Alþjóðaviðskiptastofnunin - WTO: Samningaviðræður um landbúnað.

March 18, 2003

NEGOTIATIONS ON AGRICULTURE
FIRST DRAFT OF MODALITIES FOR THE FURTHER COMMITMENTS

Revision

"13. We recognize the work already undertaken in the negotiations initiated in early 2000 under Article 20 of the Agreement on Agriculture, including the large number of negotiating proposals submitted on behalf of a total of 121 Members. We recall the long-term objective referred to in the Agreement to establish a fair and market-oriented trading system through a programme of fundamental reform encompassing strengthened rules and specific commitments on support and protection in order to correct and prevent restrictions and distortions in world agricultural markets. We reconfirm our commitment to this programme. Building on the work carried out to date and without prejudging the outcome of the negotiations we commit ourselves to comprehensive negotiations aimed at: substantial improvements in market access; reductions of, with a view to phasing out, all forms of export subsidies; and substantial reductions in trade-distorting domestic support. We agree that special and differential treatment for developing countries shall be an integral part of all elements of the negotiations and shall be embodied in the Schedules of concessions and commitments and as appropriate in the rules and disciplines to be negotiated, so as to be operationally effective and to enable developing countries to effectively take account of their development needs, including food security and rural development. We take note of the non-trade concerns reflected in the negotiating proposals submitted by Members and confirm that non-trade concerns will be taken into account in the negotiations as provided for in the Agreement on Agriculture.

"14. Modalities for the further commitments, including provisions for special and differential treatment, shall be established no later than 31 March 2003. Participants shall submit their comprehensive draft Schedules based on these modalities no later than the date of the Fifth Session of the Ministerial Conference. The negotiations, including with respect to rules and disciplines and related legal texts, shall be concluded as part and at the date of conclusion of the negotiating agenda as a whole."

General Provisions and Terms

7. Unless otherwise specified below, the following general provisions and terms shall apply:
(a) Product coverage

The product coverage as specified in Annex 1 of the Agreement on Agriculture shall apply (hereafter referred to as "agricultural products").

(b) "Year"

"Year" in the context of these modalities refers to the annual basis (calendar year, financial or marketing year) to be specified in Members' draft Schedules.

(c) "Commitment"

The term "commitment" includes concessions.

(d) Starting-point of reduction commitments

The starting-point for the first instalment of the reduction commitments in all areas shall be the beginning of year 1 of the respective implementation periods. Subsequent reductions shall be made at the beginning of each of the successive implementation years.

Market Access

Tariffs

8. Tariffs, except in-quota tariffs, shall be reduced by a simple average for all agricultural products subject to a minimum reduction per tariff line. The base for the reductions shall be the final bound tariffs as specified in the Schedules of Members. Except as provided in paragraph 16 below, the tariff reductions shall be implemented in equal annual instalments over a period of [five] years, applying the following formula:
(i) For all agricultural tariffs greater than [90 per cent ad valorem] the simple average reduction rate shall be [60] per cent subject to a minimum cut of [45] per cent per tariff line.

(ii) For all agricultural tariffs lower than or equal to [90 per cent ad valorem] and greater than [15 per cent ad valorem] the simple average reduction rate shall be [50] per cent subject to a minimum cut of [35] per cent per tariff line.

(iii) For all agricultural tariffs lower than or equal to [15 per cent ad valorem] the simple average reduction rate shall be [40] per cent subject to a minimum cut of [25] per cent per tariff line.

In applying this formula, where the tariff on a processed product is higher than the tariff for the product in its primary form, the rate of tariff reduction for the processed product shall be equivalent to that for the product in its primary form multiplied, at a minimum, by a factor of [1.3].

