Report from the Commission to the Council on the quota system for the production of potato starch
Date: 2006-12-19
Institutions: European Commission
Subjects: agricultural guidance, agricultural quota, marketing year, minimum price, potato, starch

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 19.12.2006 
COM(2006) 827 final 

2006/0268 (CNS) 

REPORT FROM THE COMMISSION TO THE COUNCIL 

on the quota system for the production of potato starch 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 1868/94 establishing a quota system  
in relation to the production of potato starch 

(presented by the Commission) 

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REPORT FROM THE COMMISSION TO THE COUNCIL 

on the quota system for the production of potato starch 

1. 

INTRODUCTION 

Potato starch is a direct competitor of cereal starch, which is produced mostly from maize and 
wheat.  

The introduction of set-aside in the cereals sector, together with an increase in the production 
of potato starch in the early 1990s, led the Council to introduce a quota system, which limited 
the  production  of  potato  starch  from  the  1995/96  marketing  year  onwards  (Regulation  (EC) 
No 1868/94 of 27 July 19941). 

The current quotas were fixed by Regulation (EC) No 941/2005 until the end of the 2006/07 
marketing year (30 June 2007). 

Under Article 3(1) of Council Regulation (EC) No 1868/94, on or before 30 September 2006 
the  Commission  must  present  to  the  Council  a  report  on  the  allocation  of  quota  within  the 
Community, accompanied by appropriate proposals. 

This report must take account of possible changes in the payments to potato producers and of 
developments on the potato starch and cereal starch markets. 

Under  Article 3(2)  of  Regulation  (EC)  No 1868/94,  on  or  before  31  December  2006  the 
Council,  acting  on  the  basis  of  Article 37  of  the  Treaty,  shall  allocate  the  quota  between 
Member  States  on  the  basis  of  the  report  referred  to  in  Article  3(1)  of  Regulation  (EC) 
No 1868/94 for use in the following three marketing years. 

2. 

THE QUOTA SYSTEM 

The quota system has the following main features: 

– 

– 

1 

quantities  are  fixed  per  Member  State  and  then  allocated  by  the  Member  States  to 
potato  starch  manufacturers,  in  the  form  of  sub-quota.  As  described  in  Section 4, 
potato producers receive a payment per tonne of starch in the potatoes delivered to the 
starch manufacturers, within the limit of the sub-quotas; 

potato  starch  manufacturers  receive  a  premium  based  on  their  sub-quota  to  offset 
certain  structural  disadvantages  compared  with  cereal  starch  producers  (fewer  by-
products  to  sell,  shorter  manufacturing  period,  high  anti-pollution  costs,  etc.). 
Payment  of  the  premium  is  subject  to  the  condition  that  manufacturers  pay  the 
minimum  price  to  producers  of  potatoes  intended  for  potato  starch  manufacture. 
Potato producers and potato starch manufacturers must conclude cultivation contracts 
each year to prevent any overrun of the sub-quota. These contracts state in particular 
the projected quantity of starch to be delivered and the minimum price to be paid by 
the  manufacturer.  A  starch  manufacturer  may  not  take  delivery  of  potatoes  that  are 
not covered by a cultivation contract; 

OJ  L  197,  30.7.1994,  p. 4.  Regulation  as  last  amended  by  Regulation  (EC)  No 941/2005  (OJ L 159, 
22.6.2005, p. 1). 

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– 

– 

in  order  to  take  into  account  variations  in  yield  caused  by  weather  conditions,  in  a 
single  marketing  year  each  starch  manufacturer  may  use  up  to  5%  of  his  allocated 
quota,  in  addition  to  his  quota  for  the  marketing  year  concerned.  The  quota  for  the 
following year is then reduced accordingly; 

apart from this 5% flexibility clause, any potato starch produced in excess of the sub-
quota  must  be  exported  from  the  Community,  in  its  unaltered  state  and  without  a 
refund,  before  1  January  following  the  end  of  the  marketing  year  in  question.  The 
minimum price must have been paid for this quantity, but no premium for it is paid to 
the starch manufacturer and no payment of aid is made to the potato producers for the 
excess amount. 

 and (EC) No 2236/20033

Detailed implementing  rules  for  the  quota system are laid down  in Commission  Regulations 
(EC) No 2235/20032
 which clarify issues such as the introduction of 
cultivation contracts, the minimum starch content of potatoes, the determination of the weight 
and  starch  content  of  potatoes  on  delivery  to  potato  starch  manufacturers,  rules  on  exports 
without a refund, inspection arrangements and penalties, rules applicable to mergers, changes 
of ownership and the commencement or termination of commercial activities by potato starch 
manufacturers. 

