Starch Policy in the European Community

Abstract

Within the framework of the EC-policy measures on starch, the European starch industry has developed successfully, also as a partner on the world market. Starch production in the European Union continues to increase by about 3 % per year. This growth is attributable almost entirely to wheat starch. Production of potato starch has reached a ceiling. The amount of maize starch remains at roughly the same volume and is thus declining in relative terms but maize continues to be the most important raw material. The European Community is easily self-sufficient with respect to starch and does not import any. The EC′s most important trading partner, the United States, produces four times as much starch especially for utilisation in the sugar and the biofuel sector. Starch exports are vital to the EC industry and account for ca. 17 % of total production, for which export refunds are granted. The subsidy granted within the Community, to compensate for the price difference on the world market and destined for the non-food sector which is not protected against imports, covers about 45 % of total starch production. Starch producers, processors and users in the Community work with this EC system which is generally well received and accepted. It is acknowledged that the refund policies provide fair indemnity with little risk of over- or undercompensation. In the context of Agenda 2000, the planned price cut should normally result in all refunds being discontinued, a major simplification and relief for business and authorities. However, if a significant price difference persists, the refunds would continue to apply, but subject to the restrictions operating within the World Trade Organisation (WTO). A strong pressure will be brought at the WTO negotiations in favour of greater market liberalisation. As regards the future enlargement of the Community, the applicant eastern countries will gradually have to adopt EC′s policies; production of starch and derivatives is still limited in these countries and they are generally not self-sufficient.