RESTRICTEDWORLD TRADE
ORGANIZATIONG/AG/R/20
22 October 1999
(99-4618)
Committee on Agriculture
SUMMARY REPORT OF THE MEETING HELD ON 29-30 SEPTEMBER 1999
Note by the Secretariat
1. The Committee on Agriculture held its twentieth meeting on 29-30 September 1999 under the
Chairmanship of Ambassador Nestor Osorio Londoño of Colombia.  The agenda of the meeting as
contained in WTO/AIR/1154 was adopted with the foll owing modifications:  the addition of questions
by Thailand regarding G/AG/N/ISL/14 and by Korea regarding G/AG/N/CHE/22 and
G/AG/N/USA/27;  and the deletion of G/AG/N/USA/25 from the listing of DS:1 notifications for
review.
Part I:  The Review Process
Matters Relevant to the Implementation of Commitments under the Reform Programme:  Article 18.6
(a) New Zealand:  Venezuela – Milk powder tariffs
2. New Zealand enquired whether the Andean Price Band System as implemented by Venezuela
had led to tariffs being applied above their bound levels and, if so, when Venezuela would rectify this
problem.  Venezuela informed the Committee that the matter had been resolved.  As set out in
Article 2 of Official Gazette 3633, the Andean pr ice band system was now being applied subject to
the application of the bound tariffs set out in Venezuela's Schedule.
(b) United States:  Dominican Republic – Discretionary import licensing for pork and beef
3. The United States sought clarification on the Dominican Republic's import licensing
procedures, in particular as regards linking the issuance of import licences to domestic production and
the requirement that each import permit be signed by the Minister of Agriculture.  The DominicanRepublic stated that it was complying with its comm itments to eliminate non-tariff measures affecting
trade in agricultural products.  Import licences were used only for animal and plant health purposes.
As concerns pork and beef imports, the authorities had detected imports by unauthorized operators
which did not meet minimum quality standards.  As a result the Ministry for Agriculture had decided
for health and standards reasons to apply more stringent requirements.  It noted that imports of pork in
first quarter 1999 had increased substantially.  The Dominican Republic indicated that it was prepared
to have bilateral meetings with the United States to address any remaining concerns.
4. The United States felt that the matter raised had not been resolved.  It still had concerns that
import licences were being issued at the discretion of the Secretary for Agriculture and that there was
no justification for this if licences were only for statistical purposes.
Review of Notifications
5. The Committee reviewed the following notifications as listed in the agenda:G/AG/R/20
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(i) on the administration of tariff and other quota commitments (Table MA:1): from
Slovak Republic (G/AG/N/SVK/19), Sw itzerland (G/AG/N/ CHE/13/Add.1) and
Thailand (G/AG/N/THA/30 and G/AG/N/THA/34);
(ii) relating to imports under tariff and other quota commitments (Table MA:2): from
Czech Republic (G/AG/ N/CZE/21), Israel (G/AG/N/ISR/7/ Corr.1), Slovak Republic
(G/AG/N/SVK/15), Switzerland (G/AG/ N/CHE/21), Thailand (G/AG/N/THA/35)
and the United States (G/AG/N/USA/23);
(iii) in the context of the special safeguard (Tables MA:3 to MA:5): from Czech Republic
(G/AG/N/CZE/22), El Sa lvador (G/AG/N/SLV/7 and Corr.1), Hungary
(G/AG/N/HUN/20), Japan (G/AG/N/JPN/39, G/AG/N/JPN/40 and G/AG/N/JPN/41),
Namibia (G/AG/N/NAM/8), Slovak Republ ic (G/AG/N/SVK/16), South Africa
(G/AG/N/ZAF/23), Thailand (G/AG/N/THA/36), the United States
(G/AG/N/USA/26) and Uruguay (G/AG/N/URY/17);
(iv) relating to domestic support commitments (Table DS:1): from Chile
(G/AG/N/CHL/10), Cyprus (G/AG/N/CYP/7/ Rev.1), Czech Republic
(G/AG/N/CZE/19), Iceland (G/AG/N/ ISL/14), Korea (G/AG/N/KOR/18 and
G/AG/N/KOR/24), Mongolia (G/AG/N/MNG/4), Namibia (G/AG/N/NAM/6),
Pakistan (G/AG/N/PAK/ 6), Poland (G/AG/N/PO L/26), Slovak Republic
(G/AG/N/SVK/18), Slovenia  (G/AG/N/SVN/12), Switzerland (G/AG/N/CHE/22),
Thailand (G/AG/N/THA/37), United States (G/AG/N/ USA/27), Uruguay
(G/AG/N/URY/15) and Zambia (G/AG/N/ZMB/2).;
(v) relating to new or modified domestic support measures exempt from reduction
(Table DS:2): from Korea (G/AG/N/KOR/25), Namibia (G/AG/N/NAM/7),
Switzerland (G/AG/N/CHE/20) and the United States (G/AG/N/USA/25);
(vi) relating to export subsidy commitments (Tables ES:1 to ES:3):  from Cyprus
(G/AG/N/CYP/8), Czech Republic (G/AG/N/CZE/20), Honduras (G/AG/N/HND/7),
Iceland (G/AG/N/ISL/15 and Corr.1), Korea (G/AG/N/KOR/26), Namibia
(G/AG/N/NAM/5), Poland (G/AG/N/POL/27), Qatar (G/AG/N/QAT/3), SlovakRepublic (G/AG/N/SVK/17) , South Africa (G/AG/ N/ZAF/25), Switzerland
(G/AG/N/CHE/24 and Corr.1), Thaila nd (G/AG/N/THA/32), Uruguay
(G/AG/N/URY/16) and Zambia (G/AG/N/ZMB/3).
6. The following notifications were subject to prelim inary review and are to be reverted to at the
next meeting in accordance with paragraph 9 of the Committee's Working Procedures:
(i) on administration of tariff and other quota (Table MA:1):  from Japan
(G/AG/N/JPN/42);
(ii) imports under tariff and other quota commitments (Table MA:2):  Indonesia
(G/AG/N/IDN/14) and Japan (G/AG/N/JPN/43);
(iii) on special safeguard (Tables MA:3 to MA:5):  from European Communities
(G/AG/N/EEC/18) and New Zealand (G/AG/N/NZL/20);
(iv) domestic support commitments (Tables DS:1 and DS:2):  from Argentina
(G/AG/N/ARG/9), European Communities (G/AG/N/EEC/12/Rev.1) and European
Communities (G/AG/N/EEC/16/Rev.1);G/AG/R/20
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(v) on export subsidy commitments (Tables ES:1 to ES:3):  from Honduras
(G/AG/N/HND/7/Rev.1), Honduras (G/AG/N/HND/8) and Indonesia
(G/AG/N/IDN/15).
7. Specific points raised with respect to the notifications listed in paragraph 5 above and the
responses thereto, as well as in relation to G/AG/N/ JPN/42, are summarized in Part II of the Annex to
this report.
8. The Committee took note that no counter-notifications had been received under Article 18.7
of the Agreement.
Other matters relating to the Review Process
(a) Deferred replies to questions raised under the review process
9. The deferred replies by Canada and the European Communities to questions raised at
previous meetings are summarized in Part III of the Annex to this report.
(b) Overdue notifications
10. As had been agreed at the March 1997 meeting of the Committee on Agriculture (G/AG/R/10,
paragraph 10, refers) the Secretariat had made available a Room Document dated 29 September 1999
showing the current status of compliance with the notification obligations.
11. The United States noted that they were awaiting a number of notifications, particularly the
EC's export subsidy notification and Canada's domestic support notification.
12. The EC replied that while the delay was regretted, the structure of the Communities and some
of its Member states meant that collecting all the necessary information was a difficult and complex
task.  Although every effort was made to submit timely notifications in some cases this was not
possible.  Nevertheless, the EC hoped to have it s export subsidy notification ready before the
Committee's November 1999 meeting.
13. Canada stated that getting all the necessary information was a complicated task involving a
number of provincial programmes but that they hoped to make both the 1996 and 1997 domestic
support notifications available shortly.
(c) Notification issues
14. In the further discussion on this subject the Chairman's suggestion was concurred in that,
while there would be no obligation to do so, Members should give consideration to following the
practical suggestions made in G/AG/W/42 with a view to improving the quality of notifications and
the efficiency of the Committee's review process.
Part II:  Other Matters within the Purview of the Committee
Secretariat Background Note on Implementation of the Marrakesh Ministerial Decision
15. The Chairman introduced the Secretariat background note on implementation of the NFIDC
Decision which had initially been revised as G/AG/W/42/Rev.1 to take account of the conclusion of
the negotiations on the new Food Aid Convention and which was to be further revised (as
G/AG/W/42/Rev.2) in order to take account of more  recent data on food aid and to correct a number
of typographical errors.G/AG/R/20
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16. Venezuela noted that food aid had been reduced due to lower availability and an increase in
the price of cereals, as well as the failure to create a mechanism to make the NFIDC Decision more
operational.  It felt that such a mechanism was essential in order to ensure technical and financial
support for those net food-importing developing countries which needed such assistance.
17. The Chairman recalled that the annual monito ring exercise in respect of implementation of
the NFIDC decision as a whole would be on the agenda of the Committee's November 1999 meeting.He noted that since the last monitoring exercise seven Donor Members had submitted updated
notifications in the Table NF:1 series.  To ensure that the annual review was comprehensive and as
productive as possible he urged all other donor Members which had not done so to submit their food
aid notifications well in advance of the November meeting.
18. The Chairman also invited the observer international organizations (the FAO, the World Food
Programme, the IMF, the OECD, the World Bank, UNCTAD and the International Grains Council) to
make contributions to the annual monitoring exercise on the NFIDC Decision at the Novembermeeting of the Committee.
Process of Analysis and Information Exchange (AIE process)
Chairman's Report
19. The Committee took note of the following report by the Chairman on the 28-
29 September 1999  meeting of the AIE process:
(i) "In line with paragraph 36 of G/AG/R/10 the following is my summary report as
Chairman of the twelfth, and last, meeting of  the AIE process held on 28-29 September 1999.
(ii) The subject of non-trade concerns was further and extensively discussed on the basis
of papers presented by Norway (AIE/57 and AIE/68), Japan (AIE/60 and AIE/61), the United
States (AIE/64), Switzerland (AIE/67) and the European Communities (AIE/73).
− The first Norwegian paper (AIE/57) stressed the importance of food security and
the role domestic production can play in achieving this objective while thesecond (AIE/68) addressed policy measures, including production supports, that
were considered necessary in order to achieve certain multifunctional objectives;
− Japan's paper (AIE/61) on food security focused on domestic production as a
vital element of food security while their paper (AIE/60) on multifunctionalityoutlined their principal concerns under this heading and pointed out that the
emphasis attributed to different non-trade concerns varied from one country to
another;
− The paper by the United States (AIE/64) suggested that measures to address non-
trade concerns needed to be targeted and decoupled from production in order to
achieve their objectives and that negative effects on other countries should be
avoided.  In this regard, the paper suggested that existing Annex 2 provisions
should be sufficient to cater for Members' non-trade concerns;
− In their paper Switzerland (AIE/67) put forward a number of criteria for
assessing the measures used to address non-trade concerns and suggested that
existing Annex 2 provisions were not sufficient to meet certain multifunctionalobjectives;  and
− The EC paper (AIE/73), which was distribu ted during the meeting, was about the
instruments which could be used to achieve multifunctional policy objectives.G/AG/R/20
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(iii) In the discussion the critical importance of food security, especially for developing
countries, was recognized and the crucial role played by international trade in achieving food
security was stressed.  It was suggested that reducing trade-distorting protection and support
would help many developing countries to improve their export performance and thus their
ability to finance their food security needs.
(iv) It was also pointed out that self-sufficiency did not necessarily mean food security as
such a policy could not address the dangers associated with disease or natural disasters.
However, the view was also expressed that domestic production, along with trade and food
stockpiles, were all essential elements of food security and that adequate levels of domestic
production were needed to address certain threats to food security, including economic crises.
(v) Differing views were expressed on the need for linkage between production measures
and the achievement of multifunctional objectives.  On the one hand it was considered that fully
decoupled supports were capable of meeting such objectives, while on the other hand it wassuggested that in the absence of some form of production support many important
multifunctional objectives could not be realized.  Doubts were also expressed about the ability
of the current provisions to cover the wide range of non-trade concerns which often differed
from one country, or group of countries, to another.  However, it was also stated that certain
trade-distorting subsidies, especially export subsidies, could not be justified on the grounds thatthey contributed to the achievement of multifunctional objectives.
(vi) On market access the United States paper on High In-Quota Tariff Rates (AIE/56)
suggested that some analytical work was needed to assess the relationship between tariff-quota
fill and applied in-quota tariff rates.  In this regard it was noted that the applied tariff rate was
only one of many factors affecting tariff-quota fill.
(vii) The issue of tariff-quota administration was addressed in the EC's paper
"Administration of Tariff Rate Quotas" (AIE/71) which outlined the EC's experience with
different methods of licence allocation.  The paper also discussed auctioning as a possible
method of quota allocation and concluded that, while there was no single best method, some
modalities for administration may be useful.
(viii) While there was support for the EC's conclusion that better rules on tariff-quota
administration were needed questions were raised regarding the legality and effectiveness of
auctioning tariff quota licences.
(ix) The EC paper (AIE/66) "Product Coverage of the Agreement on Agriculture"
suggested various alternatives for updating Annex 1 of the Agreement on the basis of the HS 96tariff nomenclature.  In this regard it was poin ted out that account might also need to be taken
of any further changes to the Harmonized System.
(x) The subject of export regulations was introduced by Japan in their paper (AIE/62).
The paper suggested that the rules on export restrictions needed to be strengthened in order to
have a better balance between the rules and disciplines on market access and those on export
restraints, including coverage of the operations of importing and exporting state trading
enterprises.
(xi) In the course of the discussion it was noted that export restraints can adversely affect
food security.   It was also suggested that import restrictions were a more important source of
distortion in world trade and this was reflected in the more extensive disciplines on such
restrictions.  Another point that was highlighted was that export restrictions were often applied
by developing countries to promote the development of processing industries by offsetting tariffescalation in some developed country markets.G/AG/R/20
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(xii) In this general context, in addition to  suggested improvements in the anti-
circumvention disciplines of Article 10.1 of the Agreement on exporting STEs, reference was
also made to the, so far unfulfilled, undertaking in Article 10.2 to arrive at internationally
agreed disciplines on export credits.
(xiii) The paper by Cuba, the Dominican Republic, El Salvador, Honduras, Nicaragua,
Pakistan, Sri Lanka and Uganda "Issues Related to Special and Differential Treatment"(AIE/63) highlighted the difficulties facing agriculture in developing compared to developed
countries and the need for more effective provisions on special and differential treatment.  The
follow-up paper by El Salvador, Cuba, Honduras, the Dominican Republic, Pakistan, Sri Lanka
and Zimbabwe "Special and Differential Treatment , Non-Paper 2" (AIE/70) went on to develop
some of the issues raised in AIE/63.
(xiv) These two papers noted that developed countries have provided much higher levels of
support and protection which has given them a considerable advantage over developingcountries and that the current provisions in the Agreement were, in some cases, inappropriate
for developing countries.  In order to allow them to develop their agriculture sectors the papers
suggested that consideration should be given to measures to improve market access for
products from developing countries, to give them flexibility on their domestic supports and to
make the Decision on Net Food-Importing De veloping Countries more operational.
(xv) There was general agreement that special and differential treatment for developing
countries was needed to take account of the difficulties they faced, although it was pointed out
that development needs often varied from one developing country to another.  It was felt that
improving market access for products of interest to developing countries and reducing
competition from subsidized production and exports would be of considerable help althoughdifferent emphasis was placed on flexibility in implementing commitments.
(xvi) Mauritius introduced their paper "Agriculture in Small Island Developing States"
(AIE/65) which set out the Plan of Action adopted by the FAO Council at its meeting in June
1999.  It was pointed out that the Plan of Action was now an official document of the General
Assembly of the United Nations.  While it was noted that the Plan also included somesuggestions which were outside the scope of the agriculture negotiations, there was extensive
support in favour of the relevant issues being addressed in the future negotiations.
(xvii)  The paper by Malaysia, Myanmar, Philippines and Thailand, "Continuation of the
Reform Process After the End of the Implementation Period" (AIE/59) outlined some options
for continuing reform after the end of the implementation period.  In introducing its paper"Agreed Conclusions of an UNCTAD Expert Meeting on Trade in Agriculture" (AIE/58)
Uruguay pointed out that these conclusions had been agreed by all participants at that meeting.
