consistent with its WTO commitments and obligations.G/AG/R/33
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10. In commenting on the responses by the United States regarding the three SMP-related issues,
the EC stated that it was concerned about such measures of surplus disposal which appeared be
designed to serve primarily the interests of the US dairy farmers and industry.  The EC considered
that it was important that the agriculture negotiations addressed the issue of indirect subsidies
provided to exports.  New Zealand stated that it continued to be concerned about both the provision ofSMP as food aid and for manufacturing to casein, which had a significant impact on international
markets and New Zealand's dairy exports.  The reason for the large stockpile held by the CCC was a
structural surplus created by the US policy.  Like the EC, New Zealand was pursuing this issue in the
agriculture negotiations.
11. Australia supported the views expressed by New Z ealand and the EC.  It too was interested in
seeing stronger disciplines on food aid materialize in the negotiations. Argentina had similar concerns
in relation to food aid.  In its view, the United States was using food aid as an instrument to remove asurplus arising from distortive agriculture policies.  Strengthened disciplines were needed in this area,
with the focus being on the need for food assistance.
12. The United States recalled that in the agriculture negotiations it had submitted a proposal
which addressed such issues as trade distorting domestic support.  The United States recognized that
its policies might adversely affect a number of Members and recommended that such problems besolved by harmonising and eventually eliminating all trade distorting domestic support.
(d) New Zealand:  Venezuela – Tariff Quota Administration – Dairy Import Licensing
13. New Zealand requested clarification from Venezuela with respect to the committee that had
been established to investigate the concerns expressed by numerous Members regarding problems
experienced with Venezuela's import licensing re gime.  The requested information included the
committee's terms of reference, composition, operation and the date when the findings would be
announced;  the last dates on which import licences for dairy products were issued;  when licences for
the importation of milk powder for the remainder of the year would be issued; whether additional
licences were issued for cheese and skimmed milk powder, given the apparent demand these products
in Venezuela, and the dates on which requests for import licences would be sought for the first half of2003.
14. In response, Venezuela stated that the Presidential Agricultural Committee was established by
Decree No. 1697, published in the Official Gazette No. 37,399 of 7 March 2002, to undertake and
monitor the action required to ensure the implementation of Venezuela's agricultural production and
agri-food policy for the period 2002-2003.  The Committee was composed of the Minister of
Agriculture and Land, who acted as Chairman, the Minister of Production and Trade, a representative
of the Ministry of Finance, a representative of the Ministry of Foreign Affairs, the Chairman of theAgricultural, Fishing, Forestry and Neighbouring Activities Development Fund (FONDAFA), a
representative of the National Assembly Subcommittee on Agriculture, a governor representing the
country's agricultural states, the Chairman of Venezuela's Agricultural Commodities Exchange, and
the Chairman of the National Federation of Ag ricultural Producers (FED EAGRO), (Article 2 of
Decree No. 1697).  The Committee's operating regulations had not yet been established.  TheCommittee had, however, established a Subcommittee with the mandate, inter alia,  of dealing with
the tariff quota allocation process.
15. Venezuela provided the following information regarding the dates of issue, the number and
total volume of the recent import licences:
• 49 import licences for milk powder (26 pe r cent), totalling 17,495.49 tonnes, between
3 October 2002 and 11 November 2002;G/AG/R/33
Page 4
• 105 import licences for cheese, totalling 2,352.33 tonnes, between 1 October 2002
and 11 November 2002;
• 24 import licences for skimmed milk powder, totalling 1,937.65 tonnes, between
1 October 2002 and 11 November 2002.
16. Venezuela pointed out that the dates of issue of the above-mentioned licences were
subsequent to those notified to the Committee at its last meeting and that new licences had recently
been issued for cheese and skimmed milk powder (G/AG/R/32, paragraph 15 refers).  The Ministry of
Agriculture and Land was in the process of arranging for the Official Notice to be published in the
first week of December with a view to issuing import licences for dairy products in early
January 2003.
17. The EC, New Zealand, Uruguay and the United States expressed their concerns and
frustration regarding Venezuela's licensing practice.  Uruguay stated that its dairy exporters had facedserious problems in accessing the Venezuelan market since 1999.  The procedures for tariff quotas
followed by Venezuela lacked the necessary transparency, with the conditions being changed from
one year to the next and adjusted to internal market demand.  Uruguay hoped that these difficulties
could be solved as soon as possible.
18. The United Stated informed the Committee it had requested formal dispute settlement
consultations with Venezuela on this subject.  New Zealand and the EC stated that they would request
to be joined in these consultations.  The EC also  intended to make a contribution to the Subcommittee
established by Venezuela at its first meeting next year.
(e) Thailand:  United States – Domestic Support Payments to Rice – Violation of the Peace
Clause
19. Thailand provided data showing the United States' domestic support payments for rice
farmers in the most recent three-year period (see Attachment 1 hereto).  With reference to the Peace
Clause (Article 13 (b)(ii) of the Agreement), Thailand noted that, even if the alleged Green Box
production flexibility payment subsidies were excluded from the total payments, the sum of the loandeficiency payments, marketing loan gains and mark eting loss payments for each of the three years
still far exceeded the level of support of US$600 million provided by the United States in 1992.  In
addition, domestic support to rice provided by the United States exceeded the value of the total
production each year.  With more than 40 per cent of its total rice production being exported, this
policy created market distortions and was inconsistent with the goal of fair trade advocated by theUnited States.  Thailand sought clarification from the United States as to whether it would reduce the
level of domestic support payments for rice at leas t to the 1992 level.  Thailand also raised the
question of whether the US Secretary of Agriculture  was authorized by the new Farm Security and
Rural Investment Act of 2002 to implement such plan.
20. The United States responded that it had received Thailand's question only recently and would
provide answers as soon as possible.  With respect to  the issue of fair trade, the United States stated
that it had submitted a proposal on trade-distorting domestic support which would first harmonise thelevels provided by Members over a period of five years and ultimately eliminate trade-distorting
domestic support.  The United States was interested in open and fair trade and invited all Members to
join the United States to move in this direction.
(f) Canada:  Venezuela –  Import licensing procedures for a number of agricultural products
21. In view of the fact that importers of Canadian onions, pork and potatoes continued to
experience problems in obtaining import permits in a timely fashion, Canada sought clarification fromG/AG/R/33
Page 5
Venezuela regarding progress being made in resolving such import licensing problems.  Furthermore,
Canada had been informed that Venezuela had initiated a new policy to begin on 1 January 2003
concerning the financing of farmers by importers of black beans.  Canada understood that this
financing would be a pre-condition for granting import licenses to participating importers.  In view of
the negative impact that this measure could have on imports of black beans from Canada, amongstother products, Canada requested further information regarding this new policy and as to whether it
would be expanded to other agriculture products besides black beans.
22. In light of these questions being posed at the meeting, Venezuela responded that it would
provide a response as soon as possible.
