C-84/76

In Case 84/76

REFERENCE to the Court under Article 177 of the EEC Treaty by the Tribunal Administratif of Rennes, for a preliminary ruling in the proceedings pending before that court between

GOULVEN COLLIC, farmer,

and

FONDS D'ORIENTATION ET DE RÉGULARISATION DES MARCHÉS AGRICOLES (Fund for the Guidance and Stabilization of Agricultural Markets),

on the interpretation of Regulations (EEC) Nos 1975/69 of the Council of 6 October 1969 and 2195/69 of the Commission of 4 November 1969, on Community premiums for withholding milk and milk products from the market,

JUDGMENT

Facts

The judgment referring the matter to the In implementation of that provision the Court and the written observations Council adopted Regulation (EEC) No submitted under Article 20 of the 1975/69 of 6 October 1969 introducing a Protocol on the Statute of the Court of system of premiums for slaughtering Justice of the EEC may be summarized cows and for withholding milk and milk as follows: products from the market (OJ English Special Edition, Second Series, III, p. 38) having regard to the fact that the I — Facts and procedure situation in milk and milk products in the Community was one of large and The main action arises out of the increasing surpluses (first recital). decision of the competent French authority to recover from the plaintiff in According to the sixth recital to that the main action a part of the Community regulation, it is possible to attain the premium paid to him for withholding desired objective, which is to reduce the amount of milk offered for intervention, milk from the market on the ground that he had failed to comply with the by granting premiums to farmers who, requirements laid down. although not abandoning production, discontinue fully and finally the 1. The system of premiums for marketing of milk and milk products. withholding milk from the market The seventh recital states that the

amount of the premium for withholding Article 2 of Regulation (EEC) No 805/68 milk and milk products from the market of the Council of 27 June 1968 on the should be fixed at a level at which it can common organization of the market in be regarded as compensation for the loss beef and veal provides that Community of income from the marketing of the measures to improve stock breeding may products. be adopted in accordance with the procedure laid down in Article 43 (2) of Article 5 of the regulation provides that the EEC Treaty. farmers having more than ten cows may,

on application, receive a premium for reimbursed if the condition concerning witholding milk and milk products from the number of adult bovine units is not the market under the conditions laid satisfied. down in the regulation. Under Article 6 the granting of the premium is to be Article 1 (2) of that regulation defines an subject, in particular, to a written 'adult bovine unit' in the following terms: undertaking from the recipient to discontinue fully and finally the sale of 'An animal of the domestic bovine milk and milk products. Under Article 7 species aged at least 12 months. Cows the amount of the premium is to be 200 not yet having calved and intended for u.a. per dairy cow on the farm at the date milk production shall be excluded.' of making the application. Under Article 8 the amount of the premium is to be Under Article 2 (1) the following rates of paid in five instalments and an amount conversion are to be applied in of 100 u.a. per dairy cow is to be paid in calculating the number of adult bovine the three months following submission units: of the written undertaking mentioned in (a) cattle of less than 4 months: 0 adult Article 6. bovine units; (b) cattle of more than 4 months but less For the purposes of the present case, the than 12 months: 0.4 adult bovine most important requirement is that units. contained in the second subparagraph .of Article 8 (2), which provides that: Under Article 15, the balance of the premium is to be paid annually in four The balance shall be paid annually in equal instalments and at the latest in the four equal instalments if the recipient 15th, 27th, 39th and 51st months has satisfied the competent authority that following the date of signature of the the number of adult bovine units he undertaking. holds is not less than the number of dairy cows held at the date of making Under Article 16 the application and that the undertaking mentioned in Article 6 has been 'If the beneficiary has not shown to the fulfilled.' satisfaction of the competent authority that he keeps the number of adult bovine The detailed rules for the implemen­ units [required] …, Member States shall tation of that regulation are to be laid take steps to recover the amount' (of 100 down in accordance with the so-called u.a. per dairy cow paid in the three Management Committee Procedure months following submission of the (Article 9). written undertaking).

