C-113/88

LEUKHARDT v HAUPTZOLLAMT REUTLINGEN'

OPINION OF MR ADVOCATE GENERAL JACOBS delivered on 9 March 1989 *

My Lords, No 804/68 on the common organization of the market in milk and milk products, introduced a levy, additional to the co-responsibility levy, on quantities of milk or milk equivalent delivered beyond a reference quantity to be determined (Official Journal 1984, L 90, p. 10). In 1. Community legislation on milk quotas implementing the levy system, Member permits farmers whose level of milk States were allowed to choose between two production was affected by an exceptional formulae. Under Formula A, the levy is event in the base year chosen by a Member payable by the individual milk producer on State to opt for an alternative base year the quantities of milk delivered to a within a limited range laid down in the purchaser which in the relevant 12-month legislation. This reference for a preliminary period exceed a reference quantity to be ruling raises the question whether the determined. Under Formula B, the Community legislation permits a farmer purchaser (e. g. the cooperative or dairy) who has suffered a long-term reduction in pays the levy on the quantities delivered to production because of circumstances outside it by producers which, in the relevant his control to choose a base year outside 12-month period, exceed a reference that range; and, if not, whether the legis­ quantity to be determined. The purchaser lation offends against general principles of then passes on the levy to the individual law recognized in Community law. In the producers in proportion to their contri­ event that the farmer must choose his alter­ bution to the excess. The sum of the indi­ native base year within the range laid down, vidual reference quantities allocated in a the national court seeks guidance as to Member State must not exceed the exactly how the individual quota is to be guaranteed total quantity established for calculated. that Member State on the basis of milk deliveries during the 1981 calendar year, plus 1%.

mination of the base year and the applicable before or during that year shall obtain, on coefficient. The format of Article 2 has request, reference to another calendar since been changed by Council Regulation reference year within the 1981 to 1983 (EEC) No 1911/86 (Official Journal 1986, period'. L 165, p. 6) and Council Regulation (EEC) No 2316/86 (Official Journal 1986, L 202, p. 3) but I shall refer to the 1984 text which was applicable at the material time. 6. In its legislation implementing the levy system, the Federal Republic opted for Formula A, with 1983 as the base year. In order to ensure that the guaranteed total 4. Under Article 2(1) the reference quantity quantity was not exceeded, in the allocation is in principle to be 'equal to the quantity of of individual quotas the quantities delivered milk or milk equivalent delivered by the by producers in 1983 were as a general rule producer during the 1981 calendar year reduced by 4%. (Formula A), or to the quantity of milk or milk equivalent purchased by a purchaser during the 1981 calendar year (Formula B), plus 1%'. However, under Article 2(2), 'Member States may provide that on their territory the reference quantity shall be Factual background equal to the quantity of milk or milk equi­ valent delivered or purchased during the 1982 calendar year or the 1983 calendar year, weighted by a percentage established so as not to exceed the guaranteed 7. The plaintiff in the national proceedings, quantity ... '. The percentage referred to Karl Leukhardt, is a dairy farmer. For may be varied on the basis of the level of reasons which are not disclosed in the order deliveries of certain categories of persons for reference, he suffered substantial and liable for the levy, of the trend in deliveries continuing losses of cows, with the result in certain regions between 1981 and 1983 that his milk deliveries declined from or of the trend of deliveries of certain 188 954 kg in 1980 to 160 707 kg in 1981, categories of persons liable during this 142 417 kg in 1982 and 142 747 kg in period. Under Article 2(3), Member States 1983. Following recognition as a hardship may also adapt the percentages referred to case, he was allocated a reference quantity in Article 2(1) and Article 2(2) so as to on the basis of his deliveries in 1981, less ensure the application of Articles 3 and 4 4 %, giving rise to a figure of 155 500 kg. of the Regulation.

'(1) Is Article3(3) of Council Regulation (EEC) No 857/84 of 31 March 1984 10. As regards the first question, the adopting general rules for the plaintiff argues that the limitation of the application of the levy referred to in choice of an alternative base year to the Article 5(c) of Regulation (EEC) range specified in Article 3(3) of Regulation No 804/68 in the milk and milk No 857/84 in a case where a producer has, products sector to be interpreted as through exceptional circumstances, suffered meaning — or, if it is in part invalid, a substantial decrease in milk production to be supplemented so as to throughout the 1981-83 period, amounts to provide — that a milk producer whose a breach of the prohibition of discrimination milk production was affected by an laid down in Article 40(3) of the Treaty, of exceptional event in every year from the general principle of equality, of the 1981 to 1983 may choose as the protection of property and freedom of calendar reference year a different economic activity, and of the general prin­ year, such as the next earliest, in which ciples of legal certainty and the protection his milk production was not affected by of legitimate expectations. an exceptional event?

(2) If Question 1 is answered in the 11. The Commission and the German negative: are Article 2(1) and (2) and Government, however, point out that the Article 3(3) of Regulation No 857/84 first question has already been answered in to be interpreted as meaning that a the Court's judgment of 17 May 1988 in producer delivering to a purchaser Case 84/87 Marcel Erpelding v Secretary of whose milk production was affected by State for Agriculture and Viticulture, and I an exceptional event in the reference fully agree with this statement. In the year chosen (in the Federal Republic of Erpelding judgment, the Court ruled that Germany, 1983) may require the the provisions of Regulation No 857/84 do delivery reference quantity to be not permit producers to choose a base year granted to him to be calculated either outside the range specified in Article 3(3),

'It should be noted that the scheme and purpose of the rules in question show that 12. The second question is concerned with they list exhaustively the situations in which the precise method of calculation of the reference quantities or individual quantities individual reference quantity of a producer can be allocated and that they lay down who has been recognized as a hardship case. precise rules concerning the determination of Can such a producer, in addition to these quantities. Since none of these choosing (within the range 1981-83) a base provisions foresees the possibility for year other than that adopted by the producers to have their deliveries of milk Member State for general application, also effected outside the 1981-83 period taken require, where the result would be more into account, such a possibility must be favourable to him, the application of a coef­ excluded ... ' (paragraph 18, emphasis ficient other than that generally applied in added).

LEUKHARDT v HAUPTZOLLAMT REUTLINGEN

17. Moreover, as the Commission points 16. Article 2 of Regulation No 857/84 is out, the judgment in Joined Cases 201 concerned with the determination of the and 202/85 Klensch and Others v Secrétaire base year and the applicable coefficient and d'État à l'agriculture et à la viticulture [1986]

OPINION OF MR JACOBS —CASE 113/88

ECR 3477, confirms that within the coefficient laid down in paragraph 1, or the framework of Article 2 of Regulation method laid down in paragraph 2: it is not No 857/84 a Member State must make a open to a Member State to combine clear choice between the method of deter­ elements from the two methods mination of the base year and the applicable (paragraph 15 of the judgment).

18. I am therefore of the opinion that the questions referred by the national court should be answered as follows:

'(1) Article 3(3) of Council Regulation No 857/84 must be interpreted as meaning that a milk producer whose milk production was affected by an exceptional event in every year from 1981 to 1983 may not choose as the calendar reference year a different year, such as the next earliest, in which his milk production was not affected by an exceptional event.

(2) Examination of the first question posed by the national court has disclosed no factor of such a kind as to affect the validity of Article 3(3) of Council Regu­ lation No 857/84.