B. R
EVIEW OF NOTIFICATIONS
23. The Committee reviewed the following notifications as listed in the agenda:
(i) on the administration of tariff and other quota commitments (Table MA:1):  from
China (CHN/1);
(ii) in the context of the special safeguard (T ables MA:3 to MA:5):  from Chinese Taipei
(TPKM/4), and Philippines (PHL/27, PHL/29 and PHL/30);
(iii) relating to domestic support commitments (Table DS:1):  from Australia
(AUS/41/Rev.1), Jordan (JOR/1), Slovak Republic (SVK/35) and South Africa(ZAF/44);
(iv) relating to new or modified domestic support measures exempt from reduction
(Table DS:2):  from Australia (AUS/43 and AUS/44), and European Communities
(EEC/39);  and
(v) relating to export subsidy commitments (Tables ES:1 to ES:3):  from Japan (JPN/77).
24. Specific points raised with respect to the notifications listed above and the responses thereto
are summarized in Part I of the Annex to this report.
C. O
THER NOTIFICATIONS BEFORE THE COMMITTEE
(a) Notifications in respect of which no questions have been raised in advance
25. The Committee took note of the following notifications, which had been circulated in advance
of the date on which the notice convening the present meeting was issued but in respect of which no
questions had been raised by that date under the Committee's Working Procedures:
(i) relating to imports under tariff and other quota commitments (Table MA:2):  from
Australia (AUS/45), Nicaragua (NIC/5) and Norway (NOR/38);
(ii) in the context of the special safeguard (Tables MA:3 to MA:5):  from  Australia
(AUS/46), Canada (CAN/48), Costa Rica (CRI/ 14), Czech Republic (CZE/41,
CZE/42 and CZE/43), Icela nd (ISL/21), Japan (JPN/ 79), Norway (NOR/39),
Philippines (PHL/28), Poland (POL/54) and South Africa (ZAF/41);
(iii) in the context of domestic support commitments (Table DS:1):  from Honduras
(HND/10/Rev.1) and Malawi (MWI/2);G/AG/R/33
Page 6
(iv) relating to new or modified domestic support measures exempt from reduction
(Table DS:2):  from Honduras (HND/13),  and
(v) on export subsidy commitments (Tables ES:1 to ES:3):  from Australia (AUS/47),
Estonia (EST/8), Jordan (JOR/2), Mala wi (MWI/1), Moldova (MOL/1), Norway
(NOR/40) and Sout h Africa (ZAF/43).
(b) Notifications circulated or made available after the notice convening the meeting was issued
26. The following notifications were subject to prelim inary review and are to be reverted to at the
next meeting for substantive review in accordance with paragraph 9 of the Committee's Working
Procedures (G/AG/1):
(i) on imports under tariff and other quota commitments (Table MA:2):  from
New Zealand (NZL/32);
(ii) in the context of the special safeguard (Tables MA:3 to MA:5):  from New Zealand
(NZL/31);
(iii) on domestic support commitments (Tables DS:1 and DS:2):  from New Zealand
(NZL/33 and NZL/34), and Slovenia (SVN/21/Rev.1 and SVN/24);  and
(iv) on export subsidy commitments (Tables ES:1 to ES:3):  from New Zealand
(NZL/35).
D. P OINTS CONCERNING NOTIFICATIONS RAISED AT PREVIOUS MEETINGS
27. There was no discussion under this agenda item.
E. C OUNTER NOTIFICATIONS UNDER ARTICLE 18.7 OF THE AGREEMENT
28. The Committee took note that no counter-notifications had been received under Article 18.7
of the Agreement.
F. O THER MATTERS RELATING TO THE REVIEW PROCESS
(a) Deferred replies to questions raised under the Review Process
29. There were no deferred replies to questions previously raised.
(b) Overdue notifications
30. The Committee took note of the room document, dated 15 November 2002, made available by
the Secretariat showing the current status of compliance with the notification obligations.
(c) Addenda to Table MA:1 notifications
31. The Chairman recalled that the WTO Ministerial Conference had endorsed the
recommendation that the Committee keep under review the implementation of the December 2000
Decision of the General Council on the administ ration of tariff quotas (WT/L/384, paragraph 1.1,
refers).  The understanding was that this decision should not place undue new burdens on developing
countries (WT/GC/M/62, paragraph 14, refers).G/AG/R/33
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32. The Committee took note that the following Members administering tariff quotas had
submitted the requisite Table MA:1 Addenda:  Australia (G/AG/N/AUS/1/Add.1);  Canada
(G/AG/N/CAN/ 2/Add.2, 6/Add.1, 10/Add.1, 19/Add.1 and 45);  Czech Republic
(G/AG/N/CZE/Rev.1/Add.1);  European Communities (G/AG/N/EEC/1/Add.2, 3/Add.1, 14/Add.1
and 15/Add.1);  Hungary (G/AG/N/HUN/1/Add.1, 5/ Add.1, 8/Add.1, 13/Add.1 and 18/Add.1);  Japan
(G/AG/N/JPN/1/Add.1, 8/Add.1, 23/ Add.2 and 57/Add.1);  Latv ia (G/AG/N/LVA/1/Add.1);
New Zealand (G/AG/N/ NZL/1/Add.1);  Norway (G/ AG/N/NOR/1/Add.1);  Slovenia
(G/AG/N/SVN/1/Add.1);   Thailand (G/AG/N/THA/38/Add.1);  and the United States
(G/AG/N/USA/ 2/Add.3 and 34/Add.1).
33. The Chairman urged those Members administering tariff quotas which had not yet done so to
provide Addenda to their MA:1 notifications in  accordance with the General Council Decision in
WT/L/384.
G. I MPLEMENTATION OF ARTICLE 10.2 OF THE AGREEMENT ON AGRICULTURE , ON THE
DEVELOPMENT OF INTERNATIONALLY AGREED DISCIPLINES TO GOVERN THE PROVISION OF
EXPORT CREDITS , EXPORT GUARANTEES OF INSURANCE PROGRAMMES , TAKING INTO
ACCOUNT THE PROVISIONS OF PARAGRAPH 4 OF THE MARRAKESH NFIDC DECISION
34. The Chairman recalled that at the June meeting a questionnaire on export credits and related
facilities was distributed on the basis that those Members who where in the position to do so were
encouraged to complete and return the questionnaire to the Secretariat.  The Secretariat had circulated
document G/AG/W/56 dated 27 October 2002 which contained the completed questionnaires which
had been received to that date.  There was no discussion under this agenda item.
PART II:  O THER MATTERS WITHIN THE PURVIEW OF THE COMMITTEE
A. M ARRAKESH MINISTERIAL DECISION ON MEASURES CONCERNING THE POSSIBLE NEGATIVE
EFFECTS OF THE REFORM PROGRAMME ON LEAST -DEVEOPED AND NET FOOD -IMPORTING
DEVELOPING COUNTRIES (NFIDC D ECISION )
(a) Proposal for Follow-Up to the Recommendation of the Inter-Agency Panel on Examining the
Feasibility of the Revolving Fund Operating as an Ex-Ante Financing Mechanism
35. The Chairman informed the Committee that a proposal for the establishment of an ex-ante
financing mechanism (G/AG/W/58 dated 28 Octobe r 2002 and Corrigendum 1) had been submitted
by Bangladesh, Cuba, Egypt, Jordan, Kenya and Sr i Lanka on behalf of the NFIDCs and LDC Group
of the WTO.  On the basis of this proposal, he had held a series of informal consultations with
interested Members, in the course of which the sponsors of the proposal were given an opportunity to
clarify a number of technical points concerning their proposal.
