Summary
Parties
Grounds
Decision on costs
Operative part
Keywords
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1.Agriculture - Common organization of the markets - Discrimination between producers or consumers - Prohibition - Scope - Discretion of the Community legislature with regard to the common agricultural policy - Judicial review - Limits
( EEC Treaty, Arts 40 and 43 )
2.Agriculture - Common organization of the markets - Milk and milk products - Additional levy on milk - Choice for the Member States between Formula A and Formula B - Different financial implications for the producers - Adjustments introduced in connection with detailed rules of application - Discrimination - None
( EEC Treaty, Art . 40(3 ), second subparagraph; Council Regulations Nos 804/68, Art . 5c(1 ), and 857/84, Arts 1(1 ) and 4a )
3.Agriculture - Common organization of the markets - Milk and milk products - Additional levy on milk - Detailed rules of application - Specific provisions applicable in certain Member States whose milk production exhibits specific features - Discrimination - None
( EEC Treaty, Art . 40(3 ), second subparagraph; Council Regulation No 857/84, Art . 3(3 ) as amended, and Art . 10(2 ) )
4.Agriculture - Common organization of the markets - Milk and milk products - Additional levy on milk - Implementation at regional level - Concept of "region" - Region and the whole of the territory of a Member State placed on the same footing - Whether permissible - Compatibility with the need to take account of structural and natural disparities between regions - No connection with the arrangements for less-favoured farming areas
( EEC Treaty, Art . 39(2)(a ); Council Regulations Nos 804/68, Art . 5c(1 ) and 857/84, Art . 1(2 ); Council Directives 75/268 and 75/269 )
Summary
1.The prohibition of discrimination laid down in Article 40(3 ) of the Treaty is merely a specific enunciation of the general principle of equality which is one of the fundamental principles of Community law and which precludes comparable situations from being treated in a different manner unless the difference in treatment is objectively justified .
However, judicial review of compliance with that principle must take account of the fact that, in matters concerning the common agricultural policy, the Community legislature has a broad discretion which corresponds to the political responsibilities imposed upon it by Articles 40 and 43 of the Treaty .
More specifically, where the Community legislature is obliged, in connection with the adoption of rules, to assess their future effects which cannot be accurately foreseen, its assessment is open to criticism by the courts only if it appears manifestly incorrect in the light of the information available to the legislature at the time of the adoption of the rules in question .
2.In leaving the choice to the Member States, for the implementation of the additional levy on milk, between Formula A, providing for the levy to be charged to the producers, and Formula B, providing for the levy to be charged to the purchasers, the Community legislature has not infringed the prohibition of discrimination between Community producers . It was reasonable for the Council to take the view that, in connection with that choice, which was justified in principle by the need to ensure that the system was fully effective throughout the Community in view of the diversity of milk production structures and in milk collecting in the different regions of the Community, to fix the levy under Formula B at 100% of the target price for milk, as against 75% under Formula A, would neutralize the advantage which producers subject to Formula B derive from the possibility of offsetting at the level of the dairies and would thus ensure equivalence in the actual levels of the levy under the two formulas . Furthermore, the choice given to the Member States under both formulas of allocating the non-utilized reference quantities of producers or purchasers to producers or purchasers in the same region and, if necessary, in other regions, also has the effect of moderating the advantages derived by producers under Formula B from the possibility of offsetting at the level of the dairies .
3.The economic structures of both Italy and Greece show certain particularities, by comparison with the other Member States, especially as regards the production and marketing of milk . The specific provisions on the adjustment of individual reference quantities in connection with exceptional events, which are applicable in Italy, and the detailed rules of application for Formula B, which are applicable in Greece, meet the need to take into consideration the specific situation of those States with regard to the application of the additional levy on milk . For that reason, the resultant difference in treatment between producers established in Italy and Greece and producers established in the other Member States is objectively justified and does not therefore constitute unlawful discrimination between Community producers .
4.Article 1(2 ) of Regulation No 857/84 must be interpreted as meaning that a Member State may treat the whole of its territory as a single region within the meaning of Article 5c(1 ) of Regulation No 804/68, even if the territory is not a geographical unit in which the natural conditions, structures of production and average herd yields are comparable, unless such a decision is manifestly unsuited to the structures of the Member State in question .
It does not give rise to an infringement of Article 39(2 ) of the Treaty, which provides that account is to be taken of structural and natural disparities between the various agricultural regions, since the rules for implementing the additional levy on milk which comprise that provision are sufficiently flexible to enable the Member States, where they apply it, to take due account of those disparities .
