Special Distribution. GENERAL AGREEMENT ON 11 October 1966 TARIFFS AND TRADE RESTRICTED

Transcription

1 RESTRICTED GENERAL AGREEMENT ON 11 October 1966 TARIFFS AND TRADE Special Distribution Group on Cereals Original: English Replies to GATT document TN.64/Ce/W/1 DENMARK (i) The levels of return, to producers including direct and indirect subsidies, subventions and other relevant arrangements, exportinga countries in relation to actual prices for wheat and thea2riial coarse grains traded internationally over a representative period- Bread grain During the harvest years 1958/ /66 guaranteed producer prices for bread grain (i.e. wheat and rye) were fixed by annual grain marketing acts under which growers of bread grain were guaranteed statutory minimum prices fixed for bread grain of specified grades sold to authorized dealers or millers before *the end of March in each harvest year. These prices were adjusted to a certain degree according to quality and supplemented by storage allowances for semi-monthly periods during six and a -half months beginning on 16 September in each harvest year. The guaranteed producer prices were during the harvest years 1959/ /65 $70.94 per ton for wheat and $68.05 per.ton for rye, delivered at.dealer, miller, port or railway station. In the harvest year 1965/66 the minimum prices were $72.39 per ton and $70.94 per ton for wheat and rye respectively. To these basic prices should be added the above-mentioned storage allowances, which were $0.58 per ton semi-monthly in the harvest years 1958/ /61 and $0.65 per ton in 1961/ /66. As for the harvest year 1966/67 there are no guaranteed producer prices for bread grain. Instead, bread grains are now covered by the same scheme as coarse grains, based on a set of basic prices and compensatory levies ("equalization charge's") intending to raise the prices of imported grains c.i.f. Danish ports

2 Page 2 to certain basic levels fixed by the Act. The basic price fixed for the harvest year 1966/67 is $75.28.per ton for both wheat and rye. This price will be raised monthly.by $0.72 per ton for six months beginning on I3.October The.-simple arithmetic.average of the guaranteed producer prices-including storage allowances for wheat and rye sold during the period 1 Augustn-31 Marqh were in the harvest years 1963/ /65 $74.65 per ton and $71.75 per ton respectively. The corresponding figures for 1965/66 were $76.09 per ton for wheat and $74L65 per ton for rye. Coar'se &rains Since the. harvest year 1958/59 aernual grain marketing acts have*.b~en passed in order to support: the price of domestic feed grain by means of levies on imported grain,.milled.;or unmilled-and grain products..the l~vies-.'are fixed as the difference between basic prices, c.i.f, Danish ports, specified in the Act and the lowest prices at which the various grains of good quality are offered c.i.f. Danish ports; the levies are fixed with validity for at least one week, and they are revised only if c.i.f. prices have changed slightly more than US$1 perl ton, :. : -The basic prices of feed grain have been the following: US$ per, ton 1959/ / / /67 Wheat and rye for fodder Barley " Oats Maize a Milo, millet P The basic prices for the harvest years 1965/66 and 1966/67 are to be raised by $0.72 per ton each month for a six month 'period beginirfg 1 October, of both harvest years. So, the basic price of coarse grain was $76.`73 per ton in early 1966 and will be $79.63:per ton in early For imports of the above-mentioned cereals in a crushed, ground or otherwise worked condition, equivalent levies are fixed.

3 Page 3 As far as bread grain is concerned the return to producer's at point of delivery has up to the present harvest year been equal to the guaranteed producer prices fixed in the Act with the addition of a storage allowance. Prices obtained by producers of coarse grains have generally tended to be below the basic prices fixed in the Act, due to abundant supplies on the Danish grain market in the first half of the crop year. An indication of the actually achieved level of Danish producer prices for coarse grains at point of delivery could be had by deducting from the Copenhagen wholesale market quotations an allowance for transport and handling costs. For barley and oats of a certain standard quality the calculation gives the following approximate prices to producer at point of delivery: US$ per ton Brley s 1962/ / / / (ii) Factual data, projections and exchange of information permitting each participant to form an opinion on the effectsondueducon, maktings and market access of commitments offered y countries participating in the current negotiations In Table I annexed hereto is shown the trends during the ten year period 1955/ /65 in-total acreage under cereals, yield per hectare, total production of cereals, net imports and the available supply. Further is shown for the same years the trends in domestic consumption, i.e. utilization of cereals for seed, milling and other industrial uses and for animal feed together with yearly changes in stocks. The last column shows the Danish self-sufficiency ratio in all cereals together, i.e. production as a percentage of domestic consumption.