36. Egypt stated that operationalizing of the NFIDC Decision was a cornerstone for a successful
round of negotiations and part of the single undertaking.  In the run up to Doha, Members had dealtwith the NFIDC Decision as an implementation is sue and the proponents of the revolving fund had
been confident that the procedures for dealing with implementation issues would address their
concerns.  To date, there was no indication that the donor were prepared to operationalize one of the
four pillars of the NFIDC Decision, i.e. financing of short-term needs.  The proposals submitted by
the NFIDCs were intended to contribute to ensuring food security which was their most importantnon-trade concern.  The food security situation was likely to worsen if world market prices of
foodstuffs exceeded their normal levels.  As a resu lt, the NFIDCs would either be unable to import
adequate food supplies or have to sacrifice some other basic needs at the expense of long-term
development objectives.  For its part, Egypt expected that the elimination of export subsidies, together
with the inevitable erosion of tariff preferences, would raise international prices to unsustainableG/AG/R/33
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levels.  If this scenario were to materialize, the proposed revolving fund would serve as a safety-net.
Egypt urged Members to take its concerns into account and considered that political will coupled with
good faith were the only way to resolve this issue.
37. Cuba, Jordan, Venezuela endorsed Egypt's statement.  Cuba said that all NFIDCs and LDCs
should be eligible to benefit from the proposed fund.  Jordan expressed concerns about requests in thenegotiations to limit food aid.  If the provision of food aid were to be constrained, there would be an
even greater need for the revolving fund to ensure food security.  Venezuela stated that
implementation of the NFIDC Decision was a fundamental part of this Agreement and called on the
Committee to accelerate its work to apply this Decision.  Tunisia considered that implementation of
NFIDC Decision had the same priority as the agriculture negotiations.  The continuation of the reform
process in agriculture was likely to have negative repercussions for LDCs and NFIDCs through
increased costs of imports of basic foodstuffs.  A new financing mechanism was therefore necessaryto allow developing countries to continue the process of agricultural reform.
38. Argentina considered that implementation of the NFIDC Decision was part of the single
undertaking.  Argentina saw merits in the revolving fund proposal since it was related to food security
and would help many developing countries to improve their capacity to import food.
39. Switzerland stated that it continued to have doubts  regarding the viability of the proposed new
fund.  In its view, the informal consultations held by the Chairman deserved to be continued in an
effort to reach a common position.  Switzerland was also willing to discuss the issues that were
important for developing countries and NFIDCs with in the framework of the agriculture negotiations.
Japan stated that it had participated constructively in the discussions on this subject and was in favour
of continuing the consultations on the establishment of a sustainable revolving fund.  Norway saidthat, like others, it needed more time to consider the specific ideas of the NFIDCs.
40. In response to Jordan's intervention, the EC stated that it did not seek limitations on food aid
but disciplines to ensure that food aid was genuine and did not have the purpose of export subsidies.
The EC agreed with Egypt that the elimination of subsidies could have negative effects on NFIDCs in
terms of rising world market prices, and that the elimination of preferences might have a grave impacton some countries.  The EC therefore favoured a more gradual approach of reduction in the ongoing
negotiations.  With respect to the new proposal by th e NFIDCs, the EC stated that it needed more time
to study the detailed replies from NFIDCs to the questions by donors.  The EC noted that it might to
useful to further consider the measures suggested by the World Bank to reduce shocks that threatened
food security, including commodity price risk management (G/AG/GEN/ 56 dated 11 December 2002
refers).
41. The United States stated that it was concerned that some of the NFIDCs and the LDCs would
not be eligible to draw on the revolving fund since they did not have the financial capability to repay
the loans.  In the view of the United States, in such circumstances food aid was needed.  While the
United States was willing to participate in finding a solution, it had doubts regarding the basic concept
and nature of the revolving fund proposal.
42. The Committee authorized the Chairman to continue his informal consultations with
interested Members concerning the proposed ex-ante financing scheme and to provide a progress
report to the General Council at its meeting on 10 December 2002 on his responsibility as Chairman.
(b) Annual Monitoring Exercise by the Committee on the Follow-Up to the Committee's
Recommendations on this Decision adopted by the Doha Ministerial Conference
43. The Committee took note of the following Table NF:1 notifications that were received since
the last annual monitoring exercise of the NF IDC Decision in December 2001:  Australia (AUS/39G/AG/R/33
Page 9
and 48), Cuba (CUB/18), EC (EEC/35), Japan (J PN/78), New Zealand (NZL /30), Norway (NOR/37)
and South Africa (ZAF/42).  The Chairman drew attention to the responses that were received from
the African Development Bank, the European Investment Bank, the FAO and the World Bank
regarding the implementation-related issue of technical and financial assistance in the framework of
the NFIDC Decision (G/AG/W/57 dated 23 October 2002 and Add.1 dated 29 November 2002).  The
statements that were made by the observer organizations under this agenda item (IMF, FAO and
World Bank) have been circulated in docum ent G/AG/GEN/56 dated 11 December 2002, and a
revision of the Secretariat background note for the purpose of facilitating the annual monitoring
exercise was circulated as G/AG/W/42/Rev.5 da ted 8 November 2002 and Corr.1 dated 29 November
2002.
44. The EC and the United States sought clarification from the representative of the IMF
regarding the review of the Compensatory Financing Facility (CFF) foreseen for 2003.  The EC notedthat a number of WTO Members felt that the CFF was more or less adequate in addressing the needs
that were reflected in the proposal for the esta blishment of a revolving fund.  The EC wondered
whether there had been discussions in the Executive Board of the IMF regarding the adequacy of the
CFF and whether consideration would be given to making it more accessible for the NFIDCs and
LDCs.  The United States raised the question of whether consideration would be given to making thefacility concessional to improve its attractiveness for LDCs and NFIDCs.
45. Argentina noted that the price increase for food that was forecast by the IMF for 2003 would
provide incentives for many farmers in developing countries to increase their production, including in
NFIDCs and LDCs (G/AG/GEN/59, page 10 refers).  Argentina, for example, had the capacity to
rapidly expand production as long as markets were not distorted by subsidies.
46. The representative of the IMF responded that the CFF had been established in 1963 and
undergone several revisions and adjustments.  The mo st recent review of the IMF took place in 2000
and the next review was scheduled for 2003.  The WTO Members in their capacity as members of the
IMF executive committee could review and revise any IMF facility available to IMF members.  The
last review showed that the CFF was designed to address temporary shocks to balance of payments,
whereas most of the shocks in developing countries were related to structural balance-of-payments
problems.  Furthermore, unlike the Poverty Reduction and Growth Facility (PRGF), the CFF was a
non-concessional facility.  Overall, most developing countries were using Stand-By Arrangements
and the PRGF which were more adequate for them.  In any event, the Executive Board would review
the CFF and could decide to change its terms of reference, the way how the facility should be used, or
decide to abolish it.