3. 

ENLARGEMENT 

Since  the  2004/05  marketing  year  six  new  Member  States  have  been  involved  in  the  quota 
system  for  potato  starch.  They  share  a  total quota  of  186 613  tonnes,  of  which  78%  goes  to 
Poland, 18% to the Czech Republic, and 4% is divided between Estonia, Latvia, Lithuania and 
Slovakia. 

With the same method that was used to establish the quotas for the existing Member States, 
the allocation of potato starch quota was based on traditional potato starch production, taking 
an  average  of  the  three  reference  years  (1999–2001  except  for  Lithuania,  where  the  years 
1998–2000 were used). As irreversible investments made before 1 February, 2002 were also 
taken into account the Czech Republic was allocated a quota of 140% of its average historic 
production, Estonia 243%, Latvia 106%, Lithuania 112% and Poland 135%.  

As  a  result,  the  EU  quota  has  increased  by  11%,  from  1.762  million  tonnes  (EU-15)  to 
1.949 million tonnes (EU-25). 

4. 

DIRECT PAYMENTS UNDER THE 2003 CAP REFORM 

Starch potato farmers are eligible for direct payments. These are granted only for the quantity 
of  potatoes  covered  by  a  cultivation  contract  between  the  starch  potato  producer  and  starch 
manufacturer,  within  the  limit  of  the  quotas  allocated  to  potato  starch  manufacturers,  in 
accordance with Regulation (EC) No 1868/94. 

2 

3 

Commission Regulation (EC) No 2235/2003 of 23 December 2003 laying down common rules for the 
application of Council Regulations (EC) No 1782/2003 and (EC) No 1868/94 as regards potato starch 
(OJ L 339, 24.12.2003, p. 36). 
Commission  Regulation  (EC)  No  2236/2003  of 23  December  2003  laying  down  detailed  rules  for  the 
application  of  Council  Regulation  (EC)  No  1868/94  establishing  a  quota  system  in  relation  to  the 
production of potato starch (OJ L 339, 24.12.2003, p. 45). 

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In  order  to  maintain  starch  potato  production  in  traditional  areas  of  production  and  to 
recognise  the  role  of  potato  production  in  the  rotation  of  crops,  partial  decoupling  has  been 
adopted in this sector. 60% of the aid4
 has been retained as aid for farmers producing potatoes 
intended  for  the  manufacture  of  potato  starch,  as  defined  in  Articles  93  and  94  of  Council 
Regulation (EC) No 1782/20035 and 40% has been decoupled and included in the single farm 
payment scheme, based on deliveries over a historical period to potato starch manufacturers.  

For  the  2004/2005  marketing  year,  the  aid  was  EUR  110.54  per  tonne  of  starch.  For  the 
2005/06 marketing year, the amount of coupled aid depends on each Member State's decision 
concerning the introduction of decoupling.  

Austria,  Denmark,  Germany  and  Sweden  decided  to  introduce  the  Single  Payment  Scheme 
and  decoupling  already  from  2005.  In  these  countries  the  coupled  part  of  the  aid  for  potato 
starch was therefore reduced to EUR 66.32/t as from 2005. The other EU-15 Member States 
producing potato starch – Finland, France, the Netherlands and Spain – decided to introduce 
the  Single  Payment  Scheme  in  2006.  Therefore,  in  2005,  the  "old"  level  of  support 
(EUR 110.54/t) was paid as coupled aid. 

From  the  2006/2007  marking  year,  all  potato  starch  producing  countries  in  the  EU-15  will 
have  implemented  the  Single  Payment  Scheme,  with  a  coupled  potato  starch  aid  of 
EUR 66.32/t. 

All  six  new  Member  States  that  were  allocated  potato  starch  quota  during  the  accession 
negotiations are currently applying the Single Area Payment Scheme (SAPS). 

