L 78/20 Official Journal of the European Union 17.3.2007 COMMISSION REGULATION (EC) No 290/2007 of 16 March 2007 establishing, for the 2007/2008 marketing year, the percentage provided for in Article 19 of Regulation (EC) No 318/2006 THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EC) No 318/2006 of 20 February 2006 on the common organisation of the markets in the sugar sector ('), and in particular the second subparagraph of Article 19(3), Article 40(2)(d)(v) and Article 42 thereof, Whereas: Article 19(1) of Regulation (EC) No 318/2006 lays down that a percentage, common to all Member States, of sugar and isoglucose may be withdrawn from the market in order to preserve the structural balance of the market at a price level which is close to the reference price. The forecast supply balance for the 2007/2008 marketing year indicates a surplus on the Community market, resulting in particular from a smaller than expected abandonment of quotas under Council Regu- lation (EC) No 320/2006 of 20 February 2006 estab- lishing a temporary scheme for the restructuring of the sugar industry in the Community and amending Regu- lation (EC) No 1290/2005 on the financing of the common agricultural policy (3). This surplus, which may amount to almost four million tonnes of sugar and isoglucose, is likely to cause a significant decrease in the Community market price during the 2007/2008 marketing year. Consequently, a withdrawal percentage should be estab- lished in application of Article 19(1) of Regulation (EC) No 318/2006 in order to preserve the structural balance of the market. However, applying the withdrawal as laid down by Article 19 of Regulation (EC) No 318/2006 does not provide an incentive to producers to reduce production, as the withdrawal percentage is applied in a linear fashion to all quantities produced under quota, without taking into account attempts by some undertakings to () OJ L 58, 28.2.2006, p. 1. Regulation as last amended by Regulation (EC) No 2011/2006 (O] L 384, 29.12.2006, p. 1). () O] L 58, 28.2.2006, p. 42. adapt their production. The withdrawal instrument may therefore be considered insufficient insofar as it does not make it possible to prevent the creation of a surplus on the market. Article 19 does not prevent surplus production; it simply makes it possible to withdraw the surplus sugar already produced. This results in costs that could be avoided if the surplus production were to be prevented at an earlier stage. In order to make the withdrawal instrument more effective by creating an incentive for producers to reduce production, the Commission intends to propose to the Council an amendment to Regulation (EC) No 318/2006 that would introduce a threshold above which quantities produced under quota by each under- taking would be withdrawn. In other words, undertakings whose production is below the threshold will be exempt from the withdrawal requirement, reflecting the fact that they contributed less to the surplus. In this way, under- takings would be able to adapt their production and decide whether or not to produce in excess of the threshold. For the threshold for applying the withdrawal percentage to have a real effect on production, the scope of the obligation provided for in Article 6(5) of Regulation (EC) No 318/2006 should be limited to avoid sugar undertakings being obliged to pay the minimum price for quantities of beet corresponding to their entire quota, including the quantities for which no delivery contracts have been concluded. However, it will not be possible to adjust the withdrawal instrument in time for it to have a preventative effect on production during the 2007/2008 marketing year. Given that the forecasts are indicating a particularly large surplus for this marketing year on account of the poor functioning of the instrument for the restructuring of the sugar industry, it is considered necessary to resort to Article 42 of Regulation (EC) No 318/2006 in order to introduce, as a matter of urgency, a preventative measure consisting in the introduction of a threshold for applying the withdrawal percentage and consequently limiting the withdrawal requirement for those undertakings that do not contribute to the surplus. The threshold should be fixed at a level that makes it possible to prevent a significant quantity of sugar from being produced, in other words a quantity comparable to that which would otherwise have been withdrawn under Article 19 of Regulation (EC) No 318/2006.