Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
1 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - MEMBER STATES - INTERVENTION - PERMISSIBILITY - CONDITION
( EEC TREATY , ARTICLE 40 )
2 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - CEREALS - PRICE - FORMATION - MEMBER STATES - INTERVENTION - PROHIBITION
( REGULATION NO 120/67 OF THE COUNCIL , ARTICLE 2 )
3 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - CEREALS - PRICE - INDIVIDUAL PRODUCER - RIGHT - MEMBER STATES - ILLEGAL INTERVENTION - DAMAGE - COMPENSATION - NATIONAL LAW - APPLICATION
( REGULATION NO 120 OF THE COUNCIL , ARTICLE 2 )
Summary
1 . INTERVENTION BY A MEMBER STATE ON THE AGRICULTURAL MARKET IS COMPATIBLE WITH THE COMMON ORGANIZATION OF THE MARKET IN THE SECTOR IN QUESTION ONLY IN SO FAR AS IT DOES NOT JEOPARDIZE THE OBJECTIVES OR OPERATION OF THAT ORGANIZATION .
2 . THE ACTION OF A MEMBER STATE IN PURCHASING DURUM WHEAT ON THE WORLD MARKET AND SUBSEQUENTLY RESELLING IT ON THE COMMUNITY MARKET AT A PRICE LOWER THAN THE TARGET PRICE IS INCOMPATIBLE WITH THE COM- MON ORGANIZATION OF THE MARKET IN CEREALS .
3 . AN INDIVIDUAL PRODUCER OF CEREALS MAY CLAIM , UNDER COMMUNITY RULES , THAT HE SHOULD NOT BE PREVENTED FROM OBTAINING A PRICE APPROXIMATING TO THE TARGET PRICE AND IN ANY EVENT NOT LOWER THAN THE INTERVENTION PRICE .
IF AN INDIVIDUAL PRODUCER HAS SUFFERED DAMAGE AS A RESULT OF THE INTERVENTION OF THE MEMBER STATE IN VIOLATION OF COMMUNITY LAW IT WILL BE FOR THE STATE , AS REGARDS THE INJURED PARTY , TO TAKE THE CONSEQUENCES UPON ITSELF IN THE CONTEXT OF THE PROVISIONS OF NATIONAL LAW RELATING TO THE LIABILITY OF THE STATE .
Parties
IN CASE 60/75
REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE PRETURA DI BOVINO FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN
CARMINE ANTONIO RUSSO
AND
AZIENDA DI STATO PER GLI INTERVENTI SUL MERCATO AGRICOLO ( AIMA ) ( NATIONAL BODY FOR INTERVENTIONS ON THE AGRICULTURAL MARKET ),
Subject of the case
ON THE INTERPRETATION OF THE PROVISIONS OF REGULATION NO 120/67 OF THE COUNCIL OF 13 JUNE 1967 ON THE COMMON ORGANIZATION OF THE MARKET IN CEREALS ( OJ , SPECIAL EDITION 1967 , P . 33 ),
Grounds
1 BY AN ORDER OF 2 MAY 1975 WHICH WAS REGISTERED AT THE COURT ON 7 JULY 1975 THE PRETORE DI BOVINO SUBMITTED TO THE COURT OF JUSTICE , PURSUANT TO ARTICLE 177 OF THE EEC TREATY , VARIOUS QUESTIONS ON THE INTERPRETATION OF REGULATION NO 120/67 OF THE COUNCIL OF 13 JUNE 1967 ON THE COMMON ORGANIZATION OF THE MARKET IN CEREALS ( OJ , ENGLISH SPECIAL EDITION 1967 , P . 33 ).
THE QUESTIONS WERE REFERRED IN THE CONTEXT OF AN ACTION INITIATED BY AN ITALIAN PRODUCER OF DURUM WHEAT AGAINST THE STATE AGENCY FOR INTERVENTION ON THE AGRICULTURAL MARKET ( AIMA ).
THE PRODUCER CLAIMS THAT HE HAS BEEN INJURED BY THE ACTIONS OF THE AIMA IN THAT IT PURCHASED LARGE QUANTITIES OF DURUM WHEAT ON THE WORLD MARKET AND RESOLD THEM TO ITALIAN PRODUCERS OF MACARONI , SPAGHETTI AND SIMILAR PRODUCTS ( ' PASTA PRODUCTS ' ) AT PRICES CONSIDERABLY BELOW THE PURCHASE PRICES AND INDEED BELOW THE INTERVENTION PRICE FIXED PURSUANT TO THE PROVISIONS CONCERNING THE COMMON ORGANIZATION OF THE MARKET IN CEREALS .
