C-311/90

1. In this case, the Finanzgericht Munich has referred two questions concerning the However, Member States shall be auth­ validity of Council Regulation No 775/87 orized to withdraw, as from the fourth of 16 March 1987 (Official Journal 1987 period, the quantities provided for the fifth L 78, p. 5), temporarily withdrawing a period.' proportion of the reference quantities mentioned in Article 5c(1) of Council Regu­ lation No 804/68 (Official Journal, English Special Edition 1968 (I), p. 176) on the common organization of the market in milk The effect, as provided by Article 1(2), was and milk products. to make any excess of milk or milk equi­ valent delivered or produced during each of the 12-month periods in question, over the quantities so reduced, subject to the additional levy. Article 2(1) provides for 2. In order to curb excess production, compensation, fixed at ECU 10 per 100 Article 1(1) of Regulation No 775/87 kilograms, to be granted in respect of the provides, in its first three subparagraphs, as quantities withdrawn. Article 2(2) permits follows: Member States to make a financial contri­ bution to the measure by increasing the compensation for the quantities withdrawn in the fourth 12-month period up to ECU 12.5 per 100 kilograms. 'From the fourth 12-month period of application of the additional levy arrangements specified in Article 5c of Regulation (EEC) No 804/68, a uniform proportion of each reference quantity as mentioned in paragraph 1 of that Article 3. Mr Hierl, who is the plaintiff in the main shall be withdrawn. proceedings, farms a mixed holding, approximately one half of which consists of grazing land used mainly for daiiy cattle. Mr Hierl enjoyed a reference quantity (or 'quota') of 17 000 kilograms, which on 16 This proportion shall be set to give a total June 1987 was reduced to 16 490 kilograms withdrawn quantity of 4%, for the fourth as from 1 April 1987. That reduction was period, and of 5.5%, for the fifth period, of made pursuant to Article 5c(3), second and the guaranteed total quantity for each third subparagraphs, of Regulation Member State laid down in paragraph 3 of No 804/68, as amended by Council Regu-

4. The Finanzgericht has doubts as to the 2. If Question 1 is answered in the validity of the provision upon which that affirmative: withdrawal was based. In the first place, it observes that, by Article 39(2) of the Treaty, in implementing the common agricultural policy account is to be taken of 'the Is the abovementioned legal provision particular nature of agricultural activity, invalid in its entirety or only in so far as which results from the social structure of milk producers having a certain agriculture and from structural and natural reference quantity are affected thereby disparities between the various agricultural (and if so what quantity)?' regions', as well as 'the need to effect the appropriate adjustments by degrees'. According to the Finanzgericht, it belongs to the particular nature of agricultural activity that, particularly in the case of dairy Conformity with the objectives of the farming, agriculture has traditionally been common agricultural policy carried on by family holdings, fodder from which is often used for the keeping of the cattle. It argues that such holdings require greater protection as compared with 6. I shall first consider the question whether industrial-scale agricultural producers, and the contested provision is consistent with the that the provisions on the withdrawal of objectives of the common agricultural policy reference quantities do not do justice to that laid down in Article 39 of the Treaty. It need for protection. The Finanzgericht should be emphasized at the outset, suggests, furthermore, that the uniform however, that it is clear from the case-law withdrawal of 5.5% of each quota is of the Court that the aim of Regulation contrary to the principle of equal treatment. No 775/87 as set out in its first recital, namely the attainment of a reasonable balance between supply and demand, is a legitimate one in the context of the common agricultural policy: see Case 84/87 Erpelding v Secrétaire d'État à l'Agriculture et à la Viticulture [1988] ECR 2647, at 5. The Finanzgericht has accordingly paragraph 26 of the judgment, and see also referred the following two questions to the Case C-331/88 Fedesa [1990] ECR 1-4023, Court: paragraphs 26 to 27 of the judgment. Nor

