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.
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, 1995 through March 31, 1996. 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: September 9, 1997.
FOR FURTHER INFORMATION CONTACT: Gayle Longest or Lorenza Olivas,
Office
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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 12, 1996, the Department published a notice of
``Opportunity to Request Administrative Review'' (61 FR 41768) of this
countervailing duty order. We received timely requests for review and
we initiated the review, covering the period April 1, 1995 through
March 31, 1996, on September 17, 1996 (61 FR 48884).
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 26 programs.
On April 28, 1997, we extended the period for completion of the
preliminary results pursuant to section 751(a)(3) of the Act. See Live
Swine from Canada; Extension of Time Limit for Countervailing Duty
Administrative Review, 62 FR 23220. Therefore, the deadline for these
preliminary results is no later than September 2, 1997, and the
deadline for the final results of this review is no later than 120 days
from the date on which these preliminary results are published in the
Federal Register.
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). 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.
Verification
As provided in section 782(i) of the Act, we verified information
submitted by the Government of Canada (GOC) and the Government of
Quebec (GOQ) related to their claim for ``green box'' treatment
pursuant to section 771(5B)(F) of the Act, of the programs covered by
the Canada/Quebec Subsidiary Agreement on Agri-Food Development (Agri-
Food) (see discussion under ``Analysis of Programs'' section below). We
followed standard verification procedures, including meeting with
government officials and examining relevant accounting and financial
records and other original source documents. Our verification results
are outlined in the public version of the Verification Report, dated
August 27, 1997, which is on file in the Central Records Unit (Room B-
099 of the Main Commerce Building).
Analysis of Programs
Allocation Methodology
In British Steel plc. v. United States, 879 F. Supp. 1254 (February
9, 1995) (British Steel), the U.S. Court of International Trade (the
Court) ruled against the allocation period methodology for non-
recurring subsidies that the Department has employed for the past
decade, a methodology that was articulated in the Final Affirmative
Countervailing Duty Determination: Certain Steel Products from Austria
(General Issues Appendix), 58 FR 37217, 37226 (July 9, 1993) (General
Issues Appendix). In accordance with the Court's decision on remand,
the Department determined that the most reasonable method of deriving
the allocation period for non-recurring subsidies is a company-specific
average useful life (AUL). This remand determination was affirmed by
the Court on June 4, 1996. British Steel, 929 F. Supp. 426, 439 (CIT
1996). Accordingly, the Department has decided to acquiesce to the
British Steel decision 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). We invite the parties to comment on the
selection of this methodology and to provide any other reasonable and
practicable approaches for complying with the Court's ruling.
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 market hogs
(which excludes slaughter sows and boars). 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.
Respondents' Claim for ``Green Box'' Treatment of the Canada/Quebec
Subsidiary Agreement on Agri-Food Development (Agri-Food Agreement)
On November 5, 1996, the GOQ made a submission pursuant to section
771(5B)(F) of the Act claiming that the Agri-Food Agreement met the
criteria for ``green box'' treatment under Annex 2 of the Agreement on
Agriculture of the World Trade Organization (WTO). On January 21, 1997,
the GOQ indicated that the GOC also supported the green box claim.
Under section 771(5B)(F) of the Act, the 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. Accordingly, the GOQ and the GOC
posited that funding under the Agri-Food Agreement should be
noncountervailable pursuant to section 771(5B)(F) of the Act.
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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 separate programs. See Swine
Tenth Review Results (62 FR 52433). No new information or evidence of
changed circumstances has been submitted in this proceeding to warrant
reconsideration of that finding.
With regard to the GOQ's and the GOC's claim from green box
treatment, we preliminarily determine that it is not necessary to reach
a decision on whether the Agri-Food Agreement and its component
programs qualify for green box status, and are, therefore, non-
countervailable because none of the component programs has any impact
on the overall subsidy rate attributable to the subject merchandise
during the POR.
