C-236/90

OPINION O F MR LENZ — CASE C-236/90

OPINION OF ADVOCATE GENERAL LENZ delivered on 27 February 1992

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MAIER v FREISTAAT BAYERN

by the producers concerned to the compe- Upon the adoption of Regulation No tent authority designated by the Member 764/89 he applied (within the stipulated State, in accordance with the procedure laid period) for a reference quantity under that down by it and provided that the producers regulation (a special reference quantity), so can prove that they still operate, in whole or that first the lessee, during the term of the in part, the same holdings as those they oper- lease, and thereafter the plaintiff's children ated at the time of the approval, referred to might engage in dairy farming. in Article 5(2) of Commission Regulation (EEC) N o 1391/78, [ 9 ] of their premium applications.'

7. The defendant's authorities rejected that application, since the plaintiff was unable to produce on his holding up to the quantity requested (see Article 3a(l)(b) of Regulation 5. The significance of that provision for the N o 857/84). It appears from the order for present case arises from the chronological reference that those authorities take that sequence of the events underlying the main approach, on the basis of Article 3a of Reg- dispute and from the contested decision of ulation N o 1546/88, where the milk pro- the defendant in the main proceedings (here- ducer has let his holding at the end of either inafter 'the defendant'). the non-marketing or the conversion period, as the case may be.

9. There is no need, in my view, to dwell at length on this question. I understand Article 3a of Regulation N o 1546/88 to mean that a farmer who had operated a holding at the time of the approval of his premium applica- tion no longer operated that holding at the 11. That interpretation is confirmed by Arti- time of his application for a special reference cle 3a of Regulation N o 857/84, under which quantity if at that latter time the holding was in order to receive a special reference quan- let to a third party. tity an applicant must be a producer. In that respect, Article 3a of Regulation N o 1546/88 simply clarifies a condition which is 10. The term Operate' means in particular, already contained in Regulation No as may be seen from Article 12(d) of Regu- 857/84. 10 A further example of a mere clari- lation N o 857/84, the activity of the 'produc- fication of an existing requirement may be er' in connection with the 'holding', the lat- seen where Article 3a of Regulation N o ter term meaning all the relevant production 1546/88 and the third recital in the preamble units. In general usage, however, a person to Regulation N o 1033/89 state — for the can be regarded as a producer only if he can purpose of defining a producer in relation to personally decide on the use of those pro- the time factor — that the producer must duction units for the purpose of production. still 'operate' the holding at the time of sub- That also applies in relation to the legal term mitting his application (which cannot be the applicable here, as is made especially clear in case if he no longer has it at his disposal the German version of Article 12(c), third [''verfügt der Erzeuger nicht ... mehr über subparagraph, of Regulation N o 857/84 as dem ... Betrieb']). That position, too, is amended by Regulation N o 764/89, accord- already defined in the second part of Article ing to which (here, for the purposes of applying Article 3a of the Regulation No 1546/88) a 'Undwirtschaftliche [r] Betriebsle- 10 — For the Member States in which Formula B applies, Article iter' (literally a person in charge of an agri- 9(l)(a) of Regulation No 1546/88 as amended by Regula- tion No 1033/89 lays down the necessary consequence for cultural holding; in the English version, a the purchaser's reference quantity.

