C-85/77

REFERENCE to the Court under Article 177 of the EEC Treaty by the Tribunale di Roma for a preliminary ruling in the action pending before that court between

SOCIETÀ SANTA ANNA AZIENDA AVICOLA

and

ISTITUTO NAZIONALE DELLA PREVIDENZA SOCIALE (INPS)

and the SERVIZIO CONTRIBUTI AGRICOLI UNIFICATI (SCAU)

on the interpretation of Article 38 (1), (3) and (4) of the EEC Treaty, in relation to Annex II thereto, and of the words "agricultural holding" as defined in certain provisions of Regulation No 70/66/EEC of the Council of 14 June 1966 and Regulation No 91/66/EEC of the Commission of 29 June 1966,

JUDGMENT

Facts and issues

The facts of the case, the course of the 4 December 1973 for the Servizio to be procedure and the observations joined as defendant. After being joined submitted pursuant to Article 20 of the the Servizio confirmed that it Protocol on the Statute of the Court of considered the classification of the Justice of the EEC may be summarized Società Santa Anna as an agricultural as follows: holding to be correct.

3. At the hearing on 28 April 1977 the I — Facts and procedure Società Santa Anna applied for the proceedings to be stayed and the case 1. The Società Santa Anna Azienda referred to the Court of Justice of the European Communities for a pre­ Avicola, whose business is the raising of liminary ruling under Article 177 of the poultry and laying hens, brought an EEC Treaty. The Servizio joined in this action on 5 January 1973 before the application while the Istituto was Tribunale Civile di Roma against the content to leave the matter to the Istituto Nazionale della Previdenza court's discretion. By order of 19 May Sociale (hereinafter referred to as "the 1977 the investigating magistrate stayed Istituto") for a declaration that it was the proceedings and ordered the case to entitled to be classified as an agri­ be referred to the Court for a pre­ cultural holding and accordingly to pay liminary ruling on the interpretation of to the Servizio Contributi Agricoli Article 38 (1), (3) and (4) of the Treaty Unificati (hereinafter referred to as "the establishing the EEC in relation to Servizio") only insurance contributions Annex II (list referred to in Article 38 of in respect of the labour it employed. the Treaty), Regulation No 70/66/EEC of 14 June 1966 published on 24 June 2. The investigating magistrate, 1966 in the Journal Officiel de la acceding to an application made by the Communauté No 112, in so far as the Società Santa Anna gave leave on following points are concerned:

" 'Agricultural holding' means a farm the purposes of identifying business situated within a limited geo­ holdings of this nature and are the graphical area, operated as a single unit, Member States accordingly under a single management and obliged to employ the concepts producing ... cereals, vegetables,..., provided in the Treaty and the and with regard to animals: cattle, said regulations in order to horses, sheep, goats, pigs, hens and identify the agricultural holdings chickens, other poultry, rabbits, game, to which must then be applied the silk-worms, bees and chicks". (Article 2 principles laid down at (a) and Annex I); "Businesses where the Community level and those agricultural area is less than one hectare evolved by the various national and those without any agricultural area legal systems with regard to social utilized for farming also constitute agri­ security? cultural holdings" (Article 3 (a) and (b); If Question 1 (b) is answered in and Regulation No 91/66/EEC of 29 the affirmative, June 1966 (Official Journal, English Special Edition 1965-1966, p. 112) in 2 (a) Can the individual Member States so far as the following points are adopt provisions or maintain a concerned: '"Agricultural holding' practice derogating therefrom? means a farm business situated within a 2 (b) Is the concept of an agricultural limited geographical area, operated as a holding provided in the Treaty single unit, under a single management and in the regulations binding and and producing ... cereals ... hens and directly applicable within the cockerels, other poultry... chicks". In Italian legal system for the addition an answer to the following purposes laid down in the questions is sought: Community provisions and the 1 (a) Does the concept of an agri­ said Italian legal system? cultural holding provided in the If Question 2 (b) is answered in Treaty by express reference to the affirmative, goods produced through the 3 (a) Has the concept of an agricultural establishment and running of a holding adopted by the EEC and business, clarified by regulations separating such business from any incorporated into the several legal systems of the Member States territorial connexion (precisely established for individual where provision is made for agri­ holdings, defined and identified as cultural holdings with an agri­ cultural area less than one hectare agricultural, individual rights which may be related to this clas­ and agricultural holdings without sification and which the national any agricultural area) apply only within the institutions of the EEC courts must protect? and is it accordingly not binding If Question 3 (a) is answered in upon the Member States who are the affirmative, thus free to define agricultural 4 (a) Are the individual rights related to holdings with reference to criteria the duty of the Member States not differing from or contrary to the to impose upon agricultural criteria adopted by the Treaty of holdings charges which, although Rome and by the said regulations? unconnected, according to the 1 (b) Has the Community adopted a national legal systems, with the Community concept of an agri­ nature of agricultural holdings as cultural holding which applies in defined with reference to the the individual Member States for criteria supplied by the Treaty and