9. Where participants apply non-ad valorem tariffs, the allocation of any tariff item in categories (ii) and (iii) above shall be based on tariff equivalents to be calculated by the participant concerned in a transparent manner, using three-year average external reference prices or data, based on a recent representative five-year period, excluding the highest and the lowest entry. Full details of the method and data used for these calculations shall be included in the tables of supporting material for the draft Schedules and shall be subject to multilateral review.
Special and Differential Treatment

10. In implementing their market access commitments, developed country Members shall take fully into account the particular needs and conditions of developing country Members by providing for greater improvement of opportunities and terms of access for agricultural products of particular interest to these Members, including the fullest liberalization of trade in tropical products, whether in primary or in processed form, and for products of particular importance to the diversification of production from the growing of illicit narcotic crops, or crops whose non-edible or non-drinkable products, while being lawful, are recognized as being harmful for human health.
11. Developing countries shall have the flexibility to declare up to [ ] agricultural products at the [6-digit] [4-digit] HS level as being special products with respect to food security, rural development and/or livelihood security concerns and designate these products with the symbol "SP" in Section I-A of Part I of their Schedules (hereafter referred to as "SP products"). This concept will be evolved in further technical consultations.
12. For all agricultural products other than SP products, the reduction commitments of developing countries shall be implemented applying the following formula:
(i) For all agricultural tariffs greater than [120 per cent ad valorem] the simple average reduction rate shall be [40] per cent subject to a minimum cut of [30] per cent per tariff line.

(ii) For all agricultural tariffs lower than or equal to [120 per cent ad valorem] and greater than [60 per cent ad valorem] the simple average reduction rate shall be [35] per cent subject to a minimum cut of [25] per cent per tariff line.

(iii) For all agricultural tariffs lower than or equal to [60 per cent ad valorem] and greater than [20 per cent ad valorem] the simple average reduction rate shall be [30] per cent subject to a minimum cut of [20] per cent per tariff line.

(iv) For all agricultural tariffs lower than or equal to [20 per cent ad valorem] the simple average reduction rate shall be [25] per cent subject to a minimum cut of [15] per cent per tariff line.

13. Where participants apply non-ad valorem tariffs, the provisions of paragraph 9 above apply.
14. The simple average reduction rate for all SP products shall be [10] per cent subject to a minimum cut of [5] per cent per tariff line.
15. In all cases, the base for the reductions shall be the final bound tariffs as specified in the Schedules of Members. The reduction commitments shall be implemented in equal annual instalments over a period of [ten] years.
Preferential Schemes

16. In implementing their tariff reduction commitments, participants undertake to maintain, to the maximum extent technically feasible, the nominal margins of tariff preferences and other terms and conditions of preferential arrangements they accord to their developing trading partners. As an exception to the modality under paragraph 8 above, tariff reductions affecting long-standing preferences in respect of products which are of vital export importance for developing country beneficiaries of such schemes may be implemented in equal annual instalments over a period of [eight] instead of [five] years by the preference-granting participants concerned, with the first instalment being deferred to the beginning of the [third] year of the implementation period that would otherwise be applicable. The products concerned shall account for at least [20] per cent of the total merchandise exports of any beneficiary concerned on a three-year average out of the most recent five-year period for which data are available. Interested beneficiaries shall notify the Committee on Agriculture, Special Session accordingly and submit the relevant statistics. In addition, any in-quota duties for these products shall be eliminated. The preference-providing Members shall undertake targeted technical assistance programmes and other measures, as appropriate, to support preference-receiving countries in efforts to diversify their economies and exports.
Tariff Quotas

Tariff Quota Volume

17. Final bound tariff quota quantities or values as specified in Members' Schedules (hereafter referred to as "tariff quota volume") which are equivalent to less than [10] per cent of "current" domestic consumption of the product concerned shall be expanded to that level. However, for up to one-quarter of the total number of tariff quotas concerned, a Member may opt for binding the tariff quota volume at a level equivalent to [8] per cent of that consumption, provided that the volumes for a corresponding number of tariff quotas concerned are expanded to [12] per cent.
18. "Current" domestic consumption means the average consumption of the period 1999-2001 or of the most recent three-year period for which data are available. Full details of the method and data used for the calculations of domestic consumption for the products concerned shall be included in the tables of supporting material for the draft Schedules and shall be subject to multilateral review.
19. The expansion of tariff quota volumes shall be implemented in equal instalments over a period of [five] years. The starting-point for implementing the expansion of tariff quotas shall be the beginning of year 1 of the implementation period. Additional market access opportunities provided by the expansion of tariff quotas shall be on an MFN basis.
Special and Differential Treatment

