TRADE IN AGRICULTURAL PRODUCTS. Synopsis of Non-Tariff Measures for the Protection of Agriculture or in support of IncomeB of Agricultural Producers

Transcription

1 Draft paper for Committee II 26 January 1959 TRADE IN AGRICULTURAL PRODUCTS Synopsis of Non-Tariff Measures for the Protection of Agriculture or in support of IncomeB of Agricultural Producers SWEDEN X I. NATIONAL AGRICULTURAL POLICIES A» General Objectives Under the long-term agricultural programme adopted in 1947 the essential objective of Swedish agricultural policy is to assure the agricultural sector the same opportunities as other groups of the population for attaining a reasonable level of income and to participate in any future rise of general prosperity* According to this programme food production should cover not less than 90 per cent of domestic requirements of indigenous commodities» The degree of protection to be granted to achieve the income objective is calculated with reference to a "basic,: type of farm, i.e. an efficiently managed holding of between 10 to 20 hectares of arable land. The income objectives provide the basis not only for price support measures but also for the long-term measures adopted to improve the structure of Swedish agriculture and to increase productivity. The principal sources for this synopsis are the ŒEC Reports of 1957 and 1958 and the Swedish Government's notification under Article XVI (L/880). INT{59)13 ÏÛ$2i

2 IWT(59)13 Page 2 B. Special Measures The function of price stabilization is performed by the co-operatives and marketing associations. These associations are independent private bodies - general directives for their functioning are issued by the Government and, in close co-operation with the Public Authorities, they play a decisive part in regulating the market for the main products. For this purpose they have at their disposal "Compensation Funds" financed from the proceeds of a variety of marketing and processing fees and certain import levies. From these Funds guaranteed prices can be ensured, stockpiling schemes operated and losses on exports covered. The Funds receive no support from the Budget. Protection for agriculture is effected mainly through an import levy system in lieu of ordinary customs duties which were suppressed on 1 September 1956 when the system entered into force. The rates remain unchanged so long as domestic prices remain within certain predetermined price limits (an "upper" and a "lower" limit). For the more important products these limits are fixed by reference to a "middle price" which corresponds to prices on the domestic market at the beginning of As a general rule the difference between each limit and the middle price has been fixed at between 10 and 15 per cent. Should domestic prices fall below the lower limit the Government raises the import levy and quantitative restrictions can be introduced in certain circumstances. If the upper limit is exceeded the import levy will be reduced or removed or quantitative control of exports introduced. The rate of the import levy itself is initially fixed so as to make up the difference between the middle price and the world price during ; the average rate is about 25 per cent of the c.i.f. import price. The middle prices serve only as a guide in determining the price limits and the import levies and in no way constitute a guaranteed price. Revenue derived from the import levies is paid to the Compensation Fund of the relevant marketing association. The system of specific import levies came into force on 1 September 1956 for an initial period of three years and may be extended should the results prove favourable.

3 ' ' '. IMT(59)13 *.:. --T.":. Page 3 When the general index of consumer prices varies by 5 per cent or more the lower and upper limits and the rate of the import levy are adjusted proportionately. On the other hand, when the index of "real prices" paid to producers shows variations of 6 per cent or more over a given period the Government enters into negotiations with farmers which may result in a modification of the import levies. Thus the Government has given farmers a dual index guarantee. For several important crops, namely wheat, rye, oilseeds and industrial potatoes the Marketing Associations have taken special steps to further' organize the market and to supplement the system of protection through Import levies. For industrial potatoes guaranteed prices are fixed in the form of a contract between producers and the competent association. For oilseeds there is a guaranteed redemption price from the beginning of the season» The Grain Trade Association fixes, each year, before the harvest, redemption prices at which it undertakes to buy all wheat and rye unsold by 1 April in the following year. The Marketing Associations levy domestic marketing and processing fees on certain products, the proceeds being paid into the relevant Compensation Fund (e.g. a milling fee on wheat and rye, a manufacturing fee on potato starch and cheese, a slaughter fee on meat, a marketing fee on milk, cream and cheese). Imports of these products are- subject to an additional compensatory levy (over and above the fixed import levy) equal to the internal fee charged on the domestic product. This revenue is also paid into the relevant Compensation Fund. A bonus is paid to fishermen on sales of fish that cannot be marketed at the fixed minimum prices. The bonus is paid from funds established from a fee levied either on other sales of the domestic catch or on imports. For exports the bonus is paid only on small herring (from the Baltic Sea) and, in certain cases, for salted herring.

