C-121/78

suspension of the levy within the

In Case 121/78

REFERENCE to the Court under Article 177 of the EEC Treaty by the Pretura di Cecina (Italy) for a preliminary ruling in the action pending before that court between

1 — Language of the Case: Italian.

JUDGMENT OF I. 2. 1979 — CASE 121/78

Giuseppe Bardi, a farmer, residing at Cecina/Livorno, Italy,

Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

The facts of the case, the course of the Special Edition 1968 (I), p. 187) provides procedure and the observations for a levy in trade with non-member submitted pursuant to Article 20 of the countries on imports into the Protocol on the Statute of the Court of Community of calves and adult bovine Justice of the EEC may be summarized as follows: animals falling within subheading 01.02 A II of the Common Customs

Tariff.

foreseeable trend of market prices for responsibility. bovine animals in the Community. The Commission, by its Regulation For this purpose Article 13 (2) provides (EEC) No 612/77 of 24 March 1977 that the Council shall each year draw up laying down rules for the application of an estimate of young male bovine the special import arrangements in animals which may be imported under respect of certain young male bovine total or partial suspension of the levy. animals for fattening (Official Journal L That estimate shall take account, on the 77, p 18), adopted special provisions with one hand, of expected Community the object of ensuring that such bovine supplies of young bovine animals animals are not used for other purposes. intended for fattening, and, on the other The Commission by Regulation No hand, of the needs of Community 1384/77 of 27 June 1977 (Official breeders. Journal L 157, p. 16) amended Regu- lations Nos 585/77 and 612/77. Article Under Article 13 (4) (a) the Commission 11 (1) of Regulation No 585/77 was shall determine each quarter the quantity supplemented by the addition inter alia which may be imported and the rate of of a provision to the effect that the suspension of the levy. applicant for a licence must be a natural Under Article 13 (3) importation under or legal person carrying on business in total or partial suspension shall be made the meat and livestock sector and conditional on production of an import officially registered in a Member State. licence issued for a quantity falling The Commission in Article 1 (1) of Regu- within the limits of the quantity laid lation No 2902/77 of 22 December 1977 down each quarter. (Official Journal L 338, p. 12) fixed for The detailed rules for the application of the period 1 January to 31 March 1978 the system of import licences were laid the maximum quantity of animals which down by the Commission in its Regu- might be imported under total or partial lation No 585/77 of 18 March 1977 suspension of the levy at 50 000 head of (Official Journal L 75, p. 5). young male bovine animals for fattening, of a live weight of 300 kilograms or less, Article 8 of Regulation No 585/77 fixes of which at least 45 000 head must be a minimum of 50 animals to which the imported into and fattened in Italy. application for a licence must relate, specifies the endorsements which the application for a licence and the licence itself shall contain and states that the