In  addition,  the  six  new  Member  States  have  the  possibility,  subject  to  authorisation  by  the 
Commission,  of  granting  Complementary  National  Direct  Payments  (CNDPs)  from  their 
national budget (with a possibility of co-financing from EU rural development money).  

In 2004, 2005 and 2006 only the Czech Republic, Latvia and Poland requested authorisation 
of  such  complementary  national  payments  specifically  for  potato  starch.  Lithuania  decided 
that the complementary national payment for starch potatoes should be at the same level as for 
other arable crops and therefore no specific envelope for potato starch was set up.  

5. 

ECONOMIC CONDITIONS ON THE STARCH MARKET 

Tables  A  and  B  annexed  to  this  report  show  the  development  of  the  production  of  potato 
starch within the context of the quota arrangements, and the different quotas fixed by Member 
State. 

Since  the  introduction  of  the  production  quotas  by  Member  State  in  1995  and  the 
incorporation  the  following  year  of  the  German  reserve  (reunification),  EU  production  of 
potato starch has been stable, with variations due to weather conditions, which have a strong 
influence on potato yield and starch content. 

4 
5 

See Article 43 of and Annex VII to Regulation (EC) No 1782/2003. 
Council  Regulation  (EC)  No  1782/2003  of  29  September  2003  establishing  common  rules  for  direct 
support  schemes  under  the  common  agricultural  policy  and  establishing  support  schemes  for  farmers 
(OJ L 270, 21.10.2003, p. 1). 

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Three  reports6
  have  been  submitted  to  the  Council  and  to  the  Parliament,  accompanied  by  a 
proposal  to  extend  the  quotas.  As  part  of  the  Agenda  2000  reform  package,  the  Council 
decided  to  reduce  the  quotas  in  2000/01  and  2001/02  in  return  for  a  higher  level  of 
compensation for starch potatoes than for cereals (75% of the cut in prices against 48.4% for 
cereals)  while  ensuring  budget  neutrality.  Table  1  shows  the  development  of  potato  starch 
production for EU-15 as a whole, compared with the quota. Except for 1998/99 and 2003/04 
(unfavourable weather conditions) EU production remained close to the quota fixed.  

Table 1 – Development of potato starch production and EU basic quota 

1998/99 

1999/2000 

2000/01 

2001/02 

2002/03 

2003/04 

2004/05*  2005/06*

PRODUCTION 

1 660.5 

1 804.8 

1 849.7  1 601.1  1 684.8  1 461.9  1 998.3  1 899.4 

QUOTA 

1 864.3 

1 864.3 

1 814.2  1 762.1  1 762.1  1 762.1  1 948.8  1 948.8 

’000 tonnes 

Ratio 
production/quota 

* 

EU-25 

89% 

97% 

102% 

91% 

96% 

83% 

103% 

97% 

While  potato  starch  production  has  been  stable  due  to  the  quota  limitation,  total  starch 
production  in  the  Community  (from  wheat,  maize  and  potatoes)  has  increased  by 
approximately 4% per year on average since 1995/96. This growth is mainly due to increases 
in  wheat  starch,  while  the  share  of  potato  starch  in  the  total  starch  market  has  steadily 
decreased and now represents 20 % of the total starch production. 

The  structure  of  the  industry  differs  between  the  Member  States.  Production  is  very 
concentrated  in  most  of  the  old  Member  States  (around  17  manufacturers  share  1.8 million 
tonnes of quota) while in the new Member States manufacturers tend to be smaller (around 16 
share  0.2  million  tonnes  of  quota).  Some  of  the  starch  producing  undertakings  are  fully  or 
partially owned by farmers. 

6. 

DEVELOPMENT OF THE CEREAL AND POTATO STARCH SECTOR 

6.1. 

Trade flows of cereal starch and potato starch 

Before the last enlargement, there were some imports of potato starch from the PECOs; since 
2005, the imported quantities are negligible. 

The  world  market  constitutes  an  important  outlet  for  the  EU  cereal  starch  and  potato  starch 
sector, including starch-derived products. About 40% of the potato starch produced is exported 
to countries outside the EU. 

6 

COM(1997) 576 final of 11.11.1997: 1998/99, 1999/2000 and 2000/01 quotas.; COM(2001) 677 final of 
16.11.2001:  2002/03,  2003/04  and  2004/05  quotas.  COM(2004) 772  final  of  6.12.2004:  2005/06  and 
2006/07 quotas. 

