 
RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/SPEC/VNM/3/Rev.2/Add.1 
28 April 2004 
 (04-1885) 
Working Party on the 
Accession of Viet Nam Original:   English 
 
 
 
ACCESSION OF VIET NAM 
 
Questions and Replies relating to Domestic Support and  
Export Subsidies in the Agricultural Sector  
 
Addendum  
  
 The Government of the Socialist Republic of  Viet Nam has submitted the following responses 
to Members questions regarding Domestic Support a nd Export Subsidies in the Agricultural Sector, 
with the request that they be circulat ed to members of the Working Party. 
  
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 WT/ACC/SPEC/VNM/3/Rev.2/Add.1 
Page 2  
 
- Green Box 
Question 1 The spending for "training services" on page  3 of document WT/ACC/SPEC/VNM/3/Rev.1 
includes funding for regular education in agricul ture. We would advise Viet Nam not to include 
this and to remove a possibly estimated sum from the amount shown. 
Answer
: 
Viet Nam takes note of this comment and has amended its WT/ACC/4 Notification accordingly. 
Question 2 
The description in footnote 3 on the extension and advisory services on page 3 of document 
WT/ACC/SPEC/VNM/3/Rev.1 includes expenditure for research relating to particular products 
(e.g. National Animal Breeds Program).  Wo uld Viet Nam consider shifting corresponding 
expenditure to heading a (i) "research" of the green box? 
Answer : 
Viet Nam takes note of this comment and has amended its WT/ACC/4 Notification accordingly. 
Question 3 
Both the description in column 2 and in footnote 8 concerning f "payments for relief from 
natural disaster" on page 5 suggest, apart from th e assistance payments to farmers, the delivery 
of food aid to farmers hit by natural disasters.  Would it be possible to include this support 
under c "domestic food aid" while keeping the other support such as irrigation and drainage assistance under the current heading? 
Answer
: 
We appreciate this comment. However, due to the st atistical limitations, Viet Nam has not been able 
to separate "domestic food aid" from other types of support under the current heading.   
Question 4 
The description of the "regional assistance progr ams" on page 6 suggests very comprehensive 
operations beyond the benefit for agricultural pr oducers.  We suggest Viet Nam to eliminate 
from the amounts for regional a ssistance payments those program elements that are not direct 
payments to agricultural producers.  Also, if so me of the operations notified serve as measures 
of assistance, direct or indirect, to encourage agricultural and rural development as part of development programs we suggest to include rel evant spending in table DS:2, Special and 
differential treatment.   WT/ACC/SPEC/VNM/3/Rev.2/Add.1 
 Page 3 
 
 
Answer : 
Viet Nam takes note of this comment. Viet Nam has moved "freight subsidies to transport essential 
agricultural products and inputs (rice, salt, fer tilizer, agro-chemicals...) to mountainous, remote 
regions" from Table DS:1 to Table DS:2.  
Question 5 
Could Viet Nam inform if the "freight subsidi es to transport commodities" to remote areas 
(page 6) are generally available?  What are these commodities and what are they used for? 
Answer : 
Freight subsidies to transport agricultural products and inputs (rice, salt, fertilizer, ) to mountainous, 
remote regions are generally available.  The main  products under this program are rice, salt, and 
fertilizer.  
- Special and Differential Treatment 
Question 6 Could Viet Nam inform, possibly using estimates , about the amount of money involved for the 
heading "financial incentives to develop economic activities on farms"? 
Answer
: 
Financial incentives to develop economic activities on farms include preferential interest-rate loan, 
VAT exemption, and income tax exemption for the firs t three or four years.  This support measure is 
constructed in the form of a Government policy, not a direct payment from the State Budget.  Taking into account the suggestion from some Working Party' s Members, Viet Nam had deleted this program 
from table DS:2 in its revised WT/ACC/4 Notification.  
- Amber Box Question 7 In table DS:4, the aggregate amount of AMS (tota l current AMS) should probably only consist 
of price support for sugar, other AMS not reaching respective de minimis levels.  We would ask Viet Nam to review some of the amounts indicated. 
Answer
: 
Viet Nam takes note of this comment and has amended its WT/ACC/4 Notification accordingly. 
Question 8 
Could Viet Nam explain how the applied administ ered price for rice and sugar is established, 
and whether comparable prices exist for cotton and pork? 
Answer : 
Administered price was applied to rice and sugar in the period 1999-2001 as follows:  WT/ACC/SPEC/VNM/3/Rev.2/Add.1 
Page 4  
 
