C-36/77
ECLI:EU:C:1977:175
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JUDGMENT. OF THE COURT <apnote>1</apnote> OF 8 NOVEMBER 1977
Azienda di Stato per gli Interventi sul Mercato Agricolo
(AIMA) v Rocco Michele Greco
(preliminary ruling requested by the Corte Suprema di Cassazione of Italy)
Case 36/77
Agriculture — Common organization of the market — Oils and fats — Olive oil —
Producers — Concept — Olive oil subsidy — Recipients (Regulation No 136/66, Article 10; Regulation No 754/67)
Since, in Regulations Nos 136/66 and fats and of Regulation No 754/67 on
754/67, the Council drew a . clear olive oil subsidies, must be interpreted as
distinction between the cultivation of to the producers of the referring olive trees the of and production olive . processed namely olive oil, and product, oil, the expression 'producers of olive oil', the subsidy for the 1967/68 oil olive oil
within the meaning of Article 10 of marketing year must therefore be granted Regulation No 136/66 on the common to those producers.
organization of the market in oils and
In Case 36/77
Reference to the Court under Article 177 of the EEC Treaty by the Combined Civil Chambers of the Corte Suprema di Cassazione of Italy for a
between preliminary ruling in the appeal pending before that court
AZIENDA DI STATO PER GLI INTERVENTI SUL MERCATO AGRICOLO (AIMA)
and
ROCCO MICHELE GRECO , Melendugno (Lecce)
on the interpretation of Regulation No 136/66/EEC of the Council of 22
September 1966 on the establishment of a common organization of the
market in oils and fats and of Regulation No 754/67/EEC of the Council of
26 October 1967 on olive oil subsidies,
1 — Language of the Case: Italian.
JUDGMENT OF 8. 11. 1977 - CASE 36/77
THE COURT
composed of: H. Kutscher, President, M. Sørensen and G. Bosco, Presidents of
Chambers, A. M. Donner, J. Mertens de Wilmars, P. Pescatore, Lord
Mackenzie Stuart, A. O'Keeffe and A. Touffait, Judges,
Advocate-General: G. Reischl Registrar: A. Van Houtte
gives the following
JUDGMENT
Facts and issues
The facts, the procedure and the Tribunale di Lecce, which by its observations submitted under Article 20 judgment of 30 June 1970 to 21 January of the Protocol on the Statute of the 1971 ordered the AIMA to pay Mr Greco Court of Justice of the EEC may be the sum of Lit 45 325 000 together with
summarized as follows: interest. The Corte d'Apello, Lecce, upheld this order by its judgment of 27 June to 27 July 1972 in which it I — Facts and procedure declared that Mr Greco could be regarded
as a producer because he had taken part
During the 1967/68 oil marketing year in the production cycle, albeit only when the olives were already ripe, Mr during the second phase. Subsequently Greco, who runs an oil producing the Corte Suprema di Cassazione
undertaking at Melendugno (Lecce), in (Combined Civil Chambers) by Order order to obtain the produce of the said No 34374 made on 18 December 1975
marketing year, took a lease of (Giurisprudenza Costituzionale 1976, II. olive-groves on estates situate in the p. 439), having found that certain
Manduria district comprising about 130 provisions of Decree Law No 1051 of 21 hectares with 7 000 trees. After he had November 1967, which in the meantime
harvested the olives and produced the had been consolidated with its olive oil he applied to the Azienda di amendments as Law No 10 of 18 Stato per gli Interventi sul Mercato January 1968 ('Provisions for the grant of Agricolo (the Italian Agency for the price subsidy for olive oil produced
Intervention on the Agricultural Market, in the 1967/68 marketing year'), are a
hereinafter referred to as 'the AIMA') for 'derogation from the Community rules in the subsidy provided for olive oil. That this field', referred the question whether
application was refused on the ground the said provisions were constitutional
that the applicant was not the producer to the Corte Costituzionale (the of the olives. Constitutional Court), which in its judgment No 203 delivered on (15 July) Mr Greco then commenced legal 18 July 1976 (Giurisprudenza proceedings against the AIMA in the Costituzionale 1976, I. p. 1292) declared
AIMA v GRECO
that those provisions were unconsti Advocate-General the Court decided to
tutional in so far as they replaced the open the oral procedure without any directly applicable corresponding preparatory inquiry. provisions of Community Regulations Nos 136/66/EEC and 754/67/EEC. II —
Summary of the written
The Corte Suprema di Cassazione, which observations submitted
was thus required to reconsider the under Article 20 of the
disputed question whether Mr Greco was Protocol on the Statute of
a producer, by its Order of 9 December the Court of Justice of the
1976 then stayed proceedings again and EEC asked the Court of Justice to interpret 'producers Observations of Mr Greco oil'
the expression of olive
contained in Article 10 (1) and (2) of
Regulation No 136/66/EEC of the Mr Greco first of all summarizes the
Council of 22 September 1966 in applicable Community regulations and
conjunction with Regulation No points out that the price subsidy for olive 754/67/EEC of the Council of 26 oil was introduced pursuant to Article 10