of Agricultural Markets) (hereinafter inspections were carried out but which referred to as 'the FORMA') a premium were marketed at the age of 41/2 months, of FF 11 663.79 for withholding milk they would have to be counted in from the market. This sum was paid on proportion to the length of time which the basis of orders for payment dated 14 they had spent on the farm. Those calves May 1970, 25 August 1971 and 18 which were over the age of 4 months August 1972. were only on Mr Collie's farm for roughly two weeks. Therefore, according The inspections carried out on 5 June to the formula 1971 and 3 May 1972 by the Direc­ tion Départementale de l'Agriculture 150x0.5/12 x 0.4 = 2.5 , (departmental directorate of agriculture) his calves for slaughter only counted as for the Department of Finistère had 2.5 adult bovine units. revealed the presence on Mr Collic's farm of 14 adult bovine units and as a Mr Collie considers that such a method result the orders for payment dated 25 of counting his calves for slaughter is August 1971 and 18 August 1972 were contrary to the Community regulation. issued. 3. Procedure The third inspection, carried out on 13 September 1973, revealed the presence In a judgment given on 7 July 1976, on Mr Collic's farm of only 4.4 adult amended by a decision of 6 August 1976, bovine units. A further inspection made the Tribunal Administratif, Rennes, on 12 February 1974 showed him to asked the Court to give a preliminary have only 6.4 adult bovine units. ruling on three questions. On 29 April 1975 the FORMA issued an enforceable statement of account in order The judgment referring the matter to the to obtain reimbursement of the total Court was received on 25 August 1976. In accordance with Article 20 of the premium of FF 11 663.79. Protocol on the Statute of the Court of

question stipulates that: 'Cattle kept on a farm for a period of less than one year It appears that the aim of Article 2 of shall count in their category in Regulation No 2195/69 is to ensure that proportion to the length of time for the person receiving the premium uses which they are there'. the acreage available for the provision of fodder for the production of beef and This rule for calculation pro rata veal. For that reason paragraph (1) (a) of temporis is in accordance with the letter that article provides that calves for and spirit of Article 2 (1) of Regulation slaughter are excluded from the field of No 2195/69. The justification for the application of equivalents, in adult rates of conversion laid down by that bovine units, in the replacement of dairy regulation and for the distinction which cows.

Article 2 of Regulation No 2195/69 thus bovine units on his farm. As a result, assumes that the pro rata temporis rule therefore, in the 15th, 27th, 39th, and will be applied in the case of animals 51st months at the latest following the which are present on the farm before date on which the person receiving the they reach the ages of 4 and 12 months premium signed the undertaking to and are kept on it for a given period withhold milk and milk products from between the ages of 4 and 12 months. the market, the competent national Any other application of the rule would authority must be able to confirm the have the effect of distorting the meaning existence of a number of adult bovine of the regulations adopted. units which is at least equal to the number of dairy cows kept when the The Commission points out that the application for the premium was made. purpose of the system of premiums for withholding milk from the market is to The rule that cattle kept on the farm for rationalize the milk market and to turn a period of less than one year count in

JUDGMENT OF 1. 3. 1977 — CASE 84/76

they are marketed, as prescribed by the French Minister for Agriculture, rather On behalf of the farmer, Mr Olive than at the date of the inspection. pointed out that it appears difficult to reconcile the amount of the subsidy with To give consideration only to the age of the double purpose of providing the animals at the date on which the compensation for withholding milk from inspection is carried out would amount the market and aid towards the to not checking whether the obligation redeployment of stock which, the imposed on him by the second Commission maintains, is at the basis of subparagraph of Article 8 (2) of the Community regulation. Mr Collic, Regulation No 1975/69 is actually who had 14 dairy cows, received in all a carried out during the full period of five subsidy of FF 11 668, which might years referred to in the regulation. The perhaps have compensated for the loss of replies proposed for the first and second income caused by withholding milk from questions render the third question the market but could not at the same purposeless. time help him to recoup the capital The Commission emphasizes that since expenditure required for the redeploy­ ment of his stock. the premium is an aid towards restructuring of herds and not towards the marketing of the livestock it could The pro rata temporis rule is not not in fact be granted to a producer who contained in the Community regulation, only kept the necessary animals on his which merely provides for a rate of conversion. farm from time to time.