− With respect to rice:  in the harvest period,  when paddy and rice prices fall far below the 
reference price causing difficulties to farmer s, the Government provides interest support 
to help enterprises purchase rice for temporary storage;   
− With respect to sugar: the Government de termines the purchasing price of raw sugar cane 
to protect sugar farmers (for example: dete rmined purchasing price for raw sugar cane in 
the period 1999 – 2000 was VND 240,000 per ton); 
− Viet Nam does not apply administered price for pork; 
− With respect to cotton, purchasing enterp rises announce the minimum price in order to 
encourage  farmers to cultivate cotton as inputs for their factories.  
Question 9 
How has the export quota for rice been opera ted? Will it be operated again in future? 
Answer
: 
In the past (prior to 2001), quotas on rice expor t were announced and allocated to rice producing 
provinces after considering domestic needs. Provinc ial authorities were responsible for allocating 
export quotas among local exporters.  This mechanis m, however, was abolished since 2001.  In the 
future, any measures applied to ri ce export shall be WTO-consistent. 
Question 10 
Import licensing (footnote 16) should not be notified as an element of domestic support. 
Answer : 
Vietnam takes note of this suggestion.  We do not  deem it as an element of domestic support, but 
rather the information for the sake of transparency. 
Question 11 
In table DS:7 (page 13), for rice, the interest rate support should be excluded from the AMS 
calculation because, as we understand, this measu re serves to maintain the price gap notified in 
DS:5. 
Answer : 
The information notified in tables DS:5 and DS:7 re flects the existing policies with respect to rice at 
the time of notification.  We would note that the value of domestic support for rice is far below the de minimis level. Therefore, we are willing to discuss with Working Party's Members on this issue with a view to bringing Viet Nam's WT/ACC/4 Notification in line with WTO practice. 
Question 12 Could Viet Nam please inform who the direct be neficiaries of the measures mentioned on page 
14 are? Are there in all cases benefits to producers? 
Answer
: 
Beneficiaries are rice purchasing enterprises. Rice pr oducers indirectly benefit from this measure.  
The rationale for applying this measure is that the Government cannot provide direct support to 
farmers, the number of whom account for a dominant proportion of the population (75 per cent).   WT/ACC/SPEC/VNM/3/Rev.2/Add.1 
 Page 5 
 
 
With interest support provided to rice purchasing en terprises, rice price would increase, which would 
then indirectly benefit farmers. 
Question 13 
For cotton, (page 15) Viet Nam mentions a minimu m price to farmers in footnote 18.  Why does 
Viet Nam not make a price gap calculation for cotton, just as it did for sugar and rice? 
Answer : 
The reason is that the international price for cotton is not available. Cotton produced in Viet Nam is 
not of the same type as cotton in the international market.  As the result, the price of domestic cotton 
is not comparable with that of co tton in the international market.  
Question 14 
Is there a minimum price to farmers for pork (footnote 19)? Answer
: 
Viet Nam does not apply minimum price to pork. 
Question 15 
It would seem Viet Nam has to shift the tax ex emption for rice and coffee (table DS:9, page 17) 
to table DS:7 possibly using an estimate for a breakdown between the products concerned. 
Answer : 
We appreciate this comment and acknowledge that it is  an appropriate suggestion.  Despite its best 
effort, Viet Nam has not been able to breakdown the tax exemption of 50 per cent for rice and coffee, 
and tax exemption of 100 per cent for all other agri cultural products produced by farmers in extremely 
difficult areas.  Therefore, this support measure rema ins in Table DS:9.  We would appreciate further 
technical assistance in this area so  that we can find a methodology to estimate this support for each 
specific product. 
Question 16 
What is the value of the total agricultural production of Viet Nam? 
Answer : 
Agricultural production outputs at current price fo r each year of the base period are as follows: 
Unit:  VND billion 
Year Production output 
1999 124,075.3 
2000 122,389.3 
2001 122,247.7 
Average 122,904.1 
 
Source: Table DS:4 of Viet Na m's revised WT/ACC/4 Notification  
 
 
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