October 1967, the preamble whereof also (1) of Regulation No 136/66/EEC, which refers to 'producers of olive oil'
and in states that 'where the production target
particular to rule. price is higher than the market target
(a) whether the expression producers of price ruling at the beginning of the
is for oil'
olive equivalent the marketing year, a subsidy equal to the purposes of the provisions laid down difference between these two prices shall in the said Community regulations to be granted to producers of olive oil
'olive the Community from producers'
that of and extracted within
(b) whether a person who, having olives harvested within the Community'. acquired olives on the tree which are
already ripe, has them harvested and He then refers to Article 5 of the same
extracts the oil from them, is also a regulation which reads 'The production
producer of olive oil. target price shall be fixed at a level which is fair to producers, account being taken The Corte Suprema di Cassazione went of the need to keep Community on tosay that 'In the proceedings before production at the required level'. the Court of Justice of the EEC it will be possible to consider the question, which For the 1967/68 marketing year the
has remained undecided, of the invalidity production target price and the market
im of the Community provisions target price were fixed, pursuant to
plementing the beforementioned Article 4 of the aforementioned
regulations on which the AIMA has regulation, by Regulation No relied in support of its own 778/67/EEC of the Council of 27
interpretation, in so far as it shall appear October 1967. Furthermore, Regulation to be relevant having regard to the No 754/67/EEC of the Council of 26 specific arguments submitted by the October 1967 stated (in Article 1) that
before subsidy referred to in Article 10 of court.'
parties the the
Regulation No 136/66/EEC 'shall be The order of the Corte Suprema di granted for olive oil', (in Article 2) that
Cassazione making the reference was 'the subsidy shall be granted on
received at the Court Registry on 17 application by the persons concerned in March 1977. the olive oil producing areas of the
Community', (in Article 3) that 'While On hearing the report of the awaiting the establishment of a
Judge-Rapporteur and the views of the Community control system each
JUDGMENT OF 8. 11. 1977 - CASE 36/77
producer Member State shall introduce interference who is to receive the
an administrative control system to subsidy, whether the olive oil
ensure that the product referred to in manufacturers or the olive producers, had Article 1 for been delegated to the Member States. subsidy'
qualifies the and
that This control system must, in particular, enable the quantity of olive The rulesin question certainly do not oil in respect of which an application for have themeaning which the AIMA gives a subsidy is made to be correlated to the them. The construction which the latter
quantity of olives harvested in the puts forward is not only inconsistent
Community and used to produce it'. This with the actual wording of the provision
latter provision was inserted for the but also with all the other provisions of
express purpose excluding from the of the regulations adopted subsequently by subsidy oil produced from olives grown the Council and also by the Commission
outside the Community. and especially with the rule laid down in Article 10 (3) of Regulation No The provisions set out in Regulation No 136/66/EEC, which entrusts to the
754/67/EEC replaced those of Regulation Commission and not to the Member No 168/66/EEC of the Council of 27 States the task of defining the detailed October 1966 which also stated (in rules for the application of that article
Article 1 thereof) that the subsidy in accordance with the procedure laid referred to in Article 10 of Regulation down in Article 38 of the said regulation, No 136/66/EEC was to be granted in the thatis to say with the assistance of a case of olive oil. Management Committee consisting of
representatives of all the Member States All the successive Council regulations and not of one Member State alone.
refer exclusively and invariably, on the
one hand, to olive oil, which alone Mr Greco draws particular attention to
qualifies for the subsidy, and, on the the provisions of Regulation No 754/67, other hand, to producers of olive oil, who upon which AIMA relies, in order to
alone receive the subsidy. refute the merits of the argument of the
opposing party and submits that a strict
All these provisions make it clear that construction of the preamble to and
the Member States have been entrusted provisions of that regulation clearly only with the task of supervision and excludes any delegation of the legislative have not been given the power to lay powers of the Council to the Member down implementing rules. The Council States and especially any delegation has reserved part of that power to itself including the power to distort completely and has conferred another part thereof the letter and spirit of Article 10 of the
upon the Commission. basic Regulation No 136/66/EEC.