(xviii)  Other new papers presented at this meeting were; AIE/69 by the United States on
trade in agricultural biotechnology products; AIE/72 by the EC on food quality, reputation and
geographical origin and AIE/74 by Uruguay on the report by the Chairman of an
FAO/Netherlands Conference "The Multifunctional Character of Agriculture and Land".  On
the EC paper, an opinion was expressed that the issue of intellectual property should not beraised in this forum.
(xix) It was noted that Secretariat background papers on products of interest to developing
countries (AIE/S13) and revised background pape rs on export subsidies (AIE/S3/Rev.1) and
domestic support (AIE/S2/Rev.2) had been circulated since the June 1999 meeting of the AIE
process.  It was also noted that revised background papers on tariff-quotas (AIE/S1 andAIE/S4) and a paper on export credits would be circulated in the near future.G/AG/R/20
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(xx) Finally it was noted that, should there be any additional papers that Members
proposed to submit in the near future that these papers would be circulated and included in the
list of AIE papers with an appropriate annotation."
Chairman's report on the AIE Process as a whole
20. As agreed by the Committee at the June 1999 meeting (G/AG/R/19, paragraph 34, refers) the
Chairman presented a short factual summary report under his own responsibility on the process of
Analysis and Information Exchange as a whole.  This report (AIE/R) also would be attached to the
Chairman's annual report to the Council for Trade in Goods.  It was noted that any papers submitted
by Members in the days following the end of the AIE process would be circulated and added, with an
appropriate annotation, to the list of AIE documents.
21. The Committee took note of the Chairman's report on the AIE process as a whole (AIE/R).
Secretariat AIE/S Background Papers
22. In line with the suggestion made in paragraph 6 of AIE/R regarding the Secretariat AIE
background papers, including those in the course of preparation or revision, the Committee agreed
that, for the purposes of Members' on-going and future work on implementation generally, these
papers should be re-issued as documents of the Committee from January 2000.
Annual Report to the Council for Trade in Goods
23. As agreed by the Committee at its June 1999 meeting (G/AG/R/19, paragraph 37, refers) the
Chairman had prepared a short factual report for the Council for Trade in Goods on the work
undertaken by the Committee in the course of 1999.  A draft of the report had been circulated on
1 September 1999 to facilitate Members' consideration of the matter.  It was noted that Annexes I andII to the report would be updated or revised as appropriate before the report was finalized.  The
Committee took note of the report which, as agreed by the Committee, would be submitted to the
Council for Trade in Goods on the responsibility of the Chairman.  (This report has since been
distributed as G/L/322.)
Other Business
24. The Secretariat confirmed that the background note (G/AG/W/32) would be updated for the
purposes of the annual consultation under Article 18.5 of the Agreement to be undertaken at the
November meeting of the Committee (G/AG/1, paragraph 17, refers).
Date of Next Meeting
25. The next regular meeting of the Committee on Agriculture will be held on 17–
18 November 1999.  The airgram convening the meeting and containing the draft agenda will be
issued on Thursday 4 November 1999.
Schedule of meetings for 2000
26. The Committee took note of the following schedule of regular meetings in 2000, on the
understanding that it may be necessary to revisit this schedule in the light of the outcome of the
Seattle Ministerial Conference:  23-24 March, 29-30 June, 28-29 September and 16-17 November.1
                                                     
1 Provision has also been made for informal meetings in conjunction with these dates and for the
possibility of a meeting in mid-October 2000.G/AG/R/20
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ANNEX – Part I
Page
Part I Summary of specific points raised on  notifications and responses thereto
(29-30 September 1999 meeting)
(i) on the administration of tariff and other quota commitments (Table MA:1) :
Switzerland (CHE/13/Add.1); Th ailand (THA/30 and THA/34);9
(ii) relating to imports under tariff and other quota commitments (Table MA:2) :
Czech Republic (CZE/21); Israel (ISR/7 /Corr.1); Slovak Republic (SVK/15);
Switzerland (CHE/21); United States (USA/23);12
(iii) relating to the use of the special sa feguard (Table MA:3 to MA:5) : Hungary
(HUN/20); Japan (JPN/39, JPN/40 and JPN/41); United States (USA/26);14
(iv) relating to domestic support commitm ents (Table DS:1) :  Chile (CHL/10);
Czech Republic (CZE/19); Iceland (I SL/14); Korea (KOR /18 and KOR/24);
Namibia (NAM/6); Pakistan (PAK/6) ; Poland (POL/26); Slovak Republic
(SVK/18); Slovenia (SVN/12); Switzerland (CHE/22); United States
(USA/27); Uruguay (URY /15); Zambia (ZMB/2);16
(v) relating to new or modified domestic support measures exempt from reduction
(Table DS:2):  Korea (KOR/25); Nami bia (NAM/7); Swit zerland (CHE/20);
United States (USA/25);37
(vi) relating to export subsidy commit ments (Tables ES:1 to ES:3) : Cyprus
(CYP/8); Czech Republic (CZE/20); Korea (KOR/26); Poland (POL/27);
Slovak Republic (SVK/17); South Afri ca (ZAF/25), Switzerland (CHE/24 and
Corr.1); Thailand (THA/32).39
Part II Summary of specific points raised and responses thereto on notifications
subject to preliminary review
on the administration of tariff and other quota commitments (Table MA:1) :
Japan (JPN/42)43
Part III Deferred replies to questions on notifi cations raised at previous meetings
(i)
(ii)relating to imports under tariff and other quota commitments (Table MA:2) :
Canada (CAN/27) and the European Communities (EEC/8 and EEC/13);
relating to domestic support commitments (Table DS:1) :  European
Communities (EEC/16).44
45Attachments
1. G/AG/N/KOR/24   - Justification of the de minimis  claim 52G/AG/R/20
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ANNEX – Part I
Review of Notifications by the Comm ittee on Agriculture on  29-30 September 1999
Summary of Specific Points Ra ised and Responses Thereto
Table MA:1 Notifications
Switzerland   G/AG/N/CHE/13/Add.1   Ta riff Quota Administra tion (Table MA:1)
Points raised by other Member s Response by Notifying Member
New Zealand:  Change in administering organization;
potential implications of changing the competent authoritycharged with allocating tariff quotas to importers.In 1998, the Federal Office of Agriculture has taken over
the Import and Export Division of the Federal Office ofForeign Economic Affairs as part of a programme designedto (a) optimize the responsibilities among the two federaloffices involved and (b) simplify procedures.  Importers
have now one single address regarding all tariff quota
matters.
Auctioning is among the several administration systems
retained by Switzerland for the implementation of its tariff
rate quotas.  Currently, the system is used to allocate sharesto importers for the following products.
Product Tariff quota #Value of bid in recent
auctions
Sfr. per kilo or liter*
Certain processed
meat productsParts of #5 and
#6Between 6.33 and 0.10
Potato products Part of  #14 Between 0.33 and 0.02
Fruit for cider #20 0.01
Seed fruit products #21 0.29
White wine* #23 and #25 0.46Australia: Extension of the auctioning system for several
products.
Additional comments:  New Zealand  and Australia
continue to have serious doubts as to the WTO consistency
of the auctioning system as a method of tariff quota
administration .As stated in previous occasions, auctioning is an internal
measure to allocate tariff quota shares at bound in-quota
rates.  Advantages are: transparency; equal opportunity forall players from both hemispheres; optimizing tariff quotafill;  efficiency in ensuring that those products that are intrue demand by the consumer are imported.
New Zealand: System used to ensure that auction premiaremain below in-quota tariff rates.The allocation process is not related to import duties, hence
no monitoring system is in place.
Brazil:  Meat  -  Reason for using multiple criteria for the
allocation of different types of meat;  different time limitsfor import licences; criteria used to select supplyingcountries.The use of multiple criteria and the different time limits
applied are a consequence of an implementation sector bysector on the basis of the merits of each single sector.Efforts are being undertaken to harmonize and simplify thesystem.
Base period import data used to establish tariff quota
volumes included trade under preferential agreements.Consequently, MFN tariff quotas include preferential
access in the form of c ountry allocations (tariff quotas #5
and #6). No other criteria, unless related to sanitaryconditions and applied in full compliance with the SPSAgreement, are used to restrict the importer's choice of thesupplier.G/AG/R/20
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Switzerland   G/AG/N/CHE/13/Add.1   Ta riff Quota Administra tion (Table MA:1)
Points raised by other Member s Response by Notifying Member
New Zealand:  Potato products  – Reason why the total
bids per bidder are restricted to 500 tonnes of potato
equivalents; definition of potato equivalents; enforcement
system in place.This is to ensure fair access of all interested importers to
tariff quota shares. The tariff quota is based on the quantity
of fresh potatoes and takes into account the quantity of
fresh potatoes that need to be processed in order to obtain agiven potato product.  The system is monitored throughstandard receipts defined by the competent authorities for
the potato products. This facilitates the acc ounting
procedure used to record the fresh potato equivalent of eachproduct consignment.
Brazil: Bread grains, coarse grain for human
consumption  and durum wheat  -  Additional information
on the allocation method; role of OSSOC.OSSOC is the organization in charge of the allocation of
tariff quota shares to importers for these three cereal tariffquotas without any quantitative restriction. OSSOC'smembership consists of impor ters and businesses active in
the grain market (producers are not involved). For tariff
quota #27, a 85 per cent domestic purchase requirementapplies.
Thailand   G/AG/N/THA/30*   Tariff Quota Administration (Table MA:1)
Points raised by other Member s Response by Notifying Member
Canada/New Zealand: Palm oil and its fractions  – Reason
for applying two quantitative allocations which differ from
those scheduled; reason for limiting the importation periodfor the share allocated to the Public WarehouseOrganization (PWO) in 1998; reason for reducing thevolume allocation in 1999.Due to supply shortages in 1998, two different allocations
were made under the tariff quota arrangement for palm oil,
as notified.  One of the allocations corresponds to theNovember and December 1998 period, since this is theperiod when the domestic supply shortage was more acute.
The resulting volume alloca tion was greater than that
scheduled for 1998.
The quantity allocation in 1999 was reduced due to an
oversupply in the domestic market. However, the totalvolume allocation is equal to the scheduled quantity.
Thailand   G/AG/N/THA/34*   Tariff Quota Administration (Table MA:1)
Points raised by other Member s Response by Notifying Member
New Zealand:  Maize  -  Reason for the decrease in the size
of the tariff quota in 1999.The tariff quota volume is equal to the scheduled quantity.
Domestic supply shortages were experienced in 1998 whilethe situation has changed in 1999. It is estimated that therewill be an oversupply in the market hence the reduction.
Australia/New Zealand:  Milk and cream, concentrated  –
    Reason for reducing the tariff quota volume;The reduction is due to the financial crisis in Thailand.  The
quota, however, amounted to 58,500 tonnes, which isgreater than the scheduled quantity.
    Reasons for not allocating licences to the second tariff
quota period in 1999; clarification sought on when thiswill be done;The allocation for the second tariff quota period was
approved by the National Committee on Livestock Policyand Development on 8 September 1999.  The Ministry ofCommerce will shortly issue the related announcement.
    Possibilities for transferring unused volumes from the
first to the second period; transferability of allocationsbetween import licensees;There is no possibility to transfer unused volumes between
periods or transfer allocations between import licensees.
    To overcome delays in allocations, whether a single
tranche allocation at the beginning of the quota year hasbeen considered.The allocation of import licenses was divided into two
periods in order to enable the markets to absorb the flow of
imports and prevent price speculations.  The size of the
allocation is greater than the quantities committed.
G/AG/R/20
Page 11
Thailand   G/AG/N/THA/34*   Tariff Quota Administration (Table MA:1)
Points raised by other Member s Response by Notifying Member
Australia:  Allocation to four different importing groups;
simplification of the system in order to improve flexibilityand predictability for both importers and exporters.The notified importing groups are the major importers of
skim milk powder.  These groups directly and fully utilise
the tariff quota allocation for the benefit of the food
industry. Given the product characteristics, Thailandbelieves that an alternative allocation system would be lessefficient.
New Zealand:  Reason for imposing short validity periodsof import permits for a range of products.The validity periods are not short but are divided into two
periods.  For certain products like palm oil, the domesticsupply is seasonal and the allocation of the tariff quota
during a particular period can offset domestic supply
shortages.G/AG/R/20
Page 12
Table MA:2 Notifications
Czech Republic  G/AG/N/CZE/21  Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
Australia/Canada/Japan/New Zealand/United States: Low
rates of tariff quota fill in 1998 for a number of products.
Ethyl alcohol (> 80 % vol.); Ethyl alcohol, undenatured
(< 80 % vol.); Fresh grapes; Glucose; Meat offal, salted,
in brine, dried; Potatoes; Rape seeds and oil; Starches;Swine, live and swine meat; Waters containing sugarand bottled waters.This is attributable to a lack  of demand for imports.  These
commodities were produced in volumes ex ceeding the
domestic consumption and the producer prices have
generally been lower than world prices. The administration
system is fully transparent, non-discriminatory and operateson the first-come, first-served basis.
Bovine meat; dairy products: Butter, milk and cream,margarine and edible mixtures of fats and oilsSee above reply.  In addition, for these products, decreasing
domestic consumption has been registered.
New Zealand: Consideration of a tariff only regime forthose tariff quotas showing consistent low fill rates.No change is being considered to the current regime.
Israel   G/AG/N/ISR/7/Corr.1     Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
Australia/Canada/New Zealand: Edible fats and oils  –
Reason for the substantial revision to reported in-quotaimports for 1995, 1996 and 1997;  consideration of tariffonly treatment.As stated previously, this revision arises from a data
processing error. The applied MFN duty is equal to theapplied in-quota tariff rate, i.e. 0.41 $/kg, which is lower
than the bound tariff quota rate of 0.8 $/kg.  Since there is
no demand for this product, there is no quota allocation.Israel does not consider am ending this tariff line.
Slovak Republic   G/AG/N/SVK/15  Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
Australia/Brazil/New Zealand/United States: Reasons for
the low fill rates, or zero in-quota imports, for :
    Milk and cream, butter, margarine; Pasta; Sunflower
seeds and oil; Waters containing added sweeteningand bottled waters;The main factors were the growing capacity of the
domestic industry and the traditional export-orientation ofcertain industries.
    Grapes, fresh; Instead of importing fresh grapes, which are destined to the
production of grape must, domestic consumers preferredimporting grape must directly.
    Meat products (bovine, poultry, swine); Poultry meat: Increased efficiency of domestic producers.
Meat offal: Efficient domestic production and low
consumer demand. Pork is tr aditionally imported from the
Czech Re public in quantities exceeding the tariff quota
volume.
    Rape seeds and rape oil; The Slovak Republic is a significant exporter in the region.
In 1998, exports – without export subsidies - were ten timeshigher than the size of the related tariff quotas.
    Starches, inulin; This is a traditional export co mmodity and there is only a
small import demand.
    Undenatured ethyl alcohol (> 80 % vol.) This commodity is traditionally imported from the Czech
Republic in quantities exceeding the tariff quota volume.
New Zealand:  Notification of volume of imports under the
preferential trade arrangement with the Czech Republic.This customs union is consis tent with GATT Article XXIV.
Therefore imports from the Czech Re public, which are
duty-free, are not counted against the tariff rate quotas.This is why such imports are not reported in thenotification.G/AG/R/20
Page 13
Switzerland   G/AG/N/CHE/21  Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
New Zealand:  Cut flowers , other fresh fruit , red wine  –
Reasons for opening these tariff quotas for less than thescheduled volumes.Some of the in-quota market access opportunities shown
in column 3 are different from those in Schedule LIX dueto technical changes.
New Zealand: Dairy products in milk equivalent  -
Reduction of in-quota imports from 1997 to 1998.In 1998, imports were 3 per cent below the tariff quota
volume indicated in Schedule LIX.  In 1997, importsexceeded the tariff quota quantity by 4 per cent.  This isnot a significant decrease of in-quota imports but a normal
fluctuation of import volumes around a generally good fill
rate.
Canada:  Durum wheat  -  Reason for the low rate of tariff
quota fill registered, since this tariff quota was filled in
1995-1997.No quantitative limits are imposed on imports taking place
at the in-quota rate.  This is  why imports in previous years
have exceeded the tariff quota quantity. The actualimported quantities reflect therefore market demand.