Article 1 (2) of that regulation fixed the decision that agricultural producers levy to be charged on imports of those wishing to import at a lower rate of levy animals at 50% of the levy applicable on young male bovine animals for fattening, the day of import. in accordance with Article 1 (5) of Regu- lation No 2902/77, had to certify that The first subparagraph of Article 1 (5) of they fulfilled the conditions laid down in that regulation provided that, within the Article 12 (1) of Law No 153 of 9 May quantity reserved for Italy, import 1975 on the implementation of the licences might be issued directly to agri- Council directives (of 17 April 1972) on cultural producers or their organizations agricultural reform (Council Directive in respect of a maximum of 30 000 head; No 72/159 on the modernization of the second subparagraph of that farms; Council Directive No 72/160 provision states that "Italy shall, for this concerning measures to encourage the purpose, specify the categories of cessation of farming and the re- applicants in the communication referred allocation of utilized agricultural area for to in Article 11 (2) of Regulation (EEC) No 585/77". the purpose of structural improvement; Council Directive No 72/161 concerning The Commission, by Regulation (EEC) the provision of socio-economic No 345/78 (Official Journal 49, p. 9), guidance for and the acquisition of which amended Regulation No 2902/77, occupational skills by persons engaged in increased the maximum quantity of agriculture (Official Journal, English young male bovine animals which might Special Edition 1972 (II), p. 324, p. 332 be imported into the Community under and p. 339 respectively). suspension of the levy in the first quarter Under Article 12 (1) of Law No 153 a of 1978 from 50 000 to 80 000 head person who devotes at least two-thirds of (Article 1 (1) of Regulation No 2902/- his total working time to farming and 77), the quantity reserved for Italy from who derives therefrom at least two-thirds 45 000 to 72 000 head and the number of of his total earned income is regarded as head in respect of which import licences a person practising farming as his main might be issued directly in Italy to agri- occupation. cultural producers or their oganizations from 30 000 to 48 000 head (Article 1 The Azienda by a letter dated 10 March (5)). 1978 gave Mr Bardi notice that, since it did not fulfil the conditions specified in On 20 February 1978 the Azienda the circular of 28 February 1978, it had Agricola Paradiso, a farming under- not applied for the import licence as taking legally constituted under Italian arranged and that the contract of 20 law as a limited partnership, owning land February was to be considered void. at Castagneto/Carducci, Donoratico, On 12 April 1978 Mr Bardi summoned agreed in writing to buy 40 quintals of AziendaAgricola Paradiso to appear maize for animal feed from Giuseppe before the Pretura di Cecina with a view Bardi, a farmer residing at Cecina/- Livorno. This order was to be deemed to to obtaining an order for specific per- formance of the contract. have been cancelled if the Azienda did

2902/77, may extend and Justice of the EEC written observations supplement at their discretion the were submitted on 12 August 1978 by conditions for admission to the the Commission of the European benefit thereof, in particular by Communities, on 14 August 1978 by Mr restricting the issue of import Bardi, the plaintiff in the main action, licences to certain categories of and on 28 August 1978 by the persons unilaterally distinguished Government of the Italian Republic. from the generality of agricultural Upon hearing the report of the Judge- producers; or whether on the other Rapporteur and the views of the hand the above-mentioned Advocate General the Court decided to Community provisions confer upon open the oral procedure without any all proprietors, whether natural or preparatory inquiry. However, it legal persons, of agricultural under- requested the plaintiff in the main action takings, in particular persons who and the Commission to answer certain are engaged in stock-farming, the questions in writing. This request was right to apply in all cases for an complied with within the periods import licence which the national specified. authorities of the Member States

the issue of import licences and the the principal factor connected with the submission of applications. implementation of the special impon arrangements. By providing for the issue (a) Thefirst question of import licences directly to agricultural producers it introduces a derogation Regulations Nos 585/77 and 612/77, as from the principle of equality of amended by Regulation No 1384/77, treatment in that its aim is to give govern every aspect of the system of priority to agricultural producers; the import licences. As far as the subjective acknowledgement that the Member State conditions for the submission of concerned has a discretion cannot be applications are concerned, the applicant inferred from that article. must be "a natural or legal person The provision stating that the Member carrying on business in the meat and State "shall specify the categories of livestock sector and officially registered applicants" must be read together with in a Member State" (Article 11 (1) (b) of the obligation to notify the Commission, Regulation No 585/77 as amended by imposed upon Member States by Article Article 5 of Regulation No 1384/77). 11 (2) of Regulation No 585/77. It is a The objective conditions for the further item of information which the application, relating in particular to the Member State has to communicate to the security and the declarations and under- Commission; the "categories of takings which are designed to guarantee applicants" must simply be mentioned in the actual purpose of the imports, are that communication, a division having exhaustively laid down by the been effected between applicants who Community rules. This means that the are "agricultural producers" and those Member States do not have any who are "traditional traders". It does not discretion or residual power in either the therefore in any way confer a power legislative or the administrative field, upon the Member State concerned but except in so far as the receipt of the imposes an obligation upon it to supply a applications, the forwarding of communi- prescribed and specific item of infor- cations and the actual issue of import mation in the context of "the communi- licences are concerned. cation referred to in Article 11 (2) of The question arises whether this situation Regulation (EEC) No 585/77". has been changed by Regulation No The expression "for this purpose" in the 2902/77, Article 1 (5) of which provides early part of the second subparagraph of that within the quantity reserved for Article 1 (5) of Regulation No 2902/77 Italy, import licences may be issued means that the actual purpose of the new directly to agricultural producers or their specific item of information is to allow organizations in respect of a specific the issue, in the context of a Community proportion and that Italy shall, for this administrative procedure, of import purpose specify the categories of licences directly to agricultural applicants in the communication referred producers. to in Article 11 (2) of Regulation No 585/77.