The AIMA argued before the Corte This conclusion is also said to be Costituzionale and also during the confirmed by the following findings: second phase of the proceedings before the Combined Civil Chambers of the 1. If Regulation No 754/67 had, by the Corte Suprema di Cassazione that expedient of an unlawful delegation of
appearances are deceptive and that legislative powers, authorized the
Article 10 of Regulation No 136/66/EEC Member States to amend or even merely was in fact to be given an interpretation to supplement the provisions of Article
contrary to the literal meaning of its text. 10 of the basic Regulation No Further, it maintained that under the 136/66/EEC, it would, according to Mr provisions of Regulation No 754/67/EEC Greco, undoubtedly have been illegal, not only supervisory powers but also the because it is clearly a straightforward
absolute power to decide without any implementing regulation. Having regard,
AIMA v GRECO
on the one hand, to the express reference Commission indicate quite clearly that it to Article 10 (2) of Regulation No is the olive growers and not the
136/66/EEC and, on the other hand, to producers who are entitled to the price
the wording of its preamble and its subsidy and that those provisions are to
provisions it would be entirely wrong to be regarded as an 'authentic interpretation' give that regulation a meaning which of the preceding rules; he would make it plainly illegal. makes the following observations:
2. To assert (as the AIMA has done) (a) In the first place, the dispute should that the problem of ascertaining to be decided with reference to the whom the subsidy should in practice be in force it Community rules when arose paid only arises as a matter of secondary and not on the basis of the later rules. importance when an application for the Moreover, the Corte Suprema di subsidy is made is tantamount to cassazione was not wrong to only that ask
disregarding both the meaning of Article Article 10 (1) and (2) of Regulation No 10 of Regulation No 136/66/EEC and of 136/66/EEC, read together with the provisions of Regulation No Regulation No 754/67/EEC, be 754/67/EEC. interpreted.
3. The AIMA cites Article 3 of Mr Greco does not object to the Court of Regulation No 754/67 in support of its argument that byadopting that Justice interpreting the later rules as well but, in order to protect his interests in regulation the Council delegated the this dispute against all contingencies legislative powers which it had both as regards procedural matters and previously, in the basic regulation, on the substance of the case, he formally reserved to itself. That article merely requests the Court to draw a clear entrusts to the Member States, while they distinction between the interpretation of await the introduction of a Community the rules applicable to the facts of this control system, the task of undertaking case and that of the rules adopted the necessary to supervision ensure that subsequently. the product (that is to say the oil and not
the olives) in fact qualifies for the
subsidy. By the same token, a (b) In the second place, if the
comparison with Article 1 as well as the Community rules contained in the later recitals to that regulation makes it quite regulations, which are all (including clear that the aim of the said supervision those adopted by the Council) is to prevent the subsidy from being regulations implementing the basic granted for oil extracted from olives Regulation No 136/66/EEC, had the
grown outside the Community or olive scope attributed to them by the AIMA oil in respect of which the subsidy has (that is to say, if they were either
already been paid. amendments or authentic interpretations of the basic rules), they would have to be 4. As far as concerns the AIMA's regarded as illegal because they are
submissions on the economic objectives inconsistent with the unambiguous
of the price subsidy for olive oil, they no meaning of Article 10 of Regulation No longer have much relevance, because 136/66/EEC, which clearly emerges from such submissions do not and cannot its letter and spirit. In this connexion Mr
justify an interpretation which is Greco draws attention to the Court's inconsistent with the spirit and letter of case-law on implementing regulations of the provisions. the Council in its judgment of 10 March Mr Greco then deals with the AIMA's 1971 in Case 38/70 and on regulations of
argument that the most recent rules the Commission in its judgment of 30 adopted by the Council and the October 1975.
JUDGMENT OF 8. 11. 1977 - CASE 36/77
Mr Greco then refers to the passage in with the specific provisions of Article 10
the ordermaking the reference where the (2) of Regulation No 136/66/EEC.