2 THE PURPOSE OF THIS ACTION , WHICH WAS UNDERTAKEN IN THE CONTEXT OF THE ANTI-INFLATION POLICY OF THE ITALIAN GOVERNMENT , WAS TO PROVIDE SUPPLIES FOR THE PASTA INDUSTRY AT PRICES WHICH WOULD ENSURE THAT PRODUCTION WAS PROFITABLE DESPITE THE MAXIMUM PRICES IMPOSED ON THE FINISHED PRODUCTS AT THE WHOLESALE AND RETAIL STAGES .
THE ACTION WAS TAKEN AT A PERIOD WHEN PRICES ON THE WORLD MARKET WERE APPRECIABLY HIGHER THAN PRICES FIXED UNDER COMMUNITY RULES , WHEREBY ALL EXPORTS OF DURUM WHEAT , COMMUNITY PRODUCTION OF WHICH IS INSUFFICIENT TO MEET REQUIREMENTS , WERE PROHIBITED TO THIRD COUNTRIES .
IT IS CLEAR FROM THE FILE THAT , ON THE ONE HAND , THE RESALE PRICE CHARGED BY AIMA TO THE PASTA INDUSTRY WAS APPROXIMATELY LIT . 13 000 PER QUINTAL , THAT IS TO SAY , IT WAS BELOW THE TARGET PRICE OF ABOUT LIT . 16 400 AND INDEED BELOW THE INTERVENTION PRICE OF ABOUT LIT . 15 000 AND THAT , ON THE OTHER HAND , THE PLAINTIFF IN THE MAIN ACTION OBTAINED A PRICE OF LIT . 17 000 PER QUINTAL FOR A QUANTITY OF DURUM WHEAT SOLD IN JANUARY 1975 .
3 IN THE FIRST TWO QUESTIONS THE NATIONAL COURT ASKS ESSENTIALLY WHETHER THE PURCHASE OF DURUM WHEAT BY A MEMBER STATE ON THE WORLD MARKET AND ITS RESALE AT PRICES BELOW THE PURCHASE PRICE , AND EVEN BELOW THE INTERVENTION PRICE IS COMPATIBLE WITH THE COMMON ORGANIZATION OF THE MARKET IN CEREALS .
THE THIRD , FOURTH AND FIFTH QUESTIONS CONCERN THE INDIVIDUAL POSITION OF TRADERS IN THE EVENT OF UNLAWFUL INTERFERENCE BY THE STATE IN THE MACHINERY OF PRICE FORMATION PRESCRIBED BY THE COMMON ORGANIZATION OF THE MARKET AND THE CONSEQUENCES TO BE DRAWN IF SUCH INTERFERENCE WERE TO RESULT IN AN INFRINGEMENT OF THE RIGHTS ACCORDED TO THOSE TRADERS BY COMMUNITY RULES .
4 THESE QUESTIONS HAVE BEEN REFERRED TO THE COURT AS A RESULT OF NON- COMPULSORY INTERVENTION BY THE STATE ON THE MARKET IN CEREALS , THE AIM OF WHICH WAS NOT TO INFLUENCE DIRECTLY THE FORMATION OF PRICES ON THAT MARKET BUT TO CHECK THE RISE IN PRICES OF CERTAIN FOODSTUFFS MADE FROM DURUM WHEAT AT CONSUMER LEVEL .
5 SUCH INTERVENTION BY A MEMBER STATE IS COMPATIBLE WITH THE COMMON ORGANIZATION OF THE MARKET IN CEREALS ONLY IN SO FAR AS IT DOES NOT JEOPARDIZE THE OBJECTIVES OR OPERATION OF THAT ORGANIZATION .
SINCE ONE OF THE PRINCIPAL OBJECTIVES OF THE ORGANIZATION IS TO GUARANTEE TO PRODUCERS A PRICE BASED ON THE TARGET PRICE THIS OBJECTIVE IS JEOPARDIZED WHERE THE ACTIONS OF THE STATE AGENCY ARE OF SUCH A NATURE AS TO INFLUENCE CONDITIONS ON THE MARKET AND TO INDUCE A TENDENCY TO FORCE PRICES BELOW THAT LEVEL .
IT MUST THEREFORE BE CONCLUDED THAT THE ACTION OF A MEMBER STATE IN PURCHASING DURUM WHEAT ON THE WORLD MARKET AND SUBSEQUENTLY RESELLING IT ON THE COMMUNITY MARKET AT A PRICE LOWER THAN THE TARGET PRICE IS INCOMPATIBLE WITH THE COMMON ORGANIZATION OF THE MARKET IN CEREALS .