Specifically, with regard to the Research program under the Agri-
Food Agreement, as discussed below in the section II. A., we have
preliminarily determined that this program does not confer
countervailable subsidies 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). Further, with
regard to the Technology Innovation program, although we found this
program to be specific in the last administrative review (see section
I.A.2.c. below), the benefit under this program is so small (Can$ 0.
00000045 per kilogram) that it has no impact on the overall subsidy
rate calculated for this POR. Similarly, even though we have never made
a decision with regard to the specificity of the Support for Strategic
Alliance (SSA) program (see section II.B. below), any benefit to the
subject merchandise under the SSA program would be so small (Can$
0.00000055 per kilogram) that there would be no impact on the overall
subsidy rate. Because neither the Technology Innovations program nor
the Support for Strategic Alliances program (either separately or
collectively) affect the overall subsidy rate calculated for this
review, there is no reason to consider whether these two programs meet
the green box criteria pursuant to section 771(5B)(F).
Under these circumstances, an analysis of whether the programs
under the Agri-Food Agreement qualify for green box treatment is not
warranted because any decision we would render would not change the
overall subsidy rate. (See, e.g., 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).
I. Programs Conferring Subsidies
A. Programs Previously Determined to Confer Subsidies
1. Federal Program: Feed Freight Assistance Program
The Feed Freight Assistance Program (FFA) is administered by the
Livestock Feed Board of Canada (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, FFA payments are also made to grain mills that
transform the feed grain into livestock feed whenever these 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 LFA.
In Live Swine from Canada; Preliminary Results of Countervailing
Duty Administrative Review (55 FR 20812; May 21, 1990) and Live Swine
from Canada; Final Results of Countervailing Duty Administrative Review
(56 FR 10410; March 12, 1991) (Swine Second and Third Review Results),
the Department found this program de jure specific, and thus
countervailable, because, based on the language of the LFA, benefits
are only available to a specific group of enterprises or industries
(livestock feeders and feed mills). Subsequently, a U.S.-Canada Free
Trade Agreement binational panel (see In the Matter of Live Swine From
Canada, USA-91-1904-03 (June 11, 1993) at 33-36) affirmed the
Department's determination in Live Swine from Canada; Preliminary
Results of Countervailing Duty Administrative Review (56 FR 29224; June
26, 1991), and Live Swine from Canada; Final Results of Countervailing
Duty Administrative Review (56 FR 50560; October 7, 1991) (Swine Fifth
Review Results), regarding the countervailability of this program. No
new information or evidence of changed
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circumstances has been submitted in this proceeding to warrant
reconsideration of this finding.
To determine the FFA benefit in the POR, we first calculated a
benefit per kilogram of live swine within each province eligible for
FFA assistance using each province's total production. Next, we
adjusted each province's rate per kilogram based on each province's
share of total Canadian exports of market hogs to the United States
during the POR. Finally, these individual provincial rates were summed
to obtain a total rate for the FFA program. On this basis, we
preliminarily determine the net subsidy for this program to be less
than Can$0.0001 per kilogram for the POR.
The FAA was terminated effective January 9, 1996. The last date for
which a producer could claim benefits was February 15, 1996, and the
last date by which payments could be received was 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 bestowed or that a substitute program has been implemented.
Accordingly, because of this program-wide change, the cash deposit rate
will be adjusted to zero for this program. See e.g., Swine Tenth Review
Results at 18098 and Final Affirmative Countervailing Duty
Determination: Certain Pasta from Turkey, 61 FR 30366, 30370; June 14,
1996 (Pasta from Turkey).
2. Federal/Provincial Programs
a. National Tripartite Stabilization Scheme for Hogs
The National Tripartite Stabilization Program (NTSP) was created in
1985 by an amendment to the Agricultural Stabilization Act (ASA). This
amendment, codified at section 10.1 of the ASA, provides for the
introduction of cost-sharing tripartite or bipartite stabilization
schemes involving the producer, the federal government, and the
provinces. Pursuant to this amendment, federal and provincial ministers
signed NTSP agreements covering specific commodities.