United States   G/AG/N/USA/23*  Tariff Quota F ill (Table MA:2)
Points raised by other Member s Response by Notifying Member
Canada:  Beef, dairy, peanuts and peanut products, sugar
and sugar containing products  – Volume of imports at
MFN and preferential rates by tariff quota in 1998; appliedduties in each case.The volume of imports at preferential rates is in general
very low due to the fact that the tariff quotas have country-
specific allocations. Furthermore, more preferential tariffrates under these tariff quotas are zero.  The United Statesundertook to provide available data at a later stage.G/AG/R/20
Page 14
Tables MA:3 to MA:5 Notifications
Hungary   G/AG/N/HUN/20#      (Table MA:4)
Points raised by other Member s Response by Notifying Member
New Zealand:  Raw and white sugar  - Source and type of
price information used in the calculation of the trigger price.
Additional general comment:  New Zealand  raised concerns
because it is the first time that  Hungary has used the special
agricultural safeguard. Importantly, the mechanism wastriggered on a product which is already, together with dairyproducts, among the most protected in Hungary.The c.i.f. import prices in the 1986-88 period were used
provided by EUROSTAT since there were no imports inHungary during this reference period.
Japan   G/AG/N/JPN/39     (Table MA:3)
Points raised by other Member s Response by Notifying Member
Condensed milk
Fat ≥ 8% Fat < 8%
Tariff prior to SSG 26.3 % + 524
yen/kg26.3 % + 261.5
yen/kg
Additional duty
resulting from SSG8.8 % + 174.67
yen/kg8.8 % + 87.17
yen/kgNew Zealand: Tariff rates in place prior to the safeguard
action; rate of additional duty being levied as a result of the
safeguard action; volume of imports affected.
Two tonnes of condensed milk were imported under the
SSG action between 1 June and 31 July 1999.
Philippines: Timeframe of application; consistency withArticle 5.4, given that the application of the safeguard willeffectively extend beyond the year of imposition.The implementation year in Japan begins on 1 April and
ends on 31 March.  In 1998, total imports exceeded the
trigger level at the end of April so the SSG wasimplemented as of 1 June.  The SSG action remained
effective until the end of the implementation year, i.e.
31 March 1999.  In 1999, total imports exceeded the
trigger level at the end of April so the SSG wasimplemented as of 1 June.  Thus no SSG action is
implemented beyond the end of the implementation year,
which is in full conformity with Article 5.4.
United States:  Calculation methodology used to derive a
trigger level of 105 per cent; use of domestic consumptionas a parameter.The average quantity of imports  during the three preceding
years (1996-98), was 22.37 tonnes while the
corresponding domestic consumption was 45,317.82
tonnes. As the market access opportunity (i.e. imports as apercentage of the corresponding domestic consumption)was less than 10 per cent, according to Article 5.4(a) the
base trigger level was 125 per cent. The domestic
consumption in 1998 was 41,502 tonnes, which is2,001.98 tonnes less than in 1997.  As the trigger level isthe sum of (a) the base trigger level multiplied by the
average quantity of imports during the three preceding
years, and (b) the absolute volume change in domesticconsumption in the most recent year compared to thepreceding year, the trigger level would become less than
105 per cent.  But, according to Article 5.4, the trigger
level shall not be less than 105 per cent of the averagequantity of imports. The trigger level for condensed milkwas therefore 24 tonnes, which is 105 per cent multipliedby 22.37 tonnes.G/AG/R/20
Page 15
Japan   G/AG/N/JPN/40     (Table MA:4)
Points raised by other Member s Response by Notifying Member
New Zealand: Rate of additional duty being levied as a
result of the safeguard action; volume of imports affected.The price-based SSG is implemented on each individual
consignment, in accordance with the provisions of
Article 5.  To avoid the publication of the quantity of
imports by each individual trader, the rate of extra dutyimposed as a result of the SSG as well as the volume ofimports affected were not published.
Japan   G/AG/N/JPN/41     (Table MA:4)
Points raised by other Member s Response by Notifying Member
New Zealand:  Clarification of prices for 1997 and 1998 in
line with footnote to Article 5.1(b).
Additional comment:  New Zealand  encouraged Japan to
derive a truly representative average trigger price for the
base period by supplementing the missing data for 1987 and
1988 using other "appropriate" prices as suggested in thefootnote to Article 5.1.Article 5.1(b) provides that the " reference price […] shall,
in general, be the average c.i.f. unit value of the productconcerned ". However, since milk powder was imported
only in 1986 during the base period, the 1986 price was
taken as the average price between 1986-88 and used as
the trigger price.
United States   G/AG/N/USA/26*    (Table MA:4)
Points raised by other Member s Response by Notifying Member
New Zealand:  Application of the safeguard on 35 lines of
dairy products; application on small volumes of imports.
Additional comment:  Recalling that the SSG mechanism
was designed to prevent import surges from disrupting
domestic markets, and noting that these conditions did notapply in the US dairy markets, New Zealand wondered
whether current procedures could not be modified  so as toavoid the imposition of the safeguard on such smallquantities of imports.Safeguards were applied to these dairy items because
certain conditions were met at the time of importation.
The system for applying price-based safeguards isautomatic and implemented by the Customs Service.  Inthe interest of transparency, the application of safeguardsis reported on an eight-digit basis, showing affectedvolumes, which then captures the small quantities.G/AG/R/20
Page 16
Table DS:1 Notifications
Chile   G/AG/N/CHL/10   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
The replies provided below are of a prelim inary nature as the notification, as we ll as the information notified so far for
the years 1995-97, is presently under review by the Government of Chile.  The Delegation of Chile undertook to informthe Committee regarding any changes resultin g from this internal review process.
Supporting Table DS:1
New Zealand: "Technical assistance funds (TAF)" - Reason
for increased expenditures; types of programmes involved.TAF is a jointly funded specialized technical assistance
programme that assists companies to increase productivity,improve business management and integrate newtechnologies into the production process.  CORFO
subsidizes part of the consultancy costs, while the company
bears the remainder.  Chile considers it imperative tomodernize its agricultural sector, and transform productionso as to improve the sector's competitiveness, especially
that of small- and medium-sized farmers.  In pursuance of
that goal, the Ministry of Agriculture drew up a strategicagenda for the sector entitled "Agricultural DevelopmentGoals 1998-2000".  The programmes involved are:  (a)
Support for Innovation and Business Management;
CORFO's coverage is doubled, with more funding beingmade available to small- and medium-sized farmers, jointlywith PROFO and TAF;  (b) since 1998, TAF programmes
are differentiated by production sector, and the Ministry of
Agriculture assigns funds by way of direct transfer toCORFO for Production Support Programmes to ensureadequate follow-up.
Canada:  "Extension and advisory services" and "Inspection
services" -  Reason for increased expenditures.The correct 1997 figure for inspection services for sanitarysafety, etc. purposes is 11,700 million Chilean pesos, andthat for 1998 is 10,560 million Chilean pesos.
Canada: "Infrastructure services – irrigation programmes"
whether these refer to on-farm initiatives or to basicinfrastructure (G/AG/R/16 refers); additional details.The correct figures for the 1998 reporting period
(thousands of 1998 pesos) should be:  Peasant farmirrigation: 1,875,288;  PROMM: 553,403.
The Peasant Farm Irrigation Programme finances studies
and medium and smaller irrigation and drainage works
intended to harness water resources, bring new areas under
irrigation and/or improve, expand or equip existingirrigation or drainage systems.  The programme of mediumand smaller irrigation works provides new technologies that
make for the economical and optimal use of water, by
means of validation units, demonstration modules, courses,workshops and technical manuals.  The funds are assignedaccording to demand, but they go for the most part to on-
farm projects geared towards small farmers.  As regard
improving and enhancing the security of irrigation, thestrategy adopted is that of modernizing on-farm irrigationand to achieve more efficient use of water by means of up-
to-date irrigation systems.  Some funds also go to small off-
farm projects needed to bring water to the farms.  The coreactivities in this regard include the building and repair ofoff-farm irrigation works, thereby improving the efficiency
of the catchment, piping, distribution and regulation of
water resources.G/AG/R/20
Page 17
Chile   G/AG/N/CHL/10   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Canada/Japan/New Zealand: "Infrastructure services –
Secondary road networks" – Status of the programme
previously notified.Domestic support is still being granted under this
programme and amounted to 27,258 Chilean pesos for
1998.  That support was not notified last year as the
assistance programme is not aimed exclusively at theagricultural sector.  It is a general programme alsoinvolving other economic entities, which makes it difficult
to quantify the funds allocated to agriculture.  The amount
shown is an estimate of th e resource allocation to the
agricultural sector for 1998.
Supporting Table DS:2
Japan: "Credit subsidy" – Reason for the decrease in
expenditures.There is an error in the amount notified for 1998 under this
item.  The figure given was 30,000 Chilean pesos whereasit should have been 1,223,722 Chilean pesos.
Czech Republic   G/AG/N/CZE/19   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Supporting Table DS:1
Canada: Absence of Table DS:2 notifications for each reported
new Green Box programme; explanation of how eachprogramme meets Annex 2 criteria.The missing notifications will be submitted. All
programmes are in conformity with Annex 2 criteria: they
are provided through a publicly-funded government agency
and in accordance with transparent and pre-establishedpolicy-specific criteria and conditions.  They do not havethe effect of providing price support to producers. Their
main objective is to consolidate and enhance the results of
the transformation process in agriculture throughrestructuring, landscape protection, and the preservation ofrural communities.
General services
Canada/United States: "Consultation" – Description of the
measure and consistency with Annex 2.Objective:  to provide organizational, economic and
professional advisory services to assist producers in theirdecision-making process through workshops and training
courses; cost-free publication of advisory literature; shows
and exhibitions of domestic animals; field and gardencrops; commodity market information systems; etc. Thesupport amounted to 60-100 per cent of  proved costsdepending on the kind of activity undertaken.
Structural adjustment through investment aids
Australia/Canada/New Zealand/United States: Operation of theprogrammes; confirmation that they do not mandate ordesignate the agricultural products to be produced; consistencywith Annex 2, para 11 (a), (b) and (e):
  "Renewal of vineyards, hop gardens and orchards" This programme is operated on a contractual basis andfocuses on the building of vineyards, hop gardens and
orchards to ensure their indispensable renewal.  Legal
provisions require that the plantings must be preserved for15 years.  The eligibility conditions do not limit growers'choice as to their production structure.
G/AG/R/20
Page 18
Czech Republic   G/AG/N/CZE/19   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
  "Beef cattle farming" This programme, reserved for the less favoured areas,
secures the non-production functions of agriculture and
supports landscape conservatio n through the restructuring
of cattle herds.  It also contributes to the natural use ofgrassland production, ensures permanent workingopportunities and the maintenance of landscape in
cultivated states.  The conditions of support do not
influence the producers' decisions regarding the conduct oftheir business operations.
  "Sheep walk" The transformation of the agricultural sector resulted in themarginalization of sheep breeding in the less favoured areasof mountainous and sub-mountainous regions. Thisfinancial support is made on a per head basis and assists
farmers in breeding sheep in or der to (a) maintain grassland
lots for environmental reasons (soil and landscapeformation, reduction of the share of eroded arable land) and(b)  restructure the land fund de stined to the intensification
of agriculture.
  "Support for dairy cows" This programme aims at upgrading the genetic potential ofdairy cows which in turn will help in restructuring of herds,i.e. decreasing the number of dairy cows while increasing
competitiveness.  Payments are not related to the level of
milk production.
  "Landscape conservation in cultural state" - Criteria used to
determine payments;Objective: keeping agricultural land free from weeds, non-
permitted waste grounds and other defects, in accordance
with the regulations.  Farmers participating in this scheme
are required to reach a level of intensity in herbivorebreeding ranging from 0.1 to 1 large cattle unit per hectareof grassland.  In the less favoured areas, the intensity must
range from 0.25 to 1.5 large cattle unit per hectare of
agricultural land.
Environmental programmes
Australia: "Support for bee-keeping" – Environmental and
conservation basis for providing such payments.The programme is aimed at preserving a sufficient number
of bee colonies which are vital for the pollination of
agricultural crops. No support is provided to the productionof honey and wax.  A 30 per cent decrease in bee colonieswas registered between 1990-93.  To stop the decline, the
Ministry of Agriculture has granted support for each colony
kept in winter since 1994. Bee colonies continued decliningin 1997.  The trend was partly reversed in 1998 when a6 per cent increase was registered.
United States "Support for flood area (spread of wild animals"
– Description;  conformity with Annex 2.In recent years, especially in 1997, the Czech Republic has
been hit by massive floods which severely affected naturallife in woods and forests. In this context, the support, giventhrough financial contributions, is aimed at forest
management.  The threatened animal species (grouse, black
grouse, partridge and bustard) are bred and released in theirnatural environment.  Additional support is given to theprofessional breeding of bezoar goat and white stag. These
animals are excluded from any commercial system or
activity.  The Ministry of Agriculture supervises theirrelease and is also responsible for their branding andregistration.G/AG/R/20
Page 19
Czech Republic   G/AG/N/CZE/19   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
United States "Support for ecological agriculture" –
Description;  conformity with Annex 2.The programme seeks to (a) encourage farmers to use
minimum chemical inputs in agricultural production
(pesticides, veterinary medicines, chemical fertilizers); (b)
improve the soil quality and protect the environment; (c)develop "bio-food" production and (d) maintain life in ruralareas, including agro-tourism.  Three basic programmes are
included: 1. support for organic farming; 2. landscape
preservation; 3. composting.
AMS
Canada: Total value of agricultural production in 1998; non-
product specific AMS as a percentage of the total value of
agricultural production.Total value of agricultural production in 1998:  77,351 mil.
Czech Crowns.  The share of non-product specific AMS in
agricultural production was 1.3 per cent.
Iceland   G/AG/N/ISL/14   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Supporting Table DS:1
New Zealand: "Cultivation and animal breeding" – Reason
for increase in expenditures.In 1998, the government settled its account concerning
back-payments of land improvements which had beenowed to farmers, support outstanding for the period 1992-1997 which amounted to 220 million ISK.
Canada/ New Zealand/Philippines/Thailand: "Repayments
for marketing levy refunds to farmers " -  Description of
programme objectives and operation; whether this is a new
measure; if so, related Table DS:2 notification showing
consistency with Annex 2, para 2.This is not a new programme.  Price reduction charges
were levied on sheepmeat producers between 1995 and1997 and invested in domestic and international market
operations with the objective of reducing sheepmeat
surplus.  These levies resulted in a decrease in farmers'incomes. The notified amount of expenditure relates toreimbursements for the remaining charges.
Canada/New Zealand: "Direct payments to sheep farmers"
– Base year on which the eligible number of head isestablished; whether this is a fixed period; whether farmershad to raise sheep to receive the payments.The agreement concerning the production of sheepmeat
during 1995-2000 requires that sheep farmers actually keepsheep on the farm to become eligible for direct payments.
Exceptionally, farmers may receive direct payments
without fulfilling this requirement if they engage inforestry, soil conservation or other environmental projects.The right to receive direct payments is based on Law no.
46/1985 concerning the production, pricing and sale of
agricultural products.  The farm eligibility is thus based onits historical right for over ten years to receive directpayments.  In order to qualify for the right to receive full
direct payments, the number of sheep kept on the farm
must be at least 60 per cent of the number allowed to thefarm. Thus direct payments are unrelated to the productionof sheepmeat but are rather a form of income support.
Canada:  "Promotion of organic production" – Whether this
programme is new; if so, related notification to showconsistency with Annex 2 criteria.This is not a new programme and was listed in previous
notifications.G/AG/R/20
Page 20
Iceland   G/AG/N/ISL/14   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
New Zealand/Philippines/Thailand: "Support to farmers
who clean up their land" - Description of programme
objectives and operation; whether this is a new programme;
related Table DS:2 notification; consistency with Annex 2,para 12.In the agreement signed between the Government and the
Farmers' Association of Iceland concerning the production
of sheepmeat, the Treasury commits itself to award a yearly
grant for environmental projects during the period 1995-2000.  All farmers may apply for a grant in order to removeredundant fences; clean or remove old houses; and for other
organized environmental projects in rural districts.  To
qualify, the applicant must live on an authorized farm but isnot required to run farming operations such as theproduction of sheepmeat.  The grant has therefore noconnection with agricultural production.
