[Federal Register Volume 63, Number 83 (Thursday, April 30, 1998)]
[Notices]
[Pages 23723-23728]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-11528]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-122-404]
Live Swine From Canada; Preliminary Results of Countervailing
Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of countervailing duty
administrative review.
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SUMMARY: The Department of Commerce (the Department) is conducting an
administrative review of the countervailing duty order on live swine
from Canada for the period April 1, 1996 through March 31, 1997. For
information on the net subsidy for all producers covered by this order,
see the Preliminary Results of Review section of this notice. If the
final results remain the same as these preliminary results of
administrative review, we will instruct the U.S. Customs Service to
assess countervailing duties as detailed in the Preliminary Results of
Review section of this notice. Interested parties are invited to
comment on these preliminary results. See Public Comment section of
this notice.
EFFECTIVE DATE: April 30, 1998.
FOR FURTHER INFORMATION CONTACT: Gayle Longest or Lorenza Olivas,
Office CVD/AD Enforcement VI, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
2786.
SUPPLEMENTARY INFORMATION:
Background
On August 15, 1985, the Department published in the Federal
Register (50 FR 32880) the countervailing duty order on live swine from
Canada. On August 4, 1997, the Department published a notice of
``Opportunity to Request Administrative Review'' (62 FR 41925) of this
countervailing duty order. We received timely requests for review and
on September 25, 1997, we initiated the review, covering the period
April 1, 1996 through March 31, 1997 (62 FR 50292).
The Department has determined that it is not practicable to conduct
a company-specific review of this order because a large number of
producers and exporters requested the review. Therefore, pursuant to
section 777A(e)(2)(B) of the Tariff Act of 1930, as amended (the Act),
we are conducting a review of all producers and exporters of subject
merchandise covered by this order on the basis of aggregate data. This
review covers 27 programs.
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions of the Tariff Act of 1930, as amended by
the Uruguay Round Agreements Act (URAA) effective January 1, 1995 (the
Act). In addition, unless otherwise indicated, all citations to the
Department's regulations are to the regulations codified at 19 CFR
section 351, published in the Federal Register at 62 FR 27296 (May 19,
1997). The Department is conducting this administrative review in
accordance with section 751(a) of the Act.
Scope of the Review
The merchandise covered by this order is live swine, except U.S.
Department of Agriculture (USDA) certified purebred breeding swine,
slaughter sows and boars, and weanlings, (weanlings are swine weighing
up to 27 kilograms or 59.5 pounds) from Canada. The merchandise subject
to the order is classifiable under the Harmonized Tariff Schedule (HTS)
item numbers 0103.91.00 and 0103.92.00. The HTS item numbers are
provided for convenience and U.S. Customs Service (Customs) purposes.
The written description of the scope remains dispositive.
Analysis of Programs
Allocation Methodology
In the past, the Department has relied on information from the U.S.
Internal Revenue Service (IRS) on the industry-specific average useful
life of assets in determining the allocation period for nonrecurring
grant benefits. See General Issues Appendix appended to Final
Countervailing Duty Determination; Certain Steel Products from Austria,
58 FR 37063, 37226 (July 9, 1993). However, in British Steel plc. v.
United States, 879 F. Supp. 1254 (CIT 1995) (British Steel), the U.S.
Court of International Trade (the Court) ruled against this allocation
methodology. In accordance with the Court's remand order, the
Department calculated a company-specific allocation period for
[[Page 23724]]
nonrecurring subsidies based on the average useful life (AUL) of non-
renewable physical assets. This remand determination was affirmed by
the Court on June 4, 1996. See British Steel, 929 F. Supp. 426, 439
(CIT 1996).
The Department has not appealed the Court's decision and, as such,
we intend to determine the allocation period for nonrecurring subsidies
using company-specific AUL data where reasonable and practicable. In
Live Swine from Canada; Preliminary Results of Countervailing Duty
Administrative Review (62 FR 52426; October 7, 1996) and Live Swine
from Canada; Final Results of Countervailing Duty Administrative Review
(62 FR 18087; April 14, 1997) (Swine Tenth Review Results), the
Department determined that it is not reasonable and practicable to
allocate non-recurring subsidies using company-specific AUL data
because it is not possible to apply a company-specific AUL in an
aggregate case (such as the case at hand). Accordingly, in this review,
the Department has continued to use as the allocation period the
average useful life of depreciable assets used in the swine industry,
as set forth in the U.S. Internal Revenue Service (IRS) Class Life
Asset Depreciation Range System (see Swine Tenth Review Results), which
is a period of three years.
