C-196/88

OPINION OF MR VAN GERVEN — JOINED CASES 196/88 TO 198/88

OPINION OF MR ADVOCATE GENERAL VAN GERVEN delivered on 30 May 1989 *

Mr President, The Community provisions Members of the Court,

1. In order to restore the balance in the 3. Under the terms of Article 5c of Council dairy sector which was suffering from major 3 Regulation 804/68, as amended by the structural surpluses, the Council adopted on aforementioned Regulation No 856/84, a 31 March 1984 Regulation Nos 856/84 and levy is imposed on quantities of milk 857/84 which introduced for an initial delivered which exceed a predetermined period of five years a levy on quantities reference quantity. This levy is payable of milk delivered beyond a threshold either by milk producers (formula A) or by guarantee. ' The Court has already given purchasers of milk (dairies) who pass it on several preliminary rulings on questions exclusively to the producers who have relating to various aspects of these stringent 2 increased their deliveries, in proportion to provisions. In the present cases the cour their contribution to the purchaser's d'appel, Rennes, raises a question on the reference quantity being exceeded (formula specific provisions relating to producers B). having a development plan.

CORNÉE AND OTHERS v COPALL AND OTHERS

7 5. The operative provisions adopted by the an absolute ceiling. Council in order to take account of the specific situation of holders of a devel opment plan are as follows. 4. Exceptions to this general scheme are provided for or may be provided for (see below at paragraph 15) in order to take into account certain specific situations, in particular the case of producers having a At the heart of these provisions is the first 8 development plan. Their Community status subparagraph of Article 3(1) of Regulation No 857/84, which is worded as follows: 5 — Article 2(1). 6 — Article 2(2). ; — Article 5c5c((3) of Regulation No 804 804// 68

(til exceptional events during lhe reference year (Article For the determination of the reference 3(3) of Regulation No 857 857// 84 ); 84); iv)) producers operating under a development plan (iv quantities referred to in Article 2 and in approval,, approval after 1 April 1984 1984,, under Directive 72// 159 72 159// EEC EEC,, on condition that the plan meets certain connection with the application of formulas criteria (Article 4 ( l )( )(bb ) of Regulation No 857

OPINION OF MR VAN GERVF.N — JOINED CASES 196/88 TO 198/88

A and B, certain special situations shall be Article 2(3) of Regulation No 857/84 taken into account as follows: permits Member States to vary the percentage applied to the reference quan­ tities in order to allocate additional reference quantities to the producers (1) Producers who have adopted milk mentioned in Articles 3 and 4. This production development plans under provision therefore enables a system of soli­ Directive 72 / 159 / EEC lodged before 1 darity to be established in which abatements March 1984 may obtain, according to are imposed on all producers in order to the Member State's decision: grant supplementary reference quantities to certain producers who find themselves in a situation which justifies specific aid. (i) if the plan is still being implemented, a special reference quantity taking account of the milk and milk product quantities provided for in the development plan,

Article 4(l)(a) of Regulation No 857/84 enables Member States to grant compen­ (ii) if the plan has been implemented sation to producers undertaking to after 1 January 1981, a special discontinue milk production definitively. reference quantity taking into Pursuant to paragraph (2) of that article, account the milk and milk product the reference quantities freed shall, as quantities which they delivered in necessary, be added to the national reserve. the year during which the plan was completed.'