Canada/New Zealand: "Advancement in slaughterhouses
for sheep" - Whether this programme is new; if so, related
notification to show consistency with Annex 2, para 13.This programme concerns the rationalization grants
provided for in the 1995 Sheepmeat Agreement.  The
objective of these grants is to improve the efficiency of
slaughtering and meat processing (e.g. quality control,handling, sanitary conditions, etc.).  Grants are awarded ona yearly basis until the year 2000.  A Table DS:2notification will be submitted.
AMS
New Zealand:  Reason for adjusting external referenceprices.
Additional comments:  Although the reported inflation rate
was found to be excessive by some Members, Australia,
New Zealand and South Africa  expressed their
appreciation of the constructive and helpful steps taken by
Iceland to address this particular issue.  Differences,
however, persist over the interpretation of Article 18.4, and
some Members hoped that further progress could be madetowards a workable solution.  In particular, Australiasuggested that the Committee starts addressing the on-
going concern regarding the definition of what constitutes
"excessive inflation".On the basis of Article 18.4 of the Agreement on
Agriculture, Iceland claimed the right to make calculationsusing figures adjusted for inflation. Those are contained in
the 1996 and 1997 notifications. Detailed arguments were
presented in support of this approach and Iceland's right hasnot been contested.  Criticism has chiefly been directed atthe unilateral method used and the lack of transparency in
its execution. In order to ensure full transparency, Iceland
has now decided to publish two different notifications ondomestic support for 1998, i.e. one version with, andanother without, inflation adjustments.
Canada:  Calculation details on Table DS:1 (withoutinflation adjustment); inflation adjustment factor; averageyearly rate of inflation over the 1986-88 to 1998 period.The Current Total AMS without inflation adjustment is
13 billion ISK.  After conversion using the average
exchange rate during the period 1986-1988, it amounts to
250 million SDR.  The notified average inflationadjustment factor over the period 1986-88 to 1998 is 85 percent.  This means that the average exchange rate of ISK vs.
SDR has increased by 85 per cent from the base period.
During the base period, the average exchange rate of SDRwas 52.11 ISK, but in 1998 it was 97.65 ISK.  During thesame period, the CPI increased by 112.96 per cent.
Iceland's commitments are expressed in SDR but inflation
reduced the level of those commitments by approximately15 per cent in real terms.G/AG/R/20
Page 21
Republic of Korea    G/AG/N/KOR/18* and KOR/24   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Supporting Table DS:1
Australia:  Relief from natural disasters - Additional
information on payments; consistency with policy specific
criteria in Annex 2.Farmers are compensated for the damages caused by
natural disasters (drought, typhoon, floods, etc.) to
agricultural facilities, farmlands, crops and livestock.
Farmers are eligible when production losses exceed 30 percent of the value of production.  Payments are less than thetotal cost of replacing such losses and do not require orspecify the type or quantity of future production.
United States: "Provision of agricultural production and
processing facilities" – Operation; consistency with
Annex 2, para 11.Korean agriculture is still characterized by a large number
of small subsistence farms (average size is about
1.4 hectare), poor infrastructure, insufficient production
and marketing facilities and a low level of mechanization.The support is aimed at improving agriculturalinfrastructure and investing in modern production,
marketing and processing facilities.  Such assistance is only
provided for the period of time considered to be necessaryand does not require or designate in any way the productsto be produced by the recipients.  The programme istherefore in full compliance with the criteria stipulated inAnnex 2, para 11.
Australia/New Zealand:  "Other - Support for improving
farmers' living conditions" – Operation; criteria used.Most Korean rural communities are characterized byrelatively low incomes and poor living conditions.  The
programme aims at enhancing farmers' living standards and
improve welfare of rural residents, e.g. through therenovation of rural houses and the provision of watersupply facilities.  This support is a ind of social welfare
programme and is not related to production.  It therefore
complies with the criteria contained in Annex 2 para 1.
Australia/Canada/New Zealand: "Other – Buffer stock
management fund" –  Operation; conformity with Annex 2,
para 1.
Additional comments: Since products are purchased and
stored when prices are low and sold when prices are high,
Canada and New Zealand  remained convinced that this
programme provides price support and should therefore beremoved from the Green Box.Fruit and vegetables are purchased during the harvest
season and released during off-crop seasons when
significant price fluctuations occur.  In most cases, less
than 1 per cent of the total volume produced is purchased.This scheme helps stabilize markets where demand is priceinelastic and supply is fluctuating. Purchases are made at
market prices, not at pre-determined administered prices.
Purchased quantities are sold through wholesale marketswhen prices go up.  Thus the programme does not supportprices nor encourage production.
In response to remaining concerns expressed by some
Members, the Delegation of  Korea offered to hold
consultations on this matter.
Supporting Table DS:2
Australia/Philippines:  Whether subsidies are product-specific or whether they are generally-available to allagriculture; nature of investment subsidies destined tomushroom and nut production.This type of support is limited to farmers living in
mountainous regions (approximately 65 per cent of Korea'sland) where farms are very small, incomes low, andagricultural conditions unfavourable.  Most farmers in such
areas grow mushrooms, nuts, and medicinal herbs.  Support
is given through investment subsidies or low interest rateloans for facilities and farming equipment.  Support is notrelated to the type of production.G/AG/R/20
Page 22
Republic of Korea    G/AG/N/KOR/18* and KOR/24   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
AMS
Canada/New Zealand/Philippines/United States:  Justific-
ation of de minimis  claims in respect of G/AG/N/KOR/18
and 24; availability of provisional estimates; inclusion of
such information when future de minimis  exemptions are
claimed.Attachment no. 1  refers.  The value of production data for
1998 is not available at present. With respect to the value of
production data for 1997, Attachment no. 1 in G/AG/R/17
refers.  As previously explained, Korea has been making its
utmost efforts to submit notifications at the earliest possibletime.  However, official production statistics for the current
year are not available in time.  Hence, in order to avoid
delayed notifications and preserve consistency in reporteddata, previous year data are used instead.  Furthermore,Korea believes that the use of previous year data makes
little difference when calculating de minimis  percentages
since total production values increase every year in nominalterms.
European Communities/United States : Rice  – Operation;
clarification of volume of eligible production to receive theapplied administered price and consistency with Annex 3,para 8;The Government rice purchase programme was established
at an early stage of Korea's economic development and hasbeen maintained for more than  30 years with the objective
to (a) stabilize domestic prices, not support them, and (b)ensure enough stockpiling for food security purposes.  The
planned volume of purchase was 1.1 million tonnes in 1998
but the actual purchase amounted to 0.928 million tonnesonly: rice farmers preferred the private markets as themarket prices for high quality rice were higher than the
government purchase price. In its notifications, Korea has
consistently used the qua ntity purchased by the
Government as the quantity eligible to receive theadministered price.
Explanation of the difference with the volume ofproduction of paddy rice given by the FAO. The FAO figure relates to total rice production in paddyequivalent whereas the notified figure is the amount ofmilled rice purchased by the Korean Government from
producers. Such purchases represent a small percentage of
the total rice production.  In order to meet reductioncommitments, the quantity of rice purchased by theGovernment decreases every year.
Canada/New Zealand/United States: Reporting ofdisaggregated expenditures for each support measure listedin ST/DS:7; calculation details as required in column 5.Disaggregated support figures are as follows (in billion
won): (a) ginseng: 0.66 for quality improvement and 12.86
as loan interest subsidy; (b) pigmeat: 7.96 for quality
improvement and 6.03 as loan interest subsidy; (c)vegetables: 0.98 for input subsidy (improvement of
packing) and 9.88 as loan interest subsidy.  Separate figureswill be provided in future notifications.
New Zealand:  Non-product specific support - Calculation
details as required in column 4 of ST/DS:9; reasons forincrease in expenditures for each of the programmes listed.This support is given in the form of a low interest rate loan.
To calculate the figure in column 5 of ST/DS:7, the actualamount of loan was multiplied by the differential betweenthe market interest rate a nd the low government interest
rate. The figure in column 4 of ST/DS:9 was calculated
using the same method.
Due to the financial crisis in late 1997, input prices (oil,
feedstuffs, fertilizers, etc.) rose considerably thereby
increasing production costs.  Market interest rates equally
soared, worsening farmers' access to credit facilities.  Thegovernment had to increase the amount of loans to farmersin order to alleviate their difficulties.  Non-product specific
AMS thus increased in 1998 over the previous year because
the number of loans increased and the differential betweenmarket and government interest rates broadened.G/AG/R/20
Page 23
Republic of Korea    G/AG/N/KOR/18* and KOR/24   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
United States:  Beef  -  Production eligible to receive the
administered price and programme description; whether a
loan interest subsidy has been allocated for beef in 1998
within the framework of an emergency debt reliefprogramme; if so, whether this is accounted for in thepresent notification and where.The 1997 financial crisis caused a sharp drop in cattle
prices which prompted government purchases on an
emergency basis. Cattle prices recovered in 1998 and the
programme came to an end in August 1998.  The level ofproduction eligible to receive the applied administeredprice was not understated in the notification.  Korea has
consistently used the actual purchased quantity. For
example, in its Schedule, which was reviewed and certifiedby Members, the government purchase quantity was usedin calculating the market price support for rice.
The loan interest subsidy referred to is a non-product
specific subsidy and is included  in "loan interest subsidy
for livestock farming" in ST/DS:9.
United States: Whether an emergency stabilization plan forsupply-demand of milk has been introduced in 1998; if so,whether this is accounted for in the present notification andwhere.This programme was introduced in 1998 as an emergency
measure. Budget appropriations previously made to otherprogrammes were diverted in order to ensure itsimplementation.  Due to its unexpected nature, no accuratedata on actual budgetary outlays, which appear to be very
small, are available at present.  Detailed information will be
submitted as soon as possible.
United States: Whether a programme to purchase breeding
cows in Cheju Island has been introduced in 1998; if so,
whether this is accounted for in the present notification.After checking this information with the Government
authorities, it appears that the breeding cow programme
was not under the government purchase programme in1998.
Namibia    G/AG/N/NAM/6   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
New Zealand: Actual expenditure levels associated with
each of the Green Box programmes.The only available figures are total budgeted amounts and
no breakdowns are availabl e (N$ million): 43.87 for
agricultural extension; 16.67 for agricultural research; and27.53 for veterinary services.
Japan: (a) "Affirmative action programme" and (b)
"National agricultural credit programme" (ST/DS:2) -
Reasons for increased expenditures.(a) This programme is aimed at helping communal farmers
purchase farms in the commercial sector.  An interest
subsidy is granted to each farmer but its level decreasesover a ten-year period.  The increased outlays are due to theincrease in the number of applicants.  (b) This programme
was designed to give loans to "previously disadvantaged
farmers" who would not otherwise qualify for loans fromcommercial banks.  Funds are given to the Agri-bank tohelp them increase their client base.  The programme is in
its third year of implementation and will be phased out in
seven years.
Pakistan    G/AG/N/PAK/6   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Canada:  Reporting of support in national currency as in
AGST supporting material.Since 1989, Pakistan has experienced a high rate of
inflation.  In 1994, this rate was approximately 13.02 per
cent.  In addition, the national currency has undergone a
great deal of depreciation. Pakistan believes that anycalculation of the AMS using the national currency wouldhave presented a distorted picture. The US dollar, acurrency which remained stable in value terms, was chosen.G/AG/R/20
Page 24
Pakistan    G/AG/N/PAK/6   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Canada:  AMS calculation methodology and use of
negative AMS for wheat; submission of a revisednotification.The Delegation of Pakistan assured the Committee that
where negative values of AMS occur, a zero will be
indicated in future notifications.  However, the negative
AMS indicated is an implicit tax on wheat producers andPakistan believes that it should be excluded from theCurrent Total AMS in the present notification.
United States: Omission of eligible production in marketprice support calculations in cases where no purchases weremade by the government; consistency with Annex 3 para 8.The Delegation of Pakistan undertook to provide answers
in writing.
United States:  Rapeseed, canola  – Omission of support in
G/AG/N/PAK/5 and in the current notification.The Delegation of Pakistan undertook to provide answers
in writing.
New Zealand:  Substantiation of the de minimis  claim for
non-product specific support.Total value of agricultural production in 1997/98 (US$
million): 17,774.67 -  Share of non-product specific AMS
in total agricultural production:  0.13 per cent.
Poland    G/AG/N/POL/26   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
United States:  Market price support calculations for all
commodities for which an administered price is set;consistency with Annex 3, para 8.The notification covers all commodities subject to a price
support mechanism.
United States:  Pork  – Procurement activities carried out
by the Agricultural Market Agency (AMA) in 1997; currentprice support mechanism for pork and beef.In 1997, the AMA purchased pork for the state reserve.
This activity was conducted as a standard commercial
transaction and not as an intervention measure as the
prevailing market price for pork was paid by AMA. Inaddition, the intervention price for pork was not set duringthis period.
In general, the support mechanism is the same for every
commodity. First, the Government establishes a list ofcommodities which are eligible to receive support in thecourse of the given year. Then, a list of related intervention
prices is published.  In the course of the year, a second
government decision signals the beginning of interventionand the specific products concerned. Only then can theAMA start intervention. During 1998, pork and beef were
not on the list of products covered by intervention
activities.
New Zealand: Rye and Wheat  – Reasons for introducing
market price support for rye in 1998; reason for the
increase in market price support for wheat in 1998
compared to 1997.The AMA intervenes when there is a risk of market
disturbance. Authorization to intervene is given by the
government. This was the case in 1998, when falling prices
prompted the government decision in order to preventfurther deterioration of the grain markets.
New Zealand: Reason for splitting the market price support
measure type for common wheat and rye.In 1998, the AMA was involved in two different kinds of
operations.  Poland considered that it would be moretransparent and useful for Members to have the datareported separately together with the appropriate notesbelow ST/DS:5.G/AG/R/20
Page 25
Slovak Republic   G/AG/N/SVK/18   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Supporting Table DS:1
Canada/New Zealand: "Product sale promotion" -
submission of Table DS:2 to describe the conformity of this
new programme with Annex 2; operation of the measure.A Table DS:2 notification will be submitted. This
programme, which meets the criteria contained in Annex 2
para 2, partially covers the costs incurred by newly-
established production-sales associations, such asadvertising, participation in exhibitions, publishing ofbooklets, etc.
Australia/Canada/New Zealand: "Partial damage
reimbursement" – Basis for this support measure;
operation; submission of Table DS:2 to describe theconformity of this new programme with Annex 2.A Table DS:2 notification will be submitted. This
programme fully meets Annex 2 para 8.  The basis forpayments were the negative climatic conditions affecting
Eastern Slovakia.  The resulting floods reduced crop
production by more than 50 per cent in certain regions.The losses suffered by farmers were only partly covered bythese payments.
Australia/Canada: "Ecological procedures" – Criteria used;
consistency with Annex 2.As part of a government programme to develop the
production of natural foodstuffs, these payments aregranted under the condition that agricultural production isundertaken according to ecological met hods and
procedures, including with regard to the cultivation of land
without chemicals and pesticides. The upper limit ofpayments per hectare of arable land is 2,000 SKK.Applicants must undertake to use ecological methods of
production for a minimum of 5 years.  This measure can
also be applied in order to convert agricultural land intograssland.
Australia/Canada: "Rural tourism" - Criteria used;
consistency with Annex 2, para 13 (follow-up toG/AG/R/11 and G/AG/R/16).The programme is applied in accordance with Annex 2 para
13.  The payment is provided only to farmers living indisadvantageous regions who face severe natural c onditions
given the quality of land and who engage in non-agriculturerelated activities such as: reconstruction of existing
accommodation and catering facilities, development of
handcrafts, etc.  The measure is not related to agriculturalproduction and the amount of support has been granted upto 30 per cent of the costs relating to the activity.
Canada/New Zealand: "Conservation of riding horse
breeding" - operation of the measure; submission of Table
DS:2 to describe the conformity of this new programmewith Annex 2.A Table DS:2 notification will be shortly submitted. This
measure was introduced to maintain horse breeding in
Slovakia for racing and tourism. This type of support
complies with Annex 2 para 1 criteria since it has no
impact on production and support is given through agovernment programme.
Supporting Table DS:3
Canada: Information on the phasing out of previous set-
aside programmes; whether the discontinuation of such
programmes is now accounted for in the Green Box or inAMS support.No other set-aside programme is being implemented.
Some of the previous programme functions are now partly
taken over under the Green Box measure "Ecologicalprocedures".