Corte Suprema di Cassazione stated that in the proceedings before the Court of Mr Greco, after making a rigorous
Justice of the EEC it would also be analysis of the provisions referred to by possible to consider the question, which AIMA, asserts that none of them in fact remains undecided, of the invalidity of has the scope which the latter claims for
Community provisions implementing it. the beforementioned regulations on
which the AIMA has relied in support of Finally, as for the French Order of 10 its interpretation, in so far as it appears to August 1967 on the enforcement of the
be relevant having regard to the Community rules relating to subsidies
arguments put before the Court by the for producers of olive oil, to which the
parties. He infers from this that, AIMA referred during the proceedings
although, strictly speaking, the operative before the national court in order to
of the order its assertion that in France part said containsonly a substantiate
request for an interpretation of also the price subsidy is paid to
Regulations Nos 136/66/EEC and producers of olives and not to producers
754/67/EEC, the Combined Civil of olive oil, Mr Greco points out, on the
Chambers — in the unlikely event of the one hand, that that French order seems
AIMA's argument being considered — to have a very different scope and, on the also wished to bring the plea of illegality other hand, that the fact that there has
to the notice of the Court of Justice, been an infringement in another
even if only by way of a supposition and Member State similar to that which has as a very subsidiary point. occurred in Italy, or that in any case
there have been similar errors of
(c) In the third place, in order to be interpretation of the same Community able to speak of an authentic rules, is certainly not a sufficiently strong interpretation it is essential that the argument to justify either the
most recent rule clarifying the scope of misinterpretation or the infringement. the earliest rule and the earliest rule as
interpreted by the most recent rule Finally, Mr Greco suggests the following should derive from the same legislative answer to the questions referred by the source. In this case only a provision Corte Suprema di Cassazione: contained in later regulations adopted by (a) The rules applicable to the dispute the Council itself acting in the full between the AIMA and Mr Greco, sovereign power of its legislative namely Article 10 of Regulation No competence can be presumed to be an 136/66/EEC of the Council (read as a
authentic interpretation any provision of whole and in particular together with
contained in Regulation No 136/66/EEC, Articles 1 and 3 thereof) and
which the Council also adopted in Regulation No 830/67/EEC of the
pursuance of the full sovereign power of Commission, must be interpreted as
the legislative competence conferred meaning that the price subsidy for upon it by the Treaty. On the other olive oil is to be paid to producers of hand, the character of an authentic oil, in proportion to the quantity of interpretation could not possibly be olive oil obtained by pressing olives ascribed to a provision contained in a produced within the Community, Commission regulation. The same with the exception only of olive oil in applies to the implementing regulations respect of which a price subsidy has adopted by the Council, not pursuant to already been granted and of olive oil the full sovereign power of its legislative which has been extracted from olives
competence, but merely for the purpose produced outside the Community. of giving effect to them in accordance On the other hand, the price subsidy
AIMA v GRECO
cannot be paid to olive growers on observation has been made in this
the basis of abstract production and connexion and similarly no amendment, productivity figures which are used which those Member States would then not to calculate the subsidy but only have had to introduce, was decided upon
as a subordinate factor for the as provided for under the procedure laid purpose of verifying the entitlement down in Article 38 of Regulation No of the producer of olive oil to the 136/66/EEC. Thus the Commission itself
subsidy in respect of the entire has also made it quite clear that from the
quantity of olive oil which he very beginning it agreed with the
declares that he has produced. interpretation put forward by the
(b) All the provisions of the subsequent Government of the Italian Republic.
implementing regulations adopted by the. Council and the Commission, The Government of the Italian Republic without prejudice to more detailed makes special reference, in support of its particulars and more important argument, to the recitals of Regulation obligations, all of which are designed No 136/66/EEC and to the objectives of
to maintain a stricter control over the Article 10 as they appear to it to be set
amount of olive oil produced, upon out in the preamble thereto. Article 10 is which the producers'
entitlement to certainly not in principle designed to
the price subsidy is based, must be grant subsidies or premiums to certain
interpreted in the same way. persons who form part of the oil
production cycle to the exclusion of
Observations of the Government of the other persons who also form part thereof
Italian Republic but in another capacity. According to the objectives of that provision the
The Government of the Italian Republic 'producers oil'
expression of olive merely observes on the first question that a specifies objectively the branch of the
systematic interpretation of all the economy which it is intended to
Community provisions referred to in the subsidize and does not differentiate order making the reference as well as between the various persons who are
those relating to the same question commercially active in that sector.
adopted subsequently leads to the Viewed in this light the designation of
inescapable conclusion that it is the the person to whom the subsidy is in fact producer of olives who is entitled to to be paid is plainly of secondary claim the olive-oil subsidy. In accordance importance. The sole aim of the
with the objectives to be attained by Community legislature when the basic
supporting agricultural production, regulation was adopted was to ensure that
which are to be found in the Community thesubsidy provided for is purely for the rules in this field, it is in fact necessary benefit of production effected within the 'producers Community from olives harvested in oil'
to treat as of olive only the
those persons who, having produced the Community. The later question, namely olives, extract the oil directly therefrom to whom the subsidy has in practice to or entrust the pressing thereof to third be paid, is merely subsidiary, arising only parties, and not those persons who as a matter of implementation, and
extract the olive oil, no matter how the should be answered after taking into olives were acquired (produced directly account the requirements of and the
or purchased from third parties). objectives pursued by the basic regulation.