Calculation Methodology for Assessment and Cash Deposit Purposes
For the period of review (POR), we calculated the net subsidy on a
country-wide basis by determining the subsidy rate for each program
subject to the administrative review in the following manner. We first
calculated the subsidy rate on a province-by-province basis; we then
weight-averaged the rate received by each province using the province's
share of total Canadian exports to the United States of the subject
merchandise. We then summed the individual provinces' weight-averaged
rates to determine the subsidy rate of each program. To obtain the
country-wide rate, we then summed the subsidy rates from all programs.
I. Programs Conferring Subsidies
A. Programs Previously Determined to Confer Subsidies
1. Federal/Provincial Programs
a. National Transition Scheme for Hogs. After termination of the
National Tripartite Stabilization Program (NTSP) for Hogs in July 1994,
hog producers became eligible to participate in the National Transition
Scheme for Hogs (Transition Scheme), which provided for one-time
payments to producers of hogs marketed from April 3, 1994 through
December 31, 1994. The Transition Scheme provided payments to hog
producers of Can$1.50 per hog from the federal government and a
matching Can$1.50 from the provincial government.
In Swine Tenth Review Results, the Department found this program to
be de jure specific, and thus countervailable, because the Transition
Scheme Agreement expressly limits its availability to a specific
industry (swine). We determined that the amounts provided by both the
federal and provincial governments to the hog producers during that POR
under the Transition Scheme represented a grant. We also found that
these grants were non-recurring because the transitional payments are
exceptional; the recipient cannot expect to receive benefits on an
ongoing basis from POR to POR; and the government approved funding
under the Transition Scheme for one year only. No new information or
evidence of changed circumstances has been submitted in this proceeding
to warrant reconsideration of this finding.
In Live Swine From Canada; Preliminary Results of Countervailing
Duty Administrative Review 62 FR 47460 (September 9, 1997) and Live
Swine From Canada; Final Results of Countervailing Duty Administrative
Review 63 FR 2204 (January 14, 1998) (Swine Eleventh Review Results)
the following provinces received benefits under this program: Alberta,
Manitoba, New Brunswick, Ontario, Quebec, and Saskatchewan.1
The amount received under this program by live swine producers was
greater than 0.50 percent of the value of total live swine sales in
Canada. On this basis, we allocated the benefit from this grant over
three years, which is the average useful life of depreciable assets
used in the swine industry, as set out in the IRS Class Life Asset
Depreciation Range System. We calculated the discount rate using the
same methodology applied in previous reviews. (See Live Swine From
Canada; Notice of Preliminary Results of Countervailing Duty
Administrative Reviews; Initiation and Preliminary Results of Changed
Circumstances Review and Intent To Revoke Order in Part 61 FR 26879,
26884 (May 29, 1996) and Live Swine From Canada; Final Results of
Countervailing Duty Administrative Reviews 61 FR 52408 (October 7,
1996) Swine 7,8,9 Review Results. We used, as a discount rate, the
simple average of the monthly medium-term corporate bond rates for the
eleventh POR, from the Bank of Canada Review Autumn (1996), published
by the Bank of Canada. We applied our standard grant methodology to
calculate each province's benefit.
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\1\ We note that the provinces of British Columbia, Manitoba,
New Brunswick, Nova Scotia, Prince Edward Island and Saskatchewan
received payments under this program during the 1994-1995 POR which
were expensed in the year of receipt. See Swine Tenth Review
Results.
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During the POR, there were no payments given under this program.