AMS
Australia: ST/DS:4 – Products listed in this table are not
reflected in ST/DS:5 and ST/DS:7.Confirmed, since these only relate to non-product-specific
support (the column heading clearly indicates "including
non-product specific AMS") which is already reported
under ST/DS:9.  However, a corrigendum is underpreparation in order to take into account the comments andconcerns by other Members (see question below).G/AG/R/20
Page 26
Slovak Republic   G/AG/N/SVK/18   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Canada/New Zealand: "Bee breeding"; "Tobacco
production promotion" – Reason for reporting these
programmes under non-product-specific support;
clarification regarding the issuance of a corrigendum forthe latter programme.The Slovak Republic apologized for the delay in submitting
a corrigendum classifying the tobacco programme as a
product-specific programme.  The related notification will
be submitted in the near future.
Due to the considerable decrease in the number of bee
colonies, the bee breeding programme was adopted in order
to preserve a sufficient volume of colonies for pollination
purposes. Owners are granted up to 120 SKK per beecolony to cover medication and related costs.  Taking intoaccount the environmental character of such support,
Slovakia believes this programme would more suitably be
reported under the Green Box category and will submit therelated corrigendum in the near future.
New Zealand:  "Capital construction" – Types of measures
involved; reason for increase in expenditures.Two former programmes, "technical equipment" and
"capital construction", were merged into one programmewhich explains the increase in expenditures.  This supportpartially cover the costs of introducing new farmtechnologies and the modernization of productioncapacities.
Slovenia   G/AG/N/SVN/12   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Canada: Confirmation that the agricultural support
measures reported in G/SCM/N/38/SVN are accounted forin the current notification; if so, where."Grants for livestock production" and "Aid for milk
collecting  in remote mountainous areas" are accounted forin the present notification under ST/DS:6 "beef" andST/DS:9 "transport cost subsidy" respectively.
Canada: Explanation of the significant increase in GreenBox support under structural adjustment throughinvestment aids.Last year, Slovenia launched a reform of its agricultural
policy emphasizing a greater reliance on structural
measures instead of market price support.  The number of
programmes promoting the sustainable development of thecountryside and the eco-sociological development ofvillages was accordingly increased.
New Zealand:  Basis for the adjustment of externalreference prices.
Additional comment:  In each notification for 1995-1998,
Slovenia has adjusted its external reference prices.The Delegation of Slovenia thanked New Zealand for
pointing out the mistake that was made and undertook to
submit the related corrections.
Switzerland   G/AG/N/CHE/22   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Canada:  Notification of support measures reported in
G/SCM/N/48/CHE;  confirmation that all the measures are
included in the present notification; category of supportwhere such measures would be included.Switzerland confirms that all these measures of support are
included in the present notification.  Some are accounted
for in the Green Box category while others are reportedunder ST/DS:7.G/AG/R/20
Page 27
Switzerland   G/AG/N/CHE/22   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Supporting Table DS:1
Australia/Canada:  General Services : Family allowances
for small farmers – Consistency with general criteria
(Annex 2, para 2).This programme is part of Switzerland's general social
policy.  Allowances are not paid to farmers as producers or
processors but to families where the income of the
household is below defined thresholds. They are in fullcompliance with Annex 2, paras 1 and 2.
Australia:  Cantonal spending -  Confirmation sought that
no direct payments are involved.This programme includes a number of measures meeting
different Annex 2 criteria.  It is not possible to account forthese measures separately. Please refer to the previousreplies given by Switzerland for more information
regarding the breakdown of expenditures and how such
measures are accounted for in the present notification underthe different Supporting Tables.
Decoupled income support
Australia:  Confirmation that payments are not based on aperiod other than after the base year.Payments are only based on surface areas and on criteria
which are unrelated to production.
New Zealand: "Cow owners who do not market milk" –
Measures taken to ensure that the payments do not act as an
incentive for beef production; whether beef sold from the
animals would be eligible for price support; consistencywith Annex 2, para 6.This measure was abolished at the end of 1998.  For further
information, please refer to earlier replies and to the
information provided in connection with G/AG/N/CHE/20
(Table DS:2) in the next section of this Annex.
Australia/Canada/Thailand: Direct additional payments –
Operation details; basis for this measure taking into account
Annex 2, para 6; basis for payments and eligibility criteria;calculation details (per farm and per area – G/AG/R/16refers); reference period.These are fully-decoupled direct lump sum payments made
to each individual agricultural operation.  All agricultural
operations or family-operated farms are eligible provided 7per cent of their agricultural area is withdrawn from marketproduction. Those agricultural operations that are using
predominantly contracted labour are not eligible.  The lump
sum payment varies between 2,000-5,700 SFr. per farmdepending on the production zones.  Mountain andhighland operations receive the higher, lowland farms the
lower support.  A pro rata  allocation is used for small
holdings below 9 hectares.  The payments are not related tofactors of production.  The corresponding Table DS:2notification provides further information on thisprogramme.
Structural adjustment through resource retirement
Canada:  "Relief purchasing programme" – Operation;
conformity with Annex 2, para 10(d).This programme implements a clearly-defined objective of
regional policy.  The measure alleviates the seasonal peakof animals on the market following the end of summer
pasturing in the Alpine region.  The programme cost relates
to the expenses incurred by keeping animals (e.g. feeding,etc.) during the period between purchase and resale.  Theprogramme as notified was abolished at the end of 1998.G/AG/R/20
Page 28
Switzerland   G/AG/N/CHE/22   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Structural adjustment through investment aids
Canada: Operation; structural disadvantage being addressed
by the programmes; time-period necessary to overcome thedisadvantage.Investment support is granted to farmers for the purchase of
land and the improvement of land and buildings. A series
of conditions apply. Credits are only given as a
complement to other sources of financing (commerciallending, use of private resources) and are subject toceilings.  Projects submitted must meet clear criteria of
future viability of the business. The adjustment of
structures is an on-going process. Although the overallprogramme is not limited in time, the duration and thegrace period of each individual loan granted to a singlefarmer are limited.
Environmental programmes
Australia/Korea/Thailand: "Summer pasturing" –
Operation; reason for the increase in expenditures;consistency with Annex 2, para 12; confirmation that
support is limited to the extra costs or loss of income
resulting from compliance.This programme ensures the traditional grazing and
maintenance of alpine pastureland.  Payments areconditional upon specific ecological criteria, i.e. the use of
fertilizer and herbicides is prohibited, animals must be fed
on the grown pasture land without recourse to additionalfeedstuffs.  The number of animals per hectare is strictlylimited.
Australia/Thailand: "Extensive cereal production" –
Consistency with Annex 2, para 12; confirmation thatsupport is limited to the extra costs or loss of incomeresulting from compliance.Payments are granted to producers of wheat, barley, rye,
oats and canola who refrain from using growth regulators,resistance stimulators, fungicides and insecticides during
the entire production cycle.  The programme reduces the
pesticide charge of the environment and compensates forthe yield foregone.
Korea: "Egg disposal, producers' reconversion" and "Set-
aside pasture land and renewable raw materials" –
Operation; reason for increase in expenditures.The increase observed is due to the increased number of
subscriptions received under each programme.  Egg
disposal was introduced in 19 97 and is limited to 5 years
(G/AG/N/CHE/16 refers).  The second programmecompensates farmers for retiring land fully from food
production. The planting of experimental renewable raw
materials which could have a potential industrial use (i.e.packaging material, fuel, etc.)  is however permitted.
Australia/Brazil/Korea : "Special ecological services" –
Consistency with Annex 2, para 12; confirmation thatsupport is limited to the extra costs or loss of incomeresulting from compliance; reasons for increased
expenditures over previous year and estimates for the
current year.The increase observed from 1996 to 1998 is due to the
increased number of subscriptions received.  The estimatedexpenditure for the current year is reported inG/AG/N/CHE/20.
Regional assistance
Australia/New Zealand:  "Allowances for milk processed
into cheese" – Operation of the programme (elaboration
beyond previous answers is requested); consistency withpolicy-specific criteria; confirmation that payments arelimited to producers in disadvantaged regions.This programme is designed to get the best added-value out
of the milk produced.  The measure is not linked to the
production of milk and does not lead to any additional
output by the dairy farm.  All regional programmes arelimited to disadvantaged regions.
Canada:  "Non-silage allowances" – Whether all livestock
sectors in the Gruyère region are eligible for this type ofassistance.All dairy farms in the Gruyère region are entitled to the
non-silage allowance provided they meet the relevantcriteria. Alpine pastureland is only inhabited in summer.The continued grazing of these marginal areas is animportant rural development objective.G/AG/R/20
Page 29
Switzerland   G/AG/N/CHE/22   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
New Zealand:  "Allowances for the cost of cattle owners in
mountain and hill areas" – Consistency with Annex 2, para
13.Through this programme, a minimum level of agriculture in
the regions specified. Payments are unrelated to production
and marketable farm output.  They are limited to a
maximum 15 cow units per farm.  In addition, as with mostSwiss support measures, income and wealth thresholdsapply.
United States   G/AG/N/USA/27   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Supporting Table DS:1
Canada/Japan/Korea: Possible new exempt measures and
related Table DS:2 notifications.Table DS:2 notifications will be submitted on the livestock
indemnity programme and the environment qualityincentives programme, which will outline how they meetAnnex 2 criteria.
General services
New Zealand: "State programmes for agriculture" –
Information on the specific programmes operated underthis heading with reference to Annex 2 criteria;disaggregated amounts of expenditure.
Additional comment:  New Zealand
 wished to put on record
its appreciation of the initiati ve taken by the United States
to set up better sources of information in order to improve
the level of accuracy of US notifications as regards the
reporting of sub-federal support measures.New sources of information are being developed to
introduce greater specificity and clarity in notifying theseprogrammes.
Brazil/New Zealand: "Food safety inspection services
(FSIS)" - Reasons for substantial increase in expenditures
from previous year; budget estimation of programmeimplementation.The 7 per cent increase in 1997 reflects a strong
commitment to fully implement the SPS Agreement and
ensure that US meat and poultry safety is among thehighest in the world.  The bulk of total expenditures coverssalaries and other expenses involved in fulfilling FSIS'regulatory responsibilities.
Philippines: "Miscellaneous contributed funds" – Meaning. These are funds r eceived from states, local organizations,
individuals and others, and are available for research workunder cooperative agreements.
Domestic food aid
European Communities:  Whether food aid is granted onlyto the people in need.The bulk of expenditures on the US domestic food aid
programmes goes to the Food Stamp Programme whichenables low-income families to buy food through incomegrants.  Other programmes ensure that children from low-
income families receive free or reduced-cost nutritious
meals in school.  In all cases, the aid is targeted at a clearlydefined segment of the population and is tied to nutritionalobjectives.
Korea: "Child nutrition programme" – Reason for the
increase in expenditures; details on market prices, quantityand price of beef purchased by the government under theprogramme.The 5 per cent increase in expenditures reflect higher
administrative costs. As noted in previous responses, allpurchases are made at market prices since they are
purchased through a competitive tender or contract process.
In all cases, the lowest contract or bid that meets USDArequirements is accepted.  Moreover, the am ount of beef
purchased under this programme represents a very small
share of total US beef production (around 2 per cent) and
therefore has a negligible impact on US beef consumption.G/AG/R/20
Page 30
United States   G/AG/N/USA/27   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
European Communities: Impact of commodity market
prices and commodity surpluses on the selection of
products destined to food and child nutrition programmes;
whether other government food procurement programmesare influenced by these factors; method used to find abalance between different commodities.In instances where commodities are purchased for
distribution through domestic food aid programmes (i.e. a
monetary transfer to the consumer is not involved), there
are specific guidelines in place to ensure that nutritionalobjectives are met.  Since these purchases cover a widerange of products, which are chosen for their nutritional
qualities, and are purchased according to a yearly plan, it is
impossible to say to what extent, if any, market pricesaffect which commodities are purchased.  All domesticfood aid programmes have been notified.
European Communities: Food programmes are presented inthe USDA Web site (ams.usda.gov/cp) as purchases which"also help to stabilise prices  in agricultural commodity
markets by balancing supply and demand " and purchase
programmes to " assist farmers, commodity producers, and
processors by helping to maintain stable commodityprices ".  In press releases, food assistance programmes are
presented as measures to " alleviate economic pressures
experienced by farmers " (ams.usda.gov/news). Consistency
with Annex 2, para 1 (b).In cases where commodities are provided instead of
monetary transfers, such as in the case of the nationalSchool Lunch Programme, they are purchased at market
prices through a competitive tender or contract process.  In
all cases, the lowest contract or bid that meets USDArequirements is accepted.  This meets the requirement ofAnnex 2 para 2(b) that the programme has not the effect ofproviding price support.
Additional comment: In view of the replies provid ed by the United States, the European Communities  continued to have
serious doubts as regards the effects of the US food programmes on domestic prices.
Decoupled income support
Brazil/Philippines: Reason for substantial increase in
expenditures from previous year; budgetary ceilingenvisaged; estimation of future expenditures.-
Australia/EC/Japan/Korea/New Zealand :  "Production
Flexibility Contracts (PFCs) " -
    Reason for the increase in expenditures; consequences
on the domestically-set reduction level in fiscal year
1998; clarification of previous statements that paymentswould be progressively reduced up to the fiscal year2002;As specified in G/AG/N/USA/5, the total amount of PFC
payments in 1997 (which is US fiscal year 1998 (FY 98),i.e. October 1997-September 1998), before adjustments for
refunds, payment limits, and contract violations and
terminations, was set by the FAIR Act at US$5.8 billioncompared to US$5.4 billion in 1996/97.  So there was aprescribed increase in payments from 1996 to 1997 (i.e. FY
97 to FY 98) even before the adjustments.  The value of the
payments was fixed in the 1996 Fair Act, subject todeficiency payments owed to farmers and repayments owedby farmers to the government under the previous farm law.
These adjustments increased the total available for
payments in FY 98 from the amount available in FY 97.The total amount available for payments declinesprogressively from FY 99 through FY 2003.  There will be
a minor discrepancy between the outlays notified and the
outlays established by the FAIR Act since the notificationis presented on a crop year basis while the Fair Actexpenditures were set on a fiscal year basis.
   Effects of increased expenditures on the number of
applications received;Concerning new applications, eligible producers were
required to enter into a seven-year contract by 1 August1996.  There have been no new applications since that date.
    Base year used; To be eligible for payments beginning in 1996, land must
have been enrolled in the annual programmes for wheat,feed grains, rice, or upland cotton in at least one of the1991 through 1995 crop years, or the land had to be
reported to the appropriate USDA office as planted during
that same period.  Several conservation requirements alsohad to be met.
G/AG/R/20
Page 31
United States   G/AG/N/USA/27   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
    Eligible surface area; farmed area (in hectares); For the 1997/98 crop year, 86.2 million hectares were
under contract. The area figures do not change significantly
year-to-year. No information on the share of eligible
surface area that is being farmed is available.  Overall, thetotal harvested cropland in 1997 was 125 million hectares.
    Estimated area of oilseeds grown on eligible land; Information on the area of oilseeds grown on land
benefitting from PFCs is not available.
    Current trend in farm ownership since the base period
since eligibility is related to the land rather thanownership;An analysis of trends in farm ownership, by area, compared
to the base period is not available.
    Production requirements  and their consistency with
Annex 2, para 6(e) (G/AG/R/16, page 50, refers), since
some producers do not have the option of planting fruit
and vegetables.Annex 2 para 6 states that "no production shall be required
in order to receive such payments".  The provisions do not
require the contract holder to produce in order to receive
the payment.
Additional comment: In view of the replies provid ed by the United States, the European Communities  remained
unconvinced of the conformity of PFCs with Annex 2 paras 6 (b) and (e).
Australia:  Confirmation that a ll payments in this category
are based on a three-year average of production in thepreceding years (Annex 2, para 8(a))All programmes notified in this category are consistent
with the loss thresholds and other requirements laid out inpara 8 of Annex 2.  In some cases, the loss may be based on
a preceding 5-year average.  These types of ad hoc natural
disaster relief programmes have been included in theUnited States supporting tables since the Uruguay Roundand their conformity with Annex 2 para 8 criteria had notbeen questioned.
Japan/Korea/New Zealand:  "Livestock indemnity
programme" – Reasons why no payments were made in
1996; whether the programme is new; consistency with
Annex 2 para 8(a).The programme was not in operation in 1996. A Table
DS:2 notification will be submitted, which will outline howthis programme meets Annex 2 criteria.