7. As regards the implementation of the general scheme, it is enough to outline the (ii) In respect of the period from 1 April two fundamental decisions taken by France. 1985 to 31 March 1986, the reference quantities of the preceding period reduced by 1% (except in mountain areas) are taken into consideration as As regards the choice of formula, France regards both purchasers and producers 6 9 opted for formula B. ' Purchasers, that is to supplying milk to them. ' say dairies, are therefore liable to pay the levy on the quantity of milk which has been delivered to them in excess of the reference quantity which has been allocated to them by the competent authority, in this case the Office national interprofessionel du lait et It is worth dwelling on the relatively small des produits laitiers (National Office for percentage weightings applying to deliveries Milk and Milk and Dairy Products) in the year 1983 for the purpose of deter­ (hereinafter referred to as 'the National mining the reference quantities of Office')· purchasers. Although I do not have any figures in this connection, it seems to me that one is entitled to take the view that these percentages were fixed essentially in order not to exceed the total quantity As regards the reference year, France chose guaranteed, in accordance with Article 2(2) the year 1983. The reference quantities for 2 of Regulation No 857/84. ° The French that year's production are reduced as Government therefore chose to make only follows according to the period of very limited use of the possibility provided implementation. for in Article 2(3) of Regulation No 857/84, which enables producers' reference 13 — Decree No 84-661 of 17 July 1984 on controlling lhe production of cow's milk and tne means of recovery of an quantities to be generally adjusted in order additional levy on purchasers and producers of cow's milk to increase the volume of additional JORF,, 21 . 7 1984 (JORF 1984,, p 2373 2373)) reference quantities in favour of priority 14 — Decree of 22 November 1984 on the determination of reference quantities for purchasers of milk for the period from 2 April 1984 to 31 March 1985 (JORF JORF,, 29 U 1984 1984,, | 7 — Article 17 of Decree No 84-661 3660)) p 3660 18 — Article 3 ( l )( )(aa ) of the Decree of 22 November 1984 15 — Decree of 10 July 1985 on the determination of reference quantities for purchasers of milk for the period from 1 19 — Anieles 2 and 3 ( l )( )(bb ) of tlie Decree of 10 July 1985 JORF,, 14 7 1985 April 1985 to 31 March 1986 (JORF 1985,, p 7979 7979)) 20 — Thus it seems likely thai the French Government used the 16 — Article 2 of Decree No 84-661 following formula 1983 -2 % = 1981 + 1%. -2%

producers. The result of this is that in whose deliveries during the year 1983 were France the national reserve was essentially greater than 200 000 litres of milk are supplied by quantities freed following the however excluded. Unless an exception is definitive discontinuance of production by made in an individual case, such producers individual producers. may not be allocated additional reference quantities before 1 April 1986. At the hearing, the representatives of the French Government stated that the fixing of such a ceiling enabled sufficient quantities to be

24 determined by ministerial decree. 9. Decree No 84-661 gives an outline of the general context in which purchasers grant, besides a basic reference quantity calculated as stated above, additional reference quan 10. In respect of the first period of tities to certain categories of producer who implementation (April 1984 to March 1985), the decree of 22 November 1984 applied are in a special situation and which I may this enabling provision in the following hereinafter designate by the expression manner. 'priority producers'. Producers who adopt a development plan pursuant to the decree of 1 June 1983 form one of the categories of producer who may thus benefit from 23 It is provided that 90% of the reference additional reference quantities. Producers quantities freed following the disconti nuance of production are to be kept in the 21 — At the hearing the representatives of the French Government stated that the reference quantity for dairies and 10% of these quantities is to be

CORNÉE AND OTHERS v COPALE AND OTHERS

after 1 April 1978 and before 31 March 857/84, machinery for regional and national 26 allocations enables surpluses of purchasers 1985. However, additional reference quantities cannot be granted to producers in excess of reference quantities to be set off whose basic reference exceeds 200 000 litres by the unused reference quantities of or 98 % (99% in mountain areas) of the purchasers who have not exhausted their delivery objective laid down for the quotas. 27 marketing year 1984 to 1985.

According to the representatives of the This single fixed allocation may be French Government at the hearing, the supplemented by an additional reference practical effect of all those measures in quantity if there is a significant difference France was that a levy did not need to be between the total reference granted and the imposed on producers and purchasers in delivery objective provided for in respect of respect of the 1984/85 marketing year. 28 the marketing year 1984/85. A supplement may also be granted to holders of a development plan whose deliveries for the year 1983 were greater than 200 000 11. As regards the second period of 29 implementation (April 1985 to March 1986), litres. Those two supplementary amounts may, however, only be allocated if the the decree of 10 July 1985 makes provision purchasers have unused reference quantities for other detailed rules of implementation. available.