However, residual benefits from provinces receiving payments in the
1995-1996 POR continue to provide countervailable benefits during the
POR now under review, which is the second year of the three-year
allocation period. To derive the benefit in this review, we took the
portion of the benefit allocated to this POR from the Swine Eleven
Review Results and, using each province's calculated total weight of
market hogs produced during the POR, derived a benefit per kilogram for
each province. We used only the weight of market hogs because only
market hogs were eligible to receive NTSP benefits. We then weight
averaged the benefits by each province's share of total Canadian
exports of market hogs to the United States during the POR and summed
the weighted averages. On this basis, we preliminarily determine the
net subsidy for this program to be Can$0.0041 per kilogram for the POR.
The Transition Scheme program has been terminated. Because the last
date residual benefits may accrue is the last day of the three-year
allocation period, which is March 31, 1998, prior to the publication of
these preliminary results, we determine that this program is terminated
with no residual benefits. Moreover, there is no evidence on the record
which would indicate that residual benefits are being provided or
received or that a substitute program has been implemented. See e.g.,
Swine Eleventh Review Results. Therefore, for cash deposit purposes,
the cash deposit rate for this program will be adjusted to zero due to
the program-wide change which became effective April 1, 1998. However,
we will continue to examine this program in the subsequent
administrative review, if conducted, which would cover the last year of
the three-year allocation period for purposes of duty assessment.
2. Provincial Programs
a. Alberta Crow Benefit Offset Program (ACBOP). This program,
administered by the Alberta Department of Agriculture, is designed to
compensate producers and users of feed grain for market distortions in
feed grain prices, created by the federal government's policy on grain
transportation. Assistance is provided
[[Page 23725]]
for feed grain produced in Alberta, feed grain produced outside Alberta
but sold in Alberta, and feed grain produced in Alberta to be fed to
livestock on the same farm. The government provides ``A'' certificates
to registered feed grain users and ``B'' certificates to registered
feed grain merchants to use as partial payments for grain purchased
from grain producers. Feed grain producers who feed their grain to
their own livestock submit a Farm Fed Claim directly to the government
for payment.
Hog producers receive benefits in one of three ways: hog producers
who do not grow any of their own feed grain receive ``A'' certificates
which are used to cover part of the cost of purchasing grain; hog
producers who grow all of their own grain submit a Farm Fed Claim to
the government of Alberta for direct payment; and hog producers who
grow part of their own grain but also purchase grain receive both ``A''
certificates and direct payments.
In Swine Second and Third Review Results (56 FR 10412), the
Department found this program to be de jure specific, and thus
countervailable, because the legislation expressly makes it available
only to a specific group of enterprises or industries (producers and
users of feed grain). No new information or evidence of changed
circumstances has been submitted in this proceeding to warrant
reconsideration of this finding.
To determine the benefit to swine producers from this program, we
followed the methodology used in Swine Tenth Review Results. Using the
Alberta Supply and Disposition Tables, we first estimated the quantity
of grain consumed by livestock in Alberta during the POR. Then we
multiplied the number of swine produced in Alberta during the POR by
the estimated average grain consumption per hog, and divided the result
by the amount of total grains used to feed livestock during the POR. We
thus calculated the percentage of total livestock consumption of all
grains in Alberta attributable to live swine during the POR. We then
multiplied this percentage by the total value of ``A'' certificates and
farm-fed claim payments received by producers during the POR. We
divided this amount by the total weight of live swine produced in
Alberta during the POR. We then weight-averaged this per-kilo benefit
by Alberta's share of total Canadian exports of market hogs to the
United States. On this basis, we preliminarily determine the benefit to
be less than Can$0.0001 per kilogram for the POR.
ACBOP was terminated on March 31, 1994. Benefits for ``A''
certificates had to be claimed by June 30, 1994, and benefits tied to
farm-fed grains had to be claimed by August 31, 1994. The original
deadline for any payment of benefits under the program was March 31,
1996, however, producers could receive payments until May 17, 1996.
Since no payments could be received after the publication of these
preliminary results, we determine this program terminated with no
residual benefits. Moreover, there is no evidence on the record which
would indicate that residual benefits are being provided or received or
that a substitute program has been implemented. Therefore, we will not
examine this program in the future, and the cash deposit rate will
continue to be zero for this program. (See Swine Eleventh Review
Results).
b. Ontario Livestock and Poultry and Honeybee Compensation Program.