20. Developing countries shall not be required to expand tariff quota volumes for SP products. For other agricultural products, final bound tariff quota volumes as specified in Members' Schedules which are equivalent to less than [6.6] per cent of "current" domestic consumption of the product concerned shall be expanded to that level. However, for up to one-quarter of the total number of tariff quotas concerned a Member may opt for binding the tariff quota volume at a level equivalent to [5] per cent of that consumption, provided that the volumes for a corresponding number of tariff quotas concerned are expanded to [8] per cent.
21. The modalities in paragraphs 18 and 19 above apply, except that the commitments by developing countries shall be implemented over a period of [ten] years.
In-quota Tariffs

22. There shall be no requirement to reduce in-quota tariffs, except that (i) in-quota duty free access shall be provided for tropical products, whether in primary or in processed form, and for products of particular importance to the diversification of production from the growing of illicit narcotic crops, or crops whose non-edible or non-drinkable products, while being lawful, are recognized as being harmful for human health, and (ii) in respect of tariff quotas where fill rates on average of the most recent [three] years for which data are available have been less than [65] per cent.

Special and Differential Treatment

28. It is recalled that under paragraph 13 of the Doha Ministerial Declaration non-trade concerns will be taken into account in the negotiations as provided for in the Agreement on Agriculture. Such concerns have been taken into account in various parts of the present text (and not only in market access). Nevertheless, further consideration needs to be given to non-trade concerns and other market access issues identified in paragraph 28 of document TN/AG/6 dated 18 December 2002 and the extent to which these issues should be taken into account in the modalities to be established and/or subsequent work.
Export Competition

Export Subsidies

29. The basis for the further commitments on export subsidies shall be the final bound budgetary outlay and quantity commitment levels as specified in Members' Schedules.
30. For a set of agricultural products representing at least [50] per cent of the aggregate final bound level of budgetary outlays for all products subject to export subsidy commitments, final bound levels of budgetary outlays and quantities as specified in Members' Schedules shall be reduced over [five years (n = 5)] using the following formulae with the constant factor c equal to [0.3] (Attachment 4 to this document provides an illustration of the operation of these formulae):
(1) Bj = Bj-1 - c · Bj-1 with j = 1, ….. , n

(2) Qj = Qj-1 - c · Qj-1 with j = 1, ….. , n

with
B = budgetary outlays Q = quantities c = constant factor j = implementation year
and B0 and Q0 being the base levels, respectively.

31. At the beginning of [year 6], budgetary outlays and quantities shall be reduced to zero.
32. For the remaining products, final bound levels of budgetary outlays and quantities as specified in Members' Schedules should be reduced over [nine years (n = 9)] instead of [five] years using the formulae (1) and (2) above. However, for these products the constant factor c shall equal [0.25]. At the beginning of [year 10], budgetary outlays and quantities for these products shall be reduced to zero.
Special and Differential Treatment

33. For a set of agricultural products representing at least [50] per cent of the aggregate final bound level of budgetary outlays for all products subject to export subsidy commitments, final bound levels of budgetary outlays and quantities as specified in developing country Members' Schedules shall be reduced over [ten years (n = 10)] using the formulae (1) and (2) above, with the constant factor c equal to [0.25]. At the beginning of [year 11], budgetary outlays and quantities shall be reduced to zero.
34. For the remaining products, final bound levels of budgetary outlays and quantities as specified in developing country Members' Schedules should be reduced over [twelve years (n = 12)] instead of [ten] years using the formulae (1) and (2) above. However, for these products the constant factor c shall equal [0.2]. At the beginning of [year 13], budgetary outlays and quantities for these products shall be reduced to zero.
35. The exemptions for developing countries under Article 9.4 for certain transport and marketing-cost subsidies set out in Article 9.1(d) and (e) of the Agreement on Agriculture shall be continued for the time of the implementation period of the further export subsidy commitments to be undertaken by developing countries.
Export Credits

36. Export credits and export credit guarantees and insurance programmes shall be subject to disciplines as outlined for further consideration in Attachment 5 to this document. It is noted that this outline is the subject of ongoing technical consultations.
Food Aid

37. International food aid shall be subject to disciplines as outlined in a revised draft for consideration in Attachment 6 to this document. This revised draft will itself be the subject of further technical consultations.
State Trading Export Enterprises