Moreover, this is the interpretation which the two Member States in which olive oil In this connexion the specific and
is produced (Italy and France) adopted mandatory designation of the person for from the outset in the provisions which whom the payments are intended was to
they notified to the Commission. No be decided by the measures referred to in
JUDGMENT OF 8. 11. 1977 - CASE 36/77
Article 10 (2) to be adopted by the complete answer to the first question for Council and also by the detailed rules for an interpretation referred by the Corte the application of the said article, to be Suprema di Cassazione, is corroborated
adopted by the Commission pursuant to by a number of other findings. subparagraph (3) thereof and in accordance with the so-called In the first place, a logical analysis of Management Committee procedure. Article 3 of Regulation No 754/67/EEC
shows that, when that regulation It remains true that Article 10 (1) clearly provided that Member States shall ensure lays down abinding principle to the
effect that Community aid is on no by a control system that the quantity of
olive oil in respect of which an account to be restricted to subsidizing application for a subsidy is made the olive processing industries but that corresponds to the quantity of olives its principal and most important task is harvested in the Community and used to to give effective support to the farmers who produce the olives for crushing. produce it, it designated the producer of
the olives which are processed into olive Moreover, the opinion of the European oil as the person who may apply for a Parliament on the draft regulation in subsidy and has to supply the necessary question (OJ No 119 of 3. 7. 1965, p.
particulars to substantiate the production 2040/65) takes the same view. of his olive grove.
As for Regulation No 754/67/EEC of the Council of 26 October 1967, the There is another aspect. If the pro
Government of the Italian Republic lays visions of Regulation No 754/67/EEC special emphasis on the provisions of (supplemented by the implementing Article 2 thereof, which in its view provisions contained in Regulaion No distinguishes individually the person to 830/67/EEC of the Commission of 9. whom the application is submitted in the November 1967) were not regarded as Member State where the olive growing sufficient to support the view that the areas are situate. In other words the person entitled to apply for a subsidy is meaning of that article is that when the olive producer, the conclusion would olives are harvested in one Member State be inescapable that there are no and processed into olive in another mandatory Community provisions cover
Member State the payment of the subsidy ing this point and that the Member falls within the competence of the first States may at their discretion designate, Member State. On the other hand, this in accordance with the essential Article 2 clearly designates the producer requirements of the control system of the olives processed into olive oil as which they have to introduce, the the person entitled to submit an operator involved in the olive-oil application for a subsidy (and therefore production cycle who is entitled to apply to receive the corresponding amount). If for and receive the Comunity subsidy. that were not the position it would be absurd to require the processing There is every reason to suppose that industries (which might also be located these circumstances do not arise in in areas where olives are not produced) to practice and that the provisions of submit their applications in the areas Regulations Nos 754/67/EEC of the where olives are produced. By stating Council and 830/67/EEC of the Council where the application has to be made and 830/67/EEC of the Commission are Article 2 also indicates clearly, although
by implication, who has to submit the more than sufficient to justify the view
that producers of olives processed into application and who can accept it. olive oil are entitled to apply for and
This conclusion, which the Government obtain payment of the Community of the Italian Republic considers to be a subsidy.
AIMA v GRECO
Finally, the Government of the Italian product. Only the person who cultivates
Republic maintains that its opinion is the olive trees until they bear ripe olives
confirmed by the provisions adopted for can therefore be regarded as a producer,
the marketing years after 1967/68, which and not the person who buys the olives
it analysesin detail. It is clear that the when they are ripe, no matter whether
Council regulations within the meaning the purchase takes place before or after
of Article 10 (2) of Regulation No they are harvested. 136/66/EEC have always regarded
producers of processed olives as being The recitals of the preamble to
those entitled to apply for the subsidy, in Regulation No 136/66/EEC clearly the same as the implementing indicate that it was the express intention way regulations adopted by the Commission of the Community legislature to support Article 10 (2) 'olive by appropriate measures growing'
pursuant to also contain
provisions which presuppose or even because olive growing and olive oil
expressly confirm the right of olive production are of special economic
producers in this respect. importance in certain regions of the
Community. It would therefore be in no
With reference to the question of the way consistent with the objectives of the validity of the Community provisions basic regulation to grant the subsidy to a
implementing Article 10 of Regulation person who plays no part in the
No 136/66/EEC, which was included in production of olives and whose role is the order making the reference and is to limited to purchasing the product from be answered if this should prove to be others when it is already ripe. necessary, the Government of the Italian Republic submits that Article 10, if This view is moreover confirmed by it is correctly interpreted, is not Regulation (EEC) No 3423/73 of the
inconsistent with those implementing Commission of 18 December 1973
provisions. The regulations adoped by which in its Article 2 (3) expressly the Council pursuant to the said Article acknowledges that 'producers who have 10 (2) in fact have formal apply for olives'
the same sold their are entitled to
validity as the basic regulation and can in the subsidy, while going on tosay that in any case never be regarded as invalidated such a case the application must include
by any breach of the preceding provision. particulars of the purchaser. Although The Commission's regulations can at all that regulation refers to a marketing year events only be regarded as the expression other than that with which this case is
of the lawful exercise of the wide concerned, there is no doubt that it is legislative power which has been relevant for the purposeinterpreting of
conferred upon the Commission in order the basic and implementing provisions to lay down, through the Management applicable for the 1967/68 marketing Committee procedure, the detailed rules year.