4 INT(59)l3 Page 4 For commodities where there is sometimes an exportable surplus, such as wheat, butter, cheese, eggs and pigmeat, the appropriate Marketing Association fixes the level of aid to be granted and this is paid from the Compensation Fund. II. SUBSIDIES (Including all forms of income and price support) For social reasons small farmers on holdings of less than 10 hectares receive support in the form of direct cash payments from the Budget. In certain cases the Government may contribute to the cost of farm land if the price involved is higher than the prospective purchaser can reasonably be asked to pay. Some reimbursement is given of the tax on petrol used for agricultural purposes. Production subsidies, paid from the Budget are granted on hemp and wool. Producers of milk receive support in the form of various price supplements and allowances financed from budget revenue. In these subsidies amounted to Kr.217 million. In 1957 the Government granted Kr.40 million in subsidies and loans to certain grain-growing districts that had suffered from bad crops. As stated in Section I B, Compensation Funds which are partly financed by import levies are used by the Marketing Associations inter alia to support exports. III. MIXING REGULATIONS The Swedish Government does not maintain such regulations for agricultural products. IV. STATE-TRADING OPERATIONS (including private enterprises enjoying special privileges) Imports of tobacco and alcoholic beverages (brandy, wine, and strong beer) are administered by monopolies. These monopolies are of a social and fiscal nature and there does not appear to be any substantial protective element in their operation. (See document L/784/Add.l/Corr.l.)

5 IMT(59)13 Page 5 V. IMPORT RESTRIOTIOIvlS Only a small number of agricultural commodities are subject to restriction when imported from the OKEC countries, the sterling area, Finland and Yugoslavia. Imports from the dollar area which have not been freed are subject to licence and licences are issued on an ad hoc basis or in accordance with directives drawn up in the light of import needs and the balance-of-payments situation. Imports from other sources are formally restricted but licences are mostly granted freely. The import of certain coimaodities takes place in accordance.i... with the terms of bilateral trade agreements. -, * A. Restrictions Applied to Products for which Support Measures are in Force - Horses, bovine cattle, sheep and swine, not for slaughter - Oats, maize, barley and millet Flour of oats, maize and millet - Meat of poultry, salted horsemeat, dry and salted pork Canned meat of bovine cattle or sheep - Milk and cream, butter and margarine - Eggs - Raw potatoes and potato flakes, meal of dried potato, potato starch - Most types of vegetable oils and oilseeds - Sugar, syrup, molasses, dextrose, glucose, fructose and lactose- : Peas and beans for human consumption No restrictions on imports from the OEEC countries, the Sterling area, Finland and Yugoslavia, so long as the domestic price remains between certain fixed price limits (see Part I). Restrictions have temporarily been reintroduced on imports of butter, swine and products thereof.

6 INT(59)13 Page 6 Fresh meat, bacon, ham Canned meat - Dried milk and cream ^ - Starch - Hemp - Apples and pears, fresh or boiled - Bananas fresh or boiled Imports from sources other than OEEC countries, the Sterling area, Finland and Yugoslavia are restricted. Imports are restricted seasonally. Licences are issued within the limits of bilateral quotas or on a case-by-case basis. Fish - Sprats and anchovies treated in certain ways - Certain types of fresh or chilled fillets and fresh or chilled fish - Herring, fresh, dried or sugar-salted - Lobsters Imports are admitted under global or bilateral quotas or on an ad hoc basis. B. Other Restrictions Applied for the Protection of Agriculture /To be furnished by the Government of Sweden^/ VI. MEASURES JIIICH TEND TO REDUCE OR REMOVE THE MEED FOR NON-TARIFF MEASURES OF PROTECTION OR SUPPORT /General statement to be furnished by the Government of Sweden^/