38. State trading export enterprises shall be subject to disciplines as outlined for further consideration in Attachment 7 to this document. This outline is to be the subject of further technical consultations.
Export Restrictions and Taxes

39. Except as provided for in paragraph 2(b) of Article XI and Articles XX and XXI of GATT 1994, the institution of new export prohibitions, restrictions or taxes on foodstuffs shall be prohibited.
Special and Differential Treatment

40. The new disciplines under paragraph 39 above are not applicable to developing countries. For these Members, the provisions of Article 12 of the Agreement on Agriculture shall continue to apply.
Domestic Support

Annex 2 of the Agreement on Agriculture (Green Box)

41. The provisions of Annex 2 of the Agreement on Agriculture shall be maintained, subject to possible amendments as outlined in a revised draft for consideration in Attachment 8 to this document. This revised draft will itself be the subject of further technical consultations.
Special and Differential Treatment

42. Possible amendments to Annex 2 of the Agreement on Agriculture are outlined for further consideration in Attachment 9 to this document. This outline, which is to be the subject of further technical consultations, includes several essentially editorial changes as compared to the previous version.
Article 6.2 of the Agreement on Agriculture

43. The provisions of Article 6.2 of the Agreement on Agriculture shall be maintained and enhanced as outlined for further consideration in Attachment 10 to this document. This outline, which is to be the subject of further technical consultations, includes an essentially editorial change as compared to the previous version.

Article 6.5 of the Agreement on Agriculture (Blue Box)

44. Direct payments under production-limiting programmes provided in accordance with the provisions of Article 6.5 of the Agreement on Agriculture (Blue Box payments) [shall be capped at the most recent notified level and bound at that level in Members' Schedules. These payments shall be reduced by [50] per cent. The reductions shall be implemented in equal annual instalments over a period of [five] years.] [shall be included in a Member's calculation of the Current Total Aggregate Measurement of Support (AMS)].
Special and Differential Treatment

45. For developing countries, [the commitment shall be implemented in equal annual instalments over a period of [ten] years, with the rate of reduction being [33] per cent.] [Blue Box payments shall be included in a Member's calculation of the Current Total AMS as of the [fifth] year of the implementation period.]
Amber Box

46. The final bound Total AMS as set out in Members' Schedules shall be reduced by [60] per cent in equal annual instalments over a period of [five] years.
47. Article 6.3 of the Agreement on Agriculture shall be amended so as to ensure that the Current AMS for individual products shall not exceed the respective average levels of such support provided over the period 1999-2001.

Special and Differential Treatment

Inflation

49. Scheduled Total AMS commitments may be expressed in national currency, a foreign currency or a basket of currencies. In case a foreign currency or a basket of currencies is used and the final bound Total AMS in a Member's Schedule is expressed in national currency (or another foreign currency) and a participant wants to avail itself of this option, the final bound Total AMS shall be converted using the average exchange rate(s) as reported by the IMF for the year at issue.
50. The provisions of Article 18.4 shall be maintained.
Article 6.4 of the Agreement on Agriculture (de minimis)

51. The de minimis level of 5 per cent under subparagraph (a) of Article 6.4 of the Agreement on Agriculture shall be reduced annually by [0.5] percentage point over a period of [five] years.

Special and Differential Treatment

Recently Acceded Members

56. Members that have recently acceded to the WTO shall have the flexibility to defer the respective implementation periods by [2] years.
Others

57. Participants will further consider the possible introduction of additional forms of flexibility for certain groupings (e.g. SIDS, vulnerable developing countries, transition economies) which have made specific proposals to this effect (TN/AG/6 refers).

(a) Tariff quota commitments shall be administered in a transparent and predictable manner and, to maximum practicable extent, in the same way as other tariff concessions.

(b) Domestic purchasing requirements or other measures having the same effect shall not be imposed, directly or indirectly, on or in connection with importation of tariff quota products.

(c) Except as specifically described in Schedules, no seasonal restrictions shall be imposed on imports under tariff quotas.

(d) A tariff quota commitment shall not be administered in a manner which precludes the importation of any product within the tariff description of the commitment, or which restricts importation of such products in processed form or for sale to final consumers.

(e) Methods of tariff quota administration shall not be employed which result in the attribution to importers of commercially non-viable allotments.