for the application of Article 10. Finally, the Government of the Italian As far as the second question referred by Republic suggests that the following the Corte Suprema di Cassazione is answers be given to the questions
concerned the Government of the Italian referred to the Court by the Corte Republic takes the view that it must Suprema di Cassazione: definitely be answered in the negative. (a) the person entitled to apply for the
According to the preceding observations olive-oil subsidy, in accordance with
the person who may apply for a subsidy the combined provisions of Article 10 is obviously the producer of the olives of Regulation No 136/66/EEC of 22 from which the oil is extracted, and it is September 1966 and of the later
clearly impossible to confuse that Regulation No 754/67/EEC of 26 producer and the mere purchaser of the October 1967, is the producer of the
JUDGMENT OF 8. 11. 1977 - CASE 36/77
olives from which the oil has been 'producer of olive oil'. The purpose of
extracted. using that expression was not, however, (b) In the event of the sale of olives on to restrict the right to receive the subsidy the tree which are already ripe it is to producers of olive oil to the exclusion
the producer, and not the purchaser, of producers of olives. It is true that for who is entitled to apply for the the 1967/68 marketing year the subsidy subsidy. was payable to producers of olive oil, but that was one of the consequences flowing Written observations of the Commission from the provisions of Article 10
aforesaid read together with Regulation The Commission first of all draws No 754/67/EEC of the Council on olive
attention to Regulation No 136/66/EEC oil subsidies, and not from the said
which the Council adopted on the basis Article 10 alone.
of Articles 42 and 43 of the Treaty which established the common organization of On the other hand, as from the 1973/74
the market in oils and fats. marketing year Regulation (EEC) No 3209/73 (OJ L 327 of 28. 1 1. 1973, p. 15) In the case of olive oil, the level of conferred upon producers of olives the
income considered to be fair for right to receive the subsidy. That new
producers is determined by fixing a system is also compatible with Article 10 production target price. However, the of Regulation No 136/66/EEC, because Community legislature considered that it the aim of that article, as one of the
was impossible to arrange for the market provisions of a basic regulation, was not
price to reach the level considered to be to determine once and for all the legal fair for producers. It therefore decided to details relating to the payment of the
enable producers to earn the income subsidy but, in accordance with the
considered to be fair partly on the legislative technique normally used by market and partly by means of a subsidy Community regulations dealing with
equal to the difference between the agriculture, to define such arrangements
production market price and the market from the standpoint of their economic
target price. The latter is fixed at a level function. It had to be made clear for this
which allows production to be marketed purpose not only that the subsidy was to
in the ordinary way and as a general rule be calculated with reference to the
at a level below that of the production quantity of oil but also that it would be target price. granted only if the oil was in fact produced, in other words, entitlement to
However, in order that the producer's the subsidy arises (whoever the recipient
income may approximate to the income may be) only after the olives have been considered to be fair the actual market processed into oil. price must not fall too far below the
market target price. To this end the In the case of the 1967/68 marketing legislature provided for the classic year the Commission makes special
instruments of intervention on the reference to Regulation No 754/67/EEC, domestic market and a levy on imports Article 2 whereof provides:
from third countries.
'The subsidies shall be granted on
With special reference to the reply to be application by the persons concerned in given to the questions referred to the the olive oil areas of the producing Court the Commission considers that the Community'.
starting point must be the provision
which provides for the subsidy, that is to The provisions of that article read
say Article 10 of Regulation No together with Article 10 of Regulation 136/66/EEC; this latter article mentions No 136/66/EEC permit the assertion to
AIMA v GRECO
be made that the 'persons concerned', conclusion that the subsidies for the
who are entitled to apply for subsidies 1967/68 marketing year had to be and who in the final analysis have granted to producers of olive oil, it would
therefore the right to receive them for be unnecessary to consider it, merely the marketing year in question, were the points out that, since the harvesting of
producers of olive oil. However, the the olives is the principal operation
reference in Article 10 to producers is involved in the production of olives, and 'weak'
somewhat and its main purpose is since it accounts for more than 50 % of
not to designate the person in whom the production costs, it cannot be said that
right is vested but to lay down the basic the person who buys ripe olives on the
condition for the existence of that right tree and harvests them is not a producer
(namely, the extraction of the oil from of olives.
the olives). This view is moreover
confirmed by the fact that in the actual Finally, the Commission suggests that
world of commerce the olive producer the questions referred by the Corte and the producer of olive oil are usually Suprema di Cassazione be answered as
the same person and Regulation No follows: 136/66/EEC was drawn up on that basis. 'Under the provisions of Article 10 of
The changes in the system for the Regulation No. 136/66/EEC, read
granting of subsidies introduced by together with Article 2 of Regulation No. Regulation (EEC) No 3209/73 and the 754/67/EEC, olive-oil subsidies for the
actual grant of the subsidies as from the 1967/68 agricultural marketing year are
1973/74 be oil.'
