NOTICES

DEPARTMENT OF COMMERCE

International Trade Administration

[C-122-404]

Live Swine From Canada; Preliminary Results of Countervailing Duty Administrative Review

Tuesday, February 12, 1991

AGENCY: International Trade Administration/Import Administration, Department of Commerce.

ACTION: Notice of preliminary results of countervailing duty administrative review. SUMMARY: The Department of Commerce has conducted an administrative review of the countervailing duty order on live swine from Canada for the period April 1, 1988 to March 31, 1989. We preliminarily determine the net subsidy for live swine (other than sows and boars) to be Can$0.0548/lb., and the net subsidy for sows and boars to be Can$0.0051/lb. We invite interested parties to comment on these preliminary results.

EFFECTIVE DATE: February 12, 1991.

FOR FURTHER INFORMATION CONTACT: Britt Doughtie or Maria Mackay, Office of Countervailing Compliance, International Trade Administration, U.S. Department of Commerce, Washington, DC 20230; telephone: (202) 377-2786.

SUPPLEMENTARY INFORMATION:

Background

On August 7, 1989, the Department of Commerce (the Department) published in the Federal Register a notice of "Opportunity to Request Administrative Review" (54 FR 32364) of the countervailing duty order on live swine from Canada (50 FR 32880). On August 11, 1989, the National Pork Producers Council requested an administrative review of the order. We initiated the review, covering the period April 1, 1988 through March 31, 1989, on September 20, 1989 (52 FR 38712). The Department has now conducted the adminstrative review in accordance with section 751(a) of the Tariff Act of 1930, as amended (the Tariff Act).

Scope of Review

Imports covered by these reviews are shipments of Canadian live swine. Through 1988, such merchandise was classifiable under item number 100.8500 of the Tariff Schedules of the United States Annotated (TSUSA). Such merchandise is currently classifiable under the Harmonized Tariff Schedule (HTS) item numbers 0103.91.00 and 0103.92.00. The TSUSA and HTS item numbers are provided for convenience and Custom's purposes. The written description remains dispositive. The review covers the period April 1, 1988 through March 31, 1989 and 46 programs.
On December 20, 1990, Pryme Pork Ltd. (Pryme), of St. Malo, Manitoba, an exporter of live weanling swine (weanlings), requested that the Department determine, pursuant to 19 CFR 355.29, that weanlings be excluded from the scope of the countervailing duty order on live swine from Canada. In its request, Pryme presents an analysis of weanlings based on the *5677 criteria set forth by the Department in Certain Steel Products from the United Kingdom (47 FR 35668; August 12, 1982) to determine whether merchandise having the same generic description could be distinguished from the goods subject to an antidumping duty order for the purpose of determining and publishing separate dumping margins. According to Pryme's analysis, weanlings are different from butcher hogs because: (1) Weanlings have a different tariff classification; (2) weanlings have dissimilar physical characteristics; (3) weanlings are customarily categorized differently; (4) weanlings have separate pricing mechanisms; (5) buyers of weanlings have different expectations; (6) weanlings have distinguishable channels of trade; (7) weanlings have different uses; and (8) weanlings undergo extensive processing after sale. Based on these criteria, Pryme concludes that weanlings are not within the scope of the order and requests that the Department issue instructions requiring the liquidation of all outstanding entries of weanlings and the refund of all countervailing duties paid on weanlings, with interest, in accordance with 19 CFR 355.24. For purposes of determining whether weanlings are within the scope of the countervailing duty order on live swine, the Department referred to its regulations on scope determinations, published at 19 CFR 355.29. This order is on live swine. The ITC, at page A-2 of its final determination, defined live swine as follows: "in general usage, swine are referred to as hogs and pigs. The term 'hogs' generally refers to mature animals and 'pigs' to young animals. The provision for live swine in the TSUS under item 100.85 applies to all domesticated swine regardless of age, sex, size, or breed." (USITC Publication 1733, Determination of Investigation No. 701.TA-224 (Final) for Live Swine and Pork from Canada, July 1985). The product descriptions of the merchandise contained in the ITC's determination and the CVD order are dispositive as to whether the merchandise in question is within the scope of the countervailing duty order. Therefore, we did not consider the additional criteria listed in s 355.29(i)(2) of the Department's regulations. Because the order covers live swine and the definition of live swine used by the ITC encompasses weanlings, the Department determines that weanlings are included in the scope of the countervailing duty order on live swine from Canada.