The general terms of the NTSP for Hogs are as follows: all
participating hog producers receive the same level of support per
market-hog unit; the cost of the scheme is shared equally between the
federal government, the provincial government, and the producers;
producer participation in the scheme is voluntary; the provinces may
not offer separate stabilization plans or other ad hoc assistance for
hogs (with the exception of Quebec's Farm Income Stabilization
Insurance Program); the federal government may not offer compensation
to swine producers in a province not party to an agreement; and the
scheme must operate at a level that limits losses but does not
stimulate over-production.
Stabilization payments are made when the market price falls below
the calculated support price. The difference between the support price
and the market price is the amount of the stabilization payment. Hogs
eligible for stabilization payments under NTSP must index above 80 on a
hog carcass grading scale.
In Live Swine From Canada; Preliminary Results of Countervailing
Duty Administrative Review (58 FR 54112; October 20, 1993 ) and Live
Swine From Canada; Final Results of Countervailing Duty Administrative
Review (59 FR 12243; March 16, 1994) (Swine Sixth Review Results), the
Department determined that NTSP was de facto specific. No new
information or evidence of changed circumstances has been submitted in
this proceeding to warrant reconsideration of this finding.
NTSP Agreement Amendment No. 3 terminated the plan as of July 2,
1994, but allowed provinces to terminate their participation in the
plan effective April 2, 1994. The plan ended with a surplus. Under the
terms of the NTSP, this surplus was to be distributed in equal shares
(33.3 percent) among the federal and provincial governments and the
producers, because each was to have contributed one-third of the funds.
In Swine Tenth Review Results, we examined the NTSP--Hogs Schedule
of Operations (Schedule of Operations) which showed the federal and
provincial governments' and the producers' contributions to the NTSP
Hog Plan for the period January 1986 through May 29, 1996. This
Schedule of Operations showed that the federal government contributed
36.6 percent and the producers and provinces contributed 31.7 percent
each, of the total tripartite contributions during this ten-year
period. Thus, the producers received a share of the surplus which is in
excess of their actual contributions to the plan.
Accordingly, the Department found that the retroactive surplus
payments constitute a benefit conferred under NTSP in the form of a
grant to producers in the amount of the difference between what the
producers actually are receiving, 33.3 percent of the surplus, and what
they should have received, 31.7 percent of the surplus (the percentage
producers actually contributed to NTSP). No new information or evidence
of changed circumstances has been submitted in this proceeding to
warrant reconsideration of this finding. During the POR, producers
received NTSP surplus payments in the following provinces which
exported live swine: Alberta, Manitoba, and Quebec.
To calculate the subsidy, we used the methodology applied in Swine
Tenth Review Results (61 FR 52426). We subtracted the amount that the
producer should have received (31.7 percent) from the amount that they
actually received (33.3 percent). The difference is the amount of the
grant. The Department's policy with respect to grants is (1) to expense
recurring grants in the year of receipt, or (2) to allocate non-
recurring grants over the average useful life of assets in the
industry, unless the sum of grants provided under a particular program
is less than 0.50 percent of a firm's total or export sales (depending
on whether the program is a domestic or export subsidy) in the year in
which the grants were received. (See General Issues Appendix at 37226).
In determining whether a grant is recurring or non-recurring, we apply
a test set out in the General Issues Appendix at 37226. We consider
grants to be non-recurring if the benefits are exceptional, the
recipient cannot expect to receive benefits on an ongoing basis from
POR to POR, and the provision of funds by the government must be
approved every year. In Swine Tenth Review Results, the Department
found that this grant is non-recurring because the benefit is
exceptional, and the recipient cannot expect to receive benefits on an
ongoing basis. No new information or evidence of changed circumstances
has been submitted in this proceeding to warrant reconsideration of
this finding.