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Table 2 – EU external exports of potato starch 

400

350

300

250

200

150

100

50

0

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Export in mio tonnes

Export in mio € 

While  the  quantity  exported  increased  by  35%  between  2004  and  2005,  the  export  value 
increased by only 11%. This confirms the information given by industry sources, which claim 
that there is currently only a small premium on the market for potato starch, despite the fact 
that potato starch is purer and of a higher quality than cereal starches, because it has the lowest 
fat and protein content and is without colour, taste or smell. 

Table 3: Potato starch – Main EU export partners in Mio tonnes – average 2001/2005 

USA 

Japan
South Korea 
Hong Kong 
Thailand 
Taiwan 
Mexico 
China 
Switzerland 
Peru 

Russia
Turkey 

Indonesia

0,0

7,1

6,7 

4,2 
3,8 

5,0

34,6

30,9

25,5

24,1

20,0

19,8

17,2

14,3

11,7

Total value of EU-Extra Exports 
for potato starch Av. 2001/2005 
314 mio tonnes

10,0

15,0

20,0

25,0

30,0

35,0

40,0

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6.2. 

Production of cereal starch and potato starch 

The production of cereal and potato starch in the Community has grown by around 2% a year 
on  average  since  1998/99,  largely  to  the  benefit  of  wheat  starch.  Since  production  of  potato 
starch has been limited by the quota system, the share of potato starch in starch production as a 
whole is declining, and is currently around 20%. 

Table 4 – Development of potato starch and cereal starch production in the EU 

million tonnes 

Production of cereal 
and potato starch 

Type 
of 
starch 

Maize 
% 
Wheat 
% 
Potato 
% 
TOTAL 

% 
Annual rate 
of change 

** 

EU-25 

1998/1999  1999/2000  2000/2001  2001/2002  2002/2003  2003/2004 

2004/2005** 

3.7 
48% 
2.2 
29% 
1.8 
23% 
7.7 
100% 

3.7 
46% 
2.4 
30% 
1.9 
24% 
8.0 
100% 

3.9 
45% 
2.8 
32% 
2.0 
23% 
8.7 
100% 

4.0 
46% 
3.0 
34% 
1.8 
20% 
8.8 
100% 

4.0 
45% 
3.0 
34% 
1.9 
21% 
8.9 
100% 

4.0 
46% 
3.1 
36% 
1.6 
18% 
8.7 
100% 

4.0 
43% 
3.3 
35% 
2.0 
21% 
9.4 
100% 

1.3% 

3.9% 

8.7% 

0.6% 

1.1% 

–1.7% 

9.3% 

estimates for cereal starch based on data supplied by AAC (Association of the Cereal Starch Industries of the 
EU), 
estimates for potato starch: notifications from the Member States under Article 20 of Regulation (EC) No 97/95, 
including production outside the quotas 

7. 

CONCLUDING REMARKS 

In the Council meeting on 30 May 2005 when the roll-over of the existing quotas for two years 
was decided, the Commission made the following declaration: 

The Commission is prepared to look into the requests of Poland and Lithuania to revise their 
potato starch quotas, in the context of future arrangements after the two year extension of the 
present quotas. 

Some key events have taken place since the last report, in particular: 

– 

– 

– 

the incorporation of starch potatoes into the Single Farm  Payment has modified the 
economic incentive for starch potato producers, whose income is now less dependant 
on this crop; 

WTO negotiations are likely to lead to a reduction in export refunds and a decrease in 
the import duties for tapioca-starch, so increasing the availability of starch on the EU 
market; 

the  reform  of  the  sugar  sector,  where  prices  will  be  substantially  reduced  during  a 
transitional  period  and  also  competition  will  intensify  between  sweeteners  based  on 
cereal starch and out-of-quota sugar to supply the chemical and fermentation industry. 
This could have a cascading effect on the starch market, leading to additional pressure 
also on the potato starch market. 

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The impact of these events will need to be assessed. 

Development in the export market also point to an over-supply of the European potato starch 
market. Therefore, all measures that might increase production in the EU should currently be 
avoided. 

Given  the  increase  of  competitive  pressure  on  the  starch  market  and  the  decoupling  of 
payments to starch potato producers, it is questionable whether the static quota system, with 
minimum prices, can guarantee the sector's long-term survival. 

