4. US-Proposed Annex IV Methodology
39. In this section, Brazil provides updated calculations for allocating contract payments over the entire sales of crops produced on farms producing upland cotton.964 In Section 3 of this annex, Brazil calculated the total amounts of contract payments received by farms producing upland cotton (Tables 3.1-3.4). Brazil also calculated the value of the contract programme crop production on farms producing upland cotton (Tables 3.5-3.8). To avoid repetition, Brazil refers to Panel to these calculations.
40. While the revised US summary data provided on 28 January 2004 neither addresses the aggregation problems resulting from the particular manner in which the United States produced its summary data,965 nor the shortcomings in terms of soybean market loss assistance payments and peanut direct and counter-cyclical payments, the United States provides information on contract base of farms that plant upland cotton, but do not hold upland cotton base. To reflect this additional information, Brazil has updated its earlier calculations.966
41. Allocating the total amount of contract payments over the entire sales of crops produced on farms that also produce upland cotton requires determining the value of the non-programme crop production on these farms. In a first step, Brazil calculates the amount of acreage planted to non-programme crops on farms that produce upland cotton.
Table 4.1
MY 1999 Non-Contract Payment Crop Acres on Upland Cotton Farms
|
Total Acreage on Farms Holding Upland Cotton Base967
|
27,912,407.1 acres
|
Total Acreage on Farms Not Holding Upland Cotton Base968
|
2,716,150.3 acres
|
Total Acreage on Upland Cotton Farms969
|
30,628,557.4 acres
|
Total Contract Crop Acreage on Farms Holding Upland Cotton Base970
|
19,540,993.9 acres
|
Total Contract Acreage on Farms Not Holding Upland Cotton Base971
|
1,847,421.3 acres
|
Total Contract Crop Acreage on Upland Cotton Farms972
|
21,388,415.2 acres
|
Total Non-Contract Crop Acreage on Upland Cotton Farms973
|
9,240,142.2 acres
|
Table 4.2
MY 2000 Non-Contract Payment Crop Acres on Upland Cotton Farms
|
Total Acreage on Farms Holding Upland Cotton Base974
|
28,104,322.2 acres
|
Total Acreage on Farms Not Holding Upland Cotton Base975
|
2,986,458.7 acres
|
Total Acreage on Upland Cotton Farms976
|
31,090,780.9 acres
|
Total Contract Crop Acreage on Farms Holding Upland Cotton Base977
|
20,420,279.8 acres
|
Total Contract Acreage on Farms Not Holding Upland Cotton Base978
|
2,132,449.4 acres
|
Total Contract Crop Acreage on Upland Cotton Farms979
|
22,552,729.2 acres
|
Total Non-Contract Crop Acreage on Upland Cotton Farms980
|
8,538,051.7 acres
|
Table 4.3
MY 2001 Non-Contract Payment Crop Acres on Upland Cotton Farms
|
Total Acreage on Farms Holding Upland Cotton Base981
|
27,412,998.5 acres
|
Total Acreage on Farms Not Holding Upland Cotton Base982
|
3,222,775.5 acres
|
Total Acreage on Upland Cotton Farms983
|
30,635,774.0 acres
|
Total Contract Crop Acreage on Farms Holding Upland Cotton Base984
|
20,502,477.8 acres
|
Total Contract Acreage on Farms Not Holding Upland Cotton Base985
|
2,290,701.8 acres
|
Total Contract Crop Acreage on Upland Cotton Farms986
|
22,793,179.6 acres
|
Total Non-Contract Crop Acreage on Upland Cotton Farms987
|
7,842,594.4 acres
|
Table 4.4
MY 2002 Non-Contract Payment Crop Acres on Upland Cotton Farms
|
Total Acreage on Farms Holding Upland Cotton Base988
|
26,576,970.2 acres
|
Total Acreage on Farms Not Holding Upland Cotton Base989
|
1,564,115.0 acres
|
Total Acreage on Upland Cotton Farms990
|
28,141,085.2 acres
|
Total Contract Crop Acreage on Farms Holding Upland Cotton Base991
|
21,505,529.6 acres
|
Total Contract Acreage on Farms Not Holding Upland Cotton Base992
|
1,202,794.9 acres
|
Total Contract Crop Acreage on Upland Cotton Farms993
|
22,708,324.5 acres
|
Total Non-Contract Crop Acreage on Upland Cotton Farms994
|
5,432,760.7 acres
|
42. Brazil notes that the calculation of the average value of the production from a non-contract crop acre in the United States is unaffected by the new summary data provided by the United States on 28 January 2004. For ease of reference, Brazil reproduces the average values in the table below.
Table 4.5
Average Per-Acre Value from Production of Non-Contract Programme Crops
in the United States995
|
MY 1999
|
MY 2000
|
MY 2001
|
MY 2002
|
$150.28
|
$155.58
|
$154.92
|
$118.42
|
43. Multiplying the per acre value of non-contract crop production by the amount of acreage planted to non-programme crops provides the total value of this production, as shown in the table below.