During this review, the benefit received from this program was less
than 0.50 percent of the value of total live swine sales in those
provinces receiving benefits under this program. On this basis, we are
allocating the benefit to the year of receipt (See General Issues
Appendix 58 FR 37226). We divided each province's benefit by the total
weight of market hogs produced in that province. We used only the
weight of market hogs because only market hogs were eligible to receive
NTSP payments. 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 then summed the weighted averages. On this basis, we
preliminarily determine the net subsidy for this program to be less
than Can$0.0001 per kilogram for the POR. Because the NTSP program has
been
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terminated, there is no evidence on the record which would indicate
that residual benefits continue to be provided or received, and there
is no evidence that a substitute program has been implemented, the cash
deposit rate will continue to be zero for this program.
b. National Transition Scheme for Hogs
After termination of the 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 between 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 the POR
under the Transition Scheme represent a grant. No new information or
evidence of changed circumstances has been submitted in this proceeding
to warrant reconsideration of this finding.
During the POR, the following provinces received benefits under
this program: Alberta, Manitoba, New Brunswick, Ontario, Quebec, and
Saskatchewan. In Swine Tenth Review Results, the Department found that
these grants are 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 has approved funding
under the Transition Scheme for one year only. During this review, 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 the
provinces receiving benefits under this program. 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. For
purposes of this review, we are continuing to calculate the discount
rate using the same methodology applied in 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, during which the
write-off occurred) 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. We then calculated
each province's total weight of market hogs produced, and calculated 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$0.0047 per kilogram for the POR.
For the province of Quebec, both the GOC and the GOQ paid the
portion of the benefits accrued under the National Transition Scheme
for Quebec producers enrolled in FISI to the Regie des Assurances
Agricoles du Quebec (Regie) , as instructed by the producers. The GOC
also paid the portion of the benefits accrued to producers not enrolled
in FISI directly to the producers. The payments to the Regie involved
monies that were due to producers according to the provisions of the
NTSP agreement (See Questionnaire Response of the GOC (December 23,
1996), Appendix 27). As the record indicates, the producers simply
chose to devolve these payments directly to the Regie rather than
receive cash payments. Therefore, we have countervailed these payments
as payments attributable to producers.
The Transition Scheme program has been terminated. This termination
does not constitute a program-wide change, however, because residual
benefits may continue to accrue. Therefore, the cash deposit rate will
not be adjusted as a result of the termination of this program.
c. Technology Innovation Program Under the Agri-Food Agreement
In Swine Tenth Review Results, we determined that the federal
contributions to this program are specific because this assistance is
provided to industries located within a designated geographical region
of Canada (i.e., Quebec). No new information or evidence of changed
circumstances has been submitted in this proceeding to warrant
reconsideration of this finding.
In Swine Tenth Review Results, we also determined that the grants
received under this program are non-recurring because they are
exceptional, the government must approve the grants every year, and the
recipient cannot expect to receive benefits on an ongoing basis.
However, because the amount received by live swine producers in this
POR is less than 0.50 percent of the value of live swine sales in this
province, we are allocating the benefit to the year of receipt (See
General Issues Appendix 58 FR 37226). We divided the total grant amount
provided to swine producers during the POR by the total weight of live
swine produced in Quebec during the POR. We then weight-averaged the
results by Quebec's share of Canadian exports of market hogs to the
United States during the POR. On this basis, we preliminarily determine
that the subsidy rate is less than Can$0.0001 per kilogram for this
program for the POR.
3. Provincial Income Stabilization Programs
a. Saskatchewan Hog Assured Returns Program (SHARP)
SHARP was established in 1976, pursuant to the Saskatchewan
Agricultural Returns Stabilization Act which authorized provincial
governments to establish stabilization plans for any agricultural
commodity. SHARP provided income stabilization payments to hog
producers in Saskatchewan when market prices fell below a designated
``floor price,'' calculated quarterly. The program was administered by
the Saskatchewan Pork Producers' Marketing Board (the Board) on behalf
of the Saskatchewan Department of Agriculture. The program was funded
by levies from participating producers on the sale of hogs and were
matched by the provincial government. When the balance in the SHARP
account was insufficient to cover payments to producers, the provincial
government provided financing on commercial terms. The principal and
interest on these loans was to be repaid by the Board from the producer
and provincial contributions. After the NTSP for Hogs was implemented
on July 1, 1986, SHARP payments were reduced by the amount of the NTSP
payments.