(f) Only imports of tariff quota products from MFN suppliers shall be credited as imports against tariff quota commitments.

(g) Export or re-export requirements shall not be imposed in connection with the importation of tariff quota products.

(h) An importer shall be treated no less favourably than another on the basis of degree of foreign affiliation or ownership.

(i) No charges, deposits or other financial requirements shall be imposed, directly or indirectly, on or in connection with the administration of tariff quota commitments or with importation of tariff quota products other than as permitted under the GATT 1994.

(a) In the case of tariff-only methods of administration and methods not requiring import licences as a condition of importation: access opportunities shall be made available from the beginning of the year concerned and timely advance public notice shall be given of any suspension of the opportunity to import at the in-quota rate of tariff.

(b) In the case of methods of administration under which import licences are a requirement:

(i) The total quantity or value of a tariff quota shall be allocated to importers sufficiently in advance of the year to which they relate so as to enable imports to be effected from the beginning of that year and to facilitate imports from developing countries and distant suppliers.

(ii) No restrictions shall be applied with respect to retail distributors and other end-users applying for and being allotted shares of tariff quotas. Nor shall conditions or formalities be imposed which would prevent any importer from utilizing fully the share which has been allocated to it within the period of validity of the corresponding import licence.

(iii) Tariff quota licences shall be valid for a period of [eight] months and shall not be transferable without the concurrence of the administering authority.

(iv) The quantity or value of any tariff quota commitment which remains unused following the expiry of the period of validity of the licences initially issued in connection with that tariff quota shall be reallocated in time to enable importation before the end of the year concerned.

(b) Members shall ensure that governmental import enterprises are not operated in such a way as to nullify or impair the benefits of market access concessions and of the commitments relating to non-tariff measures under Article 4.2 of this Agreement.

(c) Any Member which establishes or maintains a governmental import enterprise shall notify relevant information on the operations of that enterprise in accordance with a format and at intervals to be established by the Committee on Agriculture.

(d) The disciplines regarding governmental import enterprises shall not unduly impede developing countries in the pursuit of their legitimate food and livelihood security and rural development objectives. The notification requirements to be established under subparagraph (c) above shall provide for appropriate special and differential treatment for developing countries.

	Constant Factor c
	0.150.20.250.30.35
Base level	Per cent
	100100100100100
Year	"Current" bound level in per cent of base level
1	85.0 80.075.070.065.0
2	72.364.056.349.042.3
3	61.551.242.234.327.5
4	52.341.031.624.017.9
5	44.532.823.716.811.6
6	37.826.217.811.87.6
7	32.121.013.48.34.9
8	27.316.810.15.83.2
9	23.213.47.64.12.1
10	19.710.75.72.91.4
11	16.78.64.32.00.9
12	14.26.93.21.40.6

(a) direct financing support, comprising direct credits/financing, refinancing, and interest rate support;

(b) risk cover, comprising export credit insurance or reinsurance and export credit guarantees;

(c) government-to-government credit agreements covering the imports of agricultural products exclusively from the creditor country under which some or all of the risk is undertaken by the government of the exporting country;

(d) any other form of governmental support, direct or indirect, including deferred invoicing and foreign exchange risk hedging.

(a) Maximum repayment term: the maximum repayment term of a supported export credit shall not exceed the period beginning at the starting point of credit and ending on the contractual date of the final payment. The "starting point of a credit" shall be no later than the weighted mean date or actual date of the arrival of the goods in the recipient country for a contract under which shipments are made in any consecutive six-month period. The following maximum repayment terms shall be respected:

(i) for breeding cattle: [ ] months for contracts up to and including [ ]; and [ ] months for contracts exceeding [ ];

(ii) for agricultural vegetable reproduction material: [ ] months;

(iii) for exports of agricultural products to developing countries, as specified in paragraph 9(a) below: [.. months];
(iv) for exports of basic foodstuffs to least-developed and for net food-importing developing countries as listed in document G/AG/5/Rev.5, as specified in paragraph 10(a) below;

(v) for all other products and destinations: [six months/180 days].