Nor is there any breach of Directives 75/268 and 75/269 which have a specific purpose, namely the grant of State aid for the benefit of agricultural holdings located in certain less-favoured areas which are listed in accordance with Community criteria and under a Community procedure; that purpose is distinct from that pursued by the Community rules governing the additional levy on milk, with the result that those directives cannot be interpreted as requiring that the regions to which they apply must constitute distinct regions for the purposes of Article 1(2 ) of Regulation No 857/84 .
Parties
In Joined Cases C-267/88 to C-285/88
REFERENCE to the Court under Article 177 of the EEC Treaty by the tribunal de première instance ( Court of First Instance ), Verviers, for a preliminary ruling in the proceedings pending before that court between
Gustave Wuidart
and
( 1)Laiterie coopérative eupenoise, a cooperative society,
( 2)Office national du lait et ses dérivés,
( 3)The Belgian State
( Case C-267/88 ),
between
Laurent Collard
and
( 1)Laiterie coopérative eupenoise, a cooperative society,
( 2)Office national du lait et ses dérivés,
( 3)The Belgian State
( Case C-268/88 ),
between
René Schoonbroodt
and
( 1)Laiterie coopérative eupenoise, a cooperative society,
( 2)Office national du lait et ses dérivés,
( 3)The Belgian State
( Case C-269/88 ),
between
Edmond Deneve
and
( 1)Beurrerie du pays de Franchimont, a cooperative society,
( 2)Office national du lait et ses dérivés,
( 3)The Belgian State
( Case C-270/88 ),
between
Jean-Pierre Orban
and
( 1)Beurrerie du pays de Franchimont, a cooperative society,
( 2)Office national du lait et ses dérivés,
( 3)The Belgian State
( Case C-271/88 ),
between
Alfred Labeye
and
( 1)Beurrerie du pays de Franchimont, a cooperative society,
( 2)Office national du lait et ses dérivés,
( 3)The Belgian State
( Case C-272/88 ),
between
( 1)Jean-Pierre Dujardin,
( 2)Raymond Dujardin
and
( 1)Beurrerie du pays de Franchimont, a cooperative society,
( 2)Office national du lait et ses dérivés,
( 3)The Belgian State
( Case C-273/88 ),
between
André Decheneux
and
( 1)Beurrerie du pays de Franchimont, a cooperative society,
( 2)Office national du lait et ses dérivés,
( 3)The Belgian State
( Case C-274/88 ),
between
Walter Jacquemain
and
( 1)Beurrerie du pays de Franchimont, a cooperative society,
( 2)Office national du lait et ses dérivés,
( 3)The Belgian State
( Case C-275/88 ),
between
Henri Schoonbroodt
and
( 1)Laiterie régionale de Herve, a cooperative society,
( 2)Office national du lait et ses dérivés,
( 3)The Belgian State
( Case C-276/88 ),
between
Roger Dugailliez
and
( 1)Laiterie coopérative du pays de Malmédy-Vielsalm, a cooperative society,
( 2)Office national du lait et ses dérivés,
( 3)The Belgian State
( Case C-277/88 ),
between
Roland Hampert
and
( 1)Laiterie coopérative du pays de Malmédy-Vielsalm, a cooperative society,
( 2)Office national du lait et ses dérivés,
( 3)The Belgian State
( Case C-278/88 ),
between
Paul Foguenne
and
( 1)Laiterie coopérative du pays de Malmédy-Vielsalm, a cooperative society,
( 2)Office national du lait et ses dérivés,
( 3)The Belgian State
( Case C-279/88 ),
between
( 1)Patrick Archambeau,
( 2)René Archambeau
and
( 1)Beurrerie du pays de Franchimont, a cooperative society,
( 2)Office national du lait et ses dérivés,
( 3)The Belgian State
( Case C-280/88 ),
between
Maurice Brance
and
( 1)Beurrerie du pays de Franchimont, a cooperative society,
( 2)Office national du lait et ses dérivés,
( 3)The Belgian State
( Case C-281/88 ),
between
Philippe Proumen
and
( 1)Laiterie coopérative eupenoise, a cooperative society,
( 2)Office national du lait et ses dérivés,
( 3)The Belgian State
( Case C-282/88 ),
between
( 1)Albert Delhez,
( 2)Jean-Marie Delhez
and
( 1)Laiterie coopérative eupenoise, a cooperative society,
( 2)Office national du lait et ses dérivés,
( 3)The Belgian State
( Case C-283/88 ),
between
Fernand Renotte
and
( 1)Laiterie coopérative eupenoise, a cooperative society,
( 2)Office national du lait et ses dérivés,
( 3)The Belgian State
( Case C-284/88 ),
and between
Marie Brixhe
and
( 1)Laiterie régionale de Herve, a cooperative society,
( 2)Office national du lait et ses dérivés,