With regard to the nature of the The limits on the exercise of any power Community provisions at issue and the to amend on a national level the meaning degree of protection which they offer of the concept "agricultural producer" private individuals it should be stated have been determined in particular in the that since their legislative content is judgment of the Court of 13 June 1978 complete they may be regarded as in Case 139/77 Denkavit Futtermittel directly applicable. GmbH v Finanzamt Warendorf ([1977] The provisions in question are regu- ECR 1317). Those limits have been lations and are consequently primary imposed by Community law and, in legislative sources which do not require particular, by the rules in question; it is any acts incorporating them into the appropriate to refer to the wording and domestic law of the Member States and the objectives of the latter.

This occupation, that is to say to the owners finding applies especially in the field of of farms who are in a position to expand the common agricultural policy, a sector but who need the help of State in which the Member States have intervention in order to turn such transferred all their legislative and capacity for expansion as they have to administrative powers to the Community profit. This solution cannot be reconciled institutions and assumed a purely with the objectives of the special import executive function with regard to the arrangements. The directives meet the. measures adopted at Community level. requirements of the reform of agriculture and are long term measures; they (b) The second question represent the structural aspect of the common agricultural policy and their If it is assumed that the Community rules aims, the instruments which they use and allow Member States to modify or limit their field of application make them very their scope, the exercise of such a power different from policy measures relating cannot in any case be unrestricted. to markets and prices, even though they In this connexion it should be noted that have to be brought into line with the the expression "agricultural producers"

JUDGMENT OF 1. 2. 1979 — CASE 121/78

relating to the trading system for bovine Article 1 (5) of Regulation No 2902/77, animals and beef and veal are aimed at as amended by Regulation No 345/78 specific market conditions, the distinctive itself directly divided the Italian quota feature of those conditions being a (72 000 head) into two parts: one surplus in the Community as a whole (48 000 head) which may be reserved for and a serious deficit in Italy owing to the "agricultural producers" and their drop in local demand due to lack of "organizations", the other, equal to at competitiveness of the national product least one-third of the quota, which may and the discontent of breeders. It was not be reserved for that "category". The precisely because of this local situation Community rules themselves directly conferred on the Italian authorities that Regulation No 2902/77 introduced specific rules giving preferential certain discretionary powers of treatment to Italy and Italian "agri- implementation for the purpose of specifically determining the share to be cultural producers". reserved for agricultural producers and The autonomy of the agricultural their organizations and of specifically directives in relation to the regulation on defining the concepts of agricultural trade in animals is emphasized by the producers and their organizations, that is fact that the former directly exclude to say for the purpose of specifying "the from the benefit of the aids for which categories of applicants". Those powers they provide purchases of calves intended of implementation were exercised by the for slaughter (second indent of Article 8 ministerial circular in line with the recital

BARDI AZIENDA AGRICOLA PARADISO

to and derive at least half of their income partial reduction of the levy is intended from farming in the same way as such to help improve cattle rearing and beef agricultural producers. To link the rules and veal production structures in Italy. of the special impon arrangements to the The measures provided for in that regu- rules on modernizing agricultural lation are therefore addressed to agri- structures and increasing output is cultural producers who are full- or part- definitely lawful. time stock breeders.

