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Problem of Fair Competition on the Single EU Market - the Case of Potato Starch

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Chotkowski J., Gaziński B.

Olsztyn Economic Journal

2011

vol. 6

issue 1

Integration of Polish agriculture is recognized as a success. Nevertheless some remarkable difficulties have emerged. Some of them are related to low production quotas in the dairy, sugar and starch sectors. The authors argue that the level of potato starch quota inscribed for Poland is incompatible with the principle of fair competition in the inner EU market. The quota ceiling of a mere 145 thousand tons is a heavy constraint to the processing plants - their total processing capacities are estimated at some 220-260 thousand tons. Therefore, they are utilized at c. 56-66%, leading to the increase of unit costs of starch production by about 9,2% and a decrease in the competitiveness. Another point is the ratio of the quota to the volume of harvests: 0,1121 for Denmark, 0,057 for Germany and (only) 0,0131 for Poland. Furthermore, the domestic consumption of starch products in Poland is two-fold bigger than the quota with a resultant increase in importation. Paradoxically, such practices are pronounced in spite of the unutilized natural resources of Polish agriculture - a high proportion of light soils. The temporary solution is to increase the quota - the long-run one is to rethink the concept of the quota system - under the new CAP reform.

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1 Olsztyn Economic Journal

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1 2011

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Problem of Fair Competition on the Single EU Market - the Case of Potato Starch