In Live Swine From Canada; Preliminary Results of Countervailing
Duty Administrative Review (53 FR 22192; June 14, 1988) and Live Swine
From Canada; Final Results of Countervailing Duty Administrative Review
(54 FR 651; January 9, 1989) (Swine First Review Results), the
Department found the SHARP program to be de jure specific, and thus
countervailable, because the legislation expressly made the program
available only to a single industry (hog producers). No new information
or
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evidence of changed circumstances has been submitted in this proceeding
to warrant reconsideration of this finding.
In accordance with the NTSP agreement, SHARP was terminated on
March 31, 1991. At the time of termination, the SHARP fund had a
sizeable deficit because of the cumulation over the operating years of
loans from the provincial government. During the 1993-94 POR, the
government canceled the outstanding SHARP deficit. To calculate the
benefit from the loan forgiveness, we treated one-half of the amount
written off, plus interest accrued during the 1993-94 POR, as a grant.
See Swine 7,8,9 Review Results (61 FR 26879, 26884; May 29, 1996). We
took into account only half of the amount because this was the share of
the outstanding loans that the producers were responsible for repaying.
In Swine 7,8,9 Review Results, the Department determined that the
write-off of the SHARP deficit is a non-recurring grant because debt
forgiveness is exceptional, and it is a one-time event. 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
used, as a discount rate, the simple average of the monthly medium-term
corporate bond rates (for the ninth POR, the POR during which the
write-off occurred) from the Bank of Canada Review (1993-1994),
published by the Bank of Canada.
To calculate the benefit for the POR, we divided the benefit amount
allocated to the POR under the grant allocation methodology by the
total weight of market hogs produced in Saskatchewan during the POR to
obtain the average benefit per kilogram. We then weight averaged the
per kilogram benefit by Saskatchewan's share of total Canadian exports
of market hogs to the United States during the POR. On this basis, we
preliminarily determine the net subsidy to be Can$0.0015 per kilogram
for the POR.
Because the SHARP program has been terminated, there is no evidence
on the record which would indicate that residual benefits continue to
be provided or received, and there is no evidence that a substitute
program has been implemented, the cash deposit rate will continue to be
zero for this program. (See Swine Tenth Review Results).
b. Quebec Farm Income Stabilization Insurance Program (FISI)
FISI was established in 1976 under the ``Loi sur l'assurance-
stabilisation des revenues agricoles.'' The program is administered by
the Regie. The purpose of the program is to guarantee a positive net
annual income to participants when their income falls below the
stabilized net annual income. Since Quebec joined the federal
government's NTSP for Hogs in February 1989, the FISI scheme for hogs
has been covering only the difference between payments made under the
NTSP for Hogs and what FISI payments would have been in the absence of
the NTSP. There are two FISI schemes which provide payments to the
subject merchandise, the FISI scheme for Hogs and the FISI scheme for
Piglets.
Two-thirds of the funding for the FISI program is provided by the
provincial government and one-third by producer assessments.
Participation in FISI is voluntary. However, once enrolled in the
program, a producer must make a five-year commitment. Each farmer may
insure a maximum of 5,000 feeder hogs and 400 sows. 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.
In Swine Sixth Review Results (58 FR 54112), we determined FISI to
be de facto specific, and thus countervailable. Moreover, in Swine
7,8,9 Review Results, we found that the FISI program is not integrally
linked to the crop insurance and supply management programs. No new
information or evidence of changed circumstances has been submitted in
this proceeding to warrant reconsideration of these findings.