by the Community regulations, Subsequently as the result of the are nevertheless capable of discri modernization of poultry and egg minating, for social security production and the introduction of purposes, between Italian agri more advanced technical improvements cultural holdings raising poultry the Istituto claimed poultry holdings and such holdings in other were industrial in order to make them countries in the Community? subject to insurance contributions laid down for the industrial sector. Since 4. After hearing the report of the however the classification for the Judge-Rapporteur and the views of the purposes of insurance contributions is Advocate General, the Court decided to today still the characteristic feature of open the oral procedure without any an undertaking (that is to say whether it preparatory enquiry. must be regarded as agricultural or industrial and whether in consequence all the facilities allowed by the rules II — Summary of observations relating to taxes, finances, subsidies and submitted under Article 20 so forth do or do not apply) it is clear of the Protocol on the that for holdings which have expended Statute of the Court considerable effort in rationalizing their production the question whether they Observations of Santa Anna Azienda are to remain classified as agricultural Avicola s.r.l.* becomes very important. Santa Anna refers to an opinion given Submissions relating to the facts by the Iulian Consiglio di Stato on 24 The Santa Anna company states that the October 1972 in which the Consiglio di action pending before the Tribunale Stato considered it ought to refer to the Civile di Roma is one of a number of Community rules to resolve the problem actions pending before various Iulian of interpretation in question.

On the other force) has expressly included animal hand the Istituto sought to impose its husbandry (including poultry) and own views by referring to an antiquated ancillary activities in the general discretionary criterion which made the definition of the work of "farmers". As classification as an agricultural (or a result in relation to the national industrial) undertaking depend on the provisions applicable to insurance contri relationship between the amount of butions poultry holdings were always animal feeding-stuffs and fodder regarded as agricultural in every respect produced in the undertaking and the and therefore subject exclusively to the amount of animal feeding-stuffs and payment of the unified agricultural fodder purchased on the market.

SANTA ANNA AZIENDA AVICOLA v INPS

the Court of Justice will avoid discri mination on the basis of outmoded November 1975) states that "the definition of the term 'agricultural criteria operating to the detriment of holding' should be uniform throughout holdings which have sought to the European Economic Community". modernize and improve technically in Council Directive No 159 of 17 April pursuit of the objectives laid down in 1972 (Official Journal, English Special Article 39 of the Treaty. It lists a whole series of cases of discrimination Edition 1972 (II), p. 324), which contains provisions in favour of "farms especially in tax and financial matters as well as insurance contributions and suitable for development" expresses the

1. Unique Community meaning of the adopted solely to ensure the better terms and wording used by the application of its rules in certain social Treaty and secondary law and economic situations in which the farms function. After observing that the EEC Treaty does not expressly define a "holding" nor, directly and expressly, define in the The necessity of affording Community abstract "agriculture" the Santa Anna law exclusive validity in the sense company submits that the Treaty's referred to above it is even more silence nevertheless does not mean that obvious in a sector such as the one in concepts relating to holdings concerned question which completely covers two in agriculture may be defined according common organizations of markets: that to criteria alien to Community law. In of poultry meat (Regulation (EEC) No particular the Treaty's silence does not 2777/75, Official Journal L 282, p. 77) permit the assumption of lacunae nor in and that of eggs (Regulation (EEC) No consequence the notion that it is right 2771/75, Official Journal L 282, p. 49). to have recourse to the legal systems of This necessity arises from the fact that