The pro rata temporis rule helps to In the applicant's view the so-called pro guarantee that the producer receiving the rata temporis rule is not in accordance

production of meat in place of milk, it seemed that the presence on his farm of The real question is how the inspections calves to be slaughtered after the age of 4 are to be carried out and how the rates of months represented a compliance with conversion fixed by the Commission his obligation. regulation of 4 November 1969 are to be applied. In order to justify the application of the pro rata temporis rule, the FORMA and The Community regulations provided the Commission claim that it is based on that for a period of five years the person a consideration of the use made of the in receipt of the premium had to have area of farmland available for the on his farm a certain minimum number provision of fodder. However, the of cattle. They provided a method of Community regulations in question do calculation for determining whether that not refer to this consideration either minimum number was in fact kept. directly or indirectly. The regulations did not state under what Mr Collic made a great effort at conditions the rates in question were to redeployment by rearing three groups of be applied. They did not stipulate the calves for marketing at the age of 41/2 extent to which cattle which were not months, and he is now informed that in present throughout the whole period of all those calves only count for 2.5 adult five years or throughout the whole of one bovine units. The rule applied by the year were to be taken into account. FORMA and approved by the However, since the second half of the Commission is very severe and does not premium for each dairy cow is payable in in fact correspond to the spirit of the four annual instalments after verification Community regulation. of the fact that the minimum number of

for which they are on the farm before various Member States is a result of the they reach that age. Since animals aged particular features of the system of between 4 and 12 months must be taken rearing and marketing in those countries. into account at the rate of 0.4 adult In France, for example, certain categories bovine units, logic requires that there of calves (for example, Lyons and St should be a check as to whether the Etienne calves) are not slaughtered at the undertaking given has been fulfilled and age of approximately 3 months as for that account should be taken of the veal but later, between the ages of three period during which the cattle have been and twelve months and these are also on the farm. On the other hand, to categories whose rearing must be exclude entirely cattle kept for one part encouraged. Where a farm reared calves or another of the period of one year and in rotation, that is, where they left the no longer on the farm at the date of the farm at different dates between the ages inspection carried out would amount to of 4 and 12 months, a calf slaughtered at penalizing farmers who market the meat, the age of, for example, 8 months, would, although such marketing is in fact the according to the applicant have to be object of the rules in question. counted at the same rate as a calf

slaughtered at 41/2 months. In the light As regards the second question, since the of the aim of the rules, which was to pro rata temporis rule is in accordance bring about a certain stability in the with the spirit of the regulations, the market and in the livestock situation but rates of conversion must be applied when having regard also to the special features the inspection is carried out — the only of production and marketing, such a time when such an application is result would have been unfortunate.

COLLIC v FORMA

regulation, it had to take account of the adds that, in the view of the age of the cattle at the date of the Commission, Article 2 of its regulations inspection, since that is the most simple lays down an invariable rule. As regards method. However, where the pro rata inspections and calculations national temporis rule is applied the question is administrations are in a better position to settled in a different way since, by adapt the Community rule to the special definition, and in its essence, that rule features of production and marketing in takes account of the age at which the their own States. cattle leave the farms and, in certain cases, enables the different production The Advocate-General delivered his patterns in the various countries to be opinion at the hearing on 16 February taken into consideration. Mr Delmoly 1977.