3a(l) of Regulation N o 857/84. More specif- concept of producer may also include a les- ically, Article 3a(l)(a) and (b) express the see, since the rules relating to milk produc- principle that a producer who let his (entire) tion never relate to the owner of the holding holding either during the non-marketing or as a person but to the holding and its con- conversion period or afterwards is not enti- stituent parts and since, furthermore, the ref- tled to claim a special reference quantity in erence quantity constitutes a transferable his capacity as lessor. That clearly follows, in asset. In that regard, it should first of all be the case of a lease during the non-marketing pointed out that in the present case it is not or conversion period, n from Article 3a(l)(a) the lessee but the lessor who is seeking a spe- and, in the case of a subsequent lease, from cial reference quantity. Secondly, while the Article 3a(l)b), I 2 according to which appli- Community rules concerning the right to a cants must be 'able to produce on their hold- special reference quantity take account to a ing ... the reference quantity requested'. 1 3 certain extent of the circumstances of the That presupposes not only that the corre- holding, in particular as regards the quantity sponding production units exist but also that delivered or sold during the reference peri- the applicant has them at his disposal. A les- od, 14 they confer this right only on produc- sor does not meet this requirement. ers, in other words on persons who, being in charge of a holding, decide on the use of the production units. Thirdly, although it must be conceded that the plaintiff is right to state that the reference quantity may, according to the relevant provisions (Article 7 of Regula- tion N o 857/84 as amended by Regulation N o 590/85; ' 5 Article 7 of Regulation No 1546/88), be transferred from the lessor to the lessee and may then — depending on the terms of the lease — be regarded as a trans- ferable asset, such a transfer takes place, if at all, 16 not in isolation from the holding but only, as can be seen from those provisions, together with it. The intention to make it possible for the lessee — long after the begin- ning of the lease — to produce milk on the 12. In this connection it is finally necessary basis of a reference quantity granted to the to answer the plaintiff's argument that the pføintiff is incompatible with that principle.

Question 2

17. The comparison with the first group of 14. I. As regards the validity of the above farmers must in fact be made for the purpose rules, the national court first expresses of applying the principle of the protection of doubts as to the compatibility of those rules legitimate expectations. Concerning that with Article 3a (specifically Article 3a(l)(b)) principle, the Court declared in the Mul- of Regulation N o 857/84. That article der , 7 and von Deetzen l s cases, cited above, requires only that it must be possible to pro- duce the reference quantity applied for on the holding. In that regard I would refer to my examination of the first question and state that Article 3 a of Regulation No 'that a producer who has voluntarily ceased 1546/88, on the contrary, merely clarifies a production for a certain period cannot legit- requirement for the allocation of a special imately expect to resume production under reference quantity which is already con- the same conditions as those which previ- tained in the regulation adopted by the ously applied and not to be subject to any Council. The reservation expressed by the rules of market or structural policy adopted national court is therefore without founda- in the mean time;' tion.

specifically affect him precisely because he situation of a farmer who did not take part availed himself of the possibilities offered by in the Community programme. Here, how- the Community provisions.' 19 ever, it is sufficient to state that any disad- vantage which the plaintiff may have suffered derives not from Article 3 a of Regulation No 1546/88 but from the absence of a set of 18. Such a comparison is also necessary in rules applying to the group of farmers to order to ascertain whether the provision which he belongs. 22 That does not give rise infringes the prohibition on discrimination to any doubts as to the validity of the provi- laid down in Article 40(3) of the EEC Trea- sion in question. ty 20 (which, in the national court's view, it may do with regard to the situation of other farmers who participated in the Community non-marketing or conversion programme). That principle precludes comparable situa- 21. (2)(a) With regard to the period after tions from being treated in a different man- the adoption of ReguUtion No 764/89, during ner unless the difference in treatment is which, according to the plaintiff, the desired objectively justified. 21 reference quantity should now make it pos- sible for the lessee to engage in milk produc- tion, it is first necessary to consider the com- parison with farmers who did not take part 19. I shall now compare the plaintiff's situa- in the Community non-marketing or conver- tion with that of both groups of farmers. It sion programme. will be necessary in doing so to distinguish between the three periods mentioned in the order for reference, namely the period before the adoption of Regulation N o 764/89, the period after its adoption and the period fol- 22. In that respect it follows that the plain- lowing the expiry of the lease. tiff could at the most be adversely affected by the provisions which make it impossible for the lessee to obtain such a reference quantity. If a farmer who held a reference 20. (1) Regarding the disadvantages which quantity after the adoption of Regulation No farmers in the plaintiff's situation suffered 857/84 had let his holding in 1987 for because before the adoption of ReguUtion 20 years, he would have lost that reference No 764/89 they obtained no (special) refer- quantity at the beginning of the lease, in ence quantity of which they could make use accordance with both Article 7(1) of Regula- at that time either by operating the holding tion N o 857/84 and Article 5(1) of Regula- themselves or by leasing it, the only compar- tion N o 1371/84 23 (see also Article 7(1) of ison to be considered is that with the

