WORLD TRADE
ORGANIZATIONG/STR/N/3/SVK
25 June 1998
(98-2562)
Working Party on
State Trading EnterprisesOriginal:  English
STATE TRADING
Updating Notification Pursuant to Article XVII:4(a) of the GATT 1994 and
Paragraph 1 of the Understanding on the Interpretation of Article XVII
SLOVAK REPUBLIC
The following communication, dated 22 June 1998, has been received from the Permanent
Mission of the Slovak Republic.
_______________
In accordance with Article XVII:4(a) of GATT 1994 and Paragraph 1 of the Understanding
on the Implementation of Article XVII, I wish to notify hereby the operation of the State Fund for
Market Regulation of the Slovak Republic in the years 1996 and 1997.
1996
I. ENUMERATION OF STATE TRADING ENTERPRISES
The Government of the Slovak Republic wishes to notify the operation of the State Fund for
Market Regulation (SFMR – Štátny fond trhovej regulácie) – a public agency that may qualify under
the provisions of GATT Article XVII.
II. REASON AND PURPOSE FOR INTRODUCING AND MAINTAINING THE SFMR
The SFMR was established by the Act on State Fund for Market Regulation in Agriculture
No. 270/1991 Coll. of Laws, as an independent economic body.  The SFMR is oriented on domestic
market stabilization of basic agricultural and food products.
The main purpose of the SFMR is to support a nd provide fluent adjustment of manufactured
agricultural products to the changed market conditions.  The SFMR issues the list of agricultural
products being subject to market regulation in accordance with the development of supply and
demand on the domestic market.  Interventions of the SFMR are determined to solve situations when
surplus of production overcomes domestic market consumption and the prices have decreased under
the real production costs.
With the aim to provide stability and predictability of price development through elimination
of excessive price fluctuation the SFMR is authorized to make interventions on the domestic
agricultural market.  The SFMR is effecting only in subsidized exports, while non-subsidized exports
are executed freely out of any influence of this body.G/STR/N/3/SVK
Page 2
The main commodities presently being subject to the regulation by the Fund are as follows:
- cereals
- live bovine animals and beef meat- live swine and pork meat
- potatoes
- poultry and eggs
- oilplant by-products
The principal activities of the SFMR are financed from the annual budget allocation approved
by the Government of the Slovak Republic.  The scope of financing of the SFMR is limited.
III. DESCRIPTION OF FUNCTIONING OF THE SFMR
1. Market regulation with selected agricultural products and foodstuffs
The SFMR Council decides on the commodity subject to regulation, on its quantity and on the
guaranteed (minimum reference) price on which the goods are purchased from the producers.
Intervention purchases and storage of purchased goods are procured by the domestic economic
operators (entities, agents) selected in tenders.
These operators enter into contractual obligations on normal commercial terms and in case of
oversupply and subsequent fall in purchasing prices they purchase the goods in question from the
domestic producers for minimum guaranteed price and store them.  When supply does not meet
demand or in case of high level of demand the stocks are released to a domestic market on
instructions by the SFMR with the view of stabilizing the consumer prices.
2. Regulation of market through subsidized export
The SFMR Council decides on the commodity being subject to regulation, on its quantity, on
the guaranteed (minimum reference) price on which the goods are purchased from producers and on
the level of subsidy granted.  The level of export subsidies is based on the difference between world
market prices and domestic production costs.  Export subsidies are provided only in the case when the
world market prices are lower than domestic production costs.  The volume of subsidies per unit arecreated by the difference between domestic production costs and market prices, however, as a rule
reduced by 10 per cent.
On the basis of tender the economic operators are selected to effect purchase on guaranteed
prices from the domestic producers and export transactions of subsidized goods.  The SFMR providesmonitoring of products subsidized for exports.
The State Budget disbursement in total designed for the SFMR (compared with the previous
year) is as follows:
1995 Sk 650 million
1996 Sk 653.5 million
The Fund does not conduct directly any foreign trade operations on its own.  All such
operations are commissioned to the domestic economic operators which in individual cases enter thestandard contractual relations with the SFMR.  Fore ign trade transactions undertaken on behalf of the
SFMR conforming to normal commercial terms, conditions and practices, including price, profit
margins, quality, availability, marketability and other trade regulations.G/STR/N/3/SVK
Page 3
The decisions of the Fund are taken by the SFMR Council consisting of representatives of the
following bodies:  Director of the SFMR, Ministry of Agriculture, Ministry of Finance, Ministry of
Economy, Anti-monopoly Office of the SR, Slovak  Agricultural and Foodstuffs Chamber, Slovak
Chamber of Commerce and Industry, State Materi al Reserves, Slovak Consumers' Union, Trade
Union Body and State Fund for Market Regulation.
The SFMR has no monopolistic or exclusive position on the market since other traders remain
free to export or import on competitive terms and under normal market conditions.  The rights of
these operators are not affected adversely by the Fund activities.
IV. STATISTICAL INFORMATION
The activity of the SFMR in 1996 was conducted in the following areas and commodities:
(see table).
Statistical Information on Main Operations
of the SFMR in 1996
(in thousand tons)
Commodities Production Total export SFMR export Total import SFMR import
Grain (cereals) 3,322.0 24.6 0 158.2 101.2
Beef meat 66.6 7.6 0.3 4.5 0
Pork meat 199.7 1.5 0.4 4.3 0
Poultry 61.5 3.6 0.4 7.0 0
Eggs 89.0 3.9 0 0.6 0
Butter 13.1 0.6 0.4 0.8 0
Skim. milk
powder14.3 8.0 6.2 3.3 0
Cheeses 32.9 10.9 7.6 3.3 0
1997
I. ENUMERATION OF STATE TRADING ENTERPRISES
The Government of the Slovak Republic wishes to notify the operation of the State Fund for
Market Regulation (SFMR – Štátny fond trhovej regulácie) – a public agency that may qualify under
the provisions of GATT Article XVII.