However, because the possible effects will only be felt in the next few years, it is not advisable 
to  change  the  potato  starch  quota  system  now,  but  to  include  it  in  the  review  of  the  Single 
Payment Scheme, planned for 2008. 

Pending this review, and in the light of this report, in particular as regards the market balance 
between  potato  starch  and  cereal  starch  and  the  situation  on  the  export  market,  the 
Commission  proposes  a  rollover  of  the  quotas  currently  fixed  for  2006/07  for  a  further  two 
years (2007/08 and 2008/09 marketing years). 

LEGAL REFERENCES 

Direct payments and decoupling 

Council Regulation (EC) No 1782/2003 (OJ L 270, 21.10.2003, p. 1) 

Commission Regulation (EC) No 2237/2003 (OJ L 339, 24.12.2003, p. 52); 

Potato starch 

Council Regulation (EEC) No 1868/94 (OJ L 197, 30.7.1994, p. 4) 

Commission Regulation (EC) No 2235/2003 (OJ L 339, 24.12.2003, p. 36) 

Commission Regulation (EC) No 2236/2003 (OJ L 339, 24.12.2003, p. 45); 

until 30 June 2007: 

Commission Regulation (EC) No 941/2005 (OJ L 159, 22.6.2005, p. 1). 

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ANNEX 

Table A – Development of the production of potato starch  
within the context of the quota arrangements 

PRODUCTION 

2000/2001  2001/2002 2002/2003 2003/2004 2004/2005  2005/2006

’000 tonnes 

Denmark 

Germany 

Spain 

France 

Netherlands 

Austria 

Finland 

Sweden 

180.2 

698.2 

– 

274.2 

528.4 

48.1 

54.5 

66.1 

168.8 

619.9 

– 

217.4 

443.7 

43.6 

51.9 

55.7 

166.8 

630.2 

– 

271.6 

458.6 

40.1 

55.8 

61.5 

161.4 

515.6 

– 

253.8 

401.3 

31.9 

39.0 

58.9 

175.2 

682.3 

0.1 

268.8 

524.3 

46.4 

45.2 

65.1 

168.0 

650.0 

0 

259.2 

499.4 

50.1 

51.3 

62.0 

TOTAL EU-15 

1 849.7 

1 601.1 

1 684.8 

1 461.9 

1 817.5 

1 739.9 

Czech Republic 

Estonia 

Latvia 

Lithuania 

Poland 

Slovakia 

TOTAL EU-10 

TOTAL EU-25 

33.5 

34.3 

0.3 

5.8 

0.8 

0.3 

4.7 

– 

150.4 

120.2 

– 

– 

190.7 

159.5 

1 998.3 

1 899.4 

(1) 

as laid down in Regulations (EC) No 1868/94 and (EC) No 97/95, including the maximum 5% 
flexibility, not including quantities exported without a refund. 
Source: Member State notifications under Article 20 of Regulation (EC) No 97/95. 

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Table B – Development of quotas fixed for the production of potato starch 

PRODUCTION 

2000/2001 

2001/2002 until 
2003/2004 

2004/2005 until 
2006/2007 

’000 tonnes 

Denmark 

Germany 

Spain 

France 

Netherlands 

Austria 

Finland 

Sweden 

TOTAL EU-15 

Czech Republic 

Estonia 

Latvia 

Lithuania 

Poland 

Slovakia 

TOTAL EU-10 

TOTAL EU-25 

173.4 

676.7 

2.0 

273.6 

523.2 

48.4 

54.0 

63.0 

168.2 

656.3 

1.9 

265.4 

507.4 

47.7 

53.2 

62.1 

168.2 

656.3 

1.9 

265.4 

507.4 

47.7 

53.2 

62.1 

1 814.237 

1 762.148 

1 762.148 

33.7 

0.3 

5.8 

1.2 

145.0 

0.7 

186.613 

1 948.761 

Reference: Council Regulation (EC) No 1868/94. 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

1.1. 

General context 

Council Regulation (EC) No 1868/94 establishes a quota system for the production of potato 
starch  and  foresees  a  periodic  report  on  the  functioning  of  the  system,  accompanied  by  a 
legislative proposal. 

1.2. 