Australia: "Non-insured crop disaster assistance (NAP)" –
Consistency of yield-based payments with Annex 2 para 8.The NAP is triggered on a yield loss that is much greater
than that specified in para 8 of Annex 2 (50 per cent).
Furthermore, the area must have experienced a loss greater
than 35 per cent.  Since production is a function of yields,they may be used interchangeably in this evaluation.Therefore, it is safe to assu me that the conservative loss
threshold for NAP is consistent with that specified in para 8
of Annex 2.
Korea: "Disaster reserve assistance" - Reasons for increase
in expenditures.Livestock producers suffered higher losses of feed crops in
1997/98 (fiscal year) due to drought and fires.
Structural adjustment through resource retirement programmes
Australia/Korea/Thailand: "Conservation reserve programme (CRP)"
    Reason for increased expenditures; explanation for
shifting outlays from FSA to CCC; difference between
CRP implementation under FSA and under CCC;An explanation is given in the note which states that
beginning in 1997, funding  was shifted to the CCC.
Overall, outlays on CRP decreased slightly from 1996 ( See
(h) structural adjustment through resource retirement,total).  The 1996 Fair Act mandated that the Secretary of
Agriculture use the funds of the CCC to carry out various
conservation programmes, including the ConservationReserve Programme.  Therefore there is no difference inthe way the programme is run.G/AG/R/20
Page 32
United States   G/AG/N/USA/27   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
    Purpose of CCC; operations. The Commodity Credit Corporation (CCC) is a federally-
owned and operated corporation with the USDA.  It was
created to stabilize, support and protect farm income
through loans, purchases, payments and other operations.The CCC handles all money transactions for agriculturalprice and income support and related programmes.
Whether permanent cover crops are required not to bemarketable.By definition, permanent cover crops cannot be marketed.
The programme requires that producers plant permanentcovers of grass and trees on land that is subject to erosion.
Environmental payments
Australia: "Agricultural conservation programme" – Details
on cost-share arrangements.Under cost-sharing provisions, the US Government may
pay up to 75 per cent of the costs of certain conservationpractices, such as grassed waterways, filter strips, manuremanagement facilities, capping abandoned wells, and other
practices important to improving and maintaining the
health of natural resources in the area.
Australia: "Natural Resource Conservation Service
(NRCS)" – Confirmation that payments are limited to the
actual costs or loss of income resulting from compliance.Confirmed.  The programmes managed by the NRCS are
designed and intended to encourage the desired
environmental activity.
Japan/Korea: "Wetland reserve programme" – Reason for
the decrease in expenditures for NRCS activities in 1997
while those by the FSA have been introduced in that year;
whether the programme is new; consistency with Annex 2.The Fair Act authorized funding of this programme through
the CCC starting in 1997.  The outlays by the NRCS reflect
previously authorized outlays that were still available for
spending in 1997.  The difference noted is an issue ofaccounting conventions.
Australia: "Conservation programme technical assistance"
– Consistency with Annex 2, para 12.The purpose of this programme is to assist land users,
communities, units of state and local government, and otherfederal agencies in panning and implementing conservationsystems.  Therefore, this programme only covers technical
assistance to develop a conservation system, which is less
than the actual cost or loss caused by compliance with theprogramme.
Canada/Japan/Korea/Philippines: "Environmental quality
incentive" – Whether the programme is new; related Table
DS:2 notification; operation details; reason whyexpenditures are reported for the first time in 1997 whilethe programme was also budgeted in 1996; consistencywith Annex 2.A Table DS:2 notification will be submitted which will
outline how this programme meets Annex 2 criteria (see
footnote 7 concerning the composition of the programme).For 1996, previously authorized expenditures were stillreported in detail under the various programme
components.  The aggregated expenditures are reported for
the first time in 1997.
Supporting Table DS:3
Japan: Clarification of the use of "n.a." in 1997 versus  "0"
in 1996.The United States decided that it was more accurate to
indicate that these payments were not applicable rather than
zero, since the deficiency programme is no longer in effect.
AMS
Canada:  Clarification sought on the treatment of revenue
foregone (e.g. fuel tax exemptions for agricultural
producers) since under the Agreement on Agriculture,
domestic support includes both budgetary outlays andrevenue foregone by governments at national and sub-national levels.State level fuel tax exemptions are not included in this
notification and have never been included in any of the
United States notifications.  The United States does not
consider that tax exemptions fall within the scope ofdomestic support programmes covered by the Agreementon Agriculture.G/AG/R/20
Page 33
United States   G/AG/N/USA/27   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
European Communities/Japan/Korea/New Zealand: Barley,
corn, cotton, soybeans, sugar  and wheat  - Reasons why
the "marketing loan gains" (ST/DS:6) for those products
have increased; increase in AMS expenditures; whether this
is due to a change in policy objectives.The Fair Act mandates that non-recourse marketing
assistance loans be made available for 1996-2002 crops of
wheat, corn, barley, grain sorghum, oats, upland cotton,
extra-long staple cotton, rice, soybeans, sunflower seeds,canola, rapeseed, safflower, mustard seed, and flaxseed.Marketing loan payments reflect the benefit to producers
who took out a marketing assistance loan at the announced
loan rate per bushel and then were allowed to repay theloan at a rate less than the announced loan rate, asauthorized in the Farm Act.   Marketing loan gains occur
when a producer pays off a loan at a rate below the loan
rate.  These marketing loan gains are reflected inG/AG/N/USA/17 (they were designated as marketingloans").  They have increased in 1997/98 relative to
1996/97 because market prices were higher than the loan
rate in 1996/97 and as a result, marketing loan gains did notoccur.
European Communities: corn, soybeans  - "Marketing loan
gains" (ST/DS:6) – Reason for loan rates in 1997;A producer's current year production of these commodities
is eligible for the loan and the producer can decide the
share or production to place under loan. Marketing loan
payments. Monthly average prices of corn and soybeansdeclined during the 1997/98 marketing year and
approached the national average loan rate by the end of the
year.
  Details on market prices, loan rates and production Different areas of the country have different loan rates and
different market price levels so the existence of marketing
loan gains for 1997 reflect the fact that a number ofproducers were in areas with market prices below the loanrate, which triggered the reduced repayment rate provision
in that area of the country.  As of mid-September 1998,
posted county prices for corn and soybeans were belowloan rates in all producing regions.  The national averageloan rate in effect for marketing year 1997/98 for corn was
US$1.89 per bushel, while the loan rate for soybeans was
US$5.26 per bushel.  There were 9,207 million bushels ofcorn produced and the average market price was US$2.43per bushel.
Japan:  Corn  – Reason for changing the reporting period
starting date from 1 September in 1996 to 1 June in 1997.This is due to an error.  The marketing year for corn begins
on 1 September.
Japan: Cotton  : "User marketing payments" (ST/DS:6) –
Reason for the increase in expenditures.This increase reflects increased expenditures on the "Step
2" payments which are equal to the difference (reduced by
1.25 cents per pound) between the US-North Europeanprice and the Northern Europe price during the fourth weekof the consecutive four-week period multiplied by thequantity of documented purchases or sales.
Thailand: ST/DS:7 - Operation of the commodity loan
interest subsidy; whether this applies to all kinds ofcommodities; subsidy ceiling.This is a component of the non-recourse marketing
assistance loan programme which is funded by the CCC.An interest subsidy occurs because producers are charged
below-market interest rates on outstanding commodity
loans, and interest is forgiven when the commodity isforfeited to the government in lieu of repaying the loan incash, or when the loan is repaid under the marketing loan
provisions repaid at a marketing loan repayment rate lower
than the original loan rate).  There is no limit on the level ofsubsidy.G/AG/R/20
Page 34
United States   G/AG/N/USA/27   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Japan:  Dairy products, peanuts, sugar  – Data sources of
external reference prices;These are contained in AGST/USA.
    Peanuts  – Clarification regarding the use of the loan rate
(administered price) level for the volume underproduction quota;The administered price is US$610 per short ton, which
converts to US$672.4097 per metric ton.
    Sugar  – Reason for using the loan rate for cane sugar as
the administrative price instead of the loan rate for beet
sugar; ratios of cane sugar and beet sugar;The price gap for sugar cane is used to compute the market
price support for cane and beet sugar, combined.  Thisprocedure was used in the base (1986-88) period schedule,which was accepted by all Members in the final
Agreement. The reference price for the traded sugar (raw
value) is for cane sugar, so the use of the cane loan rate isconsistent with the reference price.  The production for1997 is 55 per cent beet and 45 per cent cane, and totals
8,005 thousand short tons of sugar.  This is 7,262 metric
tons of all sugar combined, as shown in ST/DS:5.  Thepercentage share in 1986-88 was 51 per cent beet and 49per cent cane sugar.
European Communities: "Water  subsidies" (ST/DS:9) –
Calculation details;The calculation details are contained in G/AG/R/16,
Attachment no.6.
    Basis for reduction of outlays between 1986 to 1997;
difference between 1996 and 1997;The difference in the figures given for 1986 relative to
1996 and 1997 is partly due to a change in accounting
methodology used to derive these estimates.  As noted inG/AG/R/16, the estimate is now calculated using a debtrefinancing method, whereas in 1986, it was done on a full
cost method.  These two methods were compared in 1991.
The debt refinancing method results in a subsidy estimatethat was 3.5 per cent higher than the full costs method.This indicates that, had the full costs method continued to
be used for 1994 (the year on which 1996 estimates are
based) and 1997, the estimated subsidy would have beenlower than notified. Concerning the difference between1996 and 1997, the 1997 estimate is an update from the
1994 estimate used for 1995 and 1996.  It reflects the
current 1997 debt outstanding and the current 1997 marketinterest rate.
Whether subsidies other than the interest on unpaidcapital are accounted for in the notification; whetherthese later subsidies could include the payment ofirrigators obligations beyond an "ability to pay" by otherwater scheme beneficiaries, selective relief or "charge-
offs" from payments allowed by Congress and a share of
the costs of operating and ma intaining the water delivery
schemes;No.  The notified subsidy is an  estimated interest subsidy
on outstanding project debt.
    Confirmation that all irrigation subsidies (at state and
federal levels) are included; enforcement mechanism inplace.Expenditures provided are at the federal level.  These are
the only expenditures for which information could beobtained.  However, the United States is currentlyimproving the informational database on state programmes.
It is hoped that it is in place before the next notification is
prepared.
G/AG/R/20
Page 35
United States   G/AG/N/USA/27   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
European Communities:  "Grazi ng subsidies" (ST/DS:9) -
Calculation details, including number of animals,
associated fees, etc.; estimated federal income foregone
where the fees charged for grazing forage on federally-owned Western land are below what is considered to be themarket value of the forage.
Additional comment:  The European Communities reported
that a 1994 USDA/ERS report concluded that the "fees
charged for grazing forage on [federally-owned] land inthe West are below what is considered to be the marketvalue for the forage."The data notified represent budgetary outlays, so there are
no calculation details.  The United States undertook toprovide an answer to the remaining questions.
European Communities/Japan: "Crop insurance subsidies"
(ST/DS:9) –
    Operation of the scheme; reason for the decrease in
expenditures in 1997;Relative to 1996, indemnities paid to producers fell by
around US$500 million while premiums paid increasedslightly.
    Calculation details; reason for the yearly variation of the
subsidy share; determination of the unit subsidy whenthe yield is below the guaranteed yield;The value of the subsidy is reflected in the net value of the
indemnities less premiums.
    Reasons for not notifying payments under the product-
specific category of support (ST/DS:6) since thecalculation is based on specific crop yields;Since the parameters are uniform by commodity and such a
wide range of commodities are covered, this programme is
notified as "non-product specific".  It can be noted that
other countries, including Canada, have notified their cropinsurance measure as non-product specific as well.Equally, Japan notifies a portion of its "agriculturalinsurance scheme" in the non-product specific category.
    Reporting of the costs of running crop insurance schemes
in the domestic support notification.-
Philippines: "State credit programmes" (ST/DS:9) -
Indication of more precise estimates for 1995-97.These annual surveys are no longer carried out.  The US
Delegation does not know when or if new estimates will beavailable.
Uruguay   G/AG/N/URY/15   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
New Zealand:  ST/DS:3: "Investment subsidies generally
available to agriculture" - Reason for the increase in
expenditure.The increase in expenditure is due to the use of a different
set of criteria by the Planning and Budget Office to allocate
budget amounts.  The Delegation of Uruguay undertook toprovide additional details subsequently.
Japan/New Zealand: "Deciduous fruit trees and citrus trees"
– whether payments are linked to the values of production;values of production figures; number of producers eligibleto receive payments; number of subsidized farmers in 1997and in 1998.The payments are linked to the values of production. In this
regard, a corrigendum will be shortly submitted to amend
the values indicated in the explanatory table attached toST/DS:6. Eligibility conditions include: (a) size: at least 1
hectare must be planted during a three-year period; owners
of more than 35 hectares planted with deciduous fruit and
citrus trees are excluded from the programme; themaximum area eligible to receive the subsidy is 15 hectaresper farmer. (b) Availability of water for irrigation purposes:
the potential beneficiaries must have access to watersources, in a volume and quality that are sufficient to set upadequate irrigation systems.  The estimated number ofeligible producers is approximately 500 out of a total
number of 1,817 deciduous fruit and citrus tree producers
(based on the 1990 general census). Total number of actualbeneficiaries in 1997 and 1998: 74 and 109 respectively.G/AG/R/20
Page 36
Uruguay   G/AG/N/URY/15   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Japan: "Grapes for wine-making" – Whether payments are
linked to the values of production; values of production
figure.The payments are linked to the values of production. In this
regard, a corrigendum will be shortly submitted to amend
the values indicated in the explanatory table attached to
ST/DS:6.
Zambia   G/AG/N/ZMB/2   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Japan:  "Marketing and trade" – Reason for the increase in
expenditures.This is partly due to the economic expansion in outlaying
areas.  The Government is giving priority consideration to
marketing and trade. Also, currency fluctuations andinflation may also account for this increase.
Japan:  "Soil and vegetation conservation (SVC)" – Status
of the programme in 1998; "Grants to Environmental
Council of Zambia" - Reason for the increase in
expendituresThe Government is now using an integrated approach in
order to address environmental issues.  The SVC project is
on-going but spending has now been shifted to item 10"environmental programmes", which is also the reason whyhigher operational costs by the Environmental Councilhave been registered.
Japan: "Forestry development projects" – Reason why the
number of projects decreased from 11 in 1996 to 3 in 1998;
operation details of the newly-reported "preservation of
natural resources" programme.These projects have not been discontinued but restructured
and integrated into an overall framework of assistance to
the forestry sector. Regarding the preservation of natural
resources, employees of the Ministry of environment underthe Department of Forestry  and the Zambia Forestry
College carry out patrols in th e forestry estates to monitor
the proper usage of resources.G/AG/R/20
Page 37
Table DS:2 Notifications
Korea   G/AG/N/KOR/25      New or Modifi ed Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
Japan: Criteria used to designate sustainable agricultural
zones; competent authority; monitoring system in place to
ensure conformity with required farming methods.Korea has recently taken an interest in environment-
friendly agriculture which is the reason why related direct
payments were introduced.  All farmers and farmers'organizations located in sustainable agricultural zones whopractice organic or low-chemical farming methods are
eligible for payments under this programme.  Sustainable
agricultural zones are designated by the local governmentsupon receipt of applications received.  However, due tobudget constraints, all eligible applicants do not r eceive the
payments.  The beneficiaries must comply with Article 3 of
the Enforcement Decree on Direct Payments to Farmersand record the respective amounts of fertilizers andpesticides applied.  Local governments and relevantagencies monitor these practices to check compliance.
Japan/United States: Method used to calculate incomelosses incurred from implementation.The payment to each farmer or farmers' organization is
determined on the basis of average income losses incurredas a result of implementing environment-friendly practices.
Studies show that the average income difference resulting
from traditional and environment-friendly farmingpractices in Korea is around 524 thousand Won per hectare.
Namibia   G/AG/N/NAM/7      New or Modified Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
Japan/New Zealand:  "Transport scheme" –
   Operation; treatment of transportation costs when
evaluating income losses and consistency with Annex 2,para 8 (b); determination of unit prices.Namibia is subject to persistent and severe drought
conditions. It is an arid country where hardly 8 per cent of
the land receives over 500 mm of rain per annum, the
minimum regarded as necessary for dryland cropping. Thissituation make planning difficult for farmers. The transport
scheme is part of the drought assistance programme. It is
designed to assist communal farmers who live in remoteareas to sell their cattle in areas that are not easilyaccessible by road. Most animals are trekked to selling
points over long distances. Without the scheme, most
farmers would not have sold their animals and thereforewould have experienced income losses.  The scheme is thusconsistent with para 8 of Annex 2.  The unit price for the
scheme is determined by the estimated number of cattle
available, forecasted prices and availability of public funds.