Analysis of Programs

I. Federal Programs

1. Agricultural Stabilization Act

The Agricultural Stabilization Act (ASA) of 1957-58 was passed by the federal government to provide for the price stabilization of named and designated agricultural commodities. On June 27, 1985, section 10 was added to the ASA. This amendment created a new option to establish commodity-specific price stabilization schemes, the National Tripartite Price Stabilization Schemes, based on agreements between the federal government, the provinces and the producers. See Notice of Preliminary Results of Countervailing Duty Administrative Review; Live Swine from Canada (53 FR 22189; June 14, 1988). The agrement reached on live swine is called the National Tripartite Price Stabilization Scheme for Hogs, and this agreement will be discussed under Section II. Named commodities, including cattle, hogs, lambs and wool; industrial milk and industrial cream; corn and soybeans; and spring wheat, winter wheat, oats and barley not produced in the designated area as defined in the Canadian Wheat Board Act, are statutorily guaranteed eligibility for payouts from ASA whereas any other commodity is required to be designated by the Governor in Council and requires a separate, yearly appropriation vote by Parliament. Because of the distinction between named and designated commodities, and the fact that only 14 commodities received ASA benefits in FY 1988/89, we preliminarily determine that the ASA is countervailable because benefits from ASA are provided to a specific enterprise or industry, or group of enterprises or industries, in accordance with section 771(5) of the Tariff Act. Although the ASA did not make payments for hogs produced during the review period, ASA's annual reports showed payments were made in FY 1988/89 for hogs produced in previous years. ASA payments are made on a per hundredweight (cwt.) basis. We used 220 pounds as the average weight of slaughter hogs (excluding sows and boars) in Canada. Payments are made only on indexed slaughter hogs. Indexing is a method of grading hog carcasses according to lean meat percentage, loin fat and weight. Because sows and boars are not indexed, they are not eligible for payments from ASA. Producers in two provinces (Quebec and Saskatchewan) received payments from ASA during the review period. To calculate the benefit, we divided the ASA payments received by the total weight of live swine (minus sows and boars) produced in the two provinces during the review period. We used 220 pounds as the average weight of slaughter hogs (excluding sows and boars). We then multiplied the benefit by the two provinces' share of total Canadian exports of live swine (minus sows and boars) to the United States, resulting in a benefit from this program during the review period that was significantly less than Can $0.0001/lb., which is effectively zero. Because sows and boars are not eligible for payments from ASA, we preliminarily determine the benefit from this program to be zero for sows and boars.

2. Feed Freight Assistance Program

The Feed Freight Assistance Program is administered by the Canadian Livestock Feed Board (the Board) under the livestock Feed Assistance Act of 1966 (LFA). The Board acts to ensure: (1) The availability of feed grain to meet the needs of livestock feeders; (2) the availability of adequate storage space in Eastern Canada to meet the needs of livestock feeders; (3) reasonable stability in the price of feed grain in Eastern Canada to meet the needs of livestock feeders; and (4) equalization of feed grain prices to livestock feeders in Eastern Canada, British Columbia, the Yukon Territory and the Northwest Territories. Although this program is clearly designed to benefit livestock feeders, FAA payments are made also to feed mills that transform the feed grain into livestock feed, when these feed mills are the first purchasers of this grain. The Board makes payments related to the cost of feed grain storage in Eastern Canada, and payments related to the cost of feed grain transportation to, or for the benefit of, livestock feeders in Eastern Canada, British Columbia, the Yukon Territory and the Northwest Territories, in accordance with the regulations of the Act. Because this program benefits only a specific group of enterprises or industries, namely livestock feeders and grain millers, in specific areas, namely Eastern Canada, British Columbia, the Yukon Territory and the Northwest Territories, we preliminarily determine that the program is countervailable. During the review period, payments were made to feed grain users for transportation assistance. The Livestock Feed Board of Canada calculated that 4.13 percent of the total transportation expenditures for feed grains receiving assistance under this program in FY 1988/89 were made to *5678 benefit live swine producers in the designated areas of Canada. Therefore, we divided the amount of feed transportation expenditures attributable to live swine producers by the total weight of live swine produced in Eastern Canada, British Columbia, the Yukon Territory and the Northwest Territories during the review period. We then weight-averaged the benefit by these areas' share of total Canadian exports of live swine, including sows and boars, to the United States, resulting in benefits from this program during the review period for both sows and boars and other live swine that were significantly less than Can$0.0001/lb., which are effectively zero.