This program, administered by the Farm Assistance Programs Branch of
the Ontario Ministry of Agriculture, Food, and Rural Affairs, provides
assistance in the form of grants which compensate producers for
livestock and poultry injured or killed by wolves, coyotes, or dogs.
Swine producers apply for and receive compensation through the local
municipal government, and the Ontario Ministry of Agriculture, Food,
and Rural Affairs reimburses the municipality.
In Swine Fifth Review Results (56 FR 29227), the Department found
this program to be de jure specific, and thus countervailable, because
the legislation expressly makes it available only to a specific group
of enterprises or industries (livestock, poultry farmers, and
beekeepers). No new information or evidence of changed circumstances
has been submitted in this proceeding to warrant reconsideration of
this finding.
To calculate the benefit, we used the methodology applied in Swine
Sixth Review Results (58 FR 54119) and subsequent reviews. We divided
the total payment to hog producers during the POR by the total weight
of live swine produced in Ontario. We then weight-averaged the result
by Ontario's share of Canadian exports of market hogs to the United
States during the POR. On this basis, we preliminarily determine the
benefit from this program to be less than Can$0.0001 per kilogram for
the POR.
c. Saskatchewan Livestock Investment Tax Credit. Saskatchewan's
1984 Livestock Tax Credit Act provides tax credits to individuals,
partnerships, cooperatives, and corporations who owned and fed
livestock marketed or slaughtered by December 31, 1989. Claimants had
to be residents of Saskatchewan and pay Saskatchewan income taxes.
Eligible claimants received credits of Can$3 for each hog. Although
this program was terminated on December 31, 1989, tax credits are
carried forward through the end of fiscal year 1996 (April 1, 1995
through March 31, 1996). In Swine First Review Results (53 FR 22198),
the Department found this program to be de jure specific, and thus
countervailable, because the program's legislation expressly made it
available only to livestock producers. No new information or evidence
of changed circumstances has been submitted in this proceeding to
warrant reconsideration of this finding.
To calculate the benefit for the POR, we used the methodology
applied in Swine Sixth Review Results (58 FR 54120) and subsequent
reviews (see Swine Tenth Review Results). In the questionnaire
responses, the GOC provided estimates of the amount of tax credits used
by hog producers in Saskatchewan during the POR, since the actual
amounts cannot be determined. We divided the amount of benefit by the
total weight of live swine produced in Saskatchewan during the POR. We
then weight-averaged the result by Saskatchewan's share of total
exports of market hogs to the United States. On this basis, we
preliminarily determine the benefit from this program to be less than
Can$0.0001 per kilogram for the POR.
The Saskatchewan Livestock Investment Tax Credit was terminated on
December 31, 1989 and the last year for disbursement of benefits was
fiscal year 1996 (April 1, 1995 through March 31, 1996). Therefore, we
consider this program terminated. Moreover, there is no evidence on the
record which would indicate that residual benefits are being provided
or received or that a substitute program has been implemented.
Therefore, we will not examine this program in the future, and the cash
deposit rate will continue to be zero for this program.
d. Saskatchewan Livestock Facilities Tax Credit. This program,
which was terminated on December 31, 1989, provided tax credits to
livestock producers based on their investments in livestock production
facilities. The tax credits can only be used to offset provincial taxes
and may be carried forward for up to seven years or until no later than
fiscal year 1996 (April 1, 1995 through March 31, 1996). Livestock
covered by this program includes cattle, horses, sheep, swine, goats,
poultry, bees, fur-bearing animals raised in captivity, or any other
designated animals; covered livestock can be raised for either breeding
or slaughter. Investments covered under the program include new
buildings, improvements to existing livestock facilities, and any
stationary equipment related to
[[Page 23726]]
livestock facilities. The program pays 15 percent of 95 percent of
project costs, or 14.25 percent of total costs.
In Swine Second and Third Review Results (55 FR 20820), the
Department found this program to be de jure specific, and thus
countervailable, because the program's legislation expressly made it
available only to livestock producers. No new information or evidence
of changed circumstances has been submitted in this proceeding to
warrant reconsideration of this finding.
