CONTENT: to roll-over potato starch quotas for a further two marketing years.

LEGISLATIVE ACT: Council Regulation (EC) No 671/2007 amending Regulation (EC) No 1868/94 establishing a quota system in relation to the production of potato starch.

CONTENT: in accordance with Regulation (EC) No 1868/94 the allocation of quotas within the Community is based on a report from the Commission to the Council. According to the report presented to the Council, the recent reform of the common market organisation in the sugar sector should be taken into account in the analysis of developments on the starch market. However, the sugar reform would become fully applicable gradually over a transitional period. Therefore, pending indication of the initial effects of this reform on the potato starch sector, the quotas for the 2006/2007 marketing year should be rolled over for two more years.

The Council adopted a regulation allocating potato starch quotas for the 2007/2008 and 2008/2009 marketing years. The Polish delegation abstained and the Lithuanian delegation voted against.

The Regulation shall continue the quotas established for the marketing years 2006/2007 for a further two marketing years – i.e. 2007/08 and 2008/09. Further, in allowing for an extension of the current quota system, the Commission is allowing itself enough time to assess the effect of the Single Payment Scheme on the potato starch sector. The review of the Single Payment Scheme will take place in 2008 and the Commission is also, therefore, proposing that its next report on the potato starch sector be prepared before 1 January 2009.

The sub-quotas available for each manufacturer for the 2007/2008 marketing year shall be adjusted to take account of any amount used in excess of quota during the 2006/2007 marketing year.

The Commission shall present the Council, before 1 January 2009, with a report on the functioning of the quota system within the Community, accompanied by appropriate proposals. This report shall take account of developments on the potato starch and cereal starch markets.

ENTRY INTO FORCE: 19 June 2007. The regulation will apply as from 1 July 2007.

The European Parliament adopted the resolution drafted by Janusz WOJCIECHOWSKI (UEN, PL) and made a few amendments to the proposed regulation on a quota system for the production of potato starch . (Please refer to the summary of 12/04/2007). The report was adopted by 586 votes in favour to 74 against with 20 abstentions.

The committee adopted the report by Janusz WOJCIECHOWSKI (UEN, PL) amending - under the consultation procedure - the proposed regulation on a quota system for the production of potato starch:

- production quotas should be allocated for a period of four years rather than two, as proposed by the Commission, and should cover the marketing years 2007/2008, 2008/2009, 2009/2010 and 2010/2011;

- the Commission should report to the Council before 1 January 2011 on the functioning of the quota system. However, if an agreement within the WTO should lead to a reduction in export refunds and a decrease in the import duties for tapioca-starch, the Commission should submit an impact report to Parliament and the Council before that deadline.

PURPOSE: to roll-over potato starch quotas for a further two marketing years.

PROPOSED ACT: Council Regulation.

BACKGROUND: in 1994 the Community established a quota system for the production of potato starch in order to limit its production. See Regulation 1868/94/EC establishing a quota system for the production of potato starch (CNS/1994/0038). This Regulation obliges the Commission to prepare, periodically, an extensive report on the potato starch industry in the EU and the overall state of the starch economy. The findings of the report form the basis of future Commission proposals regarding the potato starch quotas levels in the coming marketing years.

CONTENT: the purpose of this proposed Regulation is to roll-over the quotas established for the marketing years 2006/2007 for a further two marketing years – i.e. 2007/08 and 2008/09. In proposing an extension of the current quota system the Commission is taking account of the reform of the sugar sector, which is expected to have a significant impact on the starch market as a whole, but the effect of which are not yet known. Further, in allowing for an extension of the current quota system, the Commission is allowing itself enough time to assess the effect of the Single Payment Scheme on the potato starch sector. The review of the Single Payment Scheme will take place in 2008 and the Commission is also, therefore, proposing that its next report on the potato starch sector be prepared before 1 January 2009.

As far as the budgetary implications of the proposal are concerned the quotas will remain stable. The starch premium is set at EUR 22.24 per tonne, leading to a total expenditure for each marketing year of EUR 43.4 million.

For further details on the budgetary implications of this proposal please refer to the financial statement.

PURPOSE: to roll-over potato starch quotas for a further two marketing years.

PROPOSED ACT: Council Regulation.

BACKGROUND: in 1994 the Community established a quota system for the production of potato starch in order to limit its production. See Regulation 1868/94/EC establishing a quota system for the production of potato starch (CNS/1994/0038). This Regulation obliges the Commission to prepare, periodically, an extensive report on the potato starch industry in the EU and the overall state of the starch economy. The findings of the report form the basis of future Commission proposals regarding the potato starch quotas levels in the coming marketing years.

CONTENT: the purpose of this proposed Regulation is to roll-over the quotas established for the marketing years 2006/2007 for a further two marketing years – i.e. 2007/08 and 2008/09. In proposing an extension of the current quota system the Commission is taking account of the reform of the sugar sector, which is expected to have a significant impact on the starch market as a whole, but the effect of which are not yet known. Further, in allowing for an extension of the current quota system, the Commission is allowing itself enough time to assess the effect of the Single Payment Scheme on the potato starch sector. The review of the Single Payment Scheme will take place in 2008 and the Commission is also, therefore, proposing that its next report on the potato starch sector be prepared before 1 January 2009.

As far as the budgetary implications of the proposal are concerned the quotas will remain stable. The starch premium is set at EUR 22.24 per tonne, leading to a total expenditure for each marketing year of EUR 43.4 million.

For further details on the budgetary implications of this proposal please refer to the financial statement.