The recitals in the preamble to Regu- lation No 2902/77 make it clear that

imports subject to special terms are justified by the need to take account of the supply requirements of certain regions of the Community which have a serious deficit in bovine animals for

fattening, these requirements being parti- cularly apparent in Italy, and that the

JUDGMENT OF 1. 2. 1979 — CASE 121/78

where the Community rules are intended sources from the benefit of importing to produce their effects. Since the under suspension of the levy, follows the measure in question is directed at stock generals trend in connexion with the breeders and its aim is to make it easier improvement and modernization of agri- for them to obtain supplies, especially cultural structures and upholds, in the with a view to helping improve cattle more restricted context of cattle-rearing rearing structures in Italy, it must be structures, the philosophy and principles regarded as an additional instrument of which prompt those movements. economic and structural policy with the The questions referred to the Court same objectives as Council Directives should therefore be answered as follows: Nos 72/159, 72/160 and 72/161. Consequently, the reference by the The fact that a Member State defines, Italian authorities to the criteria laid when it actually implements a down in Law No 153 on the moderni- Community rule and in the light of the zation of agricultural structures in latter's objectives, concepts such as "agri- accordance with the provisons of those cultural producer", the precise meaning directives does not seem to be of which has not been elaborated by unjustified. general and secondary Community law, The fact that the benefits of the is not incompatible with that law. structural directives have been reserved

1 By an order of 13 May 1978, which was received at the Court on 27 May 1978, the Pretura di Cecina referred to the Court of Justice for a preliminary ruling pursuant to Article 177 of the EEC Treaty two questions on the inter- pretation of Commission Regulation (EEC) No 2902/77 of 22 December 1977, fixing the quantity of young male bovine animals which may be imported on special terms in the first quarter of 1978 (Official Journal L 338, p. 12), in conjunction, on the one hand, with Article 13 of Regulation (EEC) No 805/68 of the Council of 27 June 1968 on the common organization of the market in beef and veal, as amended by Council Regulation (EEC) No 425/77 of 14 February 1977 (Official Journal L 61, p. I), and also with Commission Regulation (EEC) No 585/77 of 18 March 1977 on the system of import and export licences for beef and veal (Official Journal L 75, p. 5) and, on the other hand, with the Council Directives of 17 April 1972 relating to various structural questions in the field of agriculture, in particular with Council Directive No 72/159 on the modernization of farms (Official Journal, English Special Edition 1972 (II), p. 324).

2 The Court's file shows that Giuseppe Bardi, the plaintiff in the main action, the manager of a farm within the Commune of Cecina (Province of Livorno), entered into a contract on 20 February 1978 with Azienda Agricola Paradiso (hereinafter referred to as "Azienda"), a limited part- nership engaged in cattle-rearing, whose farm is within the Commune of Donoratico (Province of Livorno), for the supply to the said partnership of 40 quintals of maize for animal feed.

7 Azienda does not appear to have made any application for this purpose to the competent authorities, considering that it was precluded from qualifying as a beneficiary of that import quota by Circular No 1/170332 of the Ministry for Foreign Trade dated 28 February 1978.

8 In fact, as provided for in that circular, the benefit of imports at a reduced rate of levy was reserved for agricultural producers fulfilling the conditions laid down by Article 12 (1) of Law No 153 of 9 May 1975 implementing the directives of the Council of the European Communities on the reform of agriculture (Gazzetta Ufficiale 1975, p. 3298).

9 The presumed effect of the reference in the circular to that legislative provision is to reserve the benefit of the import quota in question to individual farmers who personally devote most of their time to farming, a condition which Azienda cannot fulfil because its legal form is that of an agricultural company.

10 The plaintiff shares the view of the defendant company that a circular of the Ministry for Foreign Trade could not validly restrict in this way the category of farmers who may be entitled to the advantage provided for by Regulation No 2902/77.