II Federal Provincial Programs

1. National Tripartite Stabilization Scheme for Hogs

On June 27, 1985, Bill C-25, an amendment to the ASA, enabled the introduction of cost sharing tripartite or bipartite stabilization plans involving the producer, the federal government and/or the provinces. Pursuant to s 10.1 of this amendment, federal and provincial ministers have signed agreements covering hogs, lambs, cattle, apples, sugar beets, white pea beans and other dry edible beans, honey, and onions. Signatories to the National Tripartite Stabilization Scheme for Hogs in 1986 were Alberta, Manitoba, Ontario and Saskatchewan. The original four agreements were implemented on July 1, 1986. In February 1989, five additional provinces (British Columbia, New Brunswick, Nova Scotia, Prince Edward Island, and Quebec) became signatories to the scheme by signing agreements. Their membership in the scheme was made retroactive to January 1, 1989. The general terms of the Tripartite Scheme on Hogs are as follows: all hog producers in participating provinces receive the same level of support per unit; the cost of the scheme is shared between Canada, the province, and the producer; producer participation in the scheme is voluntary; the provinces may not offer separate stabilization plans or other ad hoc assistance for hogs (with certain exceptions); and the federal government may not offer compensation to swine producers in a province not a party to an agreement. The scheme must operate at a level that limits losses but does not stimulate over- production. The Tripartite Agreements provide for a five year phase-in period to adjust for differences between the Tripartite Scheme and the provincial programs still in effect. Existing provincial stabilization plans are to be completely phased out by 1991. During the review period, seven provincial stabilization programs remained in effect (see Section III). Hogs eligible for stabilization payments under the Tripartite Scheme must index 80 or above. Sows and boars are not eligible for benefits because they are not indexed. Stabilization payments are made when the market price falls below the support price. The difference between the support price and the average market price is the amount of the stabilization payment. The Tripartite Program does not act in law to limit the number of commodities that may be covered under agreements. Therefore, it is necessary to consider whether there is de facto specificity. The Omnibus Trade and Competitiveness Act of 1988 amended section 771(5)(B) of the Tariff Act to provide that "the administering authority, in each investigation, shall determine whether the bounty, grant, or subsidy in law or in fact is provided to a specific enterprise or industry, or group of enterprises or industries. Nominal general availability, under the terms of the law, regulation, program or rule establishing a bounty, grant, or subsidy, of the benefits thereunder is not a basis for determining that the bounty, grant, or subsidy is not, or has not been in fact provided to a specific enterprise or industry, or group thereof." Therefore, to determine whether a program is limited to a specific enterprise or industry or group of enterprises or industries, we consider: (1) Whether the law of the foreign government acts to limit the availability of a program; (2) the number of industries or groups thereof that actually use a program; (3) whether there are dominant users of a program, or whether certain industries or groups thereof receive disproportionately large benefits under a program; and (4) the extent to which a government exercises discretion in conferring benefits under a program (see e.g. s 355.43(b)(2) of "Countervailing Duties; Notice of Proposed Rulemaking and Request for Public Comments", 54 FR 23366 at 23379, 1989). However, the Tripartite Program was limited in fact to only twelve commodities in eight agreements during FY 1988/89. Hog producers were the dominant users of the program accounting for 52 percent of the total payouts from the program in FY 1988/89. Furthermore, there are no explicit or standard procedures or criteria for evaluating Tripartite Agreement requests. For the foregoing reasons, in accordance with section 771(5)(B), we preliminarily determine that the Tripartite Program is countervailable because it is limited to a specific enterprise or industry, or group of enterprises or industries. During the review period, payouts for hogs were made under the Tripartite Agreements in the provinces of Alberta, Manitoba, Ontario and Saskatchewan. To calculate the benefit, we divided two-thirds (representing the federal and provicial portions) of the payments made in FY 1988/89 by the total weight of live swine (minus sows and boars) produced in the four provinces in FY 1988/89. We then weight-averaged the benefit by the four provinces' share of total Canadian exports of live swine (minus sows and boars) to the United States. On this basis, we preliminarily determine the benefit for live swine (excluding sows and boars) to be Can$0.0481/lb. during the review period. Because sows and boars are not eligible for payments from the Tripartite Scheme, we preliminarily determine the benefit for sows and boars to be zero during the review period.

2. Canada/British Columbia Agri-Food Regional Development Subsidiary Agreement (ARDSA)

On July 25, 1985, Canada and British Columbia signed an agreement to continue agricultural development cooperation between the two governments. The agreement was preceded by the ARDSA which existed between July 1977 and July 1983. The objectives of the new agreement are to improve the competitiveness of the agri-food industry in British Columbia, increase economic output and employment opportunities in the industry, and conserve and improve the province's agricultural resources. Programs funded under the new agreement are: (1) Productivity Enhancement--including research studies in technology development, technology transfer, market and new product development, farm and agribusiness education, commodity and program planning, and public information, evaluation and implementation; (2) Resource Development--including regional irrigation and water supply systems, watershed drainage systems for agriculture, soil conservation and improvement; and (3) Commodity Development, including on-farm commodity enhancement, new and expanded market facilities, agricultural support facilities and services. Under the new agreement, each government is committed to spending up to Can $20,000,000 over five years. Funding for projects under this agreement will be jointly shared by both *5679 governments. For the review period, the only expenditures relevant to the swine industry were made in the program of productivity enhancement. All of these expenditures went to university-headed research projects. We verified that the results of these research projects were made publicly available. Therefore, we preliminarily determine that payments made for these research projects are not countervailable.