B. A
NNUAL CONSULTATION UNDER ARTICLE 18.5 OF THE AGREEMENT ON AGRICULTURE WITH
REPECT TO MEMBERS ' PARTICIPATION IN THE NORMAL GROWTH OF WORLD TRADE IN
AGRICULTURAL PRODUCTS WTHIN THE FRAMEWORK OF THE COMMITMENTS ON EXPORT
SUBSIDIES UNDER THE AGREEMENT
47. The Committee took note of the Secretariat background note which had been circulated for
the purpose of the annual consultations under Article 18.5 of the Agreement (G/AG/W/32/Rev.5 dated24 October 2002).  The European Communities stated the statistical information was very useful for
the current negotiations.  The data appeared to  vindicate the EC's view that the Uruguay Round
approach to market access was not as ineffective as some had argued.  For example, international
trade in poultry meat had tripled over the last eight years, pigmeat trade had more than doubled, and
trade in oilseeds and cheese showed an increase of more than 50 per cent over a relatively short periodof time.   As for individual countries, Brazil had increased its exports of sugar from 3 million tonnes
in the beginning of the 1990s to around 10 million tonnes in recent years.G/AG/R/33
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48. The United States noted that Thailand, which had raised an Article 18.6 matter with respect to
US subsidies for rice, had maintained its position as the number one exporter of rice, although its
market share had decreased from 34 per cent in 1992 to 28 per cent in 2000.  The United States, with
substantial domestic support, had improved its market share for rice but so had countries like Viet
Nam, with very little domestic support, and China.  It appeared that many developing countries werein fact making substantial progress on the world market.
49. With reference to SMP, Argentina stated that all exports originated in countries using
subsidies, except for Argentina and New Zealand.  This is why Argentina had great difficulties in
improving its position.  The EC responded that its market share had decreased from 49 to 25 per cent
during the implementation period of the Uruguay Round commitments, while other countries had
increased their market share.  The EC concluded that there was room for growth in the trade.
50. New Zealand observed that the data with resp ect to "Other agricultural products" showed an
increase of the EC market share.  This development indicated that the EC was able to compete
effectively on the world market without using of export subsidies.
51. Uruguay stated the benefits of trade would be greater and participation of developing
countries would increase if the market were more transparent and market distortions were eliminated.
C. M
ATTERS RAISED UNDER "OTHER BUSINESS "
(a) Annual report by the Committee to the Council for Trade in Goods
52. In line with the Committee's practice in the previous years, the Chairman had circulated a
short factual report for the Council for Trade in Goods on the work undertaken by the Committee in
the course of 2002 before this meeting in order to facilitate the consideration of this matter.  The
Committee took note of the report and agreed that the report would be submitted to the GeneralCouncil on the responsibility of the Chairman (G/L/594 dated 21 November 2002).
(b) Request for observer status
53. The Committee took note of the request for observer status by the Arab Authority for
Agricultural Investment and Devel opment which was based in Khartoum.
(c) Provisional Schedule of Meetings for 2003
54. The Committee took note of the following schedule of provisional dates for meetings in 2003,
on the basis that the dates for each regular meeting would be confirmed at the preceding meeting of
the Committee:
27 March 2003 (Thursday)
30 June 2003 (Monday)
25 September 2003 (Thursday)
20 November 2003 (Thursday)
(d) Date of Next Meeting
55. The next regular meeting of the Committee on Agriculture will be held on 27 March 2003.
The airgram convening the meeting and containing the draft agenda will be issued on Monday,
17 March 2003.G/AG/R/33
Page 11
ANNEX
Page
Part IReview of notifications by the Committee on Agriculture on
21 November 2002
(i) administration of tariff and other quota commitments (Table MA:1): China
(G/AG/N/CHN/1)12
(ii) use of the special safeguard (Tab les MA:3 to MA:5): Chinese Taipei
(G/AG/N/TPKM/4), Philippine s (G/AG/N/PHL/27, 28, 29 and 30)14
(iii) domestic support commitments (Table DS:1): Australia
(G/AG/N/AUS/4 1/Rev.1), Jordan (G/AG/ N/JOR/1), Slovak Republic
(G/AG/N/SVK/35) , South Africa (G/AG/N/ZAF/44)16
(iv) new or modified domestic suppor t measures exempt from reduction
(Table DS:2):  Australia (G/AG/N/AUS/43 and 44), European Communities
(G/AG/N/EEC/39)22
(v) export subsidy commitments (Tables ES:1  to ES:3):  Japa n (G/AG/N/JPN/77) 24
Attachments
1 Data provided by Thailand under Article 18.6 of the Agreement concerning the
United States – Domestic Support Paymen ts to Rice – Violation of the Peace
Clause25
2 Details provided by the Philippines concerning special safeguard notifications
G/AG/N/PHL/27, 29 and 3026G/AG/R/33
Page 12
ANNEX – PART I
Review of notifications by the Co mmittee on Agriculture on 21 November 2002
Summary of specific points raised and responses thereto
Table MA:1 Notifications
China     G/AG/N/CHN/1 Tariff Quota Administration   (Table MA:1)
Points raised by other Member s Response by Notifying Member
Canada -
1. Information requested regarding the criteria for applicants to be
considered "being under sound financial conditions".
2. Explanation sought as to what the annual enterprise review is, and
whether this applies to state and non-state enterprises.
3. Under point (b)(iii) in the notification, "import tariff quota for
general trade shall be allocated with reference to the volumes forwhich applicants have applied, previous import performance andproduction, or other applicable commercial standards, or under the
principle of first-come, first-served".  What determines which
approach is used for a specific application?  If a different method isused for each TQ, what are the specific criteria used to allocate eachTQ?
4. In the notification of TQ allocation procedures for 2003 from the
State Development Planning Commission (Notice No. 4, 2002),
China has again specified the subdivision of its TQs into Category A
(volumes for domestic consumption) and Category B (volumes forprocessing and re-export).  Reasons why this is not reported in thisnotification under point (c), specifically by TQ?  What is themethodology employed for dividing quota volumes betweendomestic use and processing/re-export?  Has China considered
alternatives to the allocation procedures for processing and re-export
such as issuing supplementary import permits, to ensure a minimumpredictable level of market access?China took note of questions from
Canada, the EuropeanCommunities, Japan and theUnited States regarding China's
notification relating to tariff quota
administration. Due to thetechnical nature  and detailedinformation requested, China wasunable to provide specific
answers at this meeting.
Undertook to provide a responseas soon as possible.
European Communities - Could China, in the spirit of the request of theGeneral Council (WT/L/384 refers), provide an addendum to the TableMA:1 notification containing information with references to relevant
legislation or containing copies of this legislation per individual TQ?G/AG/R/33
Page 13
China     G/AG/N/CHN/1 Tariff Quota Administration   (Table MA:1)
Points raised by other Member s Response by Notifying Member
Japan -
1. With regard to imports of rice and wheat in 2002, information
requested regarding the quantity, by countries of origin, contractedby 15 September (breakdown of this information requested by
short/medium grain rice and long grain rice).
2. Regarding the imports under tariff quotas, could China provide
information on quantities contracted this year by state tradeenterprises and private importers respectively by 15 September foreach product?  Could China also indicate quota fill rates imported by
state trade enterprises and private importers, respectively?