23. That situation is an expression of the general principle (even disregarding Regula- tion N o 764/89) that, as between lessor and lessee, for the duration of the lease only the latter, as the 'person ... farming a holding', 24 can be the person entitled to a reference 27. It might indeed appear at first sight that quantity. in the present case Article 3a also precludes a claim for a special reference quantity by the lessee, since he did not operate the holding in question at the time of the approval of the premium application under Article 5(2) of 24. In so far as Article 3a of Regulation N o Regulation (EEC) N o 1391/78. Such a con- 1546/88 (as amended by Regulation N o sequence would show that the person farm- 1033/89) now precludes a claim by a lessor, ing the holding, who as such fulfilled an because he no longer farms the holding essential formal requirement for entitlement which he operated at the time of his applica- under Regulation N o 764/89, is a person tion for a premium, such a farmer is himself other than the one whose legitimate expecta- in no worse position on that account than tions were the reason for the introduction of other farmers belonging to the abovemen- the rules. tioned reference group.

graph of Article 3a(2). The Court has transaction after the expiry of a non- expressed its views of that consequence in marketing undertaking entered into pursuant the Rauh case, 25 in which, following the to Council Regulation (EEC) N o 1078/77 of expiry of the non-marketing period, the 17 May 1977 by his predecessor in title.' owner of the holding had transferred it in a manner similar to succession. The Court considered it a restriction inconsistent with the protection of the legitimate expectations of the original producer that he, after the expiry of the non-marketing obligation which he had undertaken, was unable (in a 30. Concerning the problem that the pro- transaction similar to succession) to transfer ducer making the application is not the per- the benefit of the grant of a reference quan- son whose legitimate expectations are pro- tity (paragraph 18). In paragraph 19 the tected, 26 the Court declared that for the Court declared in that respect: purposes of Article 3a 'producers' meant

'Those restrictions would be maintained if Article 3a of Regulation N o 857/84 were 'not just farmers who themselves entered interpreted as not permitting such an heir or into an undertaking pursuant to Regulation successor to have granted to himself, in the N o 1078/77 but also those who, after the same way as the producer himself, a special expiry of the undertaking entered into by the reference quantity under the conditions laid farmer, have taken over the holding in ques- down in Article 3a.' tion by succession or by a similar transac- tion.'

35. (i) In one example the plaintiff's position is compared with that of a farmer who, because of health problems, did not, unlike the plaintiff, let his holding but operated it 32. The legal position of the lessee under with the assistance of employed labour. The Article 3a of Regulation N o 1546/88 must national court believes that smaller holdings, thus be determined with due regard to the for which it is more difficult to find labour, principle of the protection of legitimate might, in cases in which the owner experi- expectations. It cannot, therefore, be con- ences health problems, be placed in a worse trary to that principle to refer the lessor to position than larger ones. the general rule expressed in concrete terms in that article that, in the relationship between himself and the lessee for the dura- tion of the lease, only the lessee, if anyone, may be entitled to a reference quantity.

36. In that respect it should first of all be stated that if there had been no lease the plaintiff would (subject to the remaining requirements of Article 3 a of Regulation N o 33. To sum up, I consider that the contested 857/84) have been entitled to a special refer- provision, in so far as it is relevant here, does ence quantity. The fact that he does not have not, with regard to the period after the adop- such a right in his capacity as lessor, how- tion of Regulation N o 764/89, place the ever, is in itself, as has been shown, simply plaintiff in a worse position than the group the expression of a general principle underly- of farmers who did not make use of Regula- ing the milk quota rules as a whole. tion N o 1078/77 and who, after being allo- cated a reference quantity, let their holdings in 1987. In that context there is no infringe- ment of the principle of the protection of legitimate expectations.