3. Canada/Quebec Subsidiary Agreement on Agri-Food Development

On December 14, 1984, the Government of Canada entered into an Economic and Regional Development Agreement with the Province of Quebec. Programs funded under the agreement are: (1) Research and Development--including contract research and food research; (2) Technological Innovations and New Initiatives--including agricultural production, conservation, processing and marketing; and (3) Soil Conservation and Improvement--including inventory of soil degradation problems, soil and water conservation research, and technology transfer in soil and water conservation. Majority funding for projects under this agreement is shared evenly between the federal and provincial governments, with the applicant generally contributing a small portion. For the review period, the only expenditures relevant to the swine industry were made for five research projects involving on-farm demonstration of technologies new to Quebec. We verified that all of the results of these research projects were made publicly available. Therefore, we preliminarily determine that payments made for these research projects are not contervailable.

III. Provincial Price Stabilization Programs

1. Saskatchewan Hog Assured Returns Program (SHARP)

SHARP was established in 1976 pursuant to the Saskatchewan Agricultural Returns Stabilization Act. Under this act, the provincial government may establish a stabilization plan for any agricultural commodity. However, only hogs and cattle have such plans. SHARP provides stabilization payments to hog producers in Saskatchewan at times when market prices fall below a designated "floor price." The program is administered by the Saskatchewan Pork Producers' Marketing Board on behalf of the provincial Department of Agriculture. Participation is voluntary and is open to all hog producers in the province. Coverage is limited to 1,500 indexed hogs per producer each quarter. Because payments from this program were provided to indexed hogs and cattle only, we preliminarily determine that the program is limited to a specific enterprise or industry, or group of enterprises or industries and is therefore countervailable. In accordance with the Tripartite Agreement, SHARP is being phased out and will be terminated by March 31, 1991. No producers have been allowed to join SHARP since December 31, 1985. The program is funded by levies on the sale of hogs covered by the program. Levies from participating producers range from 1.5 to 4.5 percent of market returns on the sale of hogs and are matched by the province. After the Tripartite Agreement was implemented on July 1, 1986, SHARP payments were reduced by the amount of Tripartite Scheme payments. Whenever the balance in the SHARP account is insufficient to make payments to participants, the provincial government lends the needed funds to the program at terms consistent with commercial considerations. The principal and interest on these loans are repaid by the Board using the producer and provincial contributions. The floor price for this program is calculated quarterly, and stabilization payments are made when the market price is below the floor price. Payments were made to indexed hog producers in each quarter of the review period. Sows and boars were not eligible for payments. To calculate the benefit, we allocated the province's half of the total stabilization payments during FY 1988/89 over the total weight of live swine (minus sows and boars) produced in Saskatchewan. We then weight-averaged the benefit by Saskatchewan's share of total Canadian exports of live swine (minus sows and boars) to the United States. On this basis, we preliminarily determine the benefit to be zero for sows and boars and Can$0.0005/lb. for other live swine during the review period.

2. British Columbia Farm Income Insurance Plan (FIP)

The FIP was established in 1979 in accordance with the Farm Income Insurance Act of 1973 (the Farm Act) in order to assure income for farmers when commodity market prices fluctuate below basic costs of production. The guidelines for the individual commodities receiving benefits are in Schedule B of the Farm Act. Schedule B4 contains the guidelines for swine producers. FIP is only available to farmers producing commodities specified in the Schedule B guidelines. Therefore, we preliminarily determine that this program is countervailable because payments were limited to a specific group of enterprises or industries. The program is administered by the provincial Ministry of Agriculture and Food and the British Columbia Federation of Agriculture, and is funded equally by producers and the provincial government. Premiums are paid in all quarters regardless of market results. FIP payments are calculated quarterly based on the difference between costs of production and market returns. Participating producers receive FIP payments for calendar quarters during which costs of production exceed market returns. The basic costs of production and market returns are calculated quarterly according to a cost of production model described in the Farm Act. The same per unit cost of production model is used for all products receiving benefits. The Farm Act requires that ASA payments to individual producers be added to the market return price. Payments were made to indexed hog producers in each quarter of the review period. Sows and boars were not eligible for payments. To calculate the benefit, we allocated the province's half of the total stabilization payments during FY 1988/89 over the total weight of live swine (minus sows and boars) produced in British Columbia. We then weight-averaged the benefit by British Columbia's share of total Canadian exports of live swine (minus sows and boars) to the United States. On this basis, we preliminarily determine the benefit to be zero for sows and boars and Can $0.0007/lb. for other live swine during the review period.