As to quantities available to purchasers, the proportion of quantities freed which are Apart from the case of purchasers, there are retained in the dairies was reduced to 80% two other stages at which intervention is (previously 90%), the proportion accruing provided for. to the national reserve being increased to 31 20 %.

excludes from the benefit of supplementary the National Office, after levying a given quantities producers whose reference quan­ quantity for certain young farmers and for tities exceed 200 000 litres or 97 % ( 99 % in farmers who have submitted applications mountain areas) of the delivery objective found to be admissible, is to attribute the 34 laid down in their development plan . balance to purchasers in mountain areas and to purchasers comprising a particularly large proportion of priority producers whose reference quantities allocated are in marked divergence to the delivery objectives laid At the hearing, the representatives of the 3Ć down in the development plans. French Government stated that the instructions given to the regional authorities were not intended to bring about the allo­ cation of a single fixed quantity to producers having a development plan. On Finally, in accordance with Article 4a of the contrary, it was recommended that Regulation No 857/84, machinery for account should be taken of the production regional and national allocation was again objective laid down in each development applied. 37

plan.

CORNÉE AND OTHERS v COPALL AND OTHERS

lenging the levy imposed by their dairy in principle of protection of legitimate respect of the marketing year 1985/86. I expectations, inasmuch as the holders should point out that none of the plaintiffs of development plans were entitled to in the main proceedings had completely rely on the stability of commitments implemented his development plan in 1981 which they had previously entered into or 1982. I would also observe that, in the in order to allow them to increase the relevant period, all the plaintiffs produced a productivity of their farms?' quantity of milk greater than 200 000 litres.

13. In the context of these proceedings, the Analysis of the first question cour d'appel, Rennes, referred the following questions to the Court of Justice for a preliminary ruling:

14. The first question has two limbs. They seem to me to be as follows: '(1) Does Article 3 of Regulation No 857/84 allow a Member State to allocate a fixed quota to all holders of current development plans without (1) Does Article 3 of Regulation No regard to the targets in each plan, and 857/84 permit a single fixed additional to choose 1983 as the only reference reference quantity to be allocated to year without providing for any producers having a development plan? exceptions in the case of producers having a plan completed in 1981 and 1982?

(2) Does that article allow 1983 only to be chosen for the determination of the (2) Does Article 40(3) of the Treaty estab­ reference quantity of a producer who lishing the European Economic completed his development plan in 1981 Community preclude the Decrees of or 1982? 22 November 1984 and 10 July 1985 from establishing an order of priority in the allocation of supplementary reference quantities by reference to the quantities freed within each under­ The allocation of a single fixed reference taking, the benefit granted thus quantity depending on the quantities available to the purchaser?

It is also expressed in the third recital of the (2) Member States may grant a specific preamble to Regulation No 857/84, reference quantity to young farmers . .. according to which

(3) Producers whose milk production . . . has been affected by exceptional 'Member States should be enabled to adapt events .. . shall obtain, on request, the reference quantities to take into account reference to another calendar reference the special situations of certain year ..." (emphasis added). producers . .. ' (emphasis added).

The plaintiffs in the main proceedings rely on the words 'shall be taken into account' in In the light of the foregoing considerations, the first sentence of Article 3 in order to the first sentence of Article 3 should, in my argue that Member States are obliged to view, be understood to mean that it merely establish a special regime for holders of permits Member States to adapt the development plans. I do not share that reference quantities so as to ensure the opinion. application of paragraphs (1) to (3) of Article 3, without indicating whether that application is mandatory or optional. The reply to the latter question is given in para­ In my view, the first sentence of Article 3 graphs (1) to (3) of Article 3 in which a must be interpreted as taking account of the distinction is drawn between four situations : fact that the system for controlling (1) that of the holders of a development