(b) Cash payments: a minimum cash payment shall be required to be paid, by or on behalf of the importer, at or before the starting point of the supported credit, representing not less than [15] per cent of the total amount of the contract/shipment value but excluding interest as defined in subparagraph (c) below. Cash payments shall not be financed.

(c) Payment of interest: in the case of direct financing support, "interest" excludes premiums and other charges for insuring or guaranteeing supplier or financial credits, banking fees or commissions relating to the export credit, and withholding taxes imposed by the importing country. Interest shall be payable. Where the repayment term exceeds 180 days, interest shall be payable not less frequently than every six months, with the first payment to be made no later than six months after the starting point of export financing.

(d) Minimum interest rates: interest rates in respect of direct financing support shall not be below the actual cost of borrowing for the funds so employed (including the cost of funds if capital was borrowed on international capital markets in order to obtain funds of the same maturity), plus an appropriate risk-based spread reflective of prevailing market conditions: provided however that, for repayment terms of twenty-four months or longer, Members shall use Commercial Interest Reference Rates (CIRRs) as published by the OECD, plus an appropriate risk-based spread reflective of prevailing market conditions.

(e) Repayment of principal: the principal sum (transaction value minus cash payment) of an export credit shall be repayable in equal, regular six-monthly instalments starting not later than six months after the starting point of the credit.

(f) Premiums in respect of coverage of risks under export credit insurance, reinsurance and export credit guarantees: premiums shall be charged, shall be risk-based and shall be adequate to cover long-term operating costs and losses. Premium shall be expressed in percentages of the outstanding principal value of the credit, shall be payable in full at the date of issuance of cover and shall not be financed. Premium rebates shall not be accorded. Furthermore, support in the form of export credit insurance, reinsurance or guarantees shall not be provided in respect of export financing contracts whose terms and conditions are not otherwise in conformity with the provisions of this paragraph.

(g) Foreign exchange risk: Export credits, export credit insurance, export credit guarantees, and related financial support shall be provided in freely traded currencies. Foreign exchange exposure deriving from credit that is repayable in the currency of the importer shall be fully hedged, such that the market risk and credit risk of the transaction to the supplier/lender/guarantor is not increased. The cost of the hedge shall be incorporated into and be in addition to the premium rate determined in accordance with this Article.

(h) Period of validity of export financing offers: credit terms and conditions (e.g., interest rates for direct financing support and all risk-based terms and conditions) offered for an individual export credit or line of credit shall not be fixed for a period exceeding six months without payment of premium.

(a) in the case of scheduled reduction commitments relating to the value of non-conforming export financing support, the maximum level of such financing support in value terms, that may be provided in that year in respect of the agricultural product, or group of products concerned;

(b) in the case of scheduled quantity reduction commitments, the maximum quantity of an agricultural product, or group of products, in respect of which non-conforming export financing may be provided in that year; and

(c) in the case of commitments relating to repayment terms, the maximum and degressive non-conforming repayment terms that may be supported in each successive year of the specified implementation period.

(b) repayment of the principal sum in equal and regular instalments not less frequently than annually, with the first payment due no later than twelve months after the starting point of credit;

(c) payment of interest not less frequently than annually, with the first interest payment to be made no later than twelve months after the starting point of credit.

(a) additional longer maximum repayment terms of up to [ ] months;

(b) differential and more favourable interest rates and/or premiums.

(i) that, in the case of food aid to meet or relieve emergency or critical food needs arising from natural disasters, crop failures or humanitarian crises and post-crisis situations, such aid is provided on the basis of pledges and commitments to, or in response to appeals from, specialized United Nations food aid agencies, other relevant regional or international intergovernmental agencies, non-governmental humanitarian organizations and private charitable bodies, or in response to an urgent government-to-government ministerial request for assistance in meeting food needs in the immediate aftermath of a natural disaster;
(ii) that food aid for other purposes, including under programmes and projects to enhance nutritional standards amongst vulnerable groups in least-developed and net food-importing developing countries, is provided exclusively in the form of untied financial grants to be used to purchase food for or by the recipient country: except that such food aid may be provided in-kind within the framework of programmes and projects operated by specialized United Nations food aid agencies, or through non-governmental humanitarian organizations or private charitable bodies under agreements concluded with a donor Member; provided full details of the food aid to be provided under such agreements are notified to the Committee on Agriculture by the Member concerned.