JUDGMENT OF 28. 2. 1978 — CASE 85/77

In as agricultural holdings to be placed in particular the concept of agriculture to a single "category". be inferred from Article 38 et seq. There are two signs contained in Article diverges from the "national" concepts 38 of the Treaty pointing in this which make the classification of agri direction. On the one hand paragraph 1 cultural activity depend on "working of that article states that "agricultural the soil". products" means "the products of the soil, of stockfarming and of fisheries In support of this argument the Santa and products of first-stage processing Anna company cites Article 38 (1) of directly related to these products." the Treaty which refers to stockfarming Further paragraph 3 of the same article without any other qualification and this, refers to the special list to determine the in its view, means that the stockfarming agricultural products which are to be to which this provision refers covers all included in the definition which it is kinds of animals including those for possible to derive from Article 38 (1). It which land is not required.

Although these measures in (2), which provides that "in order to defining agricultural holdings did so attain the objectives set out in Article 39 expressly only for the purposes of their a common organization of agricultural application it nevertheless follows markets shall be established", shows clearly from their wording that the that all holdings concerned with institutions did not include any production or the first-stage processing reference to land in their definition of of raw materials in the commercial agricultural holdings. Thus for example sector covered by an organization of it may be inferred from Article 4 of markets are agricultural holdings within Regulation No 79/65 of the Council of the meaning of the Treaty and that 15 June 1965 (Official Journal, English once again it is the agricultural product, Special Edition 1965-1966, p. 70) that the subject-matter of their activity, which after the initial period referred to in determines the agricultural nature of the Article 4 (2) (a) the "field of survey" of activity of the holding. the institutions would be extended also

to holdings which did not have a culti However these questions raise vatable area exceeding five hectares and additional problems relating to the thus also agricultural holdings which do application of the prohibition of discrimi not have any agricultural Und at all. The nation. In spite of their abstract nature same concept may be found in Article 3 they are still considered as phases of an of Regulation No 70/66 of the Council intellectual process enabling it to be of 14 June 1966 (Journal Officiel No specifically ascertained whether a certain 112 of 24 June 1966) which provides for treatment coming within the ambit of the "field of survey" to cover "agri the Treaty, such as the imposition of cultural holdings .

products). Finally it appears from Annex I to Commission Decision No 75/682 length the Santa Anna company concludes that the problem which the of 2 October 1975 (Official Journal L Tribunale di Roma has raised related 301 of 20 November 1975, p. 8 et seq.) solely to the possibility of Italian that "An agricultural holding is thus national law derogating from defined by the following characteristics: Community law, that is to say of Italian 1.1 Output of agricultural products .

3. The legal equality of subjective violated. situations falling under the general concept of agricultural holding There is no doubt that this possibility must be ruled out. If it were acceptable In the view of the Santa Anna company the Tribunale di Roma raised a number it would give Member States "an absolute weapon" to nullify the of questions relating to the issue fundamental principle of Community whether the Community concept of agri law expressed in the prohibition of cultural holding, as set out above, is discrimination. applicable in the various Member States to identify this type or, more parti It is best understood by considering the cularly, whether this concept is directly facts of the case. Classification of a applicable in the Italian legal system. holding as non-agricultural for the

payment of insurance contributions nation contained in Article 7 or Article discriminates against it and deprives it 40 (3). More particularly even in fiscal of the benefit of various provisions of a matters the Member States cannot fiscal, financial and economic nature. create discrimination between the The Istituto by classifying a holding as various agricultural holdings, belonging agricultural or non-agricultural upsets to the same specific class having regard the whole economic sector of poultry to the activity engaged in, according to farming by altering the conditions of their relationship to the soil or its competitive equality of the holdings products. engaged in the market.

4. The application of the prohibition of technology adopted the most modern discrimination to the treatment of poultry-farming undertakings have not subjective situations inherent in the removed themselves from the "farming" social and economic context in which concept of agricultural holding the traditional agricultural undertaking The Santa Anna company considers that works. None of the most modern the questions raised by the Tribunale di poultry-farming holdings has left the Roma require above all clarification of rural environment to establish itself in the question whether the prohibitions of the areas of large industrial discrimination contained in Community concentrations.