CORNEE AND OTHERS v COPALL AND OTHERS

17. It seems to me that the foregoing 16. Having thus given the reply that the considerations provide the reply which measures provided for in Article 3(1) of should be given to the national court to Regulation No 857/84 are adopted under a assist it in resolving the disputes in the main power left to the Member States, I think it proceedings. In fact, I would recall that all may be inferred that the Member States the plaintiffs in the main proceedings may also fix a ceiling beyond which no produced, during the marketing year additional reference quantity may be 1985/86, quantities greater than 200 000 allocated. The fixing of such a ceiling may litres of milk. To the extent to which the be necessary in the context of the adjudi­ exclusion of this category of producer from cations to be carried out by the Member the benefit of the special regime for holders States between priority and non-priority of a development plan is in conformity with producers, or between categories of priority the Community provisions, the question as producers, in order to observe the threshold to the validity of the allocation of a single of the guaranteed total quantity. fixed reference quantity is no longer relevant to the plaintiffs in the main proceedings. Moreover, I think it is open to question whether the French rules for the marketing year 1985/86 do in fact provide for such a single fixed allocation in favour In this connection, I would point out that of holders of a development plan. Although the French Government chose to make only it is true that the decree of 22 November very limited use of the option open to 1984 provided for a single fixed allocation Member States generally to adapt the reference quantities of producers in order to 38 — Pursuant to Article 2(2) o( Regulation No 857/84, increase the volume of additional reference Member States may vary the percentage weighting applied to the production of the reference year chosen, in quantities in favour of priority producers accordance with the level of deliveries of certain categories (see paragraph 7). Having exercised that of producers.

That does not, however, mean that Member States are required to fix the reference 18. Should the Court deem it necessary, quantity to be allocated to the producers however, to reply to the question relating to concerned at the level of the milk the allocation of a single fixed reference production provided for in each devel­ quantity, I set out my opinion below. opment plan. Member States may, in my view, freely but objectively determine the level or levels of the additional reference quantity to be granted in addition to the basic reference quantity, provided that such In the situation under examination, the levels are based on, or in relation to, the Member States chose to make use of the production targets provided for in the devel­ option provided for in Article 3(1) of Regu­ opment plans on the one hand, and that the lation No 857/84 in favour of a certain additional quantities to be granted remain category of producers who had adopted within the limits of the guaranteed total development plans which were still being quantity, on the other hand. implemented and whose level of production was lower than the limits referred to above. In this case, the operative provisions adopted must evidently comply with the The choice of 1983 as the sole reference conditions laid down in the regulation. year

I refer again to the relevant wording: 19. I also wonder whether the question relating to the choice of 1983 as the reference year, with no provision for dero­ gation for holders of a development plan completed in 1981 or 1982, is necessary in 'If the plan is still being implemented, a the context of the main proceedings. In fact, special reference quantity taking account of none of the plaintiffs in the main the milk and milk product quantities proceedings are in the position of having provided for in the development plan' completed their development plan in 1981 (emphasis added). or 1982.

How should that provision be construed in a case where a Member State has chosen Examination of the second question 1983 as the reference year? In such a case, the provision seems to me no longer relevant as regards holders of a development plan completed in 1981 or 1982. In fact, the 22. In its second question, as I construe it, basic reference quantity for the persons the Rennes Court of Appeal asks the Court concerned is then fixed at a time when they whether the Community provisions preclude have been able to achieve the production the retention within dairies of a proportion objectives laid down in their development of the individual reference quantities which plan. That basic reference quantity thus are freed by affiliated producers who have necessarily takes account of the production definitively discontinued production (90% of the persons concerned during the course pursuant to the decree of 22 November of the year in which the plan was 1984, 80% pursuant to the decree of 10 completed. July 1985), only the balance being assigned to the national reserve.

21. In any event, Regulation No 857/84, in my view, precludes a different reference year from that chosen by the Member State 23. The reply to this question may be for producers in general from being taken derived, in my view, from Article 4(2) of into account in favour of holders of a devel­ Regulation No 857/84:

OPINION OF MR VAN GERVEN—JOINED CASES 196/88 TO 198/88

'The reference quantities freed shall, as mutandis, where a producer has ceased necessary, be added to the reserve referred to production spontaneously.' (paragraph 22 of in Article 5.' (emphasis added) the judgment)