3. According to China's Schedule, if a quota-holder has not contracted
for all the quantity by 15 September, it shall return the unused
portion of the tariff quota to the SDPC (State Development andPlanning Commission), so that the SDPC can reallocate them by1 October.  Information requested regarding reallocated quantities to
date?
4. Reasons why information on soybean oil, which is subject to a tariff
quota commitment in the Schedule, does not appear in the Table
MA: 1 notification.
United States -
1. Reasons why soy oil is not included in the notification?2. Update requested on the TQ license application process?  Will the
trade have access to China's agricultural TQs from the first day of the
2003 TQ year?
3. The Table MA:1 notification does not specifically refer to any
requirement that China has set aside a portion of the TQ for entitiesthat further process and/or re-export product imported under that TQ,even though such requirements have been in place.  Does Chinacontinue to require processing and/or re-export of specified TQ
quantities in its current TQ administration?G/AG/R/33
Page 14
Tables MA:3 to MA:5 Notifications
Chinese Taipei    G/AG/N/TPKM/4     Volume-Based Special Safeguard (Table MA:3)
Points raised by other Member s Response by Notifying Member
New Zealand – As per Article 5.2 of the Agreement,
additional duties may not be applied to minimum and
current access opportunities until such commitmentshave been fulfilled.  Confirmation sought that no dutywill be applied until the tariff quota for chicken has
been filled.
In a follow-up comment, New Zealand stated that
chicken legs and wings are a small part of the
scheduled TQ, which included a number of tarifflines for chicken, other than chicken legs and wings.Chinese Taipei ought to wait with SSG action untilthe tariff quota volume has been filled.The tariff quota for chicken legs and chicken wings
has not yet been filled.  Nevertheless, according to
Art. 5 of the Agreement an additional duty can beimposed since the import volume has exceeded thetrigger level.
Chinese Taipei has acted in accordance with the
Agreement on Agriculture, and assured theCommittee that the additional duties will be collectedonly on out-of-quota imports.
Philippines     G/AG/N/PHL/27     Price-Based Special Safeguard (Table MA:4)
Points raised by other Member s Response by Notifying Member
United States - Considers that the trigger price for the
onion special safeguard of 74.21 pesos per kilogram
(p/k) is too high, given that the average price for thepast three years has been 9.36 p/k.  Informationsought regarding the methodology and the data usedto calculate the trigger price.  Whether the notifiedtrigger prices were adjusted for inflation or changes
in the exchange rate.
The Philippine Law, Republic Act 1296, banned
imports of fresh onions and other vegetables from1955 to 1996, except for seeding purposes.  Whetherthere were imports of fresh onions and othervegetables, other than for seeding purposes, during
that period.The methodology used to calculate the trigger price
for onions is in accordance with the relevant
provisions of Art. 5 of the Agreement. The details ofthis calculation are provided in Attachment 2 hereto.The notified prices were not adjusted for inflation nor
changes in the exchange rate.
Based on available import data for 1986-1996 from
the publication "Foreign Trade Statistics" of theNational Statistics Office, there were imports ofSSG-eligible crops including onions and othervegetables.  The import data do not indicate whether
the imports were for seeding purposes, except if there
is a separate tariff line indicating that this was thecase.  In the case of onions (and shallots), import dataduring said period were classified under PSC code054.51-01, described as "onions, fresh or chilled,"
and PSC code 054.51-02 described as "shallots, fresh
or chilled."G/AG/R/33
Page 15
Philippines     G/AG/N/PHL/27     Price-Based Special Safeguard (Table MA:4)
Points raised by other Member s Response by Notifying Member
United States (cont'd)
During the 1986-88 base period, the Philippine
Government had in place the Philippine SystemCommodity Codes (PSCCs) to identify agriculturalproducts for customs purposes.  The scope of the
PSCCs seems quite limited when compared to the
broader Harmonized System (HS) Codes usedcurrently by the Philippines.  Information requestedon correlation of PSCCs with the current HS Codes
for chicken meat and chicken parts.
Follow-up comment by the United States – If the
Philippines was unable to differentiate between fresh
and frozen products and seedlings, how could CAFprices be validated?  It is inappropriate to calculatethe trigger price using values of a period when animport ban was in place.  In 1988 the Philippinesimported only 66 kg of the products in question.
Urged the Philippines to review this issue and use
import prices of the past three years for the purposeof calculating the trigger price.Refers to Attachment 2 hereto which provides a
matching of the HS Codes (2001) with PSC Codes
(1983) for chicken meat and chicken parts.
Recognizes that restrictions were in place.  On this
basis, the products in question were tariffied and
eligible for the SSG.  The data used represent actualimport prices during that period.  The Philippines isopen to discussing the question of whether revisionsor adjustments are necessary.  At this stage, thePhilippines considers that the time period chosen is
appropriate and based on Art. 5 of the Agreement.
Philippines     G/AG/N/PHL/29      Price-Based Special Safeguard (Table MA: 4)
Points raised by other Member s Response by Notifying Member
New Zealand – The tariff lines listed in the
notification do not accord with the tariff lines listed
in the Schedule of commitments. Informationrequested regarding the concordance between thescheduled and the notified tariff lines.Attachment 2 hereto provides information concerning
the concordance of tariff lines between the Philippine
Schedule of commitments in 1996 and the HS Codesin 2001 that were used in the notification.
Philippines     G/AG/N/PHL/30     Volume-Based Special Safeguard (Table MA: 3)
Points raised by other Member s Response by Notifying Member
New Zealand – The tariff lines listed in the
notification do not accord with the tariff lines listedin the Schedule of commitments.  Informationrequested regarding the concordance between the
scheduled and the notified tariff lines.Attachment 2 hereto provides information concerning
the concordance of tariff lines between the PhilippineSchedule of commitments in 1996 and the HS Codesin 2001 that were used in the notification.G/AG/R/33
Page 16
Table DS:1 Notifications
Australia   G/AG/N/AUS/41/Rev.1      Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Canada – Canada has not yet received the
information Australia undertook to provide in support
of its claim that the measure "Development IncentiveScheme (Queensland)" meets all the specific criteriaof paragraph 6 of Annex 2 (G/AG/N/AUS/42 andG/AG/R/31 refer).  This concerns particularly theeligibility for payments being determined in relation
to a "defined and fixed base period" (paragraph 6(a)).Payments under the Qld Development Incentive
Scheme are non or at most minimally production and
trade distorting.  Applicants receive a one-offpayment which is delivered in 3 equal annualinstalments.  Each individual applicant receives athird of the payment in the first or base year,followed by two equal instalments in the following
two years.  In other words, the payment does not
increase over time.
Consistent with Annex 2, paragraph 6(a), eligibility
for the payment is based on the applicant supplyingevidence of status as a landholder or occupier of the
land, with a minimum of 5 years working
occupation/guaranteed occupation.
In compliance with paragraph 6(b), (c) and (d) the
amount of the payment is not related to the type orvolume of production, prices or factors of productionin any year after the base period.  In addition, no
production is required in order to receive the
payment.
It is important to note that this programme is not
on-going, the direct payments to producers are in
effect one-off, decoupled payments.