II. REASON AND PURPOSE FOR INTRODUCING AND MAINTAINING THE SFMR
The SFMR was established by the Act on State Fund for Market Regulation in Agriculture
No. 270/1991 Coll. of Laws, as an independent economic body.  The SFMR is oriented on domestic
market stabilization of basic agricultural and food products.
The main purpose of the SFMR is to support a nd provide fluent adjustment of manufactured
agricultural products to the changed market conditions.  The SFMR issues the list of agricultural
products being subject to market regulation in accordance with the development of supply and
demand on the domestic market.  Interventions of the SFMR are determined to solve situations whenG/STR/N/3/SVK
Page 4
surplus of production overcomes domestic market consumption and the prices have decreased under
the real production costs.
With the aim to provide stability and predictability of price development through elimination
of excessive price fluctuation the SFMR is authorized to make interventions on the domesticagricultural market.  The SFMR is effecting only in subsidized exports, while non-subsidized exports
are executed freely out of any influence of this body.
The main commodities presently being subject to the regulation by the Fund are as follows:- cereals
- live bovine animals and beef meat- live swine and pork meat
-s u g a r
- poultry and eggs
- oilplant by-products
The principal activities of the SFMR are financed from the annual budget allocation approved
by the Government of the Slovak Republic.  The scope of financing of the SFMR is limited.
III. DESCRIPTION OF FUNCTIONING OF THE SFMR
1. Market regulation with selected agricultural products and foodstuffs
The SFMR Council decides on the commodity subject to regulation, on its quantity and on the
guaranteed (minimum reference) price on which the goods are purchased from the producers.
Intervention purchases and storage of purchased goods are procured by the domestic economic
operators (entities, agents) selected in tenders.
These operators enter into contractual obligations on normal commercial terms and in case of
oversupply and subsequent fall in purchasing prices they purchase the goods in question from the
domestic producers for minimum guaranteed price and store them.  When supply does not meet
demand or in case of high level of demand the stocks are released to a domestic market on
instructions by the SFMR with the view of stabilizing the consumer prices.
Since 1993 the Market organizing and promotion measures have been issued consequently for
five basic commodities:  cereals, sugar beet, milk, beef meat and pork meat.  Besides this each year
have been updated the principles of state intervention purchases, in 1997 for certain bovine animals
and swine, poultry and eggs, milk and milk products.
2. Regulation of market through subsidized export
The SFMR Council decides on the commodity being subject to regulation, on its quantity, on
the guaranteed (minimum reference) price on which the goods are purchased from producers and on
the level of subsidy granted.  The level of export subsidies is based on the difference between worldmarket prices and domestic production costs.  Export subsidies are provided only in the case when the
world market prices are lower than domestic production costs.  The volume of subsidies per unit are
created by the difference between domestic production costs and market prices, however, as a rule
reduced by 10 per cent.
On the basis of tender the economic operators are selected to effect purchase on guaranteed
prices from the domestic producers and export transactions of subsidized goods.  The SFMR provides
monitoring of products subsidized for exports.G/STR/N/3/SVK
Page 5
The State Budget disbursement in total designed for the SFMR (compared with previous
years) is as follows:
1995 Sk 650 million
1996 Sk 653.5 million
1997 Sk 1,250 million
The Fund does not conduct directly any foreign trade operations on its own.  All such
operations are commissioned to the domestic economic operators which in individual cases enter the
standard contractual relations with the SFMR.  Fore ign trade transactions undertaken on behalf of the
SFMR conforming to normal commercial terms, conditions and practices, including price, profitmargins, quality, availability, marketability and other trade regulations.
The decisions of the Fund are taken by the SFMR Council consisting of representatives of the
following bodies:  Director of the SFMR, Ministry of Agriculture, Ministry of Finance, Ministry of
Economy, Anti-monopoly Office of the SR, Slovak  Agricultural and Foodstuffs Chamber, Slovak
Chamber of Commerce and Industry, State Materi al Reserves, Slovak Consumers' Union, Trade
Union Body and State Fund for Market Regulation.
The SFMR has no monopolistic or exclusive position on the market since other traders remain
free to export or import on competitive terms and under normal market conditions.  The rights ofthese operators are not affected adversely by the Fund activities.
IV. STATISTICAL INFORMATION
The activity of the SFMR in 1997 was conducted in the following areas and commodities:
(see table).
Statistical Information on Main Operations
of the SFMR in 1997
(in thousand tons)
Commodities Production Total export SFMR export Total import SFMR import
Grain (cereals) 3,741.1 86.3 0 226.4 170.9
Beef meat 28.0 11.5 2.6 2.3 0
Pork meat 78.0 0.5 0 4.7 0
Poultry 86.5 0.3 0 5.3 0
Eggs 82.5 2.7 0 0.4 0
Butter 14.4 1.2 0 0.3 0
Skim. milk
powder13.2 8.0 8.0 3.1 0
Cheeses 42.0 10.3 7.9 3.4 0
Sugar 223.8 19.3 4.5 8.3 0
Malt 105.7 66.0 30.5 5.9 0
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