C-353/92

Council of the European Union, represented by Jean-Paul Jacqué, Director of the Legal Service, and Sofia Kyriakopoulou, of the same service, acting as Agents, with an address for service in Luxembourg at the office of Xavier Herlin, Manager of the Legal Directorate of the European Investment Bank, 100 Boulevard Konrad Adenauer,

defendant,

supported by

Commission of the European Communities, represented by Xenophon A. Yata- ganas, Legal Adviser, acting as Agent, with an address for service in Luxembourg at the office of Georgios Kremlis, of its Legal Service, Wagner Centre, Kirchberg,

intervener,

* Language of the case: Greek.

having regard to the Report for the Hearing,

after hearing oral argument from the Hellenic Republic, the Council and the Com- mission at the hearing on 18 January 1994,

after hearing the Opinion of the Advocate General at the sitting on 9 March 1994,

gives the following

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5 According to the seventeenth recital in the preamble to the basic Council regula- tion, compensatory payments should be paid once a year for a given area.

6 Article 10(1) and (2) of the basic Council regulation lay down the conditions for the payment of compensatory payments in the following terms:

' 1 . The compensatory payments for cereals and protein crops, as well as the com- pensation for the set-aside obligation, shall be paid between 16 October and 31 December next following the harvest.

2. In order to qualify for the compensatory payment, a producer must, at the lat- est by 15 May preceding the relevant harvest:

— have sown the seed,

s Commission Regulation (EEC) N o 2294/92 of 31 July 1992 on detailed rules for the application of the support system for producers of the oil seeds referred to in Council Regulation (EEC) N o 1765/92 (OJ 1992 L 221, p. 22, hereinafter referred to as 'the implementing regulation'), which became applicable as from the 1993/1994 marketing year, provides (Article 2):

' 1 . The compensatory payment provided for in Article 5(1) and (2) of Regulation (EEC) N o 1765/92 shall be allocated solely to areas under oil seed crops:

(b) included in a "general scheme" as referred to in Article 2(5) of Regulation (EEC) N o 1765/92;

(c) covered by an application including a cultivation plan and lodged with the competent authority by the date set by the Member State for that seed and region in question, which may not be later than the date mentioned in Annex I;

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1 1 The applicant states that, in the Hellenic Republic, the best period for growing soya beans is between 20 April and 15 July and that small producers usually do not sow soya beans as a secondary crop until after 15 May. Since Article 10(2) of the basic regulation specifies that date as the final date for sowing, in practice it excludes small producers from the benefit of compensatory payments for their sec- ondary crops.

i2 For that reason, the Greek Government claims that the Court should annul the basic regulation. Its action is based on five pleas in law, alleging breach of the obli- gation to state grounds, of the principle of non-discrimination, of Article 39 of the Treaty, and of the principles of the protection of legitimate expectations and of the protection of Community preference.

Admissibility

n The Council, supported by the Commission, considers that the application is inad- missible because Article 10(2) of the basic regulation does not apply to compensa- tory payments for crops of soya beans, the only crops at issue in these proceed- ings. Paragraph 2 should be read in conjunction with paragraph 1, which mentions only cereals and protein crops. Payments for oil seeds, and therefore for soya, are therefore, in their view, governed by the implementing regulation, a measure not at issue in the present proceedings.

i4 O n that point it is sufficient to note that, by virtue of Article 2(1 )(b) of the imple- menting regulation, the compensatory payment is available only in respect of areas under oil seed crops included in the general scheme. In contrast, as the Advocate General points out in paragraph 21 of his Opinion, compensatory payments to small soya producers who have opted for the simplified scheme remain subject to the basic regulation, the annulment of which is sought in these proceedings.

i7 The Greek Government goes on to say that soya producers who sow after 15 May, a category that includes above all small producers in Greece who sow a secondary crop, are, contrary to the fundamental objective of the regulation just referred to, excluded from the benefit of compensatory payments whereas, under the previous rules, they received financial support. However, the basic regulation does not give any specific reasons for that exclusion. The basic regulation should therefore be declared invalid for inadequacy of the statement of the reasons on which it is based.

is That plea cannot be upheld. As the Council rightly stated, sufficient reasons are given for every aspect of the basic regulation.

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i9 As the Court has consistently held, the statement of reasons required by Arti- cle 190 of the Treaty must be appropriate to the nature of the measure in question. It must show clearly and unequivocally the reasoning of the institution which enacted the measure so as to inform the persons concerned of the justification for the measure adopted and to enable the Court to exercise its powers of review. It has also been held that the statement of the reasons for a measure is not required to specify the matters of fact or of law dealt with, provided that it falls within the general scheme of the body of measures of which it forms part (see the judgment in Joined Cases C-63/90 and C-67/90 Portugal and Spain v Council [1992] EGR 1-5073, paragraph 16).