Jordan   G/AG/N/JOR/1      Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Canada – Annex 3 of the Agreement stipulates that
market price support (i.e. ST/DS:5) shall becalculated using a fixed external reference price.  Theprices for wheat and barley in G/AG/N/JOR/1 differ
from the 1994-96 average prices underlying its Total
AMS commitment (WT/ACC/SPEC/JOR/2/Rev.3).Will Jordan submit a corrected notification?A corrected notification has been submitted and will
be issued shortly.G/AG/R/33
Page 17
Slovak Republic     G/AG/N/SVK/35       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Green Box
Australia / Canada / New Zealand – Clarification
sought regarding "Countervailing payments in cropsin crop production", including the operation of thisprogramme, compliance with Annex 2 criteria, and as
to when a Table DS:2 notification will be submitted?In contrast to the programme "Compensation
payments in crop production", payments are linkedto keeping variety and maintenance of particular cropproduction and not to  yields.  Granted amounts arenot very high, reaching up to 370 US$/ha or up to37 US$/tonne. By way of introduction of the Table
DS:2 notification, subsidies for the above mentioned
title  are granted in linkage with maintenance ofdiversity in the following 3 groups of crops:
1. Special permanent varieties, such as productive
hop-yards, wine-yards, orchards and plantations
of berry fruits and asparagus;
2. Field vegetables, healing herbs, flax, chicory,
greenhouse vegetables including hydroponics,
potatoes for reproduction;
3. Oil seeds, poppy seeds, legumes, tobacco, soy
beans, cereals.
This measure is related also to plant biologicalprotection preparations.  All mentioned crops are
divided into three groups depending on the way of
payment.  In the case of the first group  support wasgranted up to 10% of sale per hectare includingdeliveries into own processing plants.  In the secondgroup supporting resources reached US$/ha 74–370
(3,000-15,000 SKK/ha) respectively.  In the case of
the third group supporting payments were granted upto US$/t 5–37 (200–1,500 SKK/t) respectively, incase of tobacco the payments reached up to
US$/t 493 (20,000 SKK/t).G/AG/R/33
Page 18
Slovak Republic     G/AG/N/SVK/35       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Australia, Canada – With regard to the programme
"Cows without market milk production",  anexplanation sought as to how this measure complieswith the criteria of Annex 2. Given that it appears tobe product-specific support, it should be notified as
part of the Total AMS.
Follow-up comment by Canada – The response to
questions regarding the programme "cow breedingfor milk production" which was classified as non
product-specific AMS in the 2000 Table DS:1
notification (G/AG/R/28), confirms that this supportis specific to the breeding of milk cows, hence aninput subsidy in the production of milk.  Requeststhat this support be notified as part of the milk AMS
in 2000 and 2001.In accordance with the relevant Decree of the
Ministry of Agriculture of the Slovak Republic thismeasure is a kind of development programme indistanced mountainous regions, which is aimed atmaintaining rural population and agricultural
production in these less-favoured areas.  Applicants
for support have to confirm breeding of cows ingrazing systems and veal reproduction proving theneed for milk for feeding purposes.  Milk as anoutput is not financially supported.  Total amount ofsupport has reached US$74,000 (3 million SKK), the
subsidy per meat type cow is US$148 (representing
6,000 SKK) with minimum herd number of 5 heads.
As far as the request by Canada on shifting the
support for cow breeding for milk production to theproduct-specific AMS is concerned, a corrigendum
will be submitted.
The United States – Clarification sought regarding"Regional assistance programmes" described as agri-
tourism and rural development and as to whether aTable DS:2 notification would be submitteddescribing these programmes.This measure was already notified in past years,
albeit with a slightly different title.  Under this
programme, the primary condition for granting afinancial support is performance of both agriculturaland other diversified activities in the same region inorder to reach at least 30% share of financial yieldsfrom agriculture in total business activities.  The aim
is to preserve agricultural production in rural areas.
Support can be granted for following purposes:
- reconstruction of facilities for tourism;
- promotion of traditional kinds of handicraft
production,
- establishment of  farming yards,
- establishment of horse-riding, fishing, hunting,
etc.
Other conditions for granting financial sources are a
minimum of 5 years of performance in agri-tourism
and establishment of new jobs.G/AG/R/33
Page 19
Slovak Republic     G/AG/N/SVK/35       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Follow-up question by Canada – The programme
"drought consequence refunds" in 2000 was assigned
to the Green Box in G/AG/N/SVK/30 (25 June 2001)but it was not explained how it meets the criteria ofparagraph 8(a) of Annex 2 (G/AG/R/28).  Canada
understands that the programme includes several
components such as subsidies for the State MarketRegulation Fund in Compensation of Price Disparity,Loan for State Market Regulation Fund, Future CropStart-Up, etc. totalling 4.3 billion Sk.  Explanationsought that all of these components meet
paragraph 8 (a) of Annex 2 to justify Green Box
classification.The Slovak Republic undertook to provide a
response.
Follow-up comment by Argentina –  Expressedconcerns that some programmes, which are linked toproduction, for instance bee breeding or theprogramme on cow breeding for milk production,have been assigned to the Green Box. Queries
whether the programme "Promotion of milk
consumption" would not be better classified asdomestic food aid (paragraph 4 of Annex 2).These titles have been included in the Green Box
since the amounts involved are not very high and theprogrammes focus on the maintenance of production
in less-developed areas.
Blue Box
United States – Details sought describing the set-
aside programmes listed under items (a), (b), and (c)of ST/DS:3.The reason of reintroducing this programme in 2001
is grassing. It is included only under the "a" item –"payments based on fixed area and yields".  The totalamount granted for this measure reached onlyUS$3 million (129 million SKK).  The reason is to
limit production by means of conversion of arable
land to grassland, which will be mown andmaintained against weeds.
The purpose of grassing is the need for vegetation
alternation for favourable utilisation in future yearson arable land, wine-yards, orchards and hop-yards.
Payments for initial grassing represent approx.
US$/ha 148 (6,000 SKK/ha) and for restoration ofpermanent grassland approx. US$99 (4,000 SKK/ha).G/AG/R/33
Page 20
Slovak Republic     G/AG/N/SVK/35       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Amber Box
Australia – Additional information requested
regarding the nature of payments of the followingprogrammes under ST/DS:9:
− Worse Natural Conditions
− Livestock Breeding Promotion
− Cow Breeding for Milk Production
− Compensation payments in crop production.Worse natural conditions  – Pursuant to the relevant
Decree of the Ministry of the Agriculture, selectedmountainous and less favourable areas areproclaimed taking into account the quality of the soil.
Support is oriented to the following activities:
1. maintenance of land by grazing and mowing:
support is granted depending on the number of
cattle per 100 ha and the conditions of mowingthe grassland;
2. compensation for early retirement due to less
favourable production conditions on cultivated
land;
3. compensation  of reaching lower yields due to
less favourable production conditions forgrowing of special permanent varieties:  the
principles are the same as above.
4 sheep and goat breeding – support is granted per
one head of one year old sheep or half a year old
goat, the amount of financial sources dependingon the purpose of  breeding: either utility or pure-bred breeding or other.  Support can be paid alsofor one litre of sold sheep or goat milk and also
for one kg of sold sheep or goat cheese.