4 Page 4 Table II shows the development in production, consumption and foreign trade in cereals from the crop years 1955/ /58 to the crop years 1962/ /65. The latter period compared with the former one shows an increase in total production of cereals of 1.2 million tons (27 per cent), resulting from an increase in acreage of 197,000 hectares (14.5 per cent) and an increase in yield per hectare of _70 3s.- (11 per cent). Further the comparison of the two periods shows that net imports rose by 97,000 tons (22 per cent) and total supply by 1.3 million tons (29 per cent). As far as domestic consumption of cereals is concerned, animal feeding is the dominant factor. During 1962/ /65 this usage accounted for 85.4 per cent of total domestic consuimption of all cereals. Utilization for animal feed in the latest decennium increased 1.2 million tons or 32 per cent, absorbing the expansion in domestic production. Utilization for milling and other industrial uses, mainly for hurnr.n consumption, was almost stagnant (10 per cent of total consumption), while usage for seed increased in proportion with the expansion of total acreage under cereals i.e. with 14 per cent. The Danish self-suflicipncy ratio (production harvested as a percentage of total domestic consumption) was during the period reviewed almost constant at slightly above 90 por cent. Per capita consumption of flour and groats decreased from 1956/ / kgs. or 8.5 per cent to 76.3 kgs. per year. Total consumption of the said commodities decreased 15,700 tons or 4 per cent to 359,000 tons. This trend is presumed to continue, however, at a decreasing rate. The significant increase in consumption of coarse grains for animal feed is mainly due to the marked expansion of production of pigmeat in later years. As shown in the attached Table III the pig-stock increased 2.8 million head or 55 per cent from 1956/ /65, The fowl stock decreased in the same period 1.2 million head. or 5 per cent. Annual killings of pigs in bacon factories increased 3.8 million head or 54 per cent to 10.8 million head, while production of all pigmeat (including sows) increased 214,000 tons or 40 per cent. In the poultry sector there was a strong increase in production of poultry meat - up 55,000 tons or 200 per cent - while there was a marked decl½re in production of eggs, which went down 47,000 tons cr 32 per cent.

5 Page 5 As far as future trends in production and consumption are concerned a few tentative indications could be given. The total agricultural area was in million hectares. It has been diminishing in later years at a rate of about 20,000 hectares per year on account of urban development etc., and this trend is expected to continue. A further expansion of the acreage ulder cereals can therefore only take place by an even larger reduction in areas under other crops, mainly root crops and grass, as has been the case in later years. A continuation of this trend will depend on the relative development of crop prices, milk - and meat prices and labour costs. Yields per hectare are expected to increase further, but probably at a lower growth rate. This increase together with the observed changes in land utilization may cause a modercae rise in domestic production of cereals over the next five to ten years. FNture trends in domiestic consuinption oaf cereals in Denmark are primarily depending on the livestock economy as animal feed currently accounts for about 85 per cent of total consumption. It must, therefore, be stressed that Denmark's ability to increase its consumption and net imports of cereals is almost wholly dependent on its ability to expand its animal production, especially of pigmeat, poultry meat and eggs, but also that of dairy products and meat which is fundamental for maintaining the area under grass and root crops. The expansion of livestock production, however, depends on the possibility of finding remunerative export markets for those products. In case of expanded production and exports of animal products Danish consumption of cereals is likely to increase faster than domestic production. Thus the self-sufficiency ratio would decrease and net imports as percentage of domestic consumption would increase. In the Danish view it is of fundamental importance that commitments regarding imports of grains under an international cereals agreement so far as major exporters of livestock products are concerned, should be subject to adjustment if the external market for these products shrinks.

