President. The next item is the report (A6-0137/2007) by Mr Wojciechowski, on behalf of the Committee on Agriculture and Rural Development, on the proposal for a Council regulation amending Regulation (EC) No 1868/94 establishing a quota system in relation to the production of potato starch (COM(2006)0827 C6-0046/2007 2006/0268(CNS)).

  Mariann Fischer Boel, Member of the Commission. Mr President, I should like to thank the rapporteur, Mr Wojciechowski, and members of the Committee on Agriculture and Rural Development for the work that has been carried out on this report.

I shall start by placing this proposal in its context. Since the potato starch production quotas were introduced back in 1995, we have been trying to define a strategy that could secure, enhance and promote the development of this important sector. However, over the last decade the European Union’s agricultural policies have changed dramatically, becoming more market-oriented with the decoupling of most aid payments, and reforms of the market organisations in almost all sectors.

In spite of the existence of quotas, potato starch production exceeds demand on the European market with the result that we have to export about 40% of our production into the world market, usually with the benefit of export refunds. Concerning the proposals that we are discussing today, it is of vital importance to preserve the stability of this very fragile sector while at the same time taking the fundamental changes due to the reform of the common agricultural policy into account.

The main objectives of the proposals are firstly to roll over the quotas for another two years, which will allow us to review the potato starch system in the framework of the health check. An extension of four years, as you propose in your report, would not allow us to take the opportunity to go into details with this important sector in the health check, and therefore you will understand that we cannot accept this amendment.

The second main objective is to roll over the existing quotas, which have actually provided a relatively stable market for potato starch in the European Union. I am aware that there have been repeated requests from some Member States for an increase in their quotas, and I have not forgotten the declaration made by the Council. However, an analysis of the current market situation has shown that an increase of the potato starch production quotas should be avoided at the moment. If we increase the quotas in a situation where we have over-production within the European Union, this would put even heavier pressure on the prices. We should take the opportunity to take another two years as suggested, and then, in the health check, go into details to see what a viable future for our potato starch production could look like.

  Janusz Wojciechowski (UEN), rapporteur. – (PL) Mr President, this is the fifth time the European Parliament is considering the regulation on potato starch production quotas. I am proud to present the report on this regulation for the second time. It was my pleasure to do so previously in 2005.

In practice, decisions are called for on two issues. Firstly, on how long the system of limiting the production of potato starch should be extended for, and secondly on whether the production quotas allocated to individual countries should remain unchanged or be amended. The European Commission has proposed maintaining the quota system for a further two years, leaving the quotas unchanged. Many members of the Committee on Agriculture and Rural Development pointed out, however, that two years is far too short a time period to allow for sensible planning. As a result, the Commission agreed to a four-year period.

As rapporteur, I supported that proposal. It is a sensible one, because farmers and starch manufacturers should not have swift and immediate changes imposed on them at short notice.

Starch production quota amounts are a more difficult matter. Two new Member States, Poland and Lithuania, pointed out as they already had them two years earlier, that the quotas allocated to them are too low in relation to their potential and needs. Lithuania’s quota is approximately 1 200 tonnes. This is not enough to maintain even one plant, and as a result Lithuania has ceased to manufacture starch, although it needs to manufacture around 4 700 thousand tonnes and wishes to do so. Poland is the largest producer of potatoes in Europe, or more precisely, in the European Union, but it has been allocated a quota of 144 000 tonnes. This is several times less that the highest French, German and Dutch quotas.

In my capacity as rapporteur, I proposed increasing the quota for Poland and Lithuania. Taken together, the proposed increase amounted to just under 40 000 tonnes, which is less than 2% of the total quota amount of 1 948 000 tonnes. By a small majority the committee voted against this proposal, however. Twenty members voted against it and 17 in favour.

As rapporteur, I am required to present the arguments of the majority, even though it is only a small one. I am also bound to mention the arguments adduced by the minority that tabled its amendments. There was widespread concern in the committee that increasing quotas could destabilise the market. I believe these concerns are unfounded, for the following reasons. Firstly, this is not a large increase, as it amounts to barely 2% of the total quota. Secondly, the market has changed. Although the quality of potato starch is higher, it is being supplanted by poorer quality cereal starch. The share of potato starch in total production has decreased from 25% to 20% over the last three years. This means there is actually a shortage of potato starch. Thirdly, there is an imbalance in the relationship between the old and new Member States. Ninety per cent of the quota goes to the old Member States, and only 10% to the new ones, even though the latter account for over 25% of the Union’s human capital. Fourthly, the quotas allocated are often underused. As much as several dozen percentage points are not taken up at times. If the crop fails, a shortage of starch on the market ensues. This is not compensated for in subsequent years, at least not beyond the permitted compensation of approximately 5% of the quota. Fifthly, the Commission itself has recognised the damage inflicted on Poland and Lithuania by the quota system. Commissioner Fisher Boel is present in the House today, and two years ago she herself promised that account would be taken of the special circumstances of those two countries, but this did not happen. Lastly, Europe must demonstrate solidarity not selfishness in response to the perceived needs of these two Member States that have suffered so obviously under the current system. Certain issues were closed five years ago during accession negotiations, but this does not mean that we should remain bound by those agreements forever and ignore the economic changes that have taken place since then.