During the POR, the GOQ contributed additional funds to the FISI
program for the swine plans. The GOQ did not stipulate any conditions
of repayment regarding these funds. This additional infusion of funds
by the GOQ changes the two-to-one provincial to producer ratio of the
contribution of funds to the FISI program. Therefore, any future
payouts to producers from the FISI program for the hog sector will
reflect a provincial contribution of more than two thirds. We
preliminarily determine that this additional infusion of funds to the
FISI program by the GOQ is a grant and is de jure specific, and thus
countervailable, because benefits are only available to a specific
group of enterprises or industries (swine producers). Furthermore, we
preliminarily determine that it is a non-recurring grant because the
availability of these additional provincial funds to FISI is
exceptional, and it is a one-time event. (See General Issues Appendix
at 37226.) Since this amount was greater than 0.50 percent of the value
of total live swine sales in Quebec during the POR, we are allocating
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 used, as
a discount rate, the simple average of the monthly medium-term
corporate bond rates (for the eleventh POR, during which the write-off
occurred) from the Bank of Canada Review Autumn (1996), published by
the Bank of Canada.
Using our standard grant methodology, we calculated the benefit
amount from this grant during the POR. To this amount, we added the
benefit received by swine producers from standard FISI payments during
the POR. To calculate the benefit from standard FISI payments, we used
the methodology applied in Swine Sixth Review Results and subsequent
reviews. We multiplied the total payments made under both the piglet
and feeder hog schemes during the POR by two thirds (representing the
provincial contribution). We then divided the total benefit amount by
the total weight of market hogs and sows produced in Quebec during the
POR, to get the average benefit per kilogram. We then weight-averaged
the benefit by Quebec's share of total 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 Can$0.0008 per kilogram
for the POR.
4. Other 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 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
---- page 47466 ----
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 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. Accordingly, because of this program-wide change,
the cash deposit rate will be adjusted to zero for this program.
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. 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. Ontario Bear Damage to Livestock Compensation Program
This program, administered by the Farm Assistance Programs Branch
of the Ontario Ministry of Agriculture, Food, and Rural Affairs,
provides compensation for the destruction of, or injury to, certain
types of livestock by bears. Swine producers apply for compensation
through their local Ontario Ministry of Agriculture, Food, and Rural
Affairs office. Local personnel then evaluate the damage and prepare a
report. Based on this report and the farmer's application, the
Livestock Commissioner may pay a grant to compensate for the amount of
damage. Grants for damage to live swine cannot exceed Can$200 per head.
In Swine Tenth Review Results, we found this program to be de jure
specific, and thus countervailable, because the legislation expressly
makes it available only to livestock producers, a specific group of
enterprises or industries (cattle, goats, horses, sheep, swine, and
poultry). 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 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.
d. 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 for up to seven years. 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 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 ( that is, April 1, 1995 through
---- page 47467 ----
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. Accordingly, because of this program-wide
change, the cash deposit rate will be adjusted to zero for this
program.
e. 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 (that is, 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 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 (that is, 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.
Accordingly, because of this program-wide change, the cash deposit rate
will be adjusted to zero for this program.
f. 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 had to 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. However, grants were still being provided
during the POR.
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 rate of 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 Autumn, (1996) 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 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. Specifically, for loans
outstanding during the POR, 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
loan. 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.
During the POR, loans to live swine producers were written-off by
the GONB under this program. We have added to the total amount of
written-off loans, the amount of interest accrued from the beginning of
the POR until the date on
---- page 47468 ----
which the loans were written-off. (See Swine Tenth Review Results.) The
Department determines that the amount written off and interest accrued
during the POR is a non-recurring grant because debt forgiveness is
exceptional, and it is a one-time event. (See General Issues Appendix,
58 FR at 37226 and Swine Tenth Review Results).
In addition, swine producers received grants under the grant
portion of this program. We determine that the grants received under
this program are non-recurring because the recipient cannot expect to
receive benefits on an ongoing basis from year to year. (See General
Issues Appendix at 37226 and Swine Tenth Review Results). We summed the
amount of the written-off loans and the amount of the grants. Because
the result is less than 0.50 percent of the value of live swine sales
from this province, we are allocating the benefit to the year of
receipt. (See General Issues Appendix at 37226.) Therefore, we divided
the total amount of the grants and forgiven loans provided during the
POR by the total weight of live swine sold in New Brunswick during the
POR. We then weight-averaged the result by the New Brunswick's share of
total exports of market hogs to the United States during the POR.