6 Page 6 (iii) Alternative bases for fixing an international minimum Erice with particular emphasis on the possible effects upon the competitive position of all wheat traded on world r.markets; this is also applicable to coarse grains In the Danish view the basic minimum and maximum prices established by an international grains arrangement should be fixed f.o.b. leading ocean ports for reference grains of a certain type and grade (standard quality) meeting the criteria, referred to in GATT documents TN.64/Ce/4 and TN.64/Ce/7. (iv) Quality differentials for hyarious qualities of wheat and the principal coarse grains Quality differentials should be negotiated in the Group on Cereals and the agreed differentials prescribed in an international arrangement on cereals in order to secure the proper functioning of the arrangement. (v) On the possibly of determining the relationship between rices of wheat and the principal coarse rains Relationships between minimum prices of wheat and the principal coarse grains might be defined on the basis of relative feeding values. Trends in world supply and demand might also be taken into consideration. (vi) On the scope and the methods proposed for utilizing wheat and.coa Grains surplus to normal comrarcialrequirements as food aid In the Danish view non-commercial sales of cereals should in principle be considered as an integral part of total aid given to developing countries and not as a main element of an international cereals arrangement. Non-commercial sales of cereals should as far as possible be organized multilaterally and take place in observance of the FAO Principles of Surplus Disposal in order that normal commercial trade should not be displaced or hampered.

7 TABLE I Product Consumption and Foreign Trade in Cereals Crop Years 1955/ / / g / / / /6i 1963/ /65 Acreage '000 ha 1,527. 1,367 1,395 1,391 1,429 1,445 1,537 1,542 1,570 1,568 Production Yield 100 kgs;j Total production per ha harvested ,5344 4,664 4,761 4,465 4,161 4,985 5,199 5,784 5,505 6,213 Estimated waste * Net imports of , Available supply Change in stocks Seed '000 metric tons --r- -I I - I- 4.,457. 4,652 4,626 4,932 5,119 5,209 5,481 5,667 5,675 6, Domestic consumption Milling and indus- Animal trial use feed Total incl. rwste SelfsufficienlcS ratio, , ,825 5, ,827 5, ,128 5,378 8,3.0o 4,539 5, ,36o 5, , ,584 6,1 o~o ,977 6, ,375 6, o Excludin' grain products. 2 Production (harvested) as percentage of domestic consumption including estimated waste.

8 Esti- Net im- Avail- Change Domestic consumption Crop {Acreage Yicld Total mated ports! able in Millin Total suffi- Years 1'000 ha l11 00.kgs.; production waste of 1 supply stocks Seed 'ad indus- Al in 1. cienc per ha harvested. ain rial se waste ration '000 metric tons 1955/ /58_ t , ,572 * , , /635 1, , , *4,9wj 6, /6 1, ,91rn9o6,o hange ~ 1,243-97f 1,319 ~ ,277 - ;Relativei14.5% 1lC % % 28.87g % 1-t% 25.4 TN.64/Ce/W/16 (D S) %n TABLE II Production Consumption and Foreign Trade in Cereals Excluding grain products. 2Production (harvested) as percentage of domestic consumption including estimated waste.

9 Page 9 TABLE III Stocks of Pigs and Fowls, Killings of Pigs and Production of Pigmeat, Poultry Meat and I ggs and ('000 head) Pig stock Fowl stock ,129 7, ,679 23,509 Absolute increase 2, ,170 Relative increase 55.6% + 4.7% Killings Of Pigs in Bacon Factories and and Slaughterhouses (including LOwz) ('000 head) ,980 10,771 Absolute increase 3,791 Relative increase 54.35'; Production of Pignmeat, Poultry Meat and Eggs ('000 tons) i All pigmeat Poultry meat2 Eggs (incl, sows) ' Absolute increase Relative increase ;+ 32.1% 1Excluding turkeys, ducks and geese. Including turkeys, ducks and geese.