Ladies and gentlemen, as I conclude, I should like to draw your attention to Amendment 8, which could be the basis of a good compromise. What it proposes is that if certain quotas are not used in a particular year, then the next year interested Member States, but only new ones, would be able to apply to the Commission asking to be allocated additional quotas up to the amount unused the previous year. In this way, actual manufacture computed over several years would not exceed the maximum limit of 1 948 000 tonnes, and the new Member States would be able to request higher quotas. I urge you to consider adopting this amendment, as it could lead to a sensible compromise.

  Esther de Lange, on behalf of the PPE-DE Group. – (NL) Mr President, having taken the oath this afternoon, I intend, in my maiden speech, to address the issue of potatoes, starch potatoes to be precise. This might almost have been foreordained, since I grew up with a father who used to like to read German children’s books to me – something which might be to Mr Graefe zu Baringdorf’s liking – and there would always be a story about ‘Die Bedeuting der Kartoffel’ – the meaning of the potato. I have no idea who the author was, but my father enjoyed reading it to me, and the fact that my maiden speech is about potatoes cannot be a coincidence.

Joking aside, this Commission proposal is, of course, of major importance to a number of regions in Europe, including the north-east of my own country where the potato starch industry has generated considerable employment and production. This sector, and therefore the producers and their regions, stand to benefit from clarity and certainty where planning and management in their individual businesses is concerned, certainly following the sweeping CAP reforms in 2003 and given the uncertainties associated with WTO negotiations, which are still in progress.

As somebody has already pointed out, when the current potato starch system was last extended, this House would have preferred it to have been for a longer period. Whilst the Commission is now suggesting once again to extend by two years, the rapporteur turned this into three years and the Committee on Agriculture and Rural Development was the last one to pipe in with its suggestion of four years. This is, as I see it, a clear message in the direction of the Commission and Council. In principle, there is support for the proposed extension, but ideally for a slightly longer period of time, so that those involved know where they stand in the next few years. Knowing where you stand also means, in my view, sticking with the existing quota for that period of time. In this light, proposals to extend quotas in individual Member States do not in any event enjoy our support.

  Bogdan Golik, on behalf of the PSE Group. – (PL) Mr President, this is the second debate in the House this term on the issue of potato starch production quotas. The matter was debated previously in May 2005. Unfortunately, little progress has been made during these last two years with regard to increasing the potato starch production quotas for two new Member States, Poland and Lithuania. Despite the European Commission’s statement in 2005 that the quotas would be checked and requests for increasing the quotas allocated to those countries considered, nothing has been achieved in that regard.

I shall therefore repeat what I said in my statement two years ago, namely that the potato starch production quotas allocated by the Commission are not in line with the production capacities of Polish and Lithuanian plants, their supply of raw material and the increasing demand for starch.

Concern has been expressed that increasing production quotas amounts to opening Pandora’s box, so that if Poland and Lithuania’s quotas were increased this would lead to similar requests by the remaining Member States regarding other agricultural products. It is important, however, to bear in mind the fact that the market for starch products is constantly developing, and that demand for these products is rising. In addition, it has been noted that ever since Poland joined the European Union imports of starch and starch products have been steadily increasing. There has been a notable worsening of the trade deficit for starch, and this is due precisely to the restrictions on production.

The European Commission’s stance is that the World Trade Organisation negotiations are likely to lead to a reduction in the level of export refunds and a reduction of tariff protection for the import of tapioca starch, thus increasing the availability of starch on the Community market. The Commission has not taken into account, however, that during the period when the quotas apply, that is to say for the next two marketing years, there is practically no chance of any of the provisions of a future agreement on agriculture within the World Trade Organisation being implemented. The impact of multilateral agreements on the supply of imported starch on the Community market will therefore be negligible. I trust Members of this House will endorse Mr Wojciechowski’s report and that the European Commission will grant the requests made by the governments of Poland and Lithuania to increase their quotas.