Livestock breeding promotion  – Support is granted to
breeders in the amount of  6 cents per kilogram
(2,50 SKK/kg) for sold bulls for slaughter or 4 centsper kilogram (1,50 SKK/kg) of sold swine forslaughter in live weight.  Payments for sheep andgoats are granted on similar principles as mentioned
above in previous support measures.
Cow breeding for milk production  – Payments are
made for sold milk based on allocated quota inamount of  approx. US$113 per head a nnually (4,600
SKK), with a minimum of 5 heads in breeding.
Compensation payments in crop production – These
payments are, in contrast to countervailing payments
in crop production, based on the sale of allocated
quotas. For example, payments for potatoes aregranted up to US$395 (16,000 SKK/ha) and for sugarbeet payments are US$4 (170 SKK/tonne) for sugar
beets with a sugar content of at least 15 per cent.G/AG/R/33
Page 21
Slovak Republic     G/AG/N/SVK/35       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Follow-up question by Canada – The "OECD
Monitoring and Evaluation 2002" reports a set ofminimum prices for several  products, including beef,in 2001.  Canada understands that the State Fund forMarket Regulation intervened in the beef market by
providing per tonne subsidies to remove surplus
supply in 2001.  Explanation sought  where thesupport associated with the minimum price for beef isreported in the 2001 Table DS:1 notification.The Slovak Republic undertook to provide a
response.
South Africa   G/AG/N/ZAF/44       Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Australia – Clarification sought regarding compliance
of the programme "Subsidies for a Special assistanceScheme for Beekeepers" with specific criteria ofAnnex 2 as this programme appears to be
product-specific support, and linked to production.The subsidies for beekeepers were a once-off grant to
beekeepers who lost their b ee colonies after invasion
of foreign bee species.  The government onlysubsidized the honey producers to re-establish the beecolonies and resume production.  Subsidies were not
linked to quantities of production nor to prices
farmers received.  These subsides have beendiscontinued since 1997. This programme will infuture be removed from the notification as it has been
discontinued.
Australia - South Africa has adjusted the fixed
external reference price for sugar from 445 Rand/t in
the base period to 1,404.49 Rand/t in 2000.  The
intent of Annex 3, paragraph 9 is that a fixed andunchanged reference price should apply to the baseperiod.  Requests South Africa to provide thisinformation for the Current AMS in 2000, with no
adjustments being made for the period 1995 – 1998.South Africa has not adjusted the fixed external
reference price as indicated in the question.
South Africa made use of a stable currency
(US dollar) to calculate market price support.  This isin line with a right explicitly provided for in ourUruguay Round Schedule (refer to footnote to
Schedule XVIII, Part IV, Section 1, p. 851).
The exchange rates used to calculate the External
Reference Prices (ERP) are indicated in Table DS:5.
South Africa sees no need for recalculating the AMS.
Australia – A description requested of the program"Resource Allocation", which is currently classifiedas non product-specific support.The payment indicated under resource allocation as
non-product-specific support is for the maintenanceof state agricultural land.  The subsidies will soon bephased out as the land has been earmarked for
resettlement of small-scale farmers.G/AG/R/33
Page 22
Table DS:2 Notifications
Australia G/AG/N/AUS/43    New or Modified Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
Canada – With regard to the three measures "New
Industries Development Program", "Food and Fibre
Chains", and "Dairy Regional Assistance Program",
Australia indicates that "no specified level ofproduction is required to qualify" for payment.  Whatis the significance of this statement in relation to thecriterion of paragraph 6(e) that "no production shallbe required"?  Specifically, parts of the dairy program
appear to take the form of input subsidies to
agricultural producers, which might not meet thefundamental requirement that the measures have atmost minimal effects on production.In each of the "New Industries Development
Program", "Food and Fibre Chains", and "Dairy
Regional Assistance Program" the statement "no
specified level of production is required to qualify"means that no production is required at all, in order toreceive these payments, in compliance with Annex 2,paragraph 6(e).  With regard to the Dairy RegionalAssistance Program, there appears to be some
confusion regarding the term "seed funding"
mentioned in our notification, which in this caserefers to pre-commercial funding (as opposed to thefunding of seeds for planting or an input subsidy).
Australia G/AG/N/AUS/44    New or Modified Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
Canada - With regard to the measure "Sugar Industry
Assistance Package", Australia indicates that "nospecified level of production is required to qualify"
for payment. Additionally, payment recipients must
dedicate land and labour and/or capital to a sugarindustry enterprise.   What is the significance of thesestatement in relation to the criterion of paragraph 6(e)
that "no production shall be required".
Eligibility for the "Sugar Industry Assistance
Package" is based on status as "a sugar cane producer
for two years prior to lodging the claim".  Thissuggests that the base period, being a function of thelength of the program, is not fixed.  The programhaving been extended in 2001 highlights this.  Howdoes this relate to the requirement of paragraph 6(a)
that the base period be "defined and fixed"?The Sugar Industry Assistance Package does not
require any production in order to receive payments
and therefore complies with Annex 2, paragraph 6(e).
The criterion that eligibility for sugar industry
payments is based on the contribution ofland/labour/capital to a sugar industry enterprise andstatus as a sugar cane producer for two years prior tolodging the claim, are used to determine thatapplicants are bona fide full-time farmers and not
"hobby" farmers or what Australians sometimes
colloquially call "Pitt St" or investment farmers.  Inother words, these are administrative criteria toensure, along with other conditions, that thepayments are carefully targeted.  These eligibilityconditions are not relevant to assessing whether the
payments meet the criterion of paragraph 6(e).
Applications for this program were not accepted
beyond December 2001 and the program has notbeen extended.  Furthermore, payments are not in anyway based on a level of production but solely on theapplicant's status as a farmer and income levels.  The
payment is a welfare safety-net payment with the sole
objective of meeting the welfare needs of the farmfamily rather than the business or production entity.This payment clearly meets the criteria of having nodistorting effect on production, as there is no inherent
link to production as reflected in the Green Box
criteria.G/AG/R/33
Page 23
European Communities   G/AG/N/EEC/39 New or Modified Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
The United States –  As a follow-up to the responses
at the September meeting, clarification sought as tohow the EC's restructuring programme, whichrequires farmers to produce wine grapes, meets the
criteria of Annex 2, paragraph 11(e) since there is an
explicit requirement in the EC regulation to producegrapes.  Given this production requirement, is the ECwilling to properly notify this programme as Amber
Box support?The object of the regulation is to help the producers
to restructure their production.  There is arequirement not to produce certain varieties for whichthere is not market demand.  The measure clearly
helps to turn away from surplus production in
accordance with paragraph 11 (e) of Annex 2.  TheEC does not agree that this measure should benotified as an Amber Box measure.