To calculate the benefit, we used the methodology applied in Swine
Sixth Review Results (58 FR 54121) and subsequent reviews (see Swine
Tenth Review Results). In the questionnaire responses, the GOC provided
estimates of the amount of tax credits used by hog producers in
Saskatchewan, since the actual amounts cannot be determined. We divided
the amount of benefit by the total weight of live swine produced in
Saskatchewan during the POR. We then weight-averaged the result by
Saskatchewan's share of total exports of market hogs to the United
States. On this basis, we preliminarily determine the benefit from this
program to be less than Can$0.0001 per kilogram for the POR.
The Saskatchewan Livestock Facilities Tax Credit was terminated on
December 31, 1989 and the last year for use of tax credits was fiscal
year 1996 (April 1, 1995 through March 31, 1996). Therefore, we
consider this program terminated. Moreover, there is no evidence on the
record which would indicate that residual benefits are being provided
or received or that a substitute program has been implemented.
Therefore, we will not examine this program in the future, and the cash
deposit rate will continue to be zero for this program.
e. New Brunswick Livestock Incentives Program. This program, which
operates under the Livestock Incentives Act, provides loan guarantees
to livestock producers purchasing cattle, sheep, swine, foxes, and mink
for breeding purposes, and for feeding and finishing livestock for
slaughter. Loans in amounts ranging from Can$1,000 to Can$90,000 are
granted by commercial banks or credit unions and guaranteed by the
Government of New Brunswick (GONB) to an individual, partnership,
corporation or incorporated co-operative association engaged in farming
in New Brunswick. Swine producers submit an application for a loan
under this program to a bank. The bank evaluates the loan application
based upon standard loan criteria and either approves or rejects the
application. A consideration for obtaining the loan is the presentation
to the GONB of a farm plan established at the time the loan is taken
out. For loans given for the purchase of animals for breeding purposes,
the term of the loan is not more than seven years and the first payment
of the principal is due two years after the date on which the loan was
given. For loans given for the purchase of animals for feeding
purposes, the loan is due when the animals have been sold which shall
not exceed a period of eighteen months. The interest rate for these
loans is set at the prime rate plus one percentage point.
At the end of three years after loans are issued, the GONB may give
20 percent of the loan amount to the farmer in the form of a grant. To
be eligible for this grant, the farmer must have implemented, in a
satisfactory manner, the farm plan established at the time the loan was
taken out. The grant portion of this program was terminated for loans
issued after July 15, 1992. No grants were provided during the POR and
the GOC reported that no further grants will be issued under this
program.
In Swine Second and Third Review Results (55 FR 20817), the
Department found this program to be de jure specific, and therefore
countervailable, because the program's legislation expressly made it
available only to livestock producers. No new information or evidence
of changed circumstances has been submitted in this proceeding to
warrant reconsideration of this finding.
In accordance with section 771(5)(E)(iii) of the Act, a benefit
from a loan obtained with a government guarantee shall normally be
treated as conferred ``if there is a difference, after adjusting for
any difference in guarantee fees, between the amount the recipient of
the guarantee pays on the guaranteed loan and the amount the recipient
would pay for a comparable commercial loan if there were no guarantee
by the authority.'' While there are no guarantee fees, the recipients
are paying interest at the prime rate plus one percentage point. In
Swine Tenth Review Results we found that the predominant lending rates
in Canada for comparable long-term variable-rate loans are based on the
prime rate plus a one or two-point spread. Therefore, in accordance
with the Swine Tenth Review Results methodology, as our benchmark
during the POR, we used the prime rate as published by the Bank of
Canada in the Bank of Canada Review Summer (1997) plus one and one-half
percentage points. This rate represents the simple average of the
spread above prime charged by commercial banks on comparable loans.
Comparing the benchmark interest rate to the interest rate charged on
these loans, we preliminarily determine that the amount the recipient
paid on these loans is less than the recipient would have paid on a
comparable commercial loan. We note that because this review is
conducted on an aggregate basis we are using a national-average short-
term benchmark rather than a company-specific benchmark rate.