8. Finally the Finanzgericht refers to Case 139/77 Denkavit v Finanzamt Warendorf [1978] ECR 1317, in support of the prop­ osition that holdings which produce their own fodder are particularly worthy of protection, but it is clear that no such general proposition can be derived from that 7. Given that the aims set out in Article 39 case. As the Danish Government observes, of the Treaty also include ensuring a fair in Case 139/77 Denkavit the national standard of living for the agricultural measures at issue were designed to community, easing the plight of the small compensate German farmers for the farmer may also be a legitimate policy revaluation of the German mark. objective. The regulation cannot however be Accordingly, the distinction between criticized for failing to make special farmers who produced their own fodder, provision to that end. As the Commission and those industrial producers who could points out, there are in fact other provisions import it from abroad, was relevant to the of the milk quota legislation which make it question whether a measure which gave possible for Member States to single out more favourable treatment to the former small producers for more favourable category could be classified as discrimi­ treatment: see Article 2(1) of Commission natory: see paragraph 17 of the judgment. I Regulation No 1371/84 of 16 May 1984 conclude that the contested provision is (Official Journal 1984 L 132, p. 11), which consistent with the objectives of the enables Member States to take into account, common agricultural policy laid down in in calculating amounts of quota, the level of Article 39 of the Treaty. deliveries of certain categories of person; and see also Article 3(b) of Council Regu­ lation No 857/84, inserted by Article 1(2) of Council Regulation No 3880/89 of 11 December 1989 (Official Journal 1989 L 378, p. 3), which enables additional or special quotas to be granted to producers whose individual quotas do not exceed Equal treatment 60 000 kilograms. While all provisions of Community legislation must further some objective of the Community, it plainly cannot be required that every provision serve all of the Community's goals, some of which in any event could often not be realized simultaneously: see Joined Cases 9. It must next be considered whether the 197 to 200, 243, 245 and 247/80 Ludwigs- contested provision is contrary to the hafener Walzmühle v Council and principle of equal treatment. That principle Commission [1981] ECR 3211, at paragraph is not only a general principle of law, but is

10. It' is to be noted that no concrete evidence is produced in support of the thesis that the contested measure has a relatively greater effect on small producers, and the proposition was disputed by both the Commission and the Danish Government in 'The common organization shall be limited their written observations, and by the to pursuit of the objectives set out in Article Commission at the hearing. As the 39 and shall exclude any discrimination Commission and the Danish Government between producers or consumers within the point out, that proposition is by no means Community.' self-evident, given that large producers may bear a larger burden of fixed costs, and thus find it more difficult to scale down their production. Moreover, as the Council suggested in its own written observations, it is not inconceivable that the compensation provided for in Article 2 of Regulation No 775/87 would fully compensate for any loss of profits. According to the case-law of the Court, discrimination can consist in treating different situations identically as much as in treating similar situations differently: see for example Case 13/63 Italy v Commission [1963] ECR 165 at 178, and Case 8/82 11. In any case, however, a measure which Wagner v BALM [1983] ECR 371, affects producers in different ways, paragraph 18 of the judgment. The Finanz­ depending upon the particular nature of gericht suggests that the uniform withdrawal their production or on local conditions, of 5.5% of every quota discriminates against need not be regarded as discriminatory for small producers by treating them identically the purposes of Article 40(3), if the measure to large producers. The Finanzgericht is based on objective criteria and is designed argues, in particular, that smaller producers to meet the needs of the common organ­ have greater difficulty than larger ones in ization of the market: see Case 179/84 adapting to the need to reduce production. Bozzetti v Invemizzi [1985] ECR 2301, For instance, a large producer can cut costs paragraph 34 of the judgment. There may in by buying in less imported fodder, whereas fact be no way of ensuring that the effects a small producer is more likely to produce of a general measure are absolutely identical his own feedingstuffs. Similarly, a large for all categories of producer; in such farmer is more likely to be able to circumstances, it will be sufficient if the compensate for reduced milk production by means chosen are objectively justified and stepping up production of other products. appropriate to their purpose, as long as that That point of view is supported by the purpose itself comes within the scope of the Greek Government which suggested, in its common agricultural policy: see Case 84/87 written observations and at the hearing, that Erpelding, cited above in paragraph 6, at the contested provision ignores the paragraph 30 of the judgment.

13. It is to be noted, finally, that the 14. In my view, therefore, the first question Community legislature enjoys a certain referred by the Finanzgericht is to be margin of discretion in enacting measures in answered in the negative. There is therefore the agricultural sector, which corresponds to no need to answer the second question.

Conclusion

15. I am accordingly of the opinion that the Court should answer the questions referred by the Finanzgericht as follows:

Examination of the questions referred has not revealed any factor of such a lund as to affect the validity of Article 1(1) of Regulation No 775 / 87 of 16 March 1987.

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