38. In order to assess the national court's discriminates against farmers in the plaintiff's doubts in that light, it must first be ascer- situation in comparison with those who were tained whether the abovementioned general able to continue to operate their holding principle (and also, inevitably, the provision with employed labour. in issue here) discriminate against smaller holdings. That question is clearly to be answered in the negative. Provided that it is guaranteed that in such a situation the lessee has a reference quantity or may at least claim one, the rules add nothing to the economic 41. (ii) The national court goes on to raise distinctions which exist between self- the question whether the plaintiff suffers dis- operation and leasing. The disadvantages to crimination owing to the fact that 'whether which a smaller holding may be exposed in or not the producer can invoke a special sit- connection with the employment of labour uation as having given rise to a non- are therefore only those which it must bear marketing commitment depends on the time in any event. at which the land happens to be let'. In that respect the national court explains that if the plaintiff had not let his holding he could have relied for the time being on a provi- sional reference quantity for deliveries. After that quantity had been allocated, the national court adds, the plaintiff could have let the holding, subject to the release of a certain 39. It further follows that, at the most, a par- quantity. ticular disadvantage, going beyond this framework, may be experienced by a farmer in the plaintiff's position as a result of the rules under which no special reference quan- tity is to be allocated to the lessee. I would refer in that respect, however, to what I have 42. In that respect it is sufficient to state that said regarding the comparison with farmers the considerations of the national court are who did not take part in the Community based on an incorrect premise, as the Com- programme under Regulation No mission rightly points out. The second sub- 1978/77 and stress that it is necessary when paragraph of Article 3a(4) of Regulation No assessing such claims to observe the superior 857/84 provides that the special reference principles of law, which include the prohibi- quantity is to be returned to the Community tion of discrimination. reserve if the holding is sold or leased before the end of the eighth period of application of the additional levy scheme (in other words, before 1 April 1992). In that case not only would the plaintiff lose the special reference quantity, but, instead of being transferred to the lessee, it would be returned to the Com- munity reserve. 27 40. In those circumstances I am unable to conclude that Article 3a of Regulation N o 1546/88, in so far as it requires the 27 — O n the question of the validity of this rule see von Deetzen v HauptzoUamt Oldenburg, cited above, in particular para- holding to be operated by the applicant, graph 33.

44. All of those considerations lead me t o suggest that the C o u r t s h o u l d rule as fol- lows:

1. Article 3a of R e g u l a t i o n N o 1546/88 as a m e n d e d b y R e g u l a t i o n N o 1033/89 is t o b e i n t e r p r e t e d as meaning t h a t a farmer w h o had o p e r a t e d a h o l d i n g at the t i m e of a p p r o v a l of his p r e m i u m n o l o n g e r o p e r a t e d t h a t h o l d i n g at t h e t i m e of his application for a special reference q u a n t i t y if at that latter t i m e t h e h o l d i n g was let t o a t h i r d party.

2. E x a m i n a t i o n of t h e s e c o n d question has disclosed n o factor of such a k i n d as t o affect t h e validity of Article 3a in so far as the legal situation referred t o in t h e first q u e s t i o n is concerned.

28 — With regard to the legal position following the expiry of a lease, see Article 7(3) of Regulation N o 1546/88 and (con- cerning its predecessor, Article 5(3) of Regulation N o 1371/84) Case 5/88 Wachauf v Bundesamt für Ernährung und Fortwirtschaft [1989] ECR 1-2609, paragraph 15, and Case C-l 77/90 Kühn v Landwirtschaftskammer Weser-Ems [1992] ECR 1-35, paragraph 22.

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