( 3)The Belgian State
( Case C-285/88 ),
on the interpretation and validity of certain provisions of the Community regulations relating to the additional levy on milk,
THE COURT ( Third Chamber )
composed of : M . Zuleeg, President of Chamber, J . C . Moitinho de Almeida and F . Grévisse, Judges,
Advocate General : J . Mischo
Registrar : H . A . Ruehl, Principal Administrator
after considering the observations submitted on behalf of
the plaintiffs in the main proceedings, by Roger Bourgeois and Véronique Martin, of the Liège Bar,
the Belgian Government, by J . Willems, Director of the European Affairs Department at the Ministry of Foreign Affairs, Foreign Trade and Cooperation with Developing Countries, and by M . van der Mersch, acting as Agents,
the United Kingdom, by Susan J . Hay, of the Treasury Solicitor' s Department, acting as Agent,
the Italian Government, by Ivo Braguglia, avvocato dello Stato,
the Greek Government, by Mrs Ambariotou, acting as Agent,
the Council of the European Communities, by Arthur Brautigam, Principal Administrator in the Council' s Legal Department, acting as Agent,
the Commission of the European Communities, by Patrick Hetsch and Derek Grant Lawrence, members of the Commission' s Legal Department, acting as Agents,
having regard to the Report for the Hearing and further to the hearing on 23 November 1989,
after hearing the Opinion of the Advocate General delivered at the sitting on 13 December 1989,
gives the following
Judgment
Grounds
1 By judgments of 20 September 1988, which were received at the Court Registry on 29 September 1988, the tribunal de première instance ( Court of First Instance ), Verviers ( Belgium ), referred to the Court for a preliminary ruling pursuant to Article 177 of the EEC Treaty four identical questions in 19 joined cases concerning the interpretation and validity of certain provisions of the Community regulations relating to the additional levy on milk .
2 Those questions were raised in proceedings instituted by certain milk producers in the Liège and Belgian Haute Ardenne regions before the tribunal de première instance, Verviers, against the dairies to which they are affiliated, the Office national du lait et ses dérivés and the Belgian State, for the repayment of certain sums which the dairies had withheld from the producers under the additional levy system from the price of the milk delivered by them .
3 The plaintiffs in the main proceedings argued before the national court that the Community regulations concerning the additional levy on milk and, consequently, the national rules adopted for their implementation, on the basis of which the levies were collected, are unlawful inasmuch as they are contrary to the prohibition of discrimination between Community producers laid down in Article 40(3 ) of the EEC Treaty, they disregard the Community-wide character of the common agricultural policy and they take no account of structural and physical disparities between the different agricultural regions, contrary to what is required by Article 39(2)(a ) of the Treaty .
4 In order to be able to assess those arguments, the tribunal de première instance, Verviers, stayed the proceedings and referred to the Court the following questions :
"( a)By allowing the Member States to choose between two formulas, under one of which ( Formula A ) the levy is imposed on every individual producer who has exceeded his reference quantity and no offsetting is possible, whereas under the other ( Formula B ) the levy is payable by the first purchaser and hence offsetting may take place between the suppliers of that purchaser, which may therefore have the effect of releasing a producer from having to pay any levy even though he exceeded his quota, does Article 5c of Regulation ( EEC ) No 804/68 infringe Articles 39 and 40 of the Treaty of Rome by giving rise to discrimination between Community producers?
( b)Does Article 1(1 ) of Regulation ( EEC ) No 857/84, in the version in force between 2 April 1984 and 31 March 1987, infringe that same principle of non-discrimination in so far as it fixes the levy at 75% or 100% of the target price for milk depending on whether the Member States chose Formula A or Formula B?