3. Quebec Farm Income Stabilization Insurance Programs (FISI)

The FISI was established in 1976 under the "Loi sur l'assurance- stabilisation des revenus agricoles." The program is administered by the Regie des Assurances Agricoles du Quebec (the Regie). The purpose of the program is to gurarantee a positive net annual income to participants whose income is lower than the stabilized net annual income. The stabilized net annual income is calculated according to a cost of production model that includes an adjustment for the difference between the average wage of farm workers and the average wage of all other workers in Quebec. When the annual average farm worker income is lower than the stabilized net annual income, the Regie *5680 makes a payment to the participant at the end of the year. Two-thirds of the funding for the program is provided by the provincial government and one-third by producer assessments. Participating in a stabilization scheme is voluntary. However, once a producer enrolls in a program, he must make a five-year commitment. The maximum number of feeder hogs eligible to be insured is 5,000 per farmer, and a maximum of 400 sows per farmer may also be insured. Whenever the balance in the FISI account is insufficient to make payments to participants, the provincial government lends the needed funds to the program at market rates. The principal and interest on these loans are repaid by the Regie using the producer and provincial contributions. The program covers fourteen different producer groups, including oats, hogs, barley, slaughter beef, corn, piglets, heavy grain veal, soybeans, feed wheat, food-grade wheat, heavy milk veal, cow calves, potatoes, and lambs. Several major agricultural commodities, such as eggs, dairy products, and poultry, which make up a large portion of Quebec's total agricultural production, are not covered under this program. Because this program provides benefits to only 14 commodities, we determine that it is limited to a specific group of enterprises or industries, and is therefore countervailable. Quebec joined the federal government's Tripartite Price Stabilization Scheme during the review period. The Tripartite Scheme largely replaces the FISI, but the difference between payments made under the Tripartite Scheme and what FISI payments would have been before Tripartite are still covered by FISI. All producers enrolled in the FISI program are also in the Tripartite Scheme, whereas some farmers opted for single coverage under the Tripartite Scheme. To calculate the benefit, we multiplied the total payments made under both the piglet and feeder hog programs during the review period by two-thirds (representing the provincial portion). We divided this amount by the total weight of live swine (minus sows and boars) produced in Quebec. We than weight-averaged the benefit by Quebec's share of total Canadian exports of live swine (minus sows and boars) to the United States. On this basis, we preliminarily determine the benefit to live swine (excluding sows and boars) is Can$0.0001/lb. during the review period. The benefit to sows and boars is zero because they are excluded from this program.

IV. Other Provincial Programs

1. Alberta Crow Benefit Offset Program

The purpose of this program, which is administered by Agriculture Alberta, is to eliminate market distorations in feed prices created by the federal government's policy on grain transportation. Assistance is provided on 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 certificates to registered feed grain users and registered feed grain merchants, which can be used as partial payments for grains purchased from grain producers. Feed grain producers who feed their own grain to their own livestock submit a 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 certificates which are used to cover part of the cost of purchasing grain. Second, hog producers who grow all of their own grain submit a claim to the Government of Alberta for direct payment. Finally, hog producers who grow part of their own grain but also purchase grain receive both certificates and direct payments. Because this program is limited to feed grain users, we preliminarily determine that it is limited to a specific enterprise or industry, or group of enterprises or industries, and is therefore countervailable. The payment from this program during the review period was Can$13 per ton. To determine the benefit to swine producers from this program, we first calculated a hog grain consumption to weight-grain ratio, using information from Economic Indicators of the Farm Sector, Costs of Production--Livestock and Dairy, 1989, a U.S. Department of Agriculture publication. From this document, we determined that 3.5 pounds of grain are required to grow 1 pound of pork. The average size of a market hog in Alberta is 220 pounds, and weanlings weight on average 40 pounds at the time they begin eating grain. Swine therefore increase in weight 180 pounds prior to sale for slaughter. This 180 pounds weight gain multiplied by the 3.5 ratio means that each hog consumes approximately 630 pounds of grain. We established at verification that barley, wheat, and oats make up approximately 92 percent of all grains consumed by livestock. Using figures from the Alberta Supply and Disposition Tables, we divided the total livestock consumption for these three grains in the review period by 92 percent to estimate the total metric tons of grain consumed by livestock in Alberta during the review period. For swine production figures for the review period, we used the Supply- Disposition Balance Sheets of Statistics Canada. We multiplied this number by the average grain consumption per hog and divided the result by total grain used to feed livestock animals. We thus calculated live swine's percentage of total livestock consumption of grain in Alberta to be 14.01 percent. We then multiplied this percentage by the total value of certificates and payments received during the review period to calculate the benefit to swine producers from this program. We then weight-averaged the benefit by Alberta's share of total Canadian exports of live swine, including sows and boars to the United States. On this basis, we preliminarily determine the benefit to be Can $0.0042/lb. for live swine (excluding sows and boars) and Can$0.0042/lb. for sows and boars during the review period.