Table 4.6
Total_Value_of_Non-Contract_Programme_Crops_Production__on_Upland_Cotton_Farms__996'>Total Value of Non-Contract Programme Crops Production
on Upland Cotton Farms996
|
MY 1999
|
MY 2000
|
MY 2001
|
MY 2002
|
$1,388,608,569.8
|
$1,328,350,083.5
|
$1,214,974,724.4
|
$643,347,522.1
|
44. These figures are added to the value of contract programme crops determined in Section 3 and presented below.
Table 4.7
Total_Value_of_Crop_Production_on_Upland_Cotton_Farms'>Total Value of Crop Production on Upland Cotton Farms
|
|
MY 1999
|
MY 2000
|
MY 2001
|
MY 2002
|
Value of Contract Programme Crops997
|
$4,477,294,413.0
|
$5,083,491,784.8
|
$3,874,679,644.8
|
$5,042,861,279.0
|
Value of Non-Contract Payment Crops998
|
$1,388,608,569.8
|
$1,328,350,083.5
|
$1,214,974,724.4
|
$643,347,522.1
|
Total Value999
|
$5,865,902,982.8
|
$6,411,841,868.3
|
$5,089,654,369.2
|
$5,686,208,801.1
|
Upland Cotton Value1000
|
$3,515,621,790.4
|
$4,029,636,988.1
|
$2,798,361,319.1
|
$3,414,772,646.8
|
Upland Cotton Value as a Percentage of Total Value1001
|
59.933 per cent
|
62.857 per cent
|
54.981 per cent
|
60.054 per cent
|
45. Applying this percentage rate to the total amount of contract payments received by farms producing upland cotton generates the amount of contract payments that constitute support to upland cotton under this methodology. The figures are shown in the table below.
Table 4.8
Total Contract Payments Allocated as Support to Upland Cotton1002
|
MY
|
PFC Payments
|
MLA Payments1003
|
Direct Payments
|
CCP Payments
|
1999
|
$440,061,035.8
|
$437,917,881.4
|
-
|
-
|
2000
|
$432,996,788.7
|
$460,939,354.1
|
-
|
-
|
2001
|
$304,243,319.2
|
$420,222,029.1
|
-
|
-
|
2002
|
-
|
-
|
$383,057,256.1
|
$640,389,168.2
|
46. For purposes of comparison, Brazil reproduces the results of its “14/16th” methodology, as presented to the Panel at paragraphs 8 of Brazil’s 22 December 2003 Answers to Questions and Brazil’s 9 September Further Submission.
Table 4.9
Results of Brazil’s 14/16th Methodology
|
MY
|
PFC Payments
|
MLA Payments
|
Direct Payments
|
CCP Payments
|
1999
|
$547,800,000
|
$545,100,000
|
-
|
-
|
2000
|
$541,300,000
|
$576,200,000
|
-
|
-
|
2001
|
$453,000,000
|
$625,700,000
|
-
|
-
|
2002
|
-
|
-
|
$454,500,000
|
$935,600,000
|
Annex B
Peace Clause Comparisons MY 1999-2001 Under Various Allocation Methodologies
Budgetary Outlays For Upland Cotton MY 1992, 19991004
Year
Programme
|
1992
|
1999 (1)
|
1999 (2)
|
1999 (3)
|
1999 (4)
|
1999 (5)
|
----- $ million -----
|
Deficiency Payments
|
1017.4
|
none
|
none
|
none
|
none
|
none
|
PFC Payments
|
none
|
515.3
|
574.5
|
576.5
|
440.1
|
547.8
|
MLA Payments
|
none
|
512.8
|
571.7
|
573.7
|
437.9
|
545.1
|
Marketing Loan Gains and LDP Payments1005
|
866
|
1,761
|
1,761
|
1,761
|
1,761
|
1,761
|
Step 2 Payment
|
207
|
422
|
422
|
422
|
422
|
422
|
Crop Insurance
|
26.6
|
169.6
|
169.6
|
169.6
|
169.6
|
169.6
|
Cottonseed Payments
|
none
|
79
|
79
|
79
|
79
|
79
|
Total
|
2,117.0
|
3,459.7
|
3,577.8
|
3,581.8
|
3,309.6
|
3,524.5
|
(1) Adjusted Total Upland Cotton Contract Payments to Farms Producing Upland Cotton and Holding Upland Cotton Base; (Under The Non-Adjusted Methodology, The Amount Would Be Identical)
(2) Brazil’s Allocation Methodology
(3) Annex IV-Type Allocation Over Value of Contract Payment Crops Only
(4) US-proposed Methodology
(5) Brazil’s 14/16th Methodology
Budgetary Outlays For Upland Cotton MY 1992, 20001006
Year
Programme
|
1992
|
2000 (1)
|
2000 (2)
|
2000 (3)
|
2000 (4)
|
2000 (5)
|
----- $ million -----
|
Deficiency Payments
|
1017.4
|
none
|
none
|
none
|
none
|
none
|
PFC Payments
|
none
|
482.4
|
538.1
|
546.1
|
433.0
|
541.3
|
MLA Payments
|
none
|
513.6
|
572.8
|
581.3
|
460.9
|
576.2
|
Marketing Loan Gains and LDP Payments1007
|
866
|
636
|
636
|
636
|
636
|
636
|
Step 2 Payment
|
207
|
236
|
236
|
236
|
236
|
236
|
Crop Insurance
|
26.6
|
161.7
|
161.7
|
161.7
|
161.7
|
161.7
|
Cottonseed Payments
|
none
|
185
|
185
|
185
|
185
|
185
|
Total
|
2,117.0
|
2,214.7
|
2,329.6
|
2,346.1
|
2,112.6
|
2,336.2
|
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