( c ) MustArticle 3(d ) and Articles 38, 39 and 40 of the Treaty of Rome and Regulation ( EEC ) No 13/64 be interpreted as prohibiting any renationalization of agricultural policy, particularly in the milk sector, and, if so, must the following be regarded as renationalization measures contrary to those provisions and/or as measures which infringe the principle of non-discrimination between producers :
( 1)Regulation No 1305/85 inasmuch as it authorizes Italy to postpone application of certain provisions for the first three years of application of the milk quotas;
( 2)Article 10 of Regulation ( EEC ) No 857/84 inasmuch as it authorizes Greece to consider all its purchasers taken as a whole as one purchaser;
( 3)Regulation No 590/85 inasmuch as it authorizes France to derogate from the general rules by regarding a group of purchasers as a single purchaser;
( 4)the new fourth paragraph of Article 7 of Regulation ( EEC ) No 857/84, as amended by Regulation ( EEC ) No 590/85, inasmuch as it enables an amendment of the Community rules to be made in favour of the Federal Republic of Germany;
( 5)Regulations Nos 1335/86 and 1343/86 inasmuch as they grant certain special administrative arrangements to Spanish producers?
( d ) Is it permissible to interpret Article 1(2 ) of Regulation ( EEC ) No 857/84, which defines 'region' within the meaning of Article 5c(1 ) of Regulation ( EEC ) No 804/68 as all or part of the territory of a Member State having geographical unity and in which the natural conditions, the structures of production and the average yields of herds are comparable, as meaning that a Member State may regard itself as being a single region when it does not have geographical unity and its natural conditions, structures of production and average herd yields are not comparable, and its territory includes less-favoured farming areas?
On that interpretation, is Article 1(2 ) contrary to the Treaty of Rome, in particular Article 39(2 ) thereof, and to Council Directive 75/268/EEC on mountain and hill farming and farming in certain less-favoured areas and Council Directive 75/269/EEC concerning the Community list of less-favoured farming areas within the meaning of Directive 75/268 ( Belgium )?"
5 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the relevant provisions of Community law and the Belgian implementing rules, the course of the procedure and the observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court .
First and second questions
6 In its first and second questions, which should be considered together, the national court asks in substance whether the second subparagraph of Article 5c(1 ) of Regulation ( EEC ) No 804/68 of the Council of 27 June 1968 on the common organization of the market in milk and milk products, as amended by Council Regulation ( EEC ) No 856/84 of 31 March 1984 ( Official Journal 1984, L 90, p . 10 ) and Article 1(1 ) of Council Regulation ( EEC ) No 857/84 of 31 March 1984 adopting general rules for the application of the levy referred to in Article 5c of Regulation ( EEC ) No 804/68 in the milk and milk products sector ( Official Journal 1984, L 90, p . 13 ) are valid in so far as they authorize the Member States, for the purposes of the implementation of the system imposing an additional levy on milk, to choose between two formulas, one of which ( Formula A ) provides for the collection of the levy on milk deliveries in excess of the producers' reference quantities at the rate of 75% of the target price for milk, whilst the other ( Formula B ) provides for the collection of the levy on milk deliveries in excess of the purchasers' reference quantities at the rate of 100% of the target price for milk .
7 According to the second subparagraph of Article 5c(1 ) of Regulation No 804/68, as amended by Regulation No 856/84, "the levy system shall be implemented in each region of the territory of the Member States in accordance with one of the following formulas :
Formula A
A levy shall be payable by every milk producer on the quantities of milk and/or milk equivalent which he has delivered to a purchaser and which for the 12 months concerned exceed a reference quantity to be determined .
Formula B
A levy shall be payable by every purchaser of milk or other milk products on the quantities of milk or milk equivalent which have been delivered to him by a producer and which, during the 12 months concerned, exceed a reference quantity to be determined .
The purchaser liable to the levy shall pass on the burden in the price paid to those producers who have increased their deliveries, in proportion to their contribution to the purchaser' s reference quantity being exceeded ".
8 As the Court stated in its judgment of 28 April 1988 in Case 61/87 Thevenot (( 1988 )) ECR 2375, paragraphs 11 and 12, those rules provide in essence that, in the context of Formula A, the levy is payable by the milk producer on the quantities of milk or milk equivalent which he has delivered to a purchaser and which for the 12 months concerned exceed a reference quantity attributed to him . On the other hand, in the context of Formula B, producers may take advantage within the 12 months concerned of individual reference quantities not used by other producers affiliated to the same dairy subject to those quantities being transferred to the national reserve of the Member State concerned in the cases provided for under the rules . Consequently, in the context of Formula B, the levy is not due when the increase in the deliveries made by an affiliated producer to a dairy is compensated for by a corresponding decrease in the deliveries of other producers affiliated to the same dairy, so that the total quantity purchased by the dairy remains within the limits of its reference quantity .