To calculate the total benefit to live swine producers under this
program, we summed the weight-averaged benefit calculated for the loans
and grants. On this basis, we preliminarily determine the net subsidy
from this program to be less than Can$0.0001 per kilogram.
h. 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 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 this finding.
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 Autumn
(1996), 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.
i. New Brunswick Swine Assistance Policy on Boars
The New Brunswick Swine Assistance Policy on Boars program is
administered by the New Brunswick Department of Agriculture and Rural
Development, Animal Industry Branch, for the purpose of encouraging
breeding stock producers to produce quality boars at reasonable prices
for use in commercial swine herds. This program provides assistance in
the form of grants to swine producers for the purchases of boars.
Eligible producers are entitled to receive up to Can$110 for the
purchase of boars.
In Swine Second and Third Review Results (55 FR 20817), the
Department found this program to be specific. 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 grant methodology applied in
Swine Sixth Review Results (58 FR 54119) and Swine Tenth Review Results
(61 FR 52426). In Swine Tenth Review Results, the Department found that
the grants received under this program are non-recurring because the
recipient cannot expect to receive benefits on an ongoing basis from
review period to review period. In the prior review, grants were less
than 0.50 percent, therefore, they were allocated to the years of
receipt. (See Swine Tenth Review Results) During this POR, the amount
received by live swine producers is also less than 0.50 percent of the
value of live swine sales in this province as such, we are allocating
the grant to the year of receipt. (See General Issues Appendix at
37226). We divided the total payment to hog producers during the POR by
the total weight of live swine produced in New Brunswick during the
POR. We then weight-averaged the result 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 from this program to
be less than Can$0.0001 per kilogram for the POR.
j. Nova Scotia Improved Sire Policy
This program is administered by the Nova Scotia Department of
Agriculture and Marketing Livestock Services Branch, for the purpose of
improving the quality of hog production. The program provides grants to
purebred and commercial swine producers for the purchase of boars.
Qualifying animals measure at least 90 on an Estimated Breeding Value
Index (this index estimates growth, back fat thickness and days to
market weight). Qualifying
---- page 47469 ----
animals must be used for breeding stock purposes. Producers file an
application on prescribed forms with the Department of Agriculture and
Marketing. The boars are then inspected and, if approved, assistance is
provided in the form of a premium. The higher the Estimated Breeding
Value Index, the higher the premium. In Swine Second and Third Review
Results (55 FR 20817), the Department found this program to be
countervailable because this program is limited to a specific industry.
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 divided the total payment to hog
producers during the POR by the total weight of live swine produced in
Nova Scotia. We then weight-averaged the result by Nova Scotia'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.
k. Nova Scotia Swine Herd Health Policy
The Nova Scotia Department of Agriculture and Marketing administers
a herd health program whereby it reimburses veterinarians for house
calls made to producers of commercial and purebred breeding livestock.
The purpose of this program is to upgrade herd health through the use
of herd inspection, prevention and eradication techniques. All farmers
registered under the Farm Registration Act may participate in the
program. Once approved for the program, farmers are required to follow
specified health practices and to maintain health records of all their
hogs. The government designates a veterinarian to oversee the enrolled
herd and the veterinarian is responsible for making at least six visits
annually, performing any and all necessary examinations and informing
the farmers of their findings. The veterinarian is paid by the farmer
for each visit, and also receives payment from the government. During
the POR, veterinarians were paid by the government for services
provided under the program.
In Swine Second and Third Review Results (55 FR 20817), the
Department found this program not to be countervailable because this
program is limited to producers of commercial and/or purebred breeding
livestock. At that time, we determined that breeding livestock were not
covered by the order on live swine. Since these reviews, the scope of
the order has been clarified to exclude only USDA-certified purebred
breeding swine (See, e.g., Swine Tenth Review Results.) Commercial
breeding swine are covered by the order.