  Kyösti Virrankoski, on behalf of the ALDE Group. – (FI) Mr President, Commissioner, first of all I want to thank the rapporteur, Mr Wojciechowski, for an excellent report. I would say that the potato is quite a tricky crop to cultivate. Its annual harvest varies quite considerably and its price also fluctuates greatly. The potato is also very well suited to more challenging regions, including the northernmost part of the European Union, and in that sense it is a very valuable crop. On many farms it is clearly a cash crop. For example, in my country around a third of potato starch is produced domestically and two thirds is imported, because the forest industry uses the lion’s share of it. Thus, when we examine quotas we would hope that this non-food use of the product will be taken better account of.

  Andrzej Tomasz Zapałowski, on behalf of the UEN Group. – (PL) Mr President, this debate gives a pretty clear indication of the nature of the solidarity demonstrated by the old Fifteen in the context of enabling the new Member States to secure the production of potato starch, if only for domestic purposes. Despite being a traditional producer of potato starch, Poland now has to import it. A similar situation has arisen with regard to milk quotas for which the limits set by the European Commission are also less than domestic consumption.

The House recently debated the issue of soft fruits. It became obvious in the Chamber how little the Commission cares about helping the new Member States to protect their markets. The Commission is forever referring back to the accession treaties, which were negotiated under immense pressure and weighted against the new Member States where many quotas are concerned. This makes it impossible for the new Members to compete on equal terms on the Community’s markets.

Much is said in this House about the need for the new Member States to catch up in terms of development. Action such as the Commission’s insistence on maintaining production quotas which results in the closure of production facilities and in farms going out of business demonstrates that new Member States are not being treated as equal partners within the Union. If Parliament rejects this symbolic amendment once again, it will prove that there are really two Unions. All this also puts a question mark over the process of further enlargement of the European Union. Perhaps it should be slowed down dramatically?

  Friedrich-Wilhelm Graefe zu Baringdorf, on behalf of the Verts/ALE Group. – (DE) Mr President, Commissioner, the quotas for potato starch were not laid down arbitrarily by the Commission, but were negotiated and undersigned by the Polish Government in the course of its accession – so there is an agreement that must be kept to. I believe that, just as other nations have their sensitivities, the Polish soul likes to complain. In my estimation, this amendment and the balancing-out arrangement will be adopted tomorrow. As you will remember, the amendment has been adopted once before, but the Commission invoked technical difficulties with implementation.

That was the case again just now in committee. I would ask that, when it comes to tomorrow’s vote on the amendment – which does not concern an increase in the overall quota, but instead a balancing-out – you tell the people you have dealing with it not how it will not work but how it will work, and thus take a rather more positive approach. This does not necessarily mean that the whole quantity to be balanced out will be made available; but showing goodwill on this – and possibly doing so within an appropriate timeframe – would still represent a reasonable offer on the part of the Commission.

  Czesław Adam Siekierski (PPE-DE). – (PL) Mr President, as we debate the potato starch production quota system we would do well to recall a couple of key factors concerning this market. The arguments adduced by those opposed to increasing quotas, alleging potential difficulties for the market and the emergence of significant surpluses of potato starch bear no relation to reality. In addition, the arguments relating to WTO negotiations are not very relevant. One of the results of these negotiations is supposed to be the end of export refunds, probably after 2013, whereas we are discussing quotas for the next two years 2007-2009.

It seems to me that not everyone is aware of the wide and varied applications of potato starch. I would remind the House that this starch is used in the food, feed, paper, pharmaceutical and textile industries. It is even used in the steel industry too. As the starch product market is growing, and the demand for many starch products increasing, I see no reason why the damaging low Polish and Lithuanian quotas should not be increased. Incidentally, there are over 600 starch products

Mrs Fisher Boel, the quality of Polish starch products is high, and they can therefore compete on the external market. Your declared aim is to make the Union’s agriculture competitive at global level, Commissioner, but how is this to be achieved if production is restricted through low quotas? If the signals from the market are that there is a growing need for this product, it would be appropriate to allow higher quotas for the countries requesting an increase. In view of the fact that the 2003 reforms aimed to make the Union’s agricultural sector more market orientated, the quotas should be increased.

  Marc Tarabella (PSE) . – (FR) Mr President, Commissioner, ladies and gentlemen, I should like to pay tribute to my fellow Member, Mr Wojciechowski, for his work as rapporteur on the quota system in relation to the production of potato starch. I should like simply to focus my speech on the amendments aimed at increasing the production quotas for Lithuania and Poland.