9 Article 1(1 ) of Regulation No 857/84, in the version in force from 2 April 1984 to 31 March 1987, provides that the levy referred to in Article 5c of Regulation No 804/68 is fixed at 75% of the target price for milk, where Formula A is applied, and at 100% of the target price for milk, where Formula B is applied .
10 The plaintiffs in the main proceedings consider that the aforesaid rules give rise to discrimination between producers subject to the Formula A system and those subject to the Formula B system . Although, under Formula A, producers are liable to pay the levy on any production in excess of their reference quantity, under Formula B they suffer the consequences of an increase in their deliveries only on the basis of the overall situation of the dairy to which they are affiliated . According to the plaintiffs, that advantage which producers gain from the application of Formula B is not sufficiently offset by the difference in the rate of levy which is fixed at 100% under Formula B and at 75% under Formula A .
11 In that regard it must be stated, in the first place, that a choice between a formula providing for the levy to be charged to the producers, in the event of their reference quantity being exceeded ( Formula A ), and a formula providing for the levy to be charged to the purchasers, in the event of their reference quantity being exceeded ( Formula B ), is justified in principle by the need to ensure that the system is fully effective throughout the Community, in view of the diversity of milk production structures and in milk-collecting in the different regions of the Community .
12 However, it is necessary to consider whether the rules in question give rise to discrimination between Community producers, which is prohibited by Article 40(3 ) of the Treaty, in so far as they have the effect of imposing, in general, a higher financial burden on producers subject to the Formula A system than on producers subject to the Formula B system . Such an effect may be produced because the advantage which producers under Formula B derive from the fact that they - unlike producers under Formula A - benefit from reference quantities not used by other producers affiliated to the same dairy is not entirely neutralized by the difference in the rate of levy, fixed at 75% of the target price for milk under Formula A and at 100% of that price under Formula B .
13 As the Court has consistently held, the prohibition of discrimination laid down in Article 40(3 ) of the Treaty is merely a specific enunciation of the general principle of equality which is one of the fundamental principles of Community law . That principle precludes comparable situations from being treated in a different manner unless the difference in treatment is objectively justified ( see the judgments of 25 November 1986 in Joined Cases 201 and 202/85 Klensch (( 1986 )) ECR 3477, paragraph 9, and of 17 May 1988 in Case 84/87 Erpelding (( 1988 )) ECR 2647, paragraph 29 ).
14 However, with regard to judicial review of compliance with the conditions for implementing that prohibition, it must be stated that, in matters concerning the common agricultural policy, the Community legislature has a broad discretion which corresponds to the political responsibilities imposed upon it by Articles 40 and 43 of the Treaty ( see the judgment of 11 July 1989 in Case 265/87 Schraeder (( 1989 )) ECR 2237, paragraph 22 ). More specifically, where the Community legislature is obliged, in connection with the adoption of rules, to assess their future effects, which cannot be accurately foreseen, its assessment is open to criticism only if it appears manifestly incorrect in the light of the information available to it at the time of the adoption of the rules in question .
15 In this case, it is apparent from the preamble to Regulation No 857/84 that the Council was aware of the fact that "when the levy is charged to the purchaser, its application does not necessarily cover all the quantities of milk delivered by each producer and exceeding a quantity corresponding to that adopted in order to establish the purchaser' s reference quantity" and that "in order to obtain equivalence of results, a higher levy should be fixed when it is payable by the purchaser ". The fixing of the rates of levy applicable under Formula A and Formula B was therefore based on an estimate by the Council of the extent to which, in the event of the application of Formula B, producers would in fact benefit from reference quantities not used by other producers affiliated to the same dairy . It is undisputed that since the new system had not been tried and tested, the extent of such offsetting at the level of the dairies was not foreseeable with certainty at the time of its implementation .
16 In those circumstances, it was reasonable for the Council to take the view that to fix the levy under Formula B at a rate 25 percentage points higher than that applicable under Formula A would neutralize the advantage which producers subject to Formula B derive from the possibility of offsetting at the level of the dairies and would thus ensure equivalence in the actual levels of the levy under the two formulas .