year to olive to granted to producers of olive marketing producers were decided upon solely because of the progressive alteration of
that commercial fact, when it became III — Oral procedure
apparent that an increasing number of
olive producers were selling their At the hearing on 21 September 1977 Mr production so that the olive producer and Greco, represented by N. Catalano, of the the producer of olive oil were no longer Rome Bar, the Government of the Italian the same person. In these circumstances Republic, represented by M. Conti, the payment of subsidies to olive-oil vice-Avocato dello Stato, and the
in Commission European Com producers does not fact permit the of the
attainment of the objective of the rules, munities, represented by its Legal which is to ensure a certain level of Adviser, G. Marenco, submitted their oral income for agricultural producers. arguments.
As for the first question, the Com The Advocate-General delivered his mission, after drawing attention to the opinion at the hearing on 11 October fact that, if the Court were to accept the 1977.
Decision
1 By order of 9 December 1976, which reached the Court on 17 March 1977, the Corte Suprema di Cassazione of Italy has referred to the Court for a
preliminary ruling under Article 177 of the EEC Treaty two questions
concerning the interpretation of the expression 'producers of olive oil',
JUDGMENT OF 8. 11. 1977 - CASE 36/77
contained in certain provisions of Regulation No 136/66/EEC of the Council
of 22 September 1966 on the establishment of a common organization of the
market in oils and fats (OJ, English Special Edition 1965-1966, p. 221) and of Regulation No 754/67/EEC of the Council of 26 October 1967 on olive-oil
subsidies (JO No 260 of 27. 10. 1967, p. 2).
2 The first question referred by the national court is whether the expression
'producers of olive oil'
is equivalent to the expression 'olive producers' for the
purposes of Regulations Nos 136/66 and 754/67.
3 By its second question it asks whether a person who, having acquired olives on the tree which are already ripe, has them harvested and extracts the oil
from them, is also a producer of olive oil.
4 The Court's file shows that those questions have been referred in the context
of proceedings between the manager of an oil producing undertaking, the
respondent in the main action, who took a lease during the 1967/68 oil
marketing year of certain olive groves where the olives had already ripened
and who produced olive oil from the olives which he harvested himself, and
the Azienda di Stato per gli Interventi sul Mercato Agricolo (AIMA), the
Italian Intervention Agency, the appellant in the main action which, in
reliance on national legislative provisions providing, inter alia, for payment
of the to producers of olives, refused to grant the respondent the subsidy subsidy provided for by Article 10 of Regulation No 136/66 on the ground
that he was not the producer of the olives.
5 The question to be determined by the national court is who is entitled to the subsidy provided for by those rules pursuant to the relevant Community provisions.
6 Since the main action is concerned with the 1967/68 oil marketing year it is
appropriate to consider the provisions in force at that time, namely the basic Regulation No 136/66 and Regulation No 754/67.
7 Regulation No 136/66 established a common organization of the market in
oils and fats and applies, inter alia, to oil seeds and oleaginous fruit
(including olives) and their oils.
AIMA v GRECO
8 The fourth recital of its preamble states that 'olive growing and olive-oil
production are of special economic importance in certain regions of the
Community ...'.
9 The fifth recital of the preamble to the regulation indicates that the level of
income regarded as being fair for Community producers may be 'determined by a production target price in the case of olive oil and by a target price in
the case of oil seeds'.
10 As the Council expressly referred to 'olive growing and olive-oil production'
and declared that it intended to introduce a regulatory system for incomes
based on the processed product constituted by olive oil — in complete
contrast, moreover, to the system proposed for oleaginous fruit, which is
centred on the basic product — it drew a clear distinction between two
economic activities.
11 That distinction is by the fact, which has been accepted by the not affected
appellant in the well as by the Commission, that when main action as the
regulation entered into force olive oil was in the course produced by ordinary the olive grower or on his behalf.
12 Furthermore, that distinction has been confirmed by the European
Parliament which, in its opinion on a draft regulation on the common
organization of the market in oils and fats (JO No 119 of 3. 7. 1965, p.
2040/65), proposed that the regulation be supplemented by a provision
allowing olive producers and processors to enter into special agreements for the purpose of ensuring that olive growers benefit from the subsidy — a
proposal which the Council did not accept.
13 Under the system introduced by the organization of the market established by the regulation the income considered to be fair for producers of olive oil is to
be earned partly on the market and partly by means of a subsidy equivalent to the difference between the production target price, being the price which
ensures that fair income, and the market target price, which is the price
permitting normal marketing to be carried out.
14 Since the market target price of olive oil cannot achieve its objective unless
the price actually ruling on the market is as close as possible to the market
JUDGMENT OF 8. 11. 1977 - CASE 36/77
price, the regulation provides for in the form of stabilizing machinery intervention on the domestic market and of a levy on imports from third
countries.