(iii) that food aid is provided exclusively in fully grant form;

(iv) that the provision of food aid is not tied directly or indirectly, formally or informally, explicitly or implicitly, to commercial exports of agricultural products or of other goods and services to recipient countries.

(c) Members shall ensure that their food aid transactions are carried out in accordance with the procedures under the FAO "Principles of Surplus Disposal and Consultative Obligations", including, where appropriate, the system of "Usual Marketing Requirements". Any Member may raise any matter relating to a donor Member's compliance with these principles and requirements under Article 18.6 of this Agreement.

(d) Members which are recipients of food aid undertake not to re-export such food aid otherwise than as may become appropriate as part of a food aid transaction initiated by a specialized United Nations food aid agency.

(e) Members shall report on the form in which food aid is provided, as well as on the products, amounts, destinations, channelling and other relevant terms and conditions of their food aid operations, on the basis of a format and at intervals to be established by the Committee on Agriculture.

(f) Food aid transactions which are not in conformity with the provisions of subparagraphs (b) and (c) above and which cannot be accommodated within limits of a Member's export subsidy reduction commitments shall be deemed for the purposes of Article 10.1 of this Agreement to constitute non-commercial transactions which circumvent that Member's export subsidy commitments.

(b) Members shall ensure that governmental export enterprises are not operated in such a way as to circumvent export subsidy commitments under this Agreement nor in such a manner that would nullify or impair the conditions of competition in world export markets that would prevail in the absence of such special rights, privileges or advantages. To this end Members undertake:

(i) to ensure that exports of a product by a governmental export enterprise do not take place at a price less than the price paid by such an enterprise to the domestic producers of the product concerned;
(ii) not to restrict the right of any interested entity to export, or to purchase for export, agricultural products;
(iii) not to grant special financing privileges, including government grants, loans, loan guarantees, or underwriting of operational costs, to governmental export enterprises that export for sale, directly or indirectly, a significant share of the respective Member's total exports of an agricultural product.

(c) The provisions of subparagraph (b) above, other than (b)(i), shall not apply to developing country Members.

(d) The provisions of subparagraph (b)(ii) above shall enter into force progressively on the basis of a plan to be negotiated and specified in Part IV, Section V of the Schedule of the Member concerned.

(e) Any Member which establishes or maintains a governmental export enterprise shall notify relevant information on the operations of that enterprise in accordance with a format and at intervals to be established by the Committee on Agriculture.

Payments shall be based on activities in a fixed and unchanging historical base period. All base periods shall be notified.

Compensation criteria with respect to government financial participation in income insurance and income safety-net programmes.

(a) Eligibility for such payments shall be determined by an income loss, taking into account only income derived from agriculture, which exceeds 30 per cent of average gross income or the equivalent in net income terms (excluding any payments from the same or similar schemes) in the preceding five-year period or a three-year average based on the preceding five-year period, excluding the highest and the lowest entry. Any producer meeting this condition shall be eligible to receive the payments from the government.

(b) The amount of such payments by governments shall restore a producer's income to no more than 70 per cent of income derived by that producer from agriculture in the averaging period used to trigger eligibility for payment.

(c) The amount of any such payments shall relate solely to income derived from agriculture of the farm enterprise as a whole; it shall not relate to the type or volume of production (including livestock units) undertaken by the producer; or to the prices, domestic or international, applying to such production; or to the factors of production employed.

Compensation criteria with respect to payments (made either directly or by way of government financial participation in crop insurance schemes) for relief from natural disasters.

(a) Eligibility for such payments shall arise:

- in the case of direct payments related to disasters: only following a formal recognition … excluding the highest and lowest entry.

- in the case of government financial participation in crop insurance schemes: eligibility for such payments shall be determined by a production loss which exceeds 30 per cent of the average of production in an actuarially appropriate period.

- in the case of the destruction of animals or crops to control or prevent diseases named in national legislation or international standards: the production loss may be less than the 30 per cent of the average of production referred to above.

(b) Payments made under paragraph 8 shall be applied only in respect of losses of income, livestock (including payments in connection with the veterinary treatment of animals), land or other production factors due to the natural disaster or destruction of animals or crops in question.