11 He infers from this that Azienda's obligation towards him under the contract remains intact.

BARDI AZIENDA AGRICOLA PARADISO

(2) On the assumption that the Member States may impose further and more restrictive conditions upon admission to the category of agricultural producer, whether the national authorities may determine the persons entitled to benefit according to the criteria on which they rely in implementing the Community directives on the modernization of agri- cultural structures (Directives Nos 72/159, 160 and 161/EEC), that is, with a view to a sort of State intervention the means and objectives of which are entirely distinct from and independent of those adopted in connexion with the marketing of individual agricultural products — the said criteria being moreover entirely unrelated to the actual practice of stock-farming and such as to entail the unjustified exclusion of a very large number of stock-farming undertakings, including all those having the structure of a firm or company.

JUDGMENT OF 1. 2. 1979 — CASE 121/78

15 As provided for in Article 13 (1) of Regulation No 805/68, as amended by Regulation No 425/77, the levy to be applied to young male bovine animals intended for fattening may be totally or partially suspended under the conditions laid down in that article, taking into account the supply situation and the foreseeable trend of prices.

16 Under paragraph (2) of the said article the Council shall draw up each year an estimate of young male bovine animals which may be imported under the preferential arrangements laid down in paragraph (1).

17 Finally, paragraph (4) of the said article provides that detailed rules for the application of the arrangements in question shall be determined in accordance with the procedure laid down in Article 27 of that regulation that is to say by the Commission acting in accordance with the so-called "management committee" procedure.

23 Those provisions indicate that the arrangements for importation at a reduced rate of levy were intended, as a matter of priority, during the period under consideration, to enable Italy to improve its cattle rearing and beef and veal production structures and that that Member State was expressly empowered for that purpose to specify the categories of producers entitled to benefit from that measure.

24 It is apparent therefore that the Italian authorities were empowered to reserve the benefit of that import quota to farms the development of which they intend to encourage as provided for in the Law of 9 May 1975, which has the aim of implementing in Italy the objectives laid down by the Community directives of 17 April 1972 on the reform of agricultural structures.

25 Special reference should be made to Articles 1, 2 and 3 of Council Directive No 72/159, from which it emerges that the Member States have undertaken to introduce a system of selective incentives to farms, giving priority specifically to farm businesses the heads of which practice farming as their main occupation.

26 That undertaking has been reflected in Artiles 11 and 12 of the Italian Law No 153 of 9 May 1975 to which reference is made in the Circular of 28 February 1978.

27 Therefore the answer to the questions referred must be that under Commission Regulation (EEC) No 2902/77 of 22 October 1977 the Member States concerned, and more particularly the Italian Republic, were entitled to specify the categories of agricultural producers who might benefit from the import quota of young male bovine animals under partial or total suspension of the levy within the framework of a policy intended to help improve cattle rearing and beef and veal production structures and that to allow only farmers practising farming as their main occupation so to benefit is in accordance with the obligations on the Member States arising from Council Directive No 72/159 of 17 April 1972 on the modernization of farms.

in answer to the questions referred to it by the Pretura di Cecina by an order of 13 May 1978, hereby rules:

Under Commission Regulation (EEC) No 2902/77 of 22 December 1977 fixing the quantity of young male bovine animals which may be imported on special terms in the first quarter of 1978 the Member States concerned, and more particularly the Italian Republic, were entitled to specify the categories of agricultural producers who might benefit from the import quota of young male bovine animals under partial or total suspension of the levy within the framework of a policy intended to help improve cattle rearing and beef and veal production structures.

To allow only farmers practising farming as their main occupation so to benefit is in accordance with the obligations on the Member States arising from Council Directive No 72/159 of 17 April on the moderni- zation of farms.

Kutscher Mertens de Wilmars Mackenzie Stuart Donner Pescatore

Sørensen O'Keeffe Bosco Touffait

Delivered in open court in Luxembourg on 1 February 1979.