2. Ontario Farm Tax Rebate Program

This program replaced the Ontario Farm Tax Reduction Program. Eligible farmers receive a rebate of 100 percent of property taxes levied on farm properties for municipal and school purposes; levied for local improvements under the Local Improvement Act; levied under the Provincial Land Tax Act or the Local Roads Boards Act; and imposed under the Local Services Boards Act. Farm property includes farm lands and outbuildings. Eligible properties include farms that produce food, fish, breeding horses and donkeys, pregnant mare's urine, fur-bearing animals, tobacco, flowers, nursery stock, sod or ornamentals. Any resident of Ontario may recieve a rebate if he/she owns and pays taxes on eligible properties. Residents of Southern and Western Ontario must produce farm products with a gross value of at least Can$8,000 and residents of Northern and Eastern Ontario must produce products with a gross value of at least Can$5,000. Because this program is limited to a specific group of enterprises or industries, we preliminarily determine that this program is countervailable. To calculate the benefit, we divided total rebates to swine producers by the total weight of live swine produced in Ontario during the review period. We then weight-averaged the result by Ontario's share of Canadian exports of live swine, including sows and boars, to the United States during the review period. On this basis, we preliminarily *5681 determine the benefit to be Can$0.0004/lb. for live swine (excluding sows and boars) and Can$0.0004/lb. for sows and boars during the review period.

3. Ontario (Northern) Livestock Improvement and Transportation Assistance Programs

The Northern Livestock Improvement Program reimburses farmers for up to 20 percent of the purchase cost of breeding stock, including dairy cows, heifers, beef bulls, rams, ewes, and boars. A maximum of Can$2,500 may be reimbursed to an individual during a three-year period. Swine producers are reimbursed for a maximum of Can$100 per boar. The Northern Livestock Transportation Assistance Program, terminated on March 31, 1989, reimbursed producers living in Northern Ontario 50 percent of the costs of transporting high quality breeding stock from Southern to Northern Ontario. Because these programs provide payments that are limited to livestock producers in Northern Ontario, we preliminarily determine that they are limited to a specific enterprise or industry and are therefore countervailable. To calculate the benefit, we divided the total payment to hog producers under these programs by the total weight of live swine produced in Ontario during the review period. We then weight-averaged the result by Ontario's share of Canadian exports of live swine to the United States during the review period, resulting in benefits from this program during the review period for both sows and boars and other live swine that were significantly less than Can $0.0001/lb., which are effectively zero.

4. Ontario Pork Industry Improvement Plan (OPIIP)

This five-year plan is effective from April 1, 1986 to March 31, 1991. The plan provides grants to Ontario swine producers to enable them to improve their productivity, profitability and competitive position by increasing their efficiency. To be eligible for the plan, producers must be residents of Ontario, own or lease facilities in Ontario for swine production and have at least 20 sow equivalents. One sow equivalent is equal to one sow or 15 marketweight hogs marketed annually. Ten types of grants are available to swine producers under this plan. These grants are for the following: swine production analysis, enterprise analysis, swine ventilation, productivity and quality improvement, artificial insemination, rodent control, private veterinary herd health program, education, feed analysis, and herd health improvement. During the review period, Ontario swine producers received grants under each of these programs. Because the OPIIP provides grants only to swine producers, we preliminarily determine that it is limited to a specific enterprise or industry and is therefore countervailable. To calculate the benefit, we divided the total value of all grants provided to swine producers during the review period over the total weight of live swine produced in Ontario during this period. We then weight-averaged the result by Ontario's share of total Canadian exports of live swine, including sows and boars, to the United States during the review period. On this basis, we preliminarily determine the benefits from this program to be Can$0.0002/lb. for sows and boars and Can$0.0002/lb. for other live swine during the review period.

5. Quebec Productivity Improvement and Consolidation of Livestock Production Program

This program was established in April 1987 to provide financial assistance to livestock producers for the diversification and consolidation of farm operations. The program is limited to producers with small farming operations and is divided into eight subprograms. Swine producers are eligible only for the Farm Building Improvements Subprogram. This subprogram provides grants for changes to existing piggeries in order to consolidate single-purpose operations into farrow-to-finish operations. The grants cover up to 30 percent of the actual cost of the conversion as well as the purchase and installation of special equipment. To be eligible for assistance, applicants must be recognized farm producers according to the Farm Producers' Act and be registered with the Bureau de Renseignements Agricoles. Producers operating farrowing facilities must maintain between 40 and 80 sows, and finishing farms must maintain between 500 and 1,000 hogs. The maximum assistance is Can$200 per sow and Can$25 per hog, with a maximum of Can$15,000 per farm operation for the duration of the program. Because this program is limited to livestock producers, we preliminarily determine that it is limited to a specific group of enterprises or industries, and is therefore countervailable. To calculate the benefit, we divided the total payment to swine producers by the total weight of live swine produced in Quebec during the review period. We then weight-averaged the result by Quebec's share of total Canadian exports of swine, including sows and boars, to the United States during the review period, resulting in benefits from this program during the review period for both sows and boars and other live swine that were significantly less than Can$0.0001/lb., which are effectively zero.