Grounds for the proposal 

Regulation (EC) No 941/2005 amends Regulation (EC) No 1868/94 with the purpose of fixing 
the quota for the 2005/2006 and 2006/2007 marketing years and foresees that the Commission 
shall present another report on the allocation of quota within the Community, accompanied by 
appropriate proposals. 

1.3. 

Objectives and main content of the proposal 

On  the  basis  of  the  report  from  the  Commission  to  the  Council,  the  proposal  concerns  a 
roll-over  of  the  current  quotas  for  2007/2008  and  2008/2009,  in  order  to  analyse  the 
repercussions of the reform of the sugar sector on the starch market. 

2. 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

2.1. 

Consultation of interested parties  

The  Commission  has  carried  an  extensive  consultation  of  the  starch  industry  (producers  as 
well  as  the  growers)  via  the  Association  des  Amidonniers  et  Féculiers  (AAF)  –  European 
Starch Association a.i.s.b.l. 

In addition, a Consultative Committee on starch, which is held at least once per year, last took 
place on October 20, 2006. 

2.2. 

Collection and use of expertise 

Extensive  use  has  been  made  of  the  Commission’s  internal  analysis  of  production  statistics 
and trade developments. 

2.3. 

Impact assessment  

Because of the expected repercussions of the sugar reform on the starch market, it was decided 
to opt for another roll-over of the current system and include the in-depth assessment of the 
sector in the framework of the Single Payment Scheme review, as requested by the Council in 
June 2003, which will take place in 2008. 

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3. 

LEGAL ELEMENTS OF THE PROPOSAL 

3.1. 

Summary of the proposed action 

The  proposal  consists  of  a  report  and  a  proposal  for  a  Regulation  of  the  Council  amending 
Regulation  (EC)  No  1868/94  establishing  a  quota  system  in  relation  to  the  production  of 
potato starch. 

3.2. 

Legal basis 

Article  3  of  Regulation  (EC)  No  1868/94  establishing  a  quota  system  in  relation  to  the 
production of potato starch obliges the Commission to present a report on the allocation of the 
quota, accompanied by appropriate proposals, to the Council. 

3.3. 

Subsidiarity and proportionality principle  

In  accordance  with  its  legal  basis,  the  proposal  will  address  the  challenges  identified  in  a 
proportionate manner and in accordance with the subsidiarity principle. 

3.4. 

Choice of instruments 

The proposal should take the form of a regulation. 

4. 

BUDGETARY IMPLICATIONS 

The quotas remain stable at 1 948 761 tonnes and the starch premium is set out at EUR 22,25 
per tonne (Article 5 of Council Regulation No 1868/94). This leads to a total expenditure for 
each  marketing  year  (2007/08  and  2008/09)  of  1 948 761  tonnes  multiplied  with  EUR 22,25 
per tonne, resulting in EUR 43,4 million for each of the two marketing years concerned. 

5. 

ADDITIONAL INFORMATION 

5.1. 

Review clause 

The  proposal  includes  a  review  clause  under  which  the  Commission  will  report  on  the 
implementation  of  the  Regulation  and  make  any  appropriate  proposal  for  its  amendment 
before 1 January 2009. 

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2006/0268 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 1868/94 establishing a quota system  
in relation to the production of potato starch 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 37 thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament7, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

The Annex to Council Regulation (EC) No 1868/948 fixes the potato starch quotas for 
producer Member States for the 2005/2006 and 2006/2007 marketing years. 

In accordance with Article 3(2) of Regulation (EC) No 1868/94 the allocation of quota 
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 sector of potato starch, the quotas for the 2006/2007 
marketing year should be rolled over for two more years. 

Producer Member States should allocate their quotas for a period of two years among 
all potato starch manufacturers on the basis of the quotas for the 2006/2007 marketing 
year. 

Quantities used by potato starch manufacturers in excess of the sub-quotas available in 
the 2006/2007 marketing year should be deducted in the 2007/2008 marketing year in 
accordance with Article 6(2) of Regulation (EC) No 1868/94. 

(5) 

Regulation (EC) No 1868/94 should therefore be amended accordingly, 

7 
8 

OJ C …, …, p. …. 
OJ  L  197,  30.7.1994,  p. 4.  Regulation  as  last  amended  by  Regulation  (EC)  No 941/2005  (OJ L 159, 
22.6.2005, p. 1). 