17 That finding is all the more compelling inasmuch as the rules on the rates of levy cannot be assessed without taking into account Article 4a of Regulation No 857/84 . That provision, which was introduced with retroactive effect for the first period of 12 months by an amending regulation, Council Regulation ( EEC ) No 590/85 of 26 February 1985 ( Official Journal 1985, L 68, p . 1 ), and subsequently maintained for the entire period in which the system was in force, authorizes the Member States under both Formula A and Formula B, to allocate the non-utilized reference quantities of producers or purchasers to producers or purchasers in the same region and, if necessary, in other regions . Article 4a thus allows for offsetting between producers at regional level and even as between regions, which enables them, under Formula A, to benefit from the non-utilized reference quantities of other producers . It therefore has the effect of moderating, in the same way as the difference in rates of levy, the advantages derived by producers from the possibility of offsetting at the level of the dairies, where Formula B is applied .
18 Accordingly, the Community legislature in the exercise of its broad discretion in the matter cannot be held to have infringed the prohibition of discrimination between Community producers .
19 For those reasons, the answer to the first and second questions must be that consideration of those questions has disclosed no factor of such a kind as to affect the validity of either the second subparagraph of Article 5c(1 ) of Regulation No 804/68 of the Council of 27 June 1968, as amended by Council Regulation No 856/84 of 31 March 1984, or Article 1(1 ) of Council Regulation No 857/84 of 31 March 1984 .
Third question
20 In its third question, the national court asks in substance whether various Community regulations and provisions concerning the additional levy on milk are valid in so far as they lay down specific rules applicable solely to producers established in a given Member State .
21 In order to answer that question effectively, it should be noted first of all that it became apparent during the proceedings that, contrary to what the national court seems to assume, only two of the rules referred to in the question provide for a derogation whose application is limited specifically to producers established in a given Member State .
22 The final subparagraph of Article 3(3 ) of Regulation No 857/84, which was added by an amending regulation, Council Regulation ( EEC ) No 1305/85 of 23 May 1985 ( Official Journal 1985, L 137, p . 12 ), authorizes Italy, for the first three periods of 12 months, to postpone application of the first subparagraph of Article 3(3 ), under which producers whose milk production during the reference year adopted has been affected by exceptional events occurring before or during that year are to obtain, on request, reference to another calendar reference year within the 1981-83 period .
23 The final subparagraph of Article 10 of Regulation No 857/84 provides in substance that, where Formula B is applied in Greece, all purchasers taken as a whole are to be regarded as one purchaser for the purposes of passing on to producers the levy charged to the purchaser and any adjustments in the individual quantities of those producers .
24 However, all the other rules referred in the third question are generally applicable in all the Member States . The last subparagraph of Article 12(e ) of Regulation No 857/84, as amended by Regulation No 590/85, provides, without distinguishing in any way between Member States, that on certain conditions a group of purchasers in the same geographical area is to be regarded as a single purchaser . Article 7(4 ) of Regulation No 857/84, as amended by Regulation No 590/85, authorizes all the Member States to provide, in the case of rural leases due to expire where there is no possibility of an extension, that the departing lessee is to retain all or part of the reference quantity corresponding to the holding, if he intends to continue milk production . Finally, neither Council Regulation ( EEC ) No 1335/86 of 6 May 1986 amending Regulation ( EEC ) No 804/68 on the common organization of the market in milk and milk products ( Official Journal 1986, L 119, p . 19 ), nor Council Regulation ( EEC ) No 1343/86 of 6 May 1986 amending Regulation ( EEC ) No 857/84 adopting general rules for the application of the levy referred to in Article 5c of Regulation ( EEC ) No 804/68 in the milk and milk products sector ( Official Journal 1986, L 119, p . 34 ), contains any rule of such a kind as to confer an advantage solely on producers established in a given Member State .
25 In those circumstances, it is sufficient to restrict the review of validity sought by the national court solely to the final subparagraph of Article 3(3 ) and the final subparagraph of Article 10 of Regulation No 857/84 .
26 The plaintiffs in the main proceedings claim that the two aforesaid provisions contravene the principle of non-discrimination by favouring, without any objective justification, producers from some Member States to the detriment of those from other Member States, thereby jeopardizing the establishment of a common agricultural policy .
27 In that regard, it should be borne in mind, as stated earlier, that according to the consistent case-law of the Court, the prohibition of discrimination does not preclude comparable situations from being treated differently provided the difference in treatment is objectively justified . The rules in question satisfy that condition .
