Article 3
Minimum prices Level and observance of minimum prices 1. Participants undertake to take the steps necessary to ensure that the export prices of the products defined in Article 2 of this Protocol shall not be less than the minimum prices applicable under the present Protocol. If the products are exported in the form of goods in which they have been incorporated, participants shall take the steps necessary to avoid the circumvention of the price provisions of this Protocol. 2. (a) The minimum price levels set out in the present Article take account, in particular, of the current market situation, dairy prices in producing participants, the need to ensure an appropriate relationship between the minimum prices established in the Protocols to the present Arrangement, the need to ensure equitable prices to consumers, and the desirability of maintaining a minimum return to the most efficient producers in order to ensure stability of supply over the longer term. (b) The minimum prices provided for in paragraph 1 of the present Article applicable at the date of entry into force of this Protocol are fixed at: (i) US$ 425 per tonne for the skimmed-milk powder defined in Article 2 of this Protocol; (ii) US$ 725 per tonne for the whole milk powder defined in Article 2 of this Protocol; (iii) US$ 425 per tonne for the buttermilk powder defined in Article 2 of this Protocol. 3. (a) The levels of the minimum prices specified in the present Article can be modified by the Committee, taking into account, on the one hand, the results of the operation of the Protocol and, on the other hand, the evolution of the situation of the international market. (b) The levels of the minimum prices specified in the present Article shall be subject to review at least once a year by the Committee. The Committee shall meet in September of each year for this purpose. In undertaking this review the Committee shall take account in particular, to the extent relevant and necessary, of costs faced by producers, other relevant economic factors of the world market, the need to maintain a long-term minimum return to the most economic producers, the need to maintain stability of supply and to ensure acceptable prices to consumers, and the current market situation and shall have regard to the desirability of improving the relationship between the levels of the minimum prices set out in paragraph 2 (b) of the present Article and the dairy support levels in the major producing participants. Adjustment of minimum prices 4. If the products actually exported differ from the pilot products in respect of the fat content, packaging or terms of sale, the minimum prices shall be adjusted so as to protect the minimum prices established in this Protocol for the products specified in Article 2 of this Protocol according to the following provisions: - Milk fat content: If the milk fat content of the milk powders described in Article 1 of the present Protocol excluding buttermilk powder (1) differs from the milk fat content of the pilot products as defined in Article 2 (1) (a) and (b) of the present Protocol, then for each full percentage point of milk fat as from 2 %, there shall be an upward adjustment of the minimum prices in proportion to the difference between the minimum prices established for the pilot products defined in Article 2 (1) (a) and (b) of the present Protocol (2). - Packaging: If the products are offered otherwise than in packages normally used in the trade, of a net content by weight of not less than 25 kg or 50 lbs, as appropriate, the minimum prices shall be adjusted so as to reflect the difference in the cost of packaging from the type of package specified above. - Terms of sale: If sold on terms other than fob from the exporting country or free-at-frontier exporting country (3), the minimum prices shall be calculated on the basis of the minimum fob prices specified in paragraph 2 (b) of this Article, plus the real and justified costs of the services provided ; if the terms of the sale include credit, this shall be charged for at the prevailing commercial rates in the country concerned. Exports and imports of skimmed-milk powder and buttermilk powder for purposes of animal feed 5. By derogation from the provisions of paragraphs 1 to 4 of this Article participants may, under the conditions defined below, export or import, as the case may be, skimmed-milk powder and buttermilk powder for purposes of animal feed at prices below the minimum prices provided for in this Protocol for these products. Participants may make use of this possibility only to the extent that they subject the products exported or imported to the processes and control measures which will be applied in the country of export or destination so as to ensure that the skimmed-milk powder and buttermilk powder thus exported or imported are used exclusively for animal feed. These processes and control measures shall have been approved by the Committee and recorded in a register established by it (4). Participants wishing to make use of the provisions of this paragraph shall give advance notification of their intention to do so to the Committee which shall meet, at the request of a participant, to examine the market situation. The participants shall furnish the necessary information concerning their transactions in respect of skimmed-milk powder and (1)As defined in Article 2 (1) (c) of this Protocol. (2)See Annex Ib, "Schedule of price differentials according to milk fat content". (3)See Article 2. (4)See Annex Ic, "Register of Processes and Control Measures". It is understood that exporters would be permitted to ship skimmed-milk powder and buttermilk powder for animal feed purposes in an unaltered state to importers which have had their processes and control measures inserted in the Register. In this case, exporters would inform the Committee of their intention to ship unaltered skimmed-milk powder and/or buttermilk powder for animal feed purposes to those importers which have their processes and control measures registered. buttermilk powder for purposes of animal feed, so that the Committee may follow developments in this sector and periodically make forecasts concerning the evolution of this trade. Special conditions of sales 6. Participants undertake within the limit of their institutional possibilities to ensure that practices such as those referred to in Article 4 of this Protocol do not have the effect of directly or indirectly bringing the export prices of the products subject to the minimum price provisions below the agreed minimum prices. Field of application 7. For each participant, this Protocol is applicable to exports of the products specified in Article 1 of this Protocol manufactured or repacked inside its own customs territory. Transactions other than normal commercial transactions 8. The provisions of paragraphs 1 to 7 of this Article shall not be regarded as applying to donated exports to developing countries or to exports destined for relief purposes or food-related development purposes or welfare purposes in developing countries.