We calculated the benefit from the loan portion of this program as
follows. For loans outstanding during the POR, either without
repayments or paid off during the POR, we followed the methodology
outlined in Swine Tenth Review Results. We determined the amount of the
benefit attributable to the POR by calculating the difference between
what the recipient paid during the POR under loans guaranteed by the
GONB and what the recipient would have paid during the POR under the
benchmark interest rate. We divided the benefit from all outstanding
loans and loans paid off during the POR by the total weight of live
swine produced in New Brunswick during the POR. We then weight-averaged
the benefit by New Brunswick's share of Canadian exports of market hogs
to the United States during the POR. On this basis, we preliminarily
determine the net subsidy from this program to be less than Can$0.0001
per kilogram.
f. New Brunswick Swine Industry Financial Restructuring and
Agricultural Development Act--Swine Assistance Program. The Swine
Assistance program was established in fiscal year 1981-82, by the Farm
Adjustment Board, under the Farm Adjustment Act, to provide interest
subsidies on medium-term loans to hog producers. The program was
available only to hog producers who entered production or underwent
expansion after 1979. In 1985, the Farm Adjustment Act changed to the
Agricultural Development Act. In 1984-85, this program was combined
with the Swine Industry Financial Restructuring program under the New
Brunswick Regulation 85-19. At that time, all obligations and
outstanding loans under the Swine Assistance program were rolled over
into the Swine Industry Financial Restructuring program.
The Swine Industry Financial Restructuring program was created by
the Farm Adjustment Act (OC 85-98) and became effective April 1, 1985.
Under this program the Government of New Brunswick granted hog
producers indebted to the Board a rebate of the interest on that
portion of their total debt (the residual debt) that, on March 31,
1984, exceeded the ``standard debt
[[Page 23727]]
load.'' The standard debt load is defined in the program's regulations
as the amount of debt which the farmer, in the opinion of the Board,
can reasonably be expected to service. The residual debt does not begin
to accrue interest again until the debt load is no longer
``excessive.''
In Swine Second and Third Review Results (55 FR 20816, 20817), the
Department examined these two programs separately. The Department found
(1) the Swine Assistance program to be countervailable because loans
were provided to a specific industry on terms inconsistent with
commercial considerations, and (2) the New Brunswick Swine Industry
Financial Restructuring program to be countervailable because it was
limited to a specific industry and the government's rebate of interest
and the interest repayment holiday were loan terms inconsistent with
commercial considerations. No new information or evidence of changed
circumstances has been submitted in this proceeding to warrant
reconsideration of these findings.
In Swine Tenth Review Results, we found that no new loans were
provided for the past ten years, and that there was no recent activity
on the outstanding loans. The loans given to producers were ``set
aside'' in a provincial account and were not accruing any interest. The
Department found that interest not accruing on the outstanding loan
balance constituted a benefit to live swine producers. No changes to
this program were reported in the instant review.
To calculate the benefit from this program, we multiplied the total
outstanding debt at the beginning of the POR by the benchmark interest
rate. We used, as a benchmark interest rate, the prime rate, as
published by the Bank of Canada in the Bank of Canada Review Summer
(1997), plus one and one-half percentage points. This rate represents
the simple average of the commercially available rates for comparable
loans. (See Swine Tenth Review Results). Next, we divided the benefit
by the total weight of live swine produced in New Brunswick during the
POR. We then weight-averaged the benefit by New Brunswick's share of
Canadian exports of market hogs to the United States during the POR. On
this basis, we preliminarily determine the benefit to be less than
Can$0.0001 per kilogram for the POR.
II. Programs Preliminarily Determined Not to Confer Subsidies
A. Research Program under the Canada/Quebec Subsidiary Agreement on
Agri-Food Development
The GOC and the GOQ reported that all projects completed under the
Research program during the POR were made publicly available. Because
the research results are publicly available, we preliminarily determine
that the Research program did not confer countervailable subsidies to
live swine during the POR. (See e.g., Certain Cut-to-Length Carbon
Steel Plate from Sweden; Preliminary Results of Countervailing Duty
Administrative Review, 62 FR 51683 (October 3, 1996) and Certain Cut-
to-Length Carbon Steel Plate from Sweden; Final Results of
Countervailing Duty Administrative Review, 62 FR 16551 (April 7, 1997).