15 The subsidy referred to above is provided for in Article 10 (1) of Regulation No 136/66 which reads:
'Where the production target price is higher than the market target price
ruling atbeginning the of the marketing year, a subsidy equal to the
difference between these two prices shall be granted to producers of olive oil
extracted within the Community from olives harvested within the
Community ...'.
16 Article 10 (2) thereof provides that the principles governing the grant of the subsidy for in paragraph (1) shall be defiped by the Council acting provided
in accordance with the voting procedure laid down in Article 43 of the Treaty and that acting in accordance with the same procedure, the Council shall
adopt measures to ensure that olive-oil producers receive this subsidy only in respect of oils which meet the conditions set out in paragraph (1).
17 According to those provisions, which refer to the end product, namely olive oil, and which are further corroborated by the abovementioned clear distinction between olive producers and processors, the expression 'producers
only be interpreted oil'
of olive can as referring to those persons who extract
the olive oil and it is therefore the producers of the processed product who
are entitled to the subsidy.
18 This finding is confirmed by the wording of Regulation No 754/67 on
olive-oil subsidies which was adopted pursuant to Article 10 (2) of Regulation No 136/66.
19 Indeed, that regulation provides, at Article 1, that 'The subsidy shall be granted for olive oil'
and, at Article 3, that 'While awaiting the establishment
of a Community control system each producer Member State shall introduce an administrative control system to ensure that the product referred to in Article 1 qualifies for the subsidy'.
20 Furthermore, the recitals of the preamble to the said regulation state, inter
alia, that the principles according to which the subsidy is granted to
AIMA v GRECO
olive-oil producers must be defined and that measures must be adopted
which are to ensure that that subsidy is granted only for olive oil which is produced within the Community from olives harvested in the Community, and they stipulate that it is appropriate to restrict the grant of subsidies to the
quantities of oil to which the applications made in the oil producing areas
refer.
21 Since Regulation No 754/67 provides that the subsidy shall be granted in
respect of olive oil it draws the same distinction between the basic product and the processed product as does the basic regulation.
22 It is clear from the foregoing that the answer to the first question must be
that the expression 'producers of olive oil'
within the meaning of Article 10 of Regulation No 136/66 and of Regulation No 754/67 must be interpreted as
to producers of the processed product, namely oil, and the referring olive
olive oil subsidy for the 1967/68 oil marketing year must therefore be granted to those producers.
23 Consequently the second question is no longer relevant.
Costs
24 The costs incurred by the Government of the Italian Republic and the
Commission of the European Communities, which have submitted
observations to the Court, are not recoverable.
25 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, the decision on costs is a matter for that court.
On those grounds,
THE COURT
in answer to the questions referred to itby the Corte Suprema di Cassazione of Italy by order of 9 December 1976, hereby rules:
The expression 'producers of olive oil'
within the meaning of
Article 10 of Regulation No 136/66 on the establishment of a
OPINION OF MR REISCHL - CASE 36/77
common organization of the market in oils and fats and of
Regulation No 754/67 on olive-oil subsidies must be interpreted as referring to producers of the processed product, namely olive
oil, and the olive-oil subsidy for the 1967/68 oil marketing year
must therefore be granted to those producers.
Kutscher Sørensen Bosco Donner Mertens de Wilmars
Pescatore Mackenzie Stuart O'Keeffe Touffait
Delivered in open court in Luxembourg on 8 November 1977.
A. Van Houtte H. Kutscher
Registrar President
OPINION OF MR ADVOCATE-GENERAL REISCHL <apnote>1</apnote> DELIVERED ON 11 OCTOBER 1977
Mr President, it was necessary to adopt measures which
Members of the Court, give an incentive to the expansion of
domestic production, inter alia, to olive
My opinion today concerns a reference to growing, which is the subject-
the Court for a preliminary ruling which matter of the main action. In addition it relates to the common organization of is characteristic of the market in oils and
the market in oils and fats. fats that the market price orients itself
according to the relatively low level of
This organization of the market the price of oils from oil seeds, that is, of
was introduced by Regulation No a product the raw materials for which
136/66/EEC of the Council of 22 can be imported duty-free from the
September 1966 (OJ, English Special world market with its low price level. Edition 1965-1966, p. 221). It covers oil
seeds and oleaginous fruit as well as Since these prices would not ensure a fair vegetable fats and oils and fats and oils of income for producers of olive oil the
fish and marine mammals. A organization of the market provides for characteristic of this market is that the the grant subsidy in this connexion. of a
Community's own production is It corresponds to the difference between insufficient and that there is therefore a the production target price applicable to
great demand for imports. For this reason olive oil, that is, the price which ensures
1 — Translated from the German.