28 As regards, in the first place, the final subparagraph of Article 3(3 ) of Regulation No 857/84, as amended, the preamble to the amending regulation, No 1305/85, states that in Italy there are economic structures which are more than usually fragmented into small production units, that that situation is the source of considerable difficulties for the implementation of the system of adjusting reference quantities which is provided for in Article 3(3 ) of Regulation No 857/84, and that Italy should therefore be permitted to postpone temporarily the application of certain aspects of that system . The Italian Government has also pointed out in that regard, at the hearing, that the number of natural calamities occurring in Italy and resulting in damage to production was particularly high, which would have given rise to serious problems of supervision if a large number of the producers concerned had asked for another reference year to be taken into account .
29 As regards the final subparagraph of Article 10 of Regulation No 857/84, on the other hand, it is apparent from the preamble thereto that in Greece total milk production represents less than 1% of Community production and that the total number of purchasers in that country is very high so that, with a view to making it easier to apply the arrangements for the additional levy in that Member State, all purchasers should be regarded as a single purchaser . The Greek Government further stated at the hearing that Greece is characterized by the existence of small mixed agricultural holdings, which are generally family holdings, widely dispersed geographically and lagging seriously behind structurally .
30 It is clear from the foregoing that the economic structures of both Italy and Greece show certain particularities, by comparison with the other Member States, especially as regards the production and marketing of milk . Since the rules complained of meet the need to take into consideration the specific situation of those Member States, the difference of treatment between producers established in Italy or in Greece and producers established in the other Member States, stemming from the application of those rules, is objectively justified and cannot therefore be described as discriminatory, as this has been understood by the Court . Accordingly, the argument that those rules adversely effect the common character of the agricultural policy by giving rise to unlawful discrimination between Community producers must be rejected .
31 For those reasons, the answer to the third question must be that consideration of that question has disclosed no factor of such a kind as to affect the validity of either the final subparagraph of Article 3(3 ) of Council Regulation No 857/84 of 31 March 1984, as amended by Council Regulation No 1305/85 of 23 May 1985, or the final subparagraph of Article 10 of Regulation No 857/84 .
Fourth question
32 In the first limb of the fourth question, the national court seeks in substance to ascertain whether Article 1(2 ) of Council Regulation No 857/84 of 31 March 1984 must be interpreted as meaning that a Member State may treat its entire territory as a single region, within the meaning of Article 5c(1 ) of Regulation No 804/68, even if the territory is not a geographical unit in which the natural conditions, structures of production and average herd yields are comparable .
33 The first subparagraph of Article 1(2 ) of Regulation No 857/84 provides as follows :
"' Region' within the meaning of Article 5c(1 ) of Regulation ( EEC ) No 804/68 is defined as meaning all or part of the territory of a Member State having geographical unity and in which the natural conditions, the structures of production and the average yields of the herds are comparable ."
34 It is apparent from the aforesaid provision that, in deciding whether to treat the whole of their territory as a single region, or to subdivide it into several regions, the Member States are obliged to take into consideration both the geographical structure of their territory and the natural conditions, structures of production and average herd yields in the different parts of that territory .
35 However, it should be pointed out that in appraising the criteria relating to a complex economic situation, the Member States enjoy a broad power of assessment whose limits may be held to have been exceeded only where their assessment is vitiated by a manifest error . Accordingly, even if geographical and economic conditions in the different parts of the national territory are not identical, the Member States may regard the whole of their territory as a single region, unless such a decision is manifestly unsuited to the structures of the Member State in question .
36 The answer to the first limb of the fourth question must therefore be that Article 1(2 ) of Council Regulation No 857/84 of 31 March 1984 must be interpreted as meaning that a Member State may treat the whole of its territory as a single region within the meaning of Article 5c(1 ) of Regulation No 804/68, even if the territory is not a geographical unit in which the natural conditions, structures of production and average herd yields are comparable, unless such a decision is manifestly unsuited to the structures of the Member State in question .
37 The second limb of the fourth question relates to the validity of Article 1(2 ) of Council Regulation No 857/84 of 31 March 1984, in the light of the interpretation given in response to the first limb of that question . More specifically, the national court asks whether the provision in question is compatible with the requirements of Article 39(2 ) of the Treaty, Council Directive 75/268/EEC of 28 April 1975 on mountain and hill farming and farming in certain less-favoured areas ( Official Journal 1975, L 128, p . 1 ), and Council Directive 75/269/EEC of 28 April 1975 concerning the Community list of less-favoured farming areas within the meaning of Directive 75/268/EEC ( Belgium ) ( Official Journal 1975, L 128, p . 8 ).
38 As regards, in the first place, the alleged infringement of Article 39(2 ) of the Treaty, it is appropriate to recall that, according to that provision, "in working out the common agricultural policy and the special methods for its application, account shall be taken of ( a ) the particular nature of agricultural activity, which results ... from structural and natural disparities between the various agricultural regions ...".