6. Quebec Regional Development Assistant Program

This program was established in April 1987 to promote regional development in Quebec. The program consists of four subprograms: (1) Soil upgrading; (2) consolidation of cattle and sheep production; (3) assistance for transporting livestock; and (4) marketing assistance. The Livestock Transportation Subprogram is the only one available to hog producers. This subprogram provides financial assistance to eligible producers for transporting animals to a government inspected slaughterhouse or to a public market. Quebec is divided into twelve agricultural regions, only five of which (three full regions and parts of two others) are eligible for aid under the subprogram. For purposes of this program, these five regions are divided into seven zones based on the distance from the Montreal-Quebec triangle. The assistance offered varies according to the zone in which the applicant's operation is located. Because this program is limited to livestock producers in specific regions of Quebec, we preliminarily determine that it is limited to a specific group of enterprises or industries and is limited to specific geographic areas and is therefore countervailable. To calculate the benefit, we divided the total payment to swine producers by the total weight of live swine produced in Quebec during the review period. We then weight-averaged the result by Quebec's share of total Canadian exports of live swine, including sows and boars, to the United States during the review period, resulting in benefits from this program during the review period for both sows and boars and other live swine that were significantly less than Can $0.0001/lb., which are effectively zero.

7. Saskatchewan Livestock Investment Tax Credit

Saskatchewan's 1984 Livestock Tax Credit Act provides tax credits to individuals, partnerships, cooperatives and corporations who own and feed livestock in Saskatchewan for slaughter. Claimants must be residents of Saskatchewan and pay Saskatchewan income taxes. Eligible claimants receive *5682 credits of Can$25 for each bull, steer or heifer, Can$2 for each lamb and Can$3 for each hog, and the tax credits may be carried forward for up to seven years. The credits must be included as taxable income the year after receipt. The credit is available to hogs indexing 80 or higher. Because this program is limited to livestock producers, we preliminarily determine that it is limited to a specific group of enterprises or industries and is therefore countervailable. To calculate the benefit, we divided the total amount of hog credits issued by the total weight of live swine (minus sows and boars) produced in Saskatchewan. We then weight-averaged the result by Saskatchewan's share of total exports of live swine (minus sows and boars) to the United States. On this basis, we preliminarily determine the benefit from this program to be Can $0.0002/lb. for live swine (other than sows and boars) during the review period. Because sows and boars are not eligible for this program, we preliminarily determine the benefit from this program to be zero for sows and boars.

8. Saskatchewan Livestock Facilities Tax Credit Program

This program was implemented on January 1, 1986 and provides tax credits to livestock producers for investment in livestock production facilities. The credit may only be used to offset provincial taxes. Applications for tax credits must be received by the Saskatchewan Ministry of Agriculture no later than six months after the project is completed. Livestock covered by this program can be raised for either breeding or slaughter. Eligible livestock include cattle, horses, sheep, swine, goats, poultry, bees, fur-bearing animals raised in captivity, or any other designated animals. Investments covered under the program include new buildings, improvements to existing livestock facilities, and any stationary equipment related to livestock facilities. The program pays 15 percent of 95 percent of project costs, or 14.25 percent of total costs, in order not to overlap with the Business Investment Tax Credit Program, a federal program. Participants may carry forward any unused credit for up to seven years. Because this program is limited to livestock producers, we preliminarily determine that it is limited to a specific group of enterprises or industries and is therefore countervailable. To calculate the benefit, we divided the tax credits used by hog producers during the review period by the total weight of live swine produced in Saskatchewan during the review period. We then weight-averaged the result by Saskatchewan's share of total exports of live swine, including sows and boars, to the United States during the review period. On this basis, we preliminarily determine the benefit of the Can$0.0001/lb. for sows and boars and Can $.0001/lb. for other live swine during the review period.