CORNÉE AND OTHERS v COPALL AND OTHERS

39 other words, if that proportion exceeds the paragraph 7 above). In this context, I quantities which are necessary for granting, interpret the third question submitted by the in accordance with the decision of the national court as raising the problem Member State, additional reference quan whether the Community provisions them tities to the producers concerned, the selves have not infringed the principle of the balance must be transferred to the national protection of legitimate expectation. reserve. Conversely, if that proportion is insufficient for granting, in accordance with the decision of the Member State, the additional reference quantities provided for in favour of the affiliated priority producers and the national reserve also proves inadequate in that respect, the decentralized management system must allow for a Also underlying the third question is the subsequent reduction of the percentage of national court's consideration that the freed quantities retained with purchasers holders of a development plan must be able who have been able to satisfy the needs of to reckon 'on the stability of commitments priority producers affiliated to them, in such entered into previously in order to enable a way as retroactively to neutralize the them to increase the productivity of their differences in treatment as between

arrangements. If that is the case, those necessary to examine whether holders of a arrangements appear to me neither to development plan may rely on an acquired conflict with Regulation No 857/84 nor to right with a view to fulfilling the production infringe the principle of non-discrimination. objectives provided for in their plan. Certainly, it is not for the Court to interpret Decree No 83-442 of 1 June 1983 which governs the position of holders of a devel Examination of the third question opment plan in France. This question must

39 — The national court's statement that the Decree of 10 July 26. Article 5c of Regulation No 804/68 1985 permitted an increase in production limited to l°/o for °/o fixed the total quantity guaranteed to 1985//86 seems to me to be incorrect the marketing year 1985 incorrect..

OPINION OF MR VAN GERVEN — JOINED CASES 196/88 TO 198/88

72/159/EEC, which defined the position in achieving sufficient levels of income in the Community law of holders of a devel­ future. When a limitation on the production opment plan. of such farmers is imposed on the basis of a reference year prior to the year of completion of their development plan, that is to say at a time when production will not normally have reached the level of profita­ 27. Although it is true that Directive bility forecast for the time of the plan's 72/159/EEC requires Member States to expiry, it is clear that this limitation have development plans approved by their produces effects which are harsher for them competent authorities, such approval does than for producers whose production has not confer upon the persons concerned the remained constant. Therefore, observance of right to achieve the production objectives the principle of legitimate expectation was 40 laid down in those plans. Approval is particularly necessary, which the Council limited, in my view, to conferring on was aware of, as we will see below. holders of a development plan the right to received certain aid, inter alia in the form of interest rate subsidies, whilst leaving economic and financial responsibility for the 29. In its judgment of 16 May 1979 in Case farm in the hands of the farmers 4I 84/78 Tomadini v Amministrazione delle concerned. finanze dello Stato [1979] ECR 1801, the Court reiterated the scope of the principle of legitimate expectation:

CORNÉE AND OTHERS v COPALL AND OTHERS

adopt transitional measures in accordance (ii) the right conferred on Member States with the Court's case-law were met in this to allocate additional reference quan­ case and I have no reason to doubt the tities to producers in a special situation soundness of this judgment made by the and in particular to holders of a devel­ Council in the exercise of its political opment plan (Articles 2 to 5 of Regu­ discretion. lation No 857/84);

(b) That provision does preclude a Member State from allocating to holders of a development plan which is being implemented, referred to at (a) above, a single fixed additional reference quantity which bears no relationship to the production objectives laid down in the plan.

OPINION OF MR VAN GERVEN—JOINED CASES 196/88 TO 198/88

(c) That provision does not permit Member States which have chosen 1983 as the reference year, to choose another reference year in order to determine the individual reference quantities to be allocated to the producers referred to at paragraph (a) above who completed their development plan in 1981 or 1982.

(2) Neither Council Regulation No 857/84 of 31 March 1984 nor the prohibition on discrimination laid down in the second subparagraph of Article 40(3) of the Treaty precludes a Member State which has opted for formula B from entrusting purchasers with the task of provisionally allocating a proportion of the quantities freed by affiliated producers to other affiliated producers who are m a special situation, if such allocations are capable of being adjusted subsequently in such a way as to neutralize the difference of treatment between producers depending on the purchaser to whom they are affiliated.

(3) Council Regulations Nos 856/84 and 857/84 of 31 March 1984, by requiring Member States to apply the scheme for controlling milk production to producers who have adopted a development plan under Directive 72/159/EEC whilst permitting them to take account of the situation of such producers by means of the allocation of an additional reference quantity, do not infringe the principle of the protection of legitimate expectations.