SANTA ANNA AZIENDA AVICOLA ν INPS

company and referred to by the The Treaty is concerned only with Tribunale di Roma in its order also encouraging the free movement of cover holdings of the kind such as the workers within the Community by Santa Anna company manages, but only aiming to guarantee that from the point as regards the objectives stated in them of view of insurance all periods of work and as regards the clauses of the Treaty. completed in the various Member States The objectives of the Common Agri­ are taken into consideration and that

cultural Policy specified in Article 39 of insurance benefits are paid as provided the Treaty affect only production and for in such States.

JUDGMENT OF 28. 2. 1978 — CASE 85/77

The regulation of and which contain definitions laid down national taxation is reserved to the expressly "for the purposes of this regu exclusive jurisdiction of each Member lation". State and therefore the effective burden Nor can a "Community" definition of of charges affecting the nationals of the agricultural holding be found in the Community can properly vary provisions of the Treaty or, as the according to their nationality. national court suggested, in the list It is therefore apparent that of the contained in Annex II to the Treaty numerous questions raised in the relating to agricultural products. In any reference for a preliminary ruling the event even accepting the possibility of only relevant one is that which asks inferring a common definition of agri whether any (possible) Community cultural holding from such particulars, definition of agricultural holding is this definition cannot be held to be binding on the Member States as relevant and binding if it is not regards the national rules on social expressly limited to the sector intended security in view of the fact that the by the Community legislation, namely

matters. discrimination to which the last question raised by the national court makes The specific and analytical rules reference. contemplated in Regulations Nos 3 and In the first place there can be no 1408/71 of the Council are not the question of the existence of discrimi expression of independent Community nation from the point of view of rules but fulfil the requirement of Community law where as in the present pursuing the objective referred to in case it is a question whether a particular Article 51 of the Treaty.

SANTA ANNA AZIENDA AVICOLA v INPS

The definition systems of social security, which given there is binding on the Member moreover differ inter se, adopted in the States for the purpose of this statistical various Member States. survey but not for other purposes. A fortiori, definitions (possibly) laid This also applies to the definition in down for the purposes of the Common Regulation No 91/66/EEC of the Agricultural Policy must not be allowed Commission of 29 June 1966: this to govern national social security definition also concerns only the systems which are within the jurisdiction selection of returning holdings for the of the Member States. purpose of determining incomes for On the basis of the above considerations statistical purposes.

By way of example it cites Article 2 of Council Observations of the Commission Regulation (EEC) No 1035/76 of 30 The Commission observes that the April 1976 relating to the organization of a survey on the earnings of question raised relates essentially to the scope of the definitions of agricultural permanent workers employed in agri culture (Official Journal L 118 of 5 holding contained in the Community May 1976). regulations mentioned in the order for reference; more particularly, are the In other instances Community law definitions of a general nature leaves it partly to the national applicable to the whole of the agri legislatures to define who is to benefit cultural policy, including moreover from certain measures: this is the case social security, or on the contrary are for example with Article 3 (1) of they definitions with a specific and Council Directive No 72/159/EEC of

JUDGMENT OF 28. 2. 1978 — CASE 85/77

Decision

1 By order of 19 May 1977 received at the Court on 5 July 1977 the Tribunale Civile di Roma made a reference for a preliminary ruling under Article 177 of the EEC Treaty on the interpretation of Article 38 (1), (3) and (4) of the EEC Treaty in relation to Annex II of the Treaty and of certain provisions of Regulation No 70/66/EEC of the Council of 14 June 1966 (Journal Officiel No 112, p. 2065) and Regulation No 91/66/EEC of

SANTA ANNA AZIENDA AVICOLA v INPS

the Commission of 29 June 1966 (Official Journal, English Special Edition 1965-1966, p. 112) and referred a number of questions on the definition of agricultural holding at a Community level and the possible consequences of this in the legal systems of the Member States.