9. British Columbia (B.C.) Feed Grain Market Development Program

This program was initiated on August 1, 1987, and was terminated at the end of the 1988 crop year, with the last payments being issued in February 1990. It was designed to address two issues: (1) The cash-flow problem for the grain producers in the Peace River area of Northern British Columbia, and (2) the drain of livestock into Alberta for feeding and slaughter (primarily for cattle) due to the Alberta Crow Benefit Offset Program. The program provided Can$15/ton to the grain producer when the grain was sold domestically. Livestock producers purchasing this grain were paid Can$11/ton of feed grain consumed. The payments provided an incentive for the grain users to purchase the more expensive (due to transportation costs) B.C. grain, and an incentive for the B.C. grain producers to sell in B.C., rather than exporting the grain. Because this program is limited to grain producers and grain users in B.C., we preliminarily determine that it is limited to a specific group of enterprises or industries and is therefore countervailable. To calculate the benefit, we divided the amount paid to swine producers by the total weight of live swine produced in British Columbia during the review period. We then weight-averaged the result by British Columbia's share of total exports of live swine, including sows and boars, to the United States during the review period. On this basis, we preliminarily determine the benefit to be Can$0.0001/lb. for sows and boars and Can$0.0001/lb. for other live swine during the review period.

10. British Columbia Special Hog Payment Program

As a result of a labor dispute at a major B.C. packing plant in the fall of 1988, the value of market hogs during this period fell sharply. The strike resulted in higher shipping costs for the hog purchasers because the swine were sent to slaughter houses in other provinces. In response, the government established a short-term program with payments made in FY 1988/89 only. Because this program is limited to swine producers, we preliminarily determine that it is limited to a specific group of enterprises or industries and is therefore countervailable. To calculate the benefit, we divided the total payments from this program by the total weight of live swine produced in British Columbia during the review period. We then weight-averaged the result by British Columbia's share of total exports of live swine, including sows and boars, to the United States during the review period, resulting in benefits from this program during the review period for both sows and boars and other live swine that were significantly less than Can$0.0001/lb., which are effectively zero.

Other Programs

We examined the following programs and preliminarily determine that exporters of live swine from Canada to the United States did not use them during the review period:

(1) Manitoba Hog Income Stabilization Plan; (2) Alberta Red Meat Interim Insurance Program; (3) British Columbia Swine Herd Improvement Program; (4) New Brunswick Hog Price Stabilization Program; (5) New Brunswick Livestock Incentives Program; (6) New Brunswick Agricultural Development Act-- Swine Assistance Program; (7) New Brunswick Hog Marketing Program; (8) New Brunswick Swine Industry Financial Restructuring Program; (9) New Brunswick Tripartite Price Stabilization Scheme for Hogs; (10) New Brunswick Swine Assistance Policy on Boars; (11) New Brunswick Tripartite Price Stabilization Program; (12) Newfoundland Weanling Bonus Incentive Policy; (13) Newfoundland Hog Stabilization Program; (14) Nova Scotia Natural Products Act--Pork Price Stabilization Program; (15) Nova Scotia Tripartite Price Stabilization Program; (16) Nova Scotia Swine Herd Health Policy; (17) Nova Scotia Transportation Assistance Program; (18) Nova Scotia Improved Sire Policy; (19) Prince Edward Island Hog Price Stabilization Program; (20) Prince Edward Island Transportation Grants; (21) Prince Edward Island Tripartite Price Stabilization Program; (22) Prince Edward Island Swine Development Program; (23) Prince Edward Island Interest Payments on Assembly Yard Loan; (24) Ontario Hog Price Stabilization Program; (25) Ontario Weaner Pig Stabilization Plan; (26) Newfoundland Farm Products Corporation--Hog Price Support Program; and (27) Newfoundland Weanling Bonus Incentive Policy.

*5683 Preliminary Results of Review

As a result of our review, we preliminarily determine the net subsidy for the period April 1, 1988 through March 31, 1989 to be Can$0.0051/lb. for sows and boars and Can$0.0548/lb. for all other live swine. The Department intends to instruct the Customs Service to assess countervailing duties of Can$0.0051/lb. on shipments of sows and boars and Can $0.0548/lb. on all other live swine for all shipments exported on or after April 1, 1988 and exported on or before March 31, 1989. As provided by section 751(a)(1) of the Tariff Act, the Department also intends to instruct the Customs Service to collect cash deposits of estimated countervailing duties of Can$0.0051/lb. on shipments of sows and boars and Can $0.0548/lb. on all other live swine entered, or withdrawn from warehouse, for consumption on or after the date of publication of the final results of this review. Parties to the proceeding may request disclosure of the calculations methodology and interested parties may request a hearing not later than 10 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 seven days after the time limit for filing the case brief. Any hearing, if requested, will be held seven 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 s 355.38(e) of the Department regulations. 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 355.38(c), 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 briefs or at a hearing. This administrative review and notice are in accordance with section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR 355.22. Dated: January 31, 1991.

Francis J. Sailer,

Acting Assistant Secretary for Import Administration.

[FR Doc. 91-3339 Filed 2-11-91; 8:45 am] BILLING CODE 3510-DS-M