III. Programs Preliminarily Determined to be Not Used
We also examined the following programs and preliminarily determine
that the producers and/or exporters of the subject merchandise did not
apply for or receive benefits under these programs during the POR:
A. Western Diversification Program
B. Farm Income Stabilization Insurance
C. Federal Atlantic Livestock Feed Initiative
D. Agricultural Products Board Program
E. Newfoundland Farm Products Corporation Hog Price Support Program
F. Newfoundland Hog Price Stabilization Program
G. Newfoundland Weanling Bonus Incentive Policy
H. Nova Scotia Improve Sire Policy
I. Ontario Bear Damage to Livestock Compensation Program
J. Ontario Rabies Indemnification Program
K. Ontario Swine Sales Assistance Policy
IV. Programs Preliminarily Determined to be Terminated
We have examined the following programs and preliminarily determine
they were terminated prior to the beginning of the POR (April 1, 1996),
and there is no evidence which would indicate that residual benefits
are being bestowed or that a substitute program has been implemented:
A. New Brunswick Swine Assistance Policy on Boars
B. Ontario Export Sales Aid
V. Other Programs Examined
On November 17, 1997, the GOC and the GOQ requested ``green box''
treatment for the Agri-Food Agreement. Under section 771(5B)(F) of the
Act, domestic support measures provided with respect to the
agricultural products listed in Annex 1 to the 1994 WTO Agreement on
Agriculture shall be treated as non-countervailable if the Department
determines that the measures conform fully with the provisions of Annex
2 of that same Agreement. The GOQ and the GOC claimed that the Agri-
Food Agreement met these criteria, and therefore, funding under the
Agri-Food Agreement should be noncountervailable pursuant to section
771(5B)(F) of the Act.
The initial Agri-Food Agreement was signed on February 17, 1987 and
remained in effect from 1987 to 1991. On August 26, 1993, a new Agri-
Food Agreement was enacted by the governments of Canada and Quebec
covering the period April 1, 1993 through March 31, 1998. Funding for
this agreement is shared 50/50 by the federal and provincial
governments. Through this Agreement, grants are made to private
businesses and academic organizations to fund projects under the
following program areas:
(1) Research
The purpose of this program area is to increase and diversify
scientific and technical expertise, in both the area of industrial
production and in university-based studies. Specific areas of expertise
to be covered include: food production, processing, storage and
marketing.
(2) Technology Innovation
The purpose of this program area is to speed up the rate of
adoption and dissemination of technologies and innovation and the
development of new products. This program operates through awarding
financial assistance and technical support to groups wishing to carry
out testing projects or develop new technologies to promote agri-food
development.
(3) Support for Strategic Alliances
The purpose of this program area is to stimulate cooperation and
promote strategic activities intended to improve competitiveness in
domestic and foreign markets. Funding for projects is made available to
an ``industry network'' (which includes all stakeholders in an agri-
food industry, from the producer of the raw material to the final
processor) through an application and approval process.
The Department has previously examined each of the three components
under the Agri-Food Agreement (Research, Technology Innovation, and
Support for Strategic Alliances) as three
[[Page 23728]]
separate programs. See Swine Tenth Review Results. During the POR,
producers of the subject merchandise received assistance under the
three component programs of the Agri-Food Agreement for which the GOC
and the GOQ have requested green box treatment.
Specifically, with regard to the Research program as discussed
above in the section II, we have preliminarily determined that this
program does not confer countervailable benefits because the results of
the research are publicly available. As such, there is no need to
address whether it is non-countervailable in the context of section
771(5B)(F). With regard to the Technology Innovations program and the
Support for Strategic Alliances program, any benefit to the subject
merchandise under either program or both programs combined is so small
(Can$ 0.0000013 and Can$ 0.0000008 per kilogram, respectively) that
there is no cumulative impact on the overall subsidy rate. Accordingly,
because there is no impact on the overall subsidy rate in the instant
review, we have not included the benefits from Technology Innovations
program and the Support for Strategic Alliances program in the
calculated subsidy rate for the POR, and do not consider it necessary
to address the issue of whether benefits under these programs are
noncountervailable as green box subsidies pursuant to section
771(5B)(F) of the Act. See, e.g., Final Affirmative Countervailing Duty
Determination: Steel Wire Rod from Germany, 62 FR 54990, 54995 (October
22, 1997); Certain Carbon Steel Products from Sweden; Preliminary
Results of Countervailing Duty Administrative Review 61 FR 64062, 64065
(December 3, 1996) and Certain Carbon Steel Products from Sweden; Final
Results of Countervailing Duty Administrative Review 62 FR 16549 (April
7, 1997); Final Negative Countervailing Duty Determination: Certain
Laminated Hardwood Trailer Flooring (``LHF'') From Canada 62 FR 5201
(February 4, 1997); Industrial Phosphoric Acid From Israel; Preliminary
Results of Countervailing Duty Administrative Review 61 FR 28845 (June
6, 1996) and Industrial Phosphoric Acid From Israel; Final Results of
Countervailing Duty Administrative Review 61 FR 53351 (October 11,
1996).