6 THIS SITUATION DOES NOT HOWEVER IMPLY THAT A SPECIFIC PRODUCER CAN CLAIM THAT HE HAS SUFFERED DAMAGE WHERE HE HAS SOLD HIS PRODUCTS ABOVE THE TARGET PRICE , THEREBY OBTAINING THE ADVANTAGES WHICH THE REGULATION IS INTENDED TO PRODUCE .
IN FACT UNDER COMMUNITY RULES AN INDIVIDUAL PRODUCER MAY CLAIM THAT HE SHOULD NOT BE PREVENTED FROM OBTAINING A PRICE APPROXIMATING TO THE TARGET PRICE AND IN ANY EVENT NOT LOWER THAN THE INTERVENTION PRICE .
REGULATION NO 120/67 IS IN FACT INTENDED TO SHIELD THE DEVELOPMENT OF COMMUNITY AGRICULTURAL PRODUCTION FROM FLUCTUATIONS IN WORLD PRICES AND THEREBY TO ENSURE A FAIR STANDARD OF LIVING FOR THE AGRICULTURAL COMMUNITY AND TO STABILIZE MARKETS BY MEANS OF COMMUNITY LEVIES AND REFUNDS , PROTECTING THE OPERATION OF THE COMMON AGRICULTURAL MARKET AGAINST THE RISKS OF THE WORLD MARKET .
7 THAT REGULATION IS THEREFORE NOT INTENDED TO GUARANTEE TO PERSONS CONCERNED THE RIGHT TO PROFIT FROM RANDOM MARKET TRENDS WHEN THE LEVEL OF WORLD PRICES EXCEEDS THAT CONSIDERED DESIRABLE FOR THE ATTAINMENT OF THE OBJECTIVES OF THE COMMON ORGANIZATION .
CONSEQUENTLY , AN INDIVIDUAL FARMER MAY NOT CLAIM THAT HE HAS SUFFERED DAMAGE UNDER COMMUNITY LAW IF THE PRICE WHICH HE HAS ACTUALLY OBTAINED ON THE MARKET EXCEEDS THE TARGET PRICE .
8 IT IS FOR THE NATIONAL COURT TO DECIDE ON THE BASIS OF THE FACTS OF EACH CASE WHETHER AN INDIVIDUAL PRODUCER HAS SUFFERED SUCH DAMAGE .
9 IF SUCH DAMAGE HAS BEEN CAUSED THROUGH AN INFRINGEMENT OF COMMUNITY LAW THE STATE IS LIABLE TO THE INJURED PARTY OF THE CONSEQUENCES IN THE CONTEXT OF THE PROVISIONS OF NATIONAL LAW ON THE LIABILITY OF THE STATE .
Decision on costs
COSTS
10 THE COSTS INCURRED BY THE ITALIAN GOVERNMENT AND BY THE COMMISSION , WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE . AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , IN THE NATURE OF A STEP IN THE ACTION PENDING BEFORE THE NATIONAL COURT , COSTS ARE A MATTER FOR THAT COURT .
Operative part
ON THOSE GROUNDS ,
THE COURT
IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE PRETORE DI BOVINO BY AN ORDER OF 2 MAY 1975 , HEREBY RULES :
THE PROVISIONS OF REGULATION NO 120/67 OF 13 JUNE 1967 ON THE COMMON ORGANIZATION OF THE MARKET IN CEREALS MUST BE INTERPRETED TO MEAN THAT :
( A ) THE ACTION OF A MEMBER STATE IN PURCHASING DURUM WHEAT ON THE WORLD MARKET AND SUBSEQUENTLY RESELLING IT ON THE COMMUNITY MARKET AT A PRICE LOWER THAN THE TARGET PRICE IS INCOMPATIBLE WITH THE COMMON ORGANIZATION OF THE MARKETS ;
( B ) UNDER COMMUNITY RULES AN INDIVIDUAL PRODUCER MAY CLAIM THAT HE SHOULD NOT BE PREVENTED FROM OBTAINING A PRICE APPROXIMATING TO THE TARGET PRICE AND IN ANY EVENT NOT LOWER THAN THE INTERVENTION PRICE ;
( C ) IF AN INDIVIDUAL PRODUCER HAS SUFFERED DAMAGE AS A RESULT OF THE INTERVENTION OF A MEMBER STATE IN VIOLATION OF COMMUNITY LAW IT WILL BE FOR THE STATE , AS REGARDS THE INJURED PARTY , TO TAKE THE CONSEQUENCES UPON ITSELF IN THE CONTEXT OF THE PROVISIONS OF NATIONAL LAW RELATING TO THE LIABILITY OF THE STATE .
Full & Egal Universal Law Academy