2 It appears from the order for reference that the plaintiff company in the main action which carries on in Italy the business of raising poultry and laying hens brought an action in the national court against the Istituto della Previdenza Sociale (hereinafter referred to as "the Istituto") for a declaration of its right to be classified for the purpose of social security contributions in respect of the labour it employs as an agricultural and not industrial undertaking and therefore to make payment only to the Servizio dei Contributi Agricoli Unificati of the above-mentioned contributions at the rates applicable to agricultural undertakings which it seems are less than those applicable to industrial undertakings and demanded of the plaintiff company by the Istituto.

3 First it is necessary to consider Question 1 (b) put by the national court which asks whether the Community has adopted a Community concept of an agricultural holding for the purposes of identifying holdings of this nature and whether the Member States are accordingly obliged to employ the concepts provided in the Treaty and the said regulations in order to identify the agricultural holdings to which the principles laid down at Community level and those evolved by the various national legal systems with regard to social security.

8 On the other hand since the Treaty contains no precise definition of agri­ culture and still less of agricultural holding, it is for the Community institutions to work out, where appropriate, for the purposes of the rules deriving from the Treaty such a definition of agricultural holding.

9 Although the words "agricultural holding" are used in various places in the Community rules, including the regulations referred to in the order for reference, adopted by the Council or in certain cases by the Commission, in the sphere of agriculture, the definition of these words is far from being uniform throughout these rules, which are in any case heterogeneous, but on the contrary varies according to the specific objectives pursued by the Community rules in question.

10 Even in the restricted area of statistics to which the regulations mentioned in the order for reference refer, the definitions of agricultural holding contained in the Community measures are not identical.

11 Thus by way of example Article 2 of Regulation No 70/66, on the organi­ zation of the basic survey as part of the programme of surveys into the structure of agricultural holdings states that "for the purposes of this regu­ lation" agricultural holding means a farm business situated within a limited geographical area, operated as a single unit, under a single management and producing products appearing on the list given in Annex I to that regu­ lation.

12 Regulation No 91/66 concerning the selection of returning holdings for the purpose of determining incomes of agricultural holdings while adopting for the purposes of its application the above-mentioned definition adds a new class of agricultural holdings to those referred to in Regulation No 70/66, namely "market-oriented" agricultural holdings.

16 The costs incurred by the Government of the Italian Republic and the Commission of the European Communities which submitted observations to the Court are not recoverable.

17 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 submitted to it by the Tribunale Civile di Roma by order of 5 July 1977, hereby rules:

It is impossible to find in the provisions of the Treaty or in the rules of secondary Community law any general uniform Community definition

Registrar President

OPINION OF MR ADVOCATE GENERAL REISCHL DELIVERED ON 31 JANUARY 1978 <apnote>1</apnote>

Mr. President, to agriculture were paid to the Servizio Members of the Court, Contributi Agricoli Unificati which moreover considered this correct. The plaintiff in the main action has a holding in Italy producing eggs and After the holding was modernized raising poultry. It markets eggs, day-old however the Istituto Nazionale della chicks and fattened poultry. The Previdenza Sociale claimed that holding occupies three hectares of land payment should be made to it at the partly belonging to the plaintiff and higher rates applicable to industrial partly leased; some of the land is culti­ undertakings. It alleged that poultry vated but the produce does not suffice raising was equivalent to cattle raising for the holding and for this reason it is within the meaning of Article 2135 of necessary to purchase feeding-stuffs. the Italian Codice Civile only if it were According to the plaintiff such holdings linked to the exploitation of the soil, were always regarded as agricultural for that is if it were an ancillary agricultural the purposes of social security. This was activity but not if the necessary feeding- apparently on the basis of the definition stuffs were purchased. contained in Article 2135 of the Codice The plaintiff thereupon brought an Civile, the interpretation of which, in action against the Istituto Nazionale for particular with regard to holdings of a declaration that it, the plaintiff, was to this kind, is not uniform in the case-law. be regarded for social security purposes Accordingly for workers employed on as an agricultural holding and had to the holding social security contributions pay contributions to the Servizio apparently at the lower rate applicable Contributi Agricoli. It relies on the 1 — Translated from the German.