In addition, some farmers in Prince Edward Island received payments
during the POR under the Agricultural Disaster Insurance Program
(ADIP), which is authorized under section 12(5) of the Farm Income
Protection Act (FIPA) and a provincial statute. ADIP is a voluntary
whole farm program under which a farmer may apply for income support
when his current income margin falls below 70 percent of the average of
the three previous years. Because ADIP provides income assistance based
on a ``whole farm'' basis, it is not possible to segregate out benefits
to individual agricultural products. Furthermore, it is not clear
whether live swine producers benefitted from this program during the
POR. The GOC stated that this program was designed to meet the ``green
box'' criteria under the 1994 WTO Agreement on Agriculture. With regard
to the ADIP program, any benefit to the subject merchandise under this
program is so small (Can$ 0.0000081 per kilogram) that there is no
impact on the overall subsidy rate, even when taking into account the
assistance provided under the Technology Innovations program and the
Support for Strategic Alliances program. In other words, when the
benefits from the Technology Innovations program and the Support for
Strategic Alliances program and the ADIP program are summed, the
aggregate benefit from these three programs has no impact on the
overall subsidy rate. Accordingly, because there is no impact on the
overall subsidy rate in the instant review, we have not included the
benefits from ADIP in the calculated subsidy rate for the POR, and do
not consider it necessary to address the issue of whether benefits
under this program are countervailable in this review.
Preliminary Results of Review
We preliminarily determine the total net subsidy on live swine from
Canada to be Can$0.0041 per kilogram for the period April 1, 1996
through March 31, 1997. This rate is de minimis. If the final results
of this review remain the same as these preliminary results, the
Department intends to instruct Customs to liquidate without regard to
countervailing duties all shipments of the subject merchandise from
Canada.
Because the calculated net subsidy of Can$0.0041 per kilogram is de
minimis, the cash deposit rate will be zero. Accordingly, for all
shipments of the subject merchandise from Canada, entered, or withdrawn
from warehouse, for consumption on or after the date of publication of
the final results of this review, the cash deposits of estimated
countervailing duties will be zero, if the final results remain the
same as the preliminary results.
Public Comment
Parties to the proceeding may request disclosure of the calculation
methodology and interested parties may request a hearing not later than
30 days after the date of publication of this notice. Interested
parties may submit written arguments in case briefs on these
preliminary results within 30 days of the date of publication. Rebuttal
briefs, limited to arguments raised in case briefs, may be submitted
five days after the time limit for filing the case brief. Parties who
submit argument in this proceeding are requested to submit with the
argument: (1) A statement of the issue, and (2) a brief summary of the
argument. Any hearing, if requested, will be held two days after the
scheduled date for submission of rebuttal briefs. Copies of case briefs
and rebuttal briefs must be served on interested parties in accordance
with 19 CFR 351.303(f).
Representatives of parties to the proceeding may request disclosure
of proprietary information under administrative protective order no
later than 10 days after the representative's client or employer
becomes a party to the proceeding, but in no event later than the date
the case briefs, under 19 CFR 351.309(c)(ii), are due. The Department
will publish the final results of this administrative review, including
the results of its analysis of issues raised in any case or rebuttal
brief or at a hearing.
This administrative review and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. section 1675(a)(1)), 19 CFR
section 351.213.
Dated: April 23, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-11528 Filed 4-29-98; 8:45 am]
BILLING CODE 3510-DS-P