During the POR, producers of the subject merchandise used this
program. Because the legislation for this program indicates that it is
only available to live swine producers, we preliminarily determine this
program to be de jure specific within the meaning of section
771(5A)(D)(i) of the Act.
To calculate the benefit, we divided the total payment to hog
producers during the POR by the total weight of live swine produced in
Nova Scotia. We then weight-averaged the result by Nova Scotia'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.
The Nova Scotia Swine Herd Health Policy was terminated on March
31, 1996, however, benefits under the program will continue until March
31, 1998. Because benefits will continue to be bestowed under this
program, the cash deposit rate will not be adjusted.
II. Programs Preliminarily Determined Not To Confer Subsidies
A. Research Program Under the Agri-Food Agreement
In Swine Tenth Review Results, we found that none of the research
projects funded under this program had been completed. We were
therefore unable to determine whether or not the results of the
research were publicly available due to their incomplete status. At
verification, we found that five projects related to live swine were
completed during the POR. We examined official documentation from the
GOQ that indicates that the results of these research projects were
made publicly available. (See Verification Report, dated August 27,
1997). 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) at 51683 and Certain Cut-to-Length Carbon Steel Plate
from Sweden; Final Results of Countervailing Duty Administrative
Review, 62 FR 16551 (April 7, 1997).
B. Support for Strategic Alliances Program Under the Agri-Food
Agreement
The Support for Strategic Alliances (SSA) program is administered
by the GOC. The objective of this program is to stimulate cooperation
and strategic alliance among the various stakeholders in an agri-food
``industry network'' through activities intended to improve efficiency
and competitiveness in domestic and foreign markets. The GOC indicated
in its questionnaire response that no payments were made to producers
under this program (See Response of the Government of Canada, May 13,
1997, at p. 16). However, we found at verification that some payments
had been made under this program during the POR for projects that
benefitted the swine industry as a whole (See Verification Report,
(August 27, 1997) at p. 6). Therefore, we have determined that this
program was used during the POR. However, we preliminarily determine
that any benefit provided by this program during the POR is so small as
to have no measurable impact on the overall subsidy rate for the POR.
Therefore, we need not reach a decision on the countervailability of
this program in this review.
III. Programs Preliminarily Determined To Be Not Used
We also examined the following programs and preliminarily
determined 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. Federal Atlantic Livestock Feed Initiative;
C. Agricultural Products Board Program;
D. Ontario Export Sales Aid Program;
E. Ontario Rabies Indemnification Program;
F. Ontario Swine Sales Assistance Policy;
G. Newfoundland Hog Price Support Program;
H. Newfoundland Weanling Bonus Incentive Policy;
I. Newfoundland Hog Price Stabilization Program.
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, 1995),
and there is no evidence on the record which would indicate that
residual benefits are being bestowed or that a
---- page 47470 ----
substitute program has been implemented:
A. Prince Edward Island Hog Price Stabilization Program
B. Canada/British Columbia Agri-Food Regional Development
Subsidiary Agreement;
C. Canada/Manitoba Agri-Food Development Agreement;
D. New Brunswick Agricultural Development Act-Swine Assistance
Program.
Preliminary Results of Review
We preliminarily determine the total net subsidy on live swine from
Canada to be Can$0.0071 per kilogram for the period April 1, 1995
through March 31, 1996. If the final results of this review remain the
same as these preliminary results, the Department intends to instruct
the Customs to assess countervailing duties as indicated above.
Due to the program-wide changes noted above, the cash deposit rate
will be Can$0.0055 per kilogram which is de minimis. 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.
Public Comment
Parties to the proceeding may request disclosure of the calculation
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. 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 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 19 CFR 355.38.
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, 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. 1675(a)(1)).
Dated: September 2, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 97-23850 Filed 9-8-97; 8:45 am]
BILLING CODE 3510-DS-P
The Contents entry for this article reads as follows:
International Trade Administration
NOTICES
Countervailing duties:
Live swine from--
Canada, 47460