(d) Payments made under paragraph 8 shall not exceed the level required to prevent or alleviate further loss as defined in criterion (b) above.

(d) Payments shall not … remaining in production. Payments shall be time limited.

Structural adjustment assistance provided through investment aids

(a) Such structural disadvantages must be clearly defined.

(b) The amount of such payments in any given year shall not be related to, or based on, the type or volume of production or inputs into the production (including livestock units) …

(b bis) The amount of such payments in any given year shall not be related to, or based on, the use of factors of production in any given year after the base period.

Payments under environmental programmes/animal welfare payments

(a) Eligibility for such payments shall be determined as part of a clearly-defined government environmental, conservation or animal welfare programme and be dependent on the fulfilment of specific conditions under the government programme, including conditions related to production methods or inputs.

(b) The amount of payment shall be limited to the extra costs or loss of income involved in complying with the government programme.

Public stockholding for food security purposes

The volume and accumulation … product and quality in question. Developing country Members shall be exempted from the condition in paragraph 3 that the volume and accumulation of food security stocks shall correspond to predetermined targets.

Payments to maintain domestic production capacity of staple crops for food security purposes in developing countries

(a) Eligibility for such payments shall be determined by reference to clearly-defined criteria in government programmes designed to provide support for the producers of staple crops.

(b) Total production of the crop shall account for no less than [X] per cent of the total value of agricultural production and:

- total consumption of such crop shall account for no less than [Y] per cent of the total domestic consumption of agricultural products in terms of calorie intake; or

- total export of such crop shall account for no less than [Z] per cent of the total export of a particular country.

(c) The amount of payment shall be limited to the minimum to maintain domestic production capacity of such crop of the Member concerned.

Payments to small-scale producers/family farms for the purpose of maintaining rural viability and cultural heritage in developing countries

(a) Eligibility for such payments shall be determined by reference to clearly defined criteria in government programmes designed to provide support for small-scale producers/family farms.

(b) Small-scale producers/family farms shall be defined in national legislation, taking into account such factors as total annual sales, share of hired farm labour, off-farm income, etc.

(c) The amount of such payment shall be limited to the minimum level for continued existence of such farms based on the purpose of maintaining rural viability and cultural heritage.

(d) The payment shall not mandate or in any way designate the agricultural products to be produced by the recipients.

Compensation criteria with respect to government financial participation in income insurance and income safety-net programmes.

(a) Eligibility for such payments shall be determined by an income loss, taking into account only income derived from agriculture, which exceeds 30 per cent of average gross income or the equivalent in net income terms (excluding any payments from the same or similar schemes) in the preceding three-year period or a three-year average based on the preceding five-year period, excluding the highest and the lowest entry, or, in the case of developing country Members, a certain proportion of average gross income or the equivalent in net income terms (excluding any payments from the same or similar schemes) which shall be clearly defined in national legislation. Any producer meeting this condition shall be eligible to receive the payments.

(b) The amount of such payments shall compensate for less than 70 per cent of the producer's income loss in the year the producer becomes eligible to receive this assistance, or, in the case of developing country Members, shall compensate for less than a certain proportion of the producer's income loss, which shall be clearly defined in national legislation.

(c) The amount of any such payments shall relate solely to income derived from agriculture of the farm enterprise as a whole; it shall not relate to the type or volume of production … production employed.

Payments (made either directly or by way of government financial participation in crop insurance schemes) for relief from natural disasters

(a) Eligibility for such payments shall arise only following formal … excluding the highest and the lowest entry, or, in the case of developing country Members, [exceeds 10 per cent of the average of production in the preceding year] [exceeds a proportion to be determined in national legislation of the average of production in the preceding three-year period].

6. Modification of subparagraph 10(b):

Structural adjustment assistance provided through resource retirement programmes

(b) Payments shall be conditional upon the retirement of land from marketable agricultural production for a minimum of three years, or, in the case of developing country Members, one year, and in the case of livestock … disposal.

7. Inclusion of new sentence at the end of subparagraph 13(a):

Payments under regional assistance programmes

(a) Eligibility for such payments …… temporary circumstances. Developing country Members shall be exempted from the condition that disadvantaged regions must constitute a clearly designated contiguous geographical area with a definable economic and administrative identity.