   Whether the beneficiary is the stock transportation
company or the producer who contracted the services ofthe transportation company;The payment is actually made to the transport company as
an incentive since most transporters are reluctant to go toremote areas.
Japan/New Zealand:  "Marketing incentive scheme"  and
"Restocking scheme" – Simultaneous eligibility to both
schemes; determination of unit prices.One single farmer cannot be eligible for both schemes.  The
Marketing scheme is targeted to communal farmers while
the Restocking scheme is strictly limited to commercial
farmers for breeding purposes.  The unit prices aredetermined on the basis of available funds and for ecasts of
animals marketed.G/AG/R/20
Page 38
Namibia   G/AG/N/NAM/7      New or Modified Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
Japan/New Zealand: "Restocking scheme" – Determination
of payments for large and small stock units; method used to
assess the number of breeding material sold by farmers due
to drought conditions.This scheme is administered through the Meat Board and
through registered agents and abattoirs.  To prevent fraud,
all qualifying animals for the subsidy must be branded.
Farmers must also prove that the animals were actually soldto qualify for the subsidy.  Sales through privatetransactions did not qualify under the scheme. Estimates of
breeding stock are based on sales through formal marketing
channels.
Switzerland   G/AG/N/CHE/20*   New or Modified Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
New Zealand/United States: "Contributions for herding
animals consuming coarse fodder" – Operation; category of
support under which exemption is claimed (by reference to
Annex 2 policy-specific criteria); structural and socialcriteria to be fulfilled; eligibility conditions; productionrequirements.This scheme replaces the "payments to cow owners who do
not market milk" and consists in a per head payment to
animals (i.e. horses, bovine cattle, sheep, goat) consuming
coarse fodder.  The number of head of animals owned by agiven farmer is subject to a ceiling established on the basisof ecological and production (fodder) criteria. This
payment is fully decoupled from domestic, market or
production prices and is subject to the same ecologicalcriteria as the "direct additional payments".  The measure isfully consistent with the criteria of paras 5 and 6 ofAnnex 2.
Australia/New Zealand/United States: "Surface area
contributions" – Operation; category of support under
which exemption is claimed (by reference to Annex 2policy-specific criteria); structural and social criteria to befulfilled; eligibility conditions; production requirements.This programme replaces the previously titled "direct
additional payments".  Payments are linked to surface areasand ceilings apply taking into consideration the total size ofthe agricultural holdings. Payments are made upon the
demonstration by the farmer of the ecological services
rendered. Income and wealth limits are among theeligibility criteria.
United States   G/AG/N/USA/25*   New or Modified Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
Canada:  Averaging period used; consistency with Annex
2, para 8 (a).A response has been provided previously, on several
occasions.  The United States believes that this programmeis in conformity with Annex 2 criteria and is comparablewith other natural disaster relief measures notified by theUnited States and other Members.
European Communities: Whet her expenditures under this
programme (which applies to the 1998 year) are accountedfor in G/AG/N/USA/27 (which refers to the 1997/98 year).No.  These expenditures will be reflected in next year's
notification.G/AG/R/20
Page 39
Tables ES:1 to ES:3 Notifications
Cyprus  G/AG/N/CYP/8   Export Subsidies (Tables ES:1 and ES:2)
Points raised by other Member s Response by Notifying Member
New Zealand: Fruit  - Variation in outlays and quantities
between 1996 and 1998; reasons behind the increase in
outlays between 1997 and 1998.
Australia/Canada/New Zealand/United States: Pigmeat  -
Factor used to convert the volume of exports from number
of head to tonnes; reasons for reporting subsidized exportsusing a different measurement unit than is indicated in theSchedule.
Canada/New Zealand: Wine alcohol and other grape
products  - Export subsidy volume to be expressed in
tonnes (1997 and 1998), consistently with the unit ofmeasure used in the Schedule of commitments; variation inoutlays and quantities between 1996 and 1998.
New Zealand:  Confirmation that exports in excess ofannual commitments did not r eceive any form of subsidy
for the reporting periods 1997 and 1998.The Delegation of Cyprus undertook to convey these
questions to the competent authorities.
Czech Republic  G/AG/N/CZE/20   Expo rt Subsidies (Tables ES:1 to ES:3)
Points raised by other Member s Response by Notifying Member
New Zealand:  Butter, cheeses and other dairy products
Confirmation that exports in excess of annual
commitments did not receive any form of subsidy;Confirmed.
Variation in export volumes compared to the 1997
reporting period.In 1998, total exports of other dairy products amounted to
134,600 tonnes of which milk powder (HS 0402) accounted
for 50,800 tonnes, although this group is reportedseparately.  In 1997, the total exports of other dairyproducts and milk powder amounted to 141,010 tonnes.
The Czech Re public believes that this difference is
marginal and reflects the normal course of trade.
As reflected in notification as well as in the Schedule, the
group hop seeds is comprised of several HS items.  The
total increase in the volume of exports in 1998 compared to1997 is due increased exports of wheat and barleyfollowing a good harvest season.
G/AG/R/20
Page 40
Republic of Korea   G/AG/N/KOR/26   Export Subsidies (Tables ES:1 and ES:3)
Points raised by other Member s Response by Notifying Member
New Zealand:  Details on specific cost reduction measures. Subsidies for packing, sorting and internal transport were
granted to the exports of fruits and flowers.  These
subsidies fall in the category of cost reduction measures for
exports of agricultural produc ts and internal transport
assistance as provided for in Article 9.1(d) and (e).
Total exports Values
million US$Volumes
tonnes
  Apples 3.1 3,518
  Pears 7.7 3,941New Zealand:  Apples, pears, flowers  – Total export
values and volumes.
  Flowers 12.2 2,413
Poland   G/AG/N/POL/27   Export Subsidies (Tables ES:1 and ES:2)
Points raised by other Member s Response by Notifying Member
Australia//New Zealand/Thailand: Sugar, potato starch  -
Reason for resorting to roll-over for the third consecutiveyear; intentions for 1999;  reasons for introducing subsidiesat this late stage of implementation of Uruguay Roundcommitments.
Additional comment:  Australia
 pointed out that the notion
of a "careful" use of export subsidy did not exist.  Once a
subsidy is used, it has negative consequences on worldmarkets.The use of roll-over was repeatedly discussed in the
Committee so there is no need to recall that the provision ispart of the Agreement on Agriculture.  However, Polandused roll-over in a careful and limited manner, both in
terms of product coverage and level of outlays, and because
difficult situations arose on certain markets.
Thailand: export subsidy policy for the sugar sector; data
on subsidized sugar export markets.According to the reporting system in place, exporters are
not required to specify the destination of sugar exports.Poland is therefore not in a position to submit data on thedestination of subsidized exports of sugar.
Australia/New Zealand: Whether export subsidycommitments will be complied with in the last year of theimplementation period; enforcement mechanism in place.Poland's export subsidy policy is in full compliance with its
WTO commitments.
United States: Pork  – Confirmation that no export
subsidies were used in 1998.In October, the Polish Council of Ministers decided to
subsidize pork meat up to the first quarter of 1999.According to available information, up to 1998 70 tonnes
were exported.  The first payment received by exports
occurred on April 1999.
United States:  Wheat gluten  – Confirmation that the sales
of wheat by the Agricultural Marketing Agency (AMA) to
processors did not constitute an export subsidy in 1998.The AMA sold wheat through tenders, available to all
exporters, which were then processed and exported as
gluten.  Because tendering was used, the actual pricereceived by the AMA were higher than the prevailingmarket prices.  These sales do not therefore constituteexport subsidies.
New Zealand: Confirmation that exports in excess of theannual commitment levels did not r eceive any form of
export subsidy.Confirmed.
Additional comments: The Delegations of the Philippines , Australia  and New Zealand  reiterated their strong concerns
about the use of roll-over of unused export subsidies, particularly in light of the currently depressed world sugar markets.
This policy continues to penaliz e those exporting countries whic h cannot benefit from subsidies.G/AG/R/20
Page 41
Slovak Republic   G/AG/N/SVK/17   Export Subsidies (Tables ES:1 to ES:3)
Points raised by other Member s Response by Notifying Member
Australia/New Zealand:  Other dairy products  - Reason
for resorting to roll-over in 1998; intentions for 1999;
measures being taken to bring export subsidies within
scheduled limits.
Additional comment:  New Zealand  recalled that the roll-
over provision could be used for another year only.Roll-over of export subsidies in respect of other dairy
products was applied in accordance with Article 9.2.   The
Slovak Republic may invoke this provision again in future
should extraordinary circumstances arise.
Australia: Cereal and flour products  – Total volume of
exports in 1998.Total volume of exports of cereals and flour products in
1998: 480,300 tonnes.
Canada:  Food aid activities in 1998. No food aid was provided in 1998.
New Zealand:  Confirmation that, for all notified products,exports in excess of the annual commitment levels did notreceive any form of export subsidy.Confirmed.
South Africa   G/AG/N/ZAF/25   Export Subsidies (Table ES:1)
Points raised by other Member s Response by Notifying Member
Australia/New Zealand :  Update on proposed changes to
support measures for sugar exports.South Africa is still in the process of amending legislation
to introduce changes to the sugar industry.  Theseamendments need to go through specific processes that aretaking some time to finalize. The Committee will beinformed of these changes upon their completion.
Switzerland   G/AG/N/CHE/24# and Corr.1#   Export Subsidies (Tables ES:1 to ES:3)
Points raised by other Member s Response by Notifying Member
New Zealand: Processed products  –
   Outlays exceeding commitment levels; measures taken to
ensure compliance (follow-up question);The reported outlays exceeded the corresponding
commitment levels by some 300,000 Sfrs. This over-shooting is explained by the fact that requests for exportrefunds are processed and recorded by the authorities the
month following the shipment of the goods. The allocation
of requests at the cut-off date between reporting periodsmay have produced this small margin of error (0.2 per centof the outlay commitments). Generally speaking, export
subsidy outlays were well below the commitment levels in
all preceding years. In 1997, the unused outlays werearound 10 million SFrs, i.e. close to 10 per cent of theannual commitment level. Monitoring compliance wouldimply the setting up of a huge bureaucratic system.
   Confirmation that exports in excess of the annual
commitment levels did not receive any form of exportsubsidyExports not reported in Table ES:1 did not receive any
form of export subsidy.
G/AG/R/20
Page 42
Thailand   G/AG/N/THA/32*   Export Subsidies (Tables ES:1 and ES:2)
Points raised by other Member s Response by Notifying Member
New Zealand:  Manioc pellets  – Details on cost reduction
measures; values and volumes benefitting from suchmeasures.These measures refer to costs incurred for storage and
transportation of exports.  Volume of exports affected:20,000 tonnes.
New Zealand:  Rice, eggs  – Confirmation that no export
subsidies were provided in calendar year 1999.Up until now, no export subsidies were granted in 1999.G/AG/R/20
Page 43
ANNEX – Part II
Summary of specific points raised and responses ther eto on notifications subject to preliminary review
Japan   G/AG/N/JPN/42   Tariff Quota Administration (Table MA:1)
Points raised by other Members Response by Notifying Member
Uruguay: Clarification sought regarding the notification in
relation to the administrative provisions for providing the
market access opportunities under the tariff quota for rice.Japan explained that the notification provided the
information required in terms of Table MA:1 of the
Committee's notification requirements.
Uruguay:  Request for copy of official provisionsregulating the administration of the tariff quota for rice.Japan undertook to explain the administration method on a
bilateral basis.
Additional comments:   Uruguay  expressed concern that despite many requests through bilateral consultations, it had not
been possible to obtain a copy of the official provisions regu lating the tariff quota for rice.  Uruguay reiterated its request
to receive a copy and to hear more detailed explanations in the Committee on Agriculture.  Japan explained that further
explanation would be given on a bilateral basis in addition to the notification, if necessary.
The Chairman urged the Japanese delegation to take fully into consideration the Uruguayan request concerning the
administration of the tar iff quota for rice and noted that it would also be open to Uruguay to rais e questions in writing on
this matter in advance of the November 1999 meeting where G/AG/N/JPN/42 would be subject to substantive review.G/AG/R/20
Page 44
ANNEX – Part III
Deferred replies to questions on notifications raised at previous meetings
Table MA:2 Notifications
Canada   G/AG/N/CAN/27   Tariff Quota Fill (Tables MA:2)
Points raised by Hungary at the June 1999
meetingResponse by Notifying Member
Provisions in individual free trade agreements and
preferential schemes falling under Article I:2(a) of GATT1994 that require Canada to grant preferential margins toUnited States, Mexico, Chile, Israel, Australia and New
Zealand within TRQs established as a result of the Uruguay
Round.Depending on the product, preferential tariffs within quota
may be provided to some Member countries.  Thesepreferences are consistent with Canada’s obligations underregional trade agreements, including the North American
Free Trade Agreement (United States and Mexico), the
Canada-Chile Free Trade Agreement, and the Canada-Israel Free Trade Agreement.  In the case of Australia andNew Zealand, tariff preferences are provided for some
products under long standing preferential arrangements that
are consistent with Article I.2(a) of GATT 1994.  Canada’sobligations under regional trade agreements are fullyconsistent with its WTO obligations.
With regard to the five TRQs which are partially allocatedto supplying countries:  representative periods; legal basisunder WTO; allocation method used.Two points need clarification: (a) Canada does not maintain
quantitative access commitments under regional trade
agreements for beef, concentrated or condensed milk and
cream, powdered buttermilk, butter, or cheese. So the
country allocations in the Schedule do not reflect
quantitative commitments under other trade agreements. (b)
four out of the 5 tariff quotas mentioned by Hungary
represent current, rather than minimum, access
commitments.  They were prepared in accordance with the
agreed process and guidelines, was accepted by allParticipants upon conclusion of the Uruguay Round. Aminimum access commitment exists only with regard to
butter. Therefore the allocations for
concentrated/condensed milk and cream (Australia);powdered buttermilk (New Zealand) and cheese (EuropeanCommunities) represent a continuation of country
allocations which existed prior to the Uruguay Round.  For
beef and butter, allocations were made to traditionalsuppliers, reflecting historical market shares or thedistribution of trade that might result in the absence of theimplementation of the tariff quota system.
The country allocations in these 5 tariff quotas are
consistent with Canada’s obligations under the WTOAgreements.
European Communities   G/AG/N/EEC/8 and 13   Tariff Quota Fill (Tables MA:2)
Points raised bilaterally by Ca nada Response by Notifying Member
Canada: For the reported in-quota imports, request for
information on the volume of imports which occurred atMFN rates and at preferential rates, by tariff quota, for allof the tariff quotas; applied duties in each case.The answer was given to the United States at the November
1998 meeting (G/AG/R/17, page 17, refers). The answer isthe following: For certain quotas, the possibility to takeaccount imports under the Europe Agreements is indicated
in Schedule CXL. It is the EC's view that this can only be
done when the preferential duty rate is the same as the in-quota rate applied. In no cases have preferential importsbeen counted against WTO commitments.G/AG/R/20
Page 45
Table DS:1 notifications
European Communities   G/AG/N/EEC/16    Domestic Support (Table DS:1)
Points raised by other Members at the June 1999
meetingResponse by the European Communities
Supporting Table DS:1
Decoupled income support
Australia/New Zealand/United States:  "Transitional aid to
agricultural income" - Consistency with policy-specific
criteria of Annex 2, para. 6;  whether eligible recipients are
required to engage in agricultural activity.This support covers the trans itional and digressive national
aids according to the Accession Treaty of the three new
Member States during the period 1995-1999.  Payments are
granted to producers of basic agricultural products in orderto offset the differences of price levels and support existingbetween the new Member States and the EC and amount, at
most, to this difference. These payments are granted in the
form of headage or area payments and are calculated forbasic agricultural products.  The payments are not linked toproduction.
Australia/Canada/New Zealand: "Agri-monetary aid" –
   Additional information;“Agri-monetary aid” was given as per  Article 8 of
Regulation 3813/92 which provides that " Member States
(...) may for three years grant farmers compensatory aidwhen the average agricultural conversion rate over the
previous 12 months is lower than the average agricultural
conversion rate over the 12 months preceding that period.The Council shall (...) establish the maximum amountswhich can be granted for each instalment of aid ."  This
provision was extended by Council Regulation 1527/95 for
the cases of significant reductions in agriculturalconversion rates between 23 June 1995 and 1 January 1996.Accordingly, some Member States were authorised to grant
an aid in three successive steps lasting twelve months each.