Indeed, while I understand the basic principle of Amendments 5 and 6 and of Amendment 7 – which is the sum of the first two, since it concerns small producers – in terms of proposing to increase Lithuania’s quota from 1 211 to 4 855 tonnes – that is, to quadruple it – and Poland’s quota from 144 985 to 180 000 tonnes, I feel that, if adopted, these amendments would open up a can of worms and give other Member States the opportunity to ask for the quotas on their produce to be revised at the highest level. I am thinking here of olive oil, milk, and an abundance of other products.

That is why, ladies and gentlemen, I shall do as I did in the Committee on Agriculture and Rural Development and advocate the adoption of this excellent report, but without the amendments proposed for the part-session. The way the schedule falls means that we are debating this evening, 23 April, in plenary, that we are voting tomorrow at 12 noon and that, between the two, we shall be holding a working group meeting within my group, on the subject of agriculture. We shall discuss this issue further with our fellow Members in the meeting, because opinions are, all the same, relatively divided on these amendments – the shadow rapporteur, Mr Golik, would not contradict me on that. No doubt, then, we will adopt our definitive position on these amendments tomorrow morning, before the vote.

  Jan Mulder (ALDE). – (NL) Mr President, I, too, should like to compliment the rapporteur, and, at the same time, congratulate my new Dutch fellow Member, Mrs de Lange, on her maiden speech. I did not know that the topic of potatoes was so pertinent.

I would recommend a period of four years to the Commission. Why four? I think that everyone wants some level of certainty, including farmers. Four years is also a good block of time for assessing the sugar reforms, which at the moment, is anything but clear; there is an unmistakable connection between isoglucose and potato starch. I think we will not know where we stand until four years from now, and this is why I am very much in favour of these four years.

While a few speakers before me said that they regarded Mr Graefe zu Baringdorf’s amendment as ideal, I am not so sure about that. How can you predict this year’s harvest on the basis of last year’s? Quotas cannot be transferred from one year to the next. If this is done anyway, even if the quota is too low one year and too high the next, it is of limited use, because a farmer can never predict production. In this light, I do not know if the amendment is technically viable.

  Zdzisław Zbigniew Podkański (UEN). – (PL) Mr President, the potato starch issue is being debated by Parliament once again, and it will go on appearing on our agenda until fair and responsible decisions are taken. Potato starch will remain a problem as long as the largest producer of potatoes in the European Union, namely Poland, continues to suffer as a result of starch production quotas and as long as the Commission continues to disregard Parliament. I would remind the House that two years ago the European Parliament almost unanimously supported the idea of reallocating quotas unused by the old Member States to the new Member States. The Commission has failed to act on that recommendation. Now it is saying no again. This comes as no surprise to Polish Members of the House. Commissioner Fisher Boel always says no when Poland is involved. Her aversion to Poland and Polish farmers is pretty well common knowledge. She does not show any mercy to little Lithuania either. The refusal to grant Lithuania an additional allocation of barely 3.5 thousand tonnes of starch goes to show how the strong can get everything they want in this Union of ours whilst the weak are reduced to begging. Nonetheless, there is a glimmer of hope. Mr Graefe zu Baringdorf’s words today testify to the fact that some Members of this House are capable of thinking in terms of society as a whole and of understanding the underdog. I am very grateful indeed to Mr Graefe zu Baringdorf for that.

  Šarūnas Birutis (ALDE). – (LT) A situation has developed that I would call paradoxical. Such things should not occur among partners.

Because of low starch quotas, factories in Lithuania are standing idle, and people are out of work. The quota allotted to Lithuania is ten times smaller than what is needed in the country. Therefore, starch has to be imported, while Lithuania's production lines stand idle. At the same time, there are countries where the starch quotas are excessive, and are not being used. Should this be tolerated in a common domestic market?

In relation to the time period under discussion, the quota of 1200 t of starch production allotted to Lithuania means that factories are only working at 9% of their production capacity. Therefore, EU institutions were asked to increase the production quota, which would have created conditions for economically worthwhile operation of the factories and a continuation of the potato-growing tradition in Lithuania. A negative reply was received.

An increase in the quotas for Lithuania and Poland would in no way harm other Member States, and it would be very important for Lithuania's economy. It would also be a display of solidarity and shared interests.

  Wiesław Stefan Kuc (UEN). – (PL) Mr President, today’s debate on the potato starch production quota system is a splendid example of the truth of the saying according to which the rich never understand the poor. It is hard to understand why when production quotas remain unused in certain Member States they may not be reallocated to others states whose quota allocation is too small. It is even harder to explain this to farmers.