39 That requirement is complied with in this case . It is clear from the answer given to the first limb of the fourth question that Article 1(2 ) of Regulation No 857/84 enables Member States, when implementing Article 5c(1 ) of Regulation No 804/68, to take account of structural and natural disparities between the different parts of their territory .
40 Furthermore, Article 1(2 ) of Regulation No 857/84 must be assessed in conjunction with the other provisions of the relevant legislation either authorizing or requiring structural and natural disparities between agricultural regions to be taken into account .
41 According to the second sentence of Article 2(2 ) of Regulation No 857/84, if Member States take the 1982 or 1983 calendar year as the reference year, they may vary the percentage weighting which they apply to the quantity of milk delivered or purchased during that reference year in order to calculate the reference quantity on the basis, in particular, "of the trend in deliveries in certain regions between 1981 and 1983 ".
42 In addition, Article 4(1 ) of Regulation No 857/84 authorizes Member States, in order to "complete the restructuring of milk production at national or regional level or at the level of the collecting areas", to grant compensation to producers on certain conditions if they undertake to discontinue milk production definitively, or to grant them additional reference quantities where they carry out a milk production development plan or engage in farming as their main occupation .
43 Finally, it should be noted that Article 4a of that regulation, as amended by Regulation No 590/85, authorizes Member States to allocate the non-utilized reference quantities of producers or purchasers "to producers or purchasers in the same region and, if necessary, in other regions", such allocation to be made "in order of priority within the same region, and then as between regions ".
44 The aforesaid rules, viewed as a whole, are therefore sufficiently flexible to enable the Member States, in implementing the system, to take due account of the structural and natural disparities between the different agricultural regions of their territory . The argument alleging a breach of Article 39(2 ) of the Treaty must therefore be rejected .
45 As regards, moreover, the alleged infringement of Directives 75/268 and 75/269, it is sufficient to state that the purpose of those directives differs from that of the Community rules concerning the additional levy on milk . The purpose of the said directives is to enable the Member States to establish a specific aid scheme for the benefit of agricultural holdings located in certain less-favoured areas, which are listed in accordance with Community criteria under a Community procedure . Accordingly, the fact that certain parts of a Member State' s territory are recognized as less-favoured farming areas within the meaning of those directives does not mean that they must constitute distinct regions for the purposes of Article 1(2 ) of Regulation No 857/84 .
46 For all those reasons, the answer to the second limb of the fourth question must be that consideration of that question has disclosed no factor of such a kind as to affect the validity of Article 1(2 ) of Council Regulation No 857/84 of 31 March 1984 .
Decision on costs
Costs
47 The costs incurred by the Belgian, Greek and Italian Governments and the United Kingdom and by the Council and the Commission, which have submitted observations to the Court, are not recoverable . Since these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court .
Operative part
On those grounds,
THE COURT ( Third Chamber ),
in answer to the questions submitted to it by the tribunal de première instance, Verviers, by judgments of 20 September 1988, hereby rules :
( 1)Consideration of the questions raised has disclosed no factor of such a kind as to affect the validity of either the second subparagraph of Article 5c(1 ) of Regulation ( EEC ) No 804/68 of the Council of 27 June 1968, as amended by Council Regulation ( EEC ) No 856/84 of 31 March 1984, or Article 1(1 ) of Council Regulation ( EEC ) No 857/84 of 31 March 1984 .
( 2)Consideration of the question raised has disclosed no factor of such a kind as to affect the validity of either the final subparagraph of Article 3(3 ) of Council Regulation ( EEC ) No 857/84 of 31 March 1984, as amended by Council Regulation ( EEC ) No 1305/85 of 23 May 1985, or the final subparagraph of Article 10 of Regulation ( EEC ) No 857/84 .
( 3)Article 1(2 ) of Council Regulation ( EEC ) No 857/84 of 31 March 1984 must be interpreted as meaning that a Member State may treat the whole of its territory as a single region within the meaning of Article 5c(1 ) of Regulation ( EEC ) No 804/68, even if the territory is not a geographical unit in which the natural conditions, structures of production and average herd yields are comparable, unless such a decision is manifestly unsuited to the structures of the Member State in question .
( 4)Consideration of the question raised has disclosed no factor of such a kind as to affect the validity of Article 1(2 ) of Council Regulation ( EEC ) No 857/84 of 31 March 1984 .
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