The criteria for granting the aid were as follows: (a) aidcould be granted only to farmers (b) the aid could notexceed a specified amount for the Member States
concerned (Belgium, Denmark, Germany, Luxembourg, the
Netherlands and Austria) (c) the aid should be reduced withat least  a third for each 12-month period (d) the aid mustnot be linked to production made after the introduction of
the aid and (e) the aid could not favour any particular type
of production or be dependent on production subsequent tothe introduction.
    Consistency with policy-specific criteria of Annex 2,
para. 6, in particular para. 6(a) which calls for a fixed
and defined base period.The requirements of paras (a) to (e) of Annex 2 are met
since Member States may be authorised to grant farmers a
compensatory aid under strict conditions when the averageagricultural conversion rate, over the previous 12 months islower than the average agricultural rate over the 12 months
preceding that period. The aid will be based on this fixed
reference in the past and is not linked to productionundertaken after the introduction of the aid. It should benoted that paragraph 6(a) provides that eligibility to aid
shall be determined by clearly defined criteria and
subsequently list a number of examples (such as) whichmeans that the list is not exhaustive.
G/AG/R/20
Page 46
European Communities   G/AG/N/EEC/16    Domestic Support (Table DS:1)
Points raised by other Members at the June 1999
meetingResponse by the European Communities
Income insurance and income safety-net programmes
Australia/Canada/Japan/New Zealand/Thailand:
 Involvement in this category of support, especially since
budgetary outlays are reported for the first time: Newregulations are listed (Council Regulation 1527/95,Commission Regulation 2921/95) - Whether the EC intend
to submit Table DS:2 notifications; operation of these
measures with reference to Annex 2 criteria.The notified figure should be corrected to 0 as no such
programmes are operated in the EC.  The notified amountconcerns insurance subsidies and should therefore benotified in ST/DS:9. The remaining corresponds to tax
exemptions, which should not have been notified. ( A
revision was subsequently submitted by the EC andcirculated to Members ).
Structural adjustment assistance provided through producer retirement programmes
Brazil/Japan/New Zealand: Reason for the increase from
1995/96 to 1996/97 in the amounts destined to thisprogramme category.Due to a lack of information the expenditure indicated for
the year 1995/1996 of 148.8 Mio ECU corresponds to theEAGGF contribution only and does not show total public
expenditure. The figure should be 210 Mio ECU. The
figure given for 1996/97 relates to total public expenditure.However, the amount for 96/97 should be reviseddownwards to 948.4 Mio ECU, as 800 Mio ECU
correspond, it now appears, to health insurance payments
that were notified by error.  The result of these correctionsshows a slighter increase of expenditures concerning theProducer Retirement Programme which can be justified by
a higher application rate after a weak starting phase
following the accession of new Member States in 1995, andby the application of these programmes in the new GermanLänder.
Structural adjustment assistance provided through resource retirement programmes
Brazil: Reason for the increase from 1995/96 to 1996/97 inthe amounts destined to this programme category.The increase is due to a higher application rate to set aside
land.
Structural adjustment assistance provided through investment aids
Australia/Canada/United States:  Whether, for each listedmeasure, payments are in response to objectively
demonstrated structural disadvantages and are limited to
the amount n ecessary to compensate for these
disadvantages.The diversity of European agriculture and national/regional
conditions does not allow giving an exhaustive list of all
the structural disadvantages being addressed. National or
regional investment aid programs are always adapted to thespecific structural problems which might be, e.g. smallstructures of  holdings,  out-dated technical equipment, low
diversification of agricultural activities. Applicants have to
submit an investment plan showing the disadvantages theyface (based on objective criteria) and indicating how theproposed investments will improve the structure of the
farm. Payments are limited to a certain share of the
investment volume for which an upper limit for eligibilityis set. The share is differentiated according the type ofinvestment and the area where the investment is
effectuated. e.g. for certain less-favoured areas the aid
intensity is higher.G/AG/R/20
Page 47
European Communities   G/AG/N/EEC/16    Domestic Support (Table DS:1)
Points raised by other Members at the June 1999
meetingResponse by the European Communities
United States: "Construction of processing, …  equipment"
and "purchase of machinery and equipment, animals,
buildings and plantations" - Eligibility requirements;
structure and operation; consistency with para. 11 criteria
which refer only to the provision of payments that aredetermined by reference to clearly-defined criteria and shallnot designate the type of output to be produced.Applicants must give evidence that investments are viable
and contribute to the adjustment of structural disadvantages
they face. The investments are partial financed andregionally differentiated in order to take into account thedifferent structural disadvantages for which objectivecriteria exist (delimitation of Objective 1 and 6 areas, e.g.).
Payments are not related to the type or volume of
production but to the type and volume of investmentundertaken. Therefore, payments are also not related toproduction prices. The payments are only granted for the
realisation of the investment, mostly in form of capital
grants. The mentioned actions (construction of processing,packaging, and storing centres and equipment, as well aspurchase of machinery and equipment are eligible under the
support scheme to improve the processing and marketing of
agricultural products under Regulation (EC) n° 951/97. Adetailed description of the measures involved was providedlast year. The payments do not mandate or designate theagricultural products to be produced.
Australia/Canada:  "Aid for young farmers" – Consistency
with para. 11 criteria; nature of "objectively demonstratedstructural disadvantages";  base period used.The objectives of the additional investment aid for young
farmers and the setting up aid for  young farmers under
Regulation 950/97 (art 10 and 11) are (a) to facilitate their
installation and (b) structural adjustment of their holdingsafter their first installation. Structural disadvantagesjustifying this measure ar e demonstrated by the very
negative demographic data concerning the age structure of
European farmers. Only 8.3% of farm owners/managers areunder thirty-five, while 24.5%, i.e. almost a quarter of allactive farmers are over sixty-five years old. There is noneed to specify the “base period” as investment aid is in no
case related to the type or volume of production undertaken
in any year after the aid has been authorised.G/AG/R/20
Page 48
European Communities   G/AG/N/EEC/16    Domestic Support (Table DS:1)
Points raised by other Members at the June 1999
meetingResponse by the European Communities
Canada:  New regulations are listed (Council Regulations
950/97 and 951/97) – Whether the EC intend to submit a
DS:2 notification; operation of these measures withreference to Annex 2 criteria.These are not new policy measures but simply a
codification of existing legislation which consolidates in
one version all the amendments undertaken to the previousRegulations. As explained last year, the applicant has tospecify in the investment plan the time period in whichhe/she wants to realise the investment. Investment plans
have an average duration of two-three years. One farmer
may only apply for three investment plans in a 6-year'speriod. Compensation for the structural disadvantage iscalculated in accordance with strict limits set up at
Community level expressed in terms of maximum eligible
investment amounts and aid intensities, which areconsidered to be sufficient to compensate the structuralhandicaps. The concrete aid amounts are defined by
Member States/regions according the national/regional
situation, and may in no case exceed the limits set atCommunity level. The policy-specific criteria arerespected. For the investment aid for agricultural holdings,
minimum eligibility conditions for applicants to the scheme
are established at EU level. Applicants must (a) be full-timefarmers (at least 25 % of income from farming, and at least50 % of income derived from farming and other activities
(forestry, tourism, craft activities, activities for monitoring
the countryside), and at least 50 % of working time onfarm); (b) possess adequate occupational skill andcompetence; (c) submit a Material Improvement Plan (this
plan must show that the investments are justified with
regard to the situation of the holding and its economicposition and that implementation of the plan will bringabout a lasting improvement of that situation); (d) keep
simplified accounts. The income is less than 1.2 times the
reference income of each Member State concerned. Theamount of payment given is strictly determined by the costsand type of investment (fixed assets or equipment) and not
related to the volume of production or product price. The
payments relate strictly to the investment concerned. Thereis no obligation for beneficiaries to produce a particularproduct.G/AG/R/20
Page 49
European Communities   G/AG/N/EEC/16    Domestic Support (Table DS:1)
Points raised by other Members at the June 1999
meetingResponse by the European Communities
Environmental programmes
Brazil/Canada/Japan:  Reason for the increase from
1995/96 to 1996/97 in the amounts destined to thisprogramme category; One new regulation is listed (CouncilRegulation 950/97) – Whether it can be assumed that the
increase in expenditures over the previous year is due to
this regulation; whether the EC intend to submit a DS:2notification; operation of this measure with reference toAnnex 2 criteria.The reasons are twofold : (a) more programmes, and (b)
payments were made regarding two years ofimplementation for some of the programmes. This increaseis not due to the establishment of Regulation (EC) n°
950/97, which doesn’t concern environmental programmes
but aims at the modernisation of farm structure.  The year1996 was the first year during which payments for agri-environment measures were made in the three new Member
States, which explains most of the increase since these new
Member States showed substantial implementation. Inaddition, in other Member States, the process of developingnew programmes had not yet come to an end in 1996,
which also resulted in new expenditure.  Since the entry
into force of Regulation (EEC) 2078/92, no new policyunder the agri-environment scheme has been introduced.Since then, new programmes proposed by Member States
and approved by the Commission have been introduced
under this Regulation.
United States: Operation details for each listed measure.
explanation of how payments are limited to the amount
necessary to compensate for extra costs or lost income
involved in complying with the programme.These measures are provided by the agro-environmental
Regulation  (EEC) No 2078/92, a framework programme at
EU level. Major measures are: - protection of environment
and preservation of the countryside, control of soil erosion,extensification, biodiversity, forestry measures,preservation of landscape and habitats. The programmes
are developed by national, regional or local authorities,
depending on the degree of administrative decentralisationas well as on the environmental and agriculturalcharacteristics of the relevant areas and their specific needs
and then at the end put forward to the Commission for
approval. A description of the geography and farming inthe area concerned and the proposed objectives andconditions for support are included in  these programmes.
The amount of the payment is limited to the extra costs or
loss of income, based on model calculations.
AMS
Brazil:  Reason for the increase from 1995/96 to 1996/97 inthe AMS.Due to an error in the production figure for tomatoes, the
AMS figure for 1995/96 needs to be revised upwards toread 50.026 Mio ECU (A revision was distributedsubsequently).
United States:  Reason why references to the specific legalbasis for the measures listed in ST/DS:5, 7 and 8 wereomitted.The legal basis for the measures listed will be provided in
future notifications.
Korea:  Explanation sought on the difference between the"price gap policy" (applied to olive oil in ST/DS:6) and the
"price support" policy (referred to in ST/DS:5), in terms of
policy objectives and implementation mechanisms.
Canada/New Zealand:  ST/DS:4 - Substantiation of the de
minimis  claims.Cereals (aid Portugal): The Portuguese producers can apply
for a direct aid for each tonne of cereals sold on the market.It is not possible to allocate this aid to the different cereals.
The total production value of cereals in the EU-15 was
21.849 Mio ECU. Potatoes for processing into starch:  391Mio ECU. The de minimis claim for durum wheat is notcorrect because the AMS is negative.G/AG/R/20
Page 50
European Communities   G/AG/N/EEC/16    Domestic Support (Table DS:1)
Points raised by other Members at the June 1999
meetingResponse by the European Communities
Supporting Table DS:6
Canada:  Sugar  -  Whether the support for the beet sector
in Spain notified in G/SCM/N/25/EEC is included in theamount shown with respect to "Direct aid Spain"; where.Yes, this support has been included.
As explained last year, the support to tobacco growersconsists of 2 main instruments:  (a) a premium, paid to help
raise grower’s income and at the same time gear productionto market requirements and permit disposal of the tobacco
grown in the Union. (b) a special conversion premium
granted in the framework of a three-year programme inparticular for conversion to certain tobacco varieties. Theamount of 32.5 Mio refers to the tob acco conversion
premium applied for the last time in 1995.
Notification 95/96 premium
conversion premium
total1,007.6
32.5
1,040.1Japan: Tobacco  -  Whether a policy change accounts for
the increased value of non-exempt direct payments.
Notification 96/97 premium 1,005.3
Supporting Table DS:8
Korea: Apples, pears  - Details on the specific contents of
the "price support" policies; calculation details; reasons
why the EMS was calculated for these products.The price support policy for certain fruit and vegetables
consists of applying a specific import duty when the price
of the product concerned is lower than a certain level. Thismeans that the tariff may vary according to the value ofeach lot imported. The highest entry price during the year
has been taken as applied administered price. The product-
specific EMS is equal to the difference between theadministered price and the fixed external world marketprice, multiplied by the internal production.
Korea: Citrus fruit, lemons, peaches, plums and pears
for processing  -  Explanation of the "minimum price"
policy; calculation details.Processors have to pay a fixed minimum price to the
producer to provide them with an adequate income. Thepayment of the minimum price is a condition for theprocessor to receive processing aid. The EMS is equal to
the difference of the minimum price and the fixed world
market price, multiplied by the quantities processed.
Korea: Cotton, wine  - Operation of the "guide price";
specific calculation details for each product.Cotton: aid is equal to the difference between a fixed guide
price and a world market price is granted to ginning firms,
which are required to pay a minimum price to theproducers. Wine: a guide price is fixed at a level whichensures a fair income to producers.  If the actual price isbelow the guide price, the intervention mechanism could be
activated. The EC did not provide market price support in
the sense of  ST/DS:5.  The aid given to the cotton sector islisted in ST/DS:8, product-specific EMS.
Japan: Potatoes for processing to starch  - Whether the
decreasing value of the EMS over the previous year isrelated to decreasing yields.An error was made in the notification for 1995/96.  The
volume of production of potatoes was used instead of thestarch content of potatoes. The right production figure for1995/96 is 1.58 Mio tonne, resulting in an EMS  of  –159.7
Mio ECU. The production figures for marketing year
1996/97 were also revised recently: 1. 862 Mio tonnes
instead of 1.600 Mio tonnes, resulting in an EMS of– 188.4 Mio ECU.G/AG/R/20
Page 51
European Communities   G/AG/N/EEC/16    Domestic Support (Table DS:1)
Points raised by other Members at the June 1999
meetingResponse by the European Communities
Japan/Korea : Tomatoes  - Details on the specific contents
of the "price support" policy; reason why the EMS was
calculated for this product; calculation details;See above explanation with respect to apples and pears.
reason for the increased value of the EMS from 1995/96 to
1996/97.There  was an error in the production figure of tomatoes in
the  1995/96 notification. This figure, subsequently revised
in G/AG/N/EEC/12/Rev.1, resulted in a slight decrease in
the year 1996/97.
Supporting Table DS:9
Thailand:  "Insurance subsidies" - Nature of such subsidies;
difference with the measures reported in ST/DS:1 (p. 4refers).Undertook to provide an answer at a later stage.
United States: "Other" - Meaning and nature of related
measures.This concerns national aids for marketing and promotion
services, which may qualify for inclusion into the GreenBox category.  A  corrigendum may be submitted in this
respect .G/AG/R/20
Page 52
Attachment no. 1
G/AG/N/KOR/24:  Justification of the de minimis  claim
Percentage AMS to Production Value
( Million won)
Products1998
AMS
(A)1997 Production
value
(B)*AMS Percentage
(A/B, %)
 Rapeseed 389 n.a. n.a.
 Silk-worm 6 73 8.22
 Soybean 8,970 273,504 3.28
 Malting barley 749 103,093 0.73
 Red pepper 1,476 989,141 0.14
 Garlic 2,911 795,962 0.37
 Apple 5,099 674,025 0.76
 Pear 1,572 484,259 0.32
 Citrus fruit 534 715,892 0.07
 Chestnut 3,425 249,177 1.37
 Ginseng roots 13,524 304,908 4.44
 Beef 183,061 2,107,342 8.69
 Pigmeat 13,991 1,960,128 0.71
 Other cereal 2,484 74,273 3.34
 Potatoes 396 495,395 0.08
 Other vegetables 10,864 4,541,881 0.24
 Other fruits 1,684 1,523,620 0.11
 Medicinal crops 606 237,984 0.25
 Flowering plants 3,557 475,624 0.74
 Mushrooms 2,798 550,850 0.51
 Other Agr. Products 5 800 0.62
 Non-Product-Specific 525,495 30,270,602 1.74
*Agricultural Information and Statistics Bureau, Ministry of Agriculture and Forestry, Korea.
__________