Why should the misgivings of Union bureaucrats take precedence over the logic, needs, and solidarity of the Member States of the European Union? If farmers in Denmark, France, Italy or Germany were to be badly treated, their Polish colleagues would stand shoulder to shoulder with them. The quota increase proposed by the rapporteur will not harm anyone and will not result in budgetary changes either. Failure to implement it will make it abundantly clear, however, that the Union is governed by the principle according to which ‘what is yours is mine and what is mine is untouchable’. Is this really what we all want?

  Zbigniew Krzysztof Kuźmiuk (UEN). – (PL) Polish MEPs have been raising the issue of an increase in the potato starch production quotas for Poland and Lithuania with the Commissioner ever since Poland joined the European Union. At the Council held on 30 May 2005 the Commission actually stated that it was prepared to consider Poland and Lithuania’s submission in this regard, but only after the two-year period of validity of the present production quotas. This period is almost over. We are now debating the Council regulation on the matter but neither the Council nor the Commission has any intention of abiding by earlier statements.

There are at least three reasons why starch production limits should be increased for the new Member States, notably Poland and Lithuania. Firstly, in the framework of the current potato starch production quotas as much as 90% of the quota is allocated to the Fifteen, and less than 10% to the ten new Member States. By contrast, where potato production is concerned, the old Member States account for only 70% of production, and the new Member States for as much as 30%. Secondly, starch production in the new Member States takes place in small processing plants, which play an important role in the local economy and the development of rural areas. Increasing production quotas would therefore make a significant contribution to reducing unemployment in those areas. Thirdly, there have been major cutbacks in agricultural production in the new Member States, affecting both the plant and animal sectors. These cutbacks impact negatively on the development of rural areas.

  Mariann Fischer Boel, Member of the Commission. Mr President, this has been a very interesting debate, clearly showing that there are huge differences between different Members of the European Parliament as regards the possibility of modifying the starch quotas for two Member States: Poland and Lithuania.

It has already been mentioned today that these quotas were allocated to the new Member States on the basis of historical production. They were accepted by all of the new Member States, including Poland and Lithuania. We have to bear in mind that we have to be very careful to keep the market balanced. I would not want to upset this balance, and nor would other starch-producing Member States.

I think that the proposal of a two year rollover allows us, as I said previously, to include the discussion on the future of quotas for starch in our health check. It will also allow us to analyse the first effects of our sugar reform, where sweeteners, also based on cereal starch, will now face fierce competition from out-of-quota sugar in the chemical and fermentation industries. I am quite sure that this might have a knock-on effect on the starch market, leading to additional pressure on the potato starch market.

Finally, I want to react briefly to the point raised by the rapporteur about the reallocation of unused quotas. This has also been included in a new amendment. It is obvious that this proposal will lead to an increase in overall potato starch production. Therefore it has to be seen in connection with the supply situation of the potato starch market, where, as I said before, currently 40% of production has to be exported. It also raises the question of equal treatment, as quotas are fixed by the same method for all Member States. I think that the Member States that have generated this shortfall want to benefit from the carry-over. So the Commission will not support the idea of a four-year rollover.

  President. The debate is closed.

The vote will take place on Tuesday at 12 noon.

Written statement (Article 142)

  Witold Tomczak (IND/DEM), in writing. – (PL) Mr President, can one expect to sort out the world’s problems without first putting one’s own house in order? In the European Union’s case this thought springs readily to mind, if we consider how the problems of the new Member States are dealt with.

We are today debating yet another problem experienced by the new Member States. In this instance the difficulty relates to the potato starch market and only two countries are affected. The figures clearly indicate that the current organisation of this market is artificial, unfair and fails to take account of the real situation. Poland is the leading potato producer in the Union, yet it has become an importer of potato starch. This is not because it is unable to manufacture starch, or that its starch is too expensive or of poor quality. Poland is importing starch as a result of political decisions on the size of quota allocations. We should be ashamed of these decisions, because they are irrational and nonsensical. They have led to a situation in which poorer quality cereal starch is replacing better quality potato starch. Should we really be making the Union a laughing stock and losing credibility at global level?

It has been said that clever people correct their mistakes whilst the stupid thrive on them. The current starch quota allocation most certainly classes as a mistake. I am confident that the Union is capable of correcting it. The construction of the enlarged Europe is often reminiscent of building a house from the roof down, instead of up from the foundations.