20 In this case, the eighteenth recital to the basic regulation refers expressly to the need 'to determine certain conditions for applying for compensatory payments and to specify when producers shall be paid'. The setting of a final date for sowing and for lodgment of the application is not therefore excluded.

The plea as to breach of the principle of non-discrimination

24 According to the Greek Government, small producers in Greece are treated less favourably than their counterparts in the other Member States. Small producers in Greece sow soya as a secondary crop after 15 May because, in view of the soil and climatic conditions in the Hellenic Republic, the period from 20 April to 15 July is the best for sowing soya. In the other Member States, the sowing period is shorter and sowing generally takes place well before 15 May. Since the contested date is imposed without distinction on producers whose circumstances are objectively dif- ferent, the principle of equal treatment laid down in the second subparagraph of Article 40(3) of the Treaty is infringed.

25 It must be borne in mind that the agricultural policy requires the adoption of com- mon rules which may affect producers differently according to the individual ori- entation of their production or local conditions; but they may not be regarded as constituting discrimination prohibited by Article 40(3) of the Treaty if they are based on objective rules formulated to meet the needs of the general common organization (see in particular the judgment in Case 179/84 Bozzetti v Invernizzi [1985] ECR 2301, paragraph 34).

26 Article 10(2) of the basic regulation comes within that category of rules.

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The plea as to breach of Article 39 of the Treaty

32 The Greek Government maintains that Article 10(2) of the basic regulation under- mines two objectives of the common agricultural policy.

33 First, soya producers who sow their land after 15 May are not assured of a fair standard of living within the meaning of Article 39(l)(b) of the E E C Treaty. Since that crop fails to qualify for compensatory payments as a result of Article 10(2), the income of those growers is reduced.

34 Secondly, producers are discouraged from growing soya after 15 May, so that the availability of supplies to the Community mentioned in Article 39(1 )(d) is no longer guaranteed.

35 The Greek Government then refers to Article 39(2) by virtue of which, in working out the common agricultural policy, account is to be taken of 'the particular nature of agricultural activity, which results from the social structure of agriculture'. Social policy in that sector should therefore seek to reduce inequalities between large and small producers. In the present case, the producers who sow soya as a secondary crop after 15 May are above all small producers — the large producers confine themselves to a single main crop. Since Article 10(2) of the basic regulation - prevents the former from receiving compensatory payments, the differences between small and large producers are accentuated.

39 Those reductions are not such as to affect the legality of the basic regulation. The losses of income are offset by the compensatory payments for which small soya producers in Greece may qualify. Moreover, there is nothing in the documents before the Court to indicate that it is absolutely impossible for those producers to complete sowing by 15 May. Furthermore, it is common ground that the Greek authorities have not made any approach to the Community authorities to vary the date provided for in Article 10(2) of the basic regulation, as allowed under certain conditions by the seventh indent of the first paragraph of Article 12.

40 It must also be noted that Article 39(1 )(d) seeks to ensure the availability of sup- plies in the Community but does not require, as the Greek Government contends, self-sufficiency.

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4i In those circumstances, it cannot be considered that, by fixing 15 May as the final date, the Council infringed Article 39 of the Treaty.

42 The plea as to infringement of that provision must therefore be rejected.

markets and which they enjoyed at a given time (see Case C-350/88 Delacre, cited above, paragraph 34).

46 That applies with greater force in the present case in view of the fact that Regula- tion N o 3766/91, applicable to the 1992 harvests, already required, in Article 4(7), the observance of a final date (30 May) for the lodgment of an application for financial support for soya as a secondary crop. Accordingly, Article 10(2) of the basic regulation did not constitute an innovative departure from the previous reg- ulation except in so far as it set the final date as 15 rather than 30 May.

47 Furthermore, the new system introduced in 1992 by the basic regulation applies only with effect from the 1993/1994 marketing year. It follows that soya producers had sufficient time to adjust their sowing of secondary crops to the new rules, which merely brought forward by 15 days the final date laid down in the previous regulation.

48 It follows from the foregoing that the plea as to breach of the principle of the pro- tection of legitimate expectations must also be rejected.

The plea as to breach of the principle of Community preference

49 According to the Greek Government, by adopting Article 10(2) of the basic reg- ulation, the Council infringed the principle of Community preference. Commu- nity producers, being unable to qualify for the compensatory payments for soya

Costs

53 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since the Hellenic Republic has been unsuccessful, it must be ordered to pay the costs. Pursuant to Article 69(4), the Commission should bear its own costs.

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O n those grounds,

THE COURT

Delivered in open court in Luxembourg on 14 July 1994.

R. Grass O . Due Registrar President

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