Clarification sought as to whether individual ECMember States contribute to payments made underthe restructuring and conversion programme
implemented in their territories.  Information sought
concerning the contribution by the EC Member statesand whether they were included in the support levelindicated in the EC's notification of the restructuringand conversion programme.  Breakdown requested of
support levels under the restructuring and conversion
programme, including any support provided byindividual EC Member states, by  new varietalconversion, grape production relocation, and the
adoption of improved management techniques.Individual EC member States do not contribute to
payments made on the restructuring and conversionprogramme.   There is only Community financing
with the exception of the application of  Article 14/4
of the regulation No 1493/99.  However, memberStates have not used that possibility.  Individualproducers  provide 50% or 25% of co-financingdepending on whether or not they are located in less
favoured areas. The expenditures in the budget year
2001 for the three restructuring and conversionmeasures taking together were as follows:
Germany 14 million Euros
Spain 172 million EurosFrance 19 million Euros
Italy 115 million Euros
Austria 12 million EurosPortugal 41 million Euros.
A break-down between these measures is not
available.
Follow-up comment by the United States – If  certain
policies are moved to the Green Box the farmers
should be free to choose, i.e. the policies should not
affect their productions decisions.  According to theEC, there is a negative list associated with thisregulation.  In the case of a negative list, there areproducts which producers cannot produce, such as,
for example grapes.  Does the EC maintain a negative
list or positive list, i.e. varieties that the producer maychoose to plant as he receives the payments?The EC quoted paragraph 11 (e), Annex 2:  "The
payments shall not mandate or in any way designate
the agricultural products to be produced by the
recipients except to require them not to produce aparticular product".  This is precisely what the EC isdoing with this policy.
Regarding the question concerning the positive list
the EC undertook to provide a response.G/AG/R/33
Page 24
Tables ES:1 to ES:3 Notifications
Japan   G/AG/N/JPN/77     Export Subsidies (Tables ES:1 and ES:2)
Points raised by other Member s Response by Notifying Member
United States – Clarification sought as to whether all
of the notified commodities were exported as food
aid and whether all of these commodities were
produced in Japan, or some or all imported underJapan's WTO minimum access requirements.
Follow-up question by the United States –
Information sought regarding break-down of products
exported as food aid.All of the notified commodities were exported as
food aid and include commodities imported under
minimum access requirements.
The amount imported under Japan's WTO minimum
access requirements and then exported as food aidwas 196,081 tonnes of rice, which constitutes around
23% of the total quantity of the food aid notified.G/AG/R/33
Page 25
Attachment 1
Data provided by Thailand unde r Article 18.6 of the Agreement concerning the United States –
Domestic Support Payments to Rice – Violation of the Peace Clause
Unit:  Million US$
U.S. Domestic Support Program on Rice11999 2000 2001
Loan Deficiency Payments 161 278 306
Marketing Loan Gains 240 319 402
Production Flexibility Payments2453 379 350
Marketing Loss Payments3453 453 453
Total Payments 1,307 1,429 1,511
Total Value of U.S. Rice Production 1,230 1,06941,0235
Note:1We estimate crop insurance payments to be between US$100 million and US$200 million.
Data on export credit guarantee is not publicly available.
2Figures are fiscal year figures adjusted to marketing year.
3The payment equals payments made in 1999.
4Estimate by USDA.
5Forecast as of 12 June 2001 by USDA.G/AG/R/33
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Attachment 2
Details provided by the Philippines regarding special safeguard notifications
G/AG/N/PHL/27, 29 and 30
(a) Response to United States’s Request for Methodology and Data Used to Calculate the Trigger
Price for Onions (G/AG/N/PHL/27)
Data used in computing the trigger price :
Reference yearsVolume of imports
(in kilograms)CIF Value of
imports (in pesos)Unit CIF value of
imports (in pesos per
kilogram)
1986 100  6, 850 68.50
1987 335 24,990 74.60
1988 66  5,337 80.86
Source:  National Statistics Office (NSO), Annual  publication on Foreign Trade Statistics, NSO.
Product HS code: 0703. 10 00
Description: Onions and shallots, fresh or chilled
Computation of the trigger price :
Trigger price =  average CIF price for the years 1986, 1987, and 1988
=  sum of CIF value of imports for 1986-88 ÷ sum of volume of imports for 1986-88
Onion trigger price = (6,850 + 24,990 + 5,337) pesos ÷ (100 + 335 + 66) kgs
= 37,177 pesos ÷ 501 kgs
/g222 Trigger price = 74.21 pesos per kilogramG/AG/R/33
Page 27
(b) Response to United States’s Request for Explanation on PSCC Correlation with the current
HS Codes for Chicken Meat a nd Chicken Parts G/AG/N/PHL/29
The following table presents the matching of the HS Codes (2001) with PSC Codes (1983) for
chicken meat and chicken parts:
HS Code
(2001)Description of ProductPSCC
(1983)Description of Product
0207.11 20Meat of fowls of the species Gallus
domesticus, not cut in pieces, fresh orchilled011.41-00Chickens killed/dressed, fresh, chilled or
frozen
0207.12 20Meat of fowls of the species Gallus
domesticus, not cut in pieces, frozen011.41-00Chickens killed/dressed, fresh, chilled or
frozen
0207.14 12Livers of the species Gallus
domesticus, frozen011.81-00Poultry liver, fresh, chilled or frozen, salted or
in brine
011.41-00Chickens killed/dressed, fresh, chilled or
frozen0207.14 92Other cuts and offal of fowls of the
species Gallus domesticus, frozen011.44-00Poultry offals other than liver, fresh, chilled or
frozen
1602.32 10Meat or offal of fowls of the species
Gallus domesticus, prepared orpreserved in airtight containers014.92-01 Chicken meat in airtight containers
1602.32 90Meat or offal of fowls of the species
Gallus domesticus, prepared orpreserved in airtight containers014.99-00Other prepared or preserved meat and edible
offals, n.e.s.
(c) Response to United States’s Request for Explanation on PSCC Correlation with the current
HS Codes for Chicken Meat and Chicken Parts (G/AG/N/PHL/30)
The following table presents the concordance of the tariff lines between the Philippine schedule of
commitments in 1994 and the HS Codes in 2001 that were used in the notifications.
Notifications Schedule of Commitments
HS Code
(2001)Description of ProductHS Code
(1994)Description of Product
0207.11 20Meat of fowls of the species Gallus
domesticus, not cut in pieces, fresh orchilled0207.10 12Chickens and ducks not cut in pieces, fresh or
chilled
0207.12 20Meat of fowls of the species Gallus
domesticus, not cut in pieces, frozen0207.21 00Fowls of the species Gallus domesticus, not
cut in pieces, frozen
0207.14 12Livers of the species Gallus
domesticus, frozen0207.50 00Poultry livers, frozen
0207.14 92Other cuts and offal of fowls of the
species Gallus domesticus, frozen0207.41 00Cuts and offal, other than livers,  of fowls of
the species Gallus domesticus, frozen
0703.10 00 Onions and shallots, fresh or chilled 0703.10 00 Onions and shallots, fresh or chilled
1602.32 10Meat or offal of fowls of the species
Gallus domesticus, prepared orpreserved in airtight containers1602.39 10Poultry meat or offal, other than turkey,
prepared or preserved in airtight containers
1602.32 90Meat or offal of fowls of the species
Gallus domesticus, prepared orpreserved other than in airtightcontainers1602.39 90Poultry meat or offal, other than turkey
prepared or preserved, not in airtightcontainers
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