Law

1 By judgment of 7 July 1976, received at the Court on 25 August 1976, the Tribunal Administratif, Rennes, put to the Court three questions concerning the interpretation of Regulation (EEC) No 2195/69 of the Commission of 4 November 1969 establishing methods of giving effect to the system of premiums for withholding milk and milk products from the market (JO 1969, L 278, p. 6).

2 Those questions arose within the context of a dispute between a farmer and the competent national authority over the question whether the latter's decision to recover a part of the premium which it had paid to the farmer was lawful.

3 The second subparagraph of Article 8 (2) of Regulation (EEC) No 1975/69 of the Council of 6 October 1969 (OJ, English Special Edition, Second Series, III, p. 38), which introduces that system provides that the premium shall only be paid if, in addition to satisfying other conditions, the person receiving the premium has on his farm a number of adult bovine units not less than the number of dairy cows held at the date of making the application for the premium.

9 Article 2 of Regulation (EEC) No 805/68 of the Council of 27 June 1968 on the common organization of the market in beef and veal (OJ, English Special Edition, 1968, I, p. 187) provides that Community measures to improve stock breeding may be adopted in accordance with the procedure laid down in Article 43 (2) of the EEC Treaty.

10 In order to reduce the amount of milk offered for intervention and, at the same time, to increase the quantity of beef and veal produced in the Community, Regulation No 1975/69 adopted in 1969 provided for a premium for withholding milk and milk products from the market, to be granted to those farmers who, subject to certain conditions, discontinue fully and finally the sale of those products.

11 The purpose of that premium was to encourage a trend apparent among certain farmers to substitute the production of beef and veal for the marketing of milk and milk products.

12 For that reason, as stated above, the second subparagraph of Article 8 (2) of that regulation provides that the grant of the premium shall involve an

COLLIC v FORMA

obligation to keep on the farm a number of adult bovine units not less than the number of dairy cows held at the date of making the application for the premium.

17 Under the terms of Article 16 of the regulation in question, if the person in receipt of the subsidy has not shown to the satisfaction of the competent authority that he keeps the requisite number of adult bovine units, the Member States shall take steps to recover the first half of the subsidy.

18 The effect of the provision in Article 2 that calves of less than 4 months shall be counted as '0 adult bovine units' is to prevent farmers who rear calves for slaughter which are sold at about the age of 4 months from receiving the premium.

JUDGMENT OF 1. 3. 1977 — CASE 84/76

19 A consideration of the objectives of the provisions in question shows that the important factor in the application of the regulation is not the occasional presence on the farm of the required number of adult bovine units but the presence of that number throughout the whole of the reference year.

20 It is for the competent authority to ensure that, on average, the number of adult bovine units required by Regulation No 1975/69 of the Council has been kept throughout the whole of the reference period.

21 The use of the expression 'to the satisfaction of the competent authority' in Article 16 of Regulation No 2195/69 allows the authority to exercise its discretion as regards the evidence which must be provided by the person to whom the premium is paid.

COLLIC v FORMA

27 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 Tribunal Administratif, Rennes, the decision on costs is a matter for that court.

On those grounds,

THE COURT,

in answer to the question referred to it by the Tribunal Administratif, Rennes, by judgment of 7 July 1976, hereby rules.

1. Article 2 of Regulation (EEC) No 2195/69 requires the competent authority, in calculating the number of adult bovine units on a farm, to take such animals into account in proportion to the time for which they have been there;

OPINION OF MR ADVOCATE-GENERAL CAPOTORTI DELIVERED ON 16 FEBRUARY 1977 <apnote>1</apnote>

Mr President, an aspect of the system of premiums for Members of the Court, withholding milk and milk products from the market, which was introduced 1. The questions of interpretation by Regulation (EEC) No 1975/69 of the which the Court is called upon to resolve Council of 6 October 1969, the detailed in Case 84/76 (Collic) are concerned with rules for implementation of which are

1 — Translated from the Italian.