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13 

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HAS ADOPTED THIS REGULATION: 

Article 1 

Regulation (EC) No 1868/94is amended as follows: 

(1) 

Articles 2 and 3 are replaced by the following: 

“Article 2 

1. 

2. 

The  potato-starch  producing  Member  States  shall  be  allocated  quotas  for  the 
2007/2008 and 2008/2009 marketing years in accordance with the Annex. 

Each  producer  Member  State  referred  to  in  the  Annex  shall  allocate  its  quota 
among  potato-starch  manufacturers  for  use  in  the  2007/2008  and  2008/2009 
marketing years on the basis of the sub-quotas available to each manufacturer in 
2006/2007, subject to application of the second subparagraph. 

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 in accordance with Article 6(2). 

Article 3 

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.” 

(2) 

The Annex is replaced by the text in the Annex to this Regulation. 

Article 2 

This Regulation shall enter into force on the third day following that of its publication in the 
Official Journal of the European Union. 

It shall apply from 1 July 2007. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, … 

For the Council 
The President 

EN 

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ANNEX  

Potato starch quotas for the 2007/2008 and 2008/2009 marketing years 

Czech Republic 

Denmark 

Germany 

Estonia 

Spain 

France 

Latvia 

Lithuania 

Netherlands 

Austria 

Poland 

Slovakia 

Finland 

Sweden 

(tonnes) 

33 660 

168 215 

656 298 

250 

1 943 

265 354 

5 778 

1 211 

507 403 

47 691 

144 985 

729 

53 178 

62 066 

TOTAL 

1 948 761 

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FINANCIAL STATEMENT 

1. 

BUDGET HEADING (nomenclature 2007): 

05 02 01 03 
05 03 01 02 
05 03 02 18 

APPROPRIATIONS 
PDB 2007: 
€97 million 
€2.111 million 
€112 million 

2. 

3. 

4. 

TITLE: 
Council Regulation amending Regulation (EC) No 1868/94 establishing a quota system in relation to the 
production of potato starch 

LEGAL BASIS: 
Article 37 of the Treaty 

AIMS: 
To make a roll-over of the current quota system for another two marketing years (2007/08 and 2008/09). 

5. 

FINANCIAL IMPLICATIONS 

12 MONTH 
PERIOD 
(EUR million) 

FINANCIAL 
YEAR 2007 
(EUR million) 

FINANCIAL 
YEAR 2008 
(EUR million) 

5.0 

CHARGED TO THE EC BUDGET 

EXPENDITURE 
– 
(REFUNDS/INTERVENTIONS) 
– 
– 

NATIONAL AUTHORITIES 
OTHER 

5.1  REVENUE 

– 

– 

168,4 

– 

OWN RESOURCES OF THE EC  

– 
(LEVIES/CUSTOMS DUTIES) 
– 

NATIONAL 

5.0.1  ESTIMATED EXPENDITURE 
5.1.1  ESTIMATED REVENUE 

5.2  METHOD OF CALCULATION: 

2009 

170,4 

2010 

– 

2011 

– 

2012 

– 

The quotas remain stable at 1 948 761 tons. 
– starch premium = €22,25 x 1 948 761 = €43,4 Mio in budget year 2008 and budget year 2009 
– aid for starch potato (EU15) * = 1 762 148 x €66,32/t = €116,9 mio in budget years 2008 and 2009 
– SAPS (EU-10) **=  186.613 x €110,54/t x 40% = €8,3 mio in budget year 2008 

186 613 x 110,54 x 50% = €10,3 mio in budget year 2009 

Total budget year 2008: €168,4 mio 
Total budget year 2009: €170,4 mio. 

6.0  CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE 

RELEVANT CHAPTER OF THE CURRENT BUDGET? 

6.1  CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF 

THE CURRENT BUDGET? 

6.2  WILL A SUPPLEMENTARY BUDGET BE NECESSARY? 

6.3  WILL APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS? 

YES NO 

YES NO 

YES NO 

YES NO 

OBSERVATIONS: 
*  All  potato  starch  producing  countries  in  the  EU  15  will  implement  the  SPS  during  the  marketing  years 

** 

2007/08 and 2008/09, with a coupled potato starch aid of 66,32 €/t; 
the assumption is that all six new member states that are allocated potato starch quota will go on applying 
the SAPS for the period concerned. 

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