C-152/95

JUDGMENT OF 9. 10. 1997 — CASE C-152/95

J U D G M E N T O F T H E C O U R T (Second Chamber) 9 October 1997 *

In Case C-152/95,

R E F E R E N C E to the Court under Article 177 of the EC Treaty by the Tribunal Administratif, Amiens (France), for a preliminary ruling in the proceedings pend- ing before that court between

Michel Macon and Others

and

MACON AND OTHERS v PRÉFET DE L'AISNE

Advocate General: D. Ruiz-Jarabo Colomer, Registrar: R. Grass,

after considering the written observations submitted on behalf of:

— Michel Macon and other persons, by Alain Letissier, of the Laon Bar,

— the French Government, by Catherine de Salins, Deputy Director of the Legal Affairs Directorate of the Ministry of Foreign Affairs, and Gautier Mignot, Secretary of Foreign Affairs in the same Directorate, acting as Agents,

— the Commission of the European Communities, by Gérard Rozet, Legal Adviser, acting as Agent,

JUDGMENT OF 9. 10. 1997 — CASE C-152/95

Article 2 of Council Regulation (EEC) N o 1637/91 of 13 June 1991 fixing com- pensation with regard to the reduction of the reference quantities referred to in Article 5c of Regulation (EEC) N o 804/68 and compensation for the definitive discontinuation of milk production (OJ 1991 L 150, p. 30).

2 That question has been raised in proceedings between Michel Macon and other persons, members of the Groupement Agricole d'Exploitation en Commun (col- lective farming group) du Canada in Ardon (the ' G A E C du Canada') and the Préfet de l'Aisne concerning payment of compensation for definitive discontinua- tion of milk production for the marketing year 1991/92.

3 Having milk reference quantities in the context of direct sales, the G A E C du Canada applied, in respect of the milk marketing year 1991/92, for the compensa- tion for definitive discontinuation of all milk production provided for by Regu- lation N o 1637/91, a regulation which forms part of the additional levy scheme.

4 According to the second sentence of the first subparagraph of Article 5c(l) of Regulation (EEC) N o 804/68 of the Council of 27 June 1968 on the common organization of the market in milk and milk products (OJ, English Special Edition 1968 (I), p. 176), as amended by Council Regulation (EEC) N o 856/84 of 31 March 1984 (OJ 1984 L 90, p. 10), the objective of the additional levy introduced by the latter regulation was 'to curb the increase in milk production while at the same time permitting the structural developments and adjustments required'.

9 Article 2 of Regulation N o 1637/91 provides:

' 1 . At the request of the party concerned and subject to the conditions defined in this Regulation, the Member States shall grant to any producer, as defined in the first subparagraph of Article 12(c) of Regulation (EEC) N o 857/84, or to any asso- ciated producer, where the second subparagraph of Article 12(c) of the aforesaid Regulation is applicable, who undertakes to discontinue definitively all milk

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JUDGMENT OF 9. 10. 1997 — CASE C-152/95

production before a date to be determined, compensation payable in five annual instalments during the last quarter of each of the following calendar years 1992, 1993, 1994, 1995 and 1996, without prejudice to the possibility for the Member States to pay the compensation on earlier dates and/or in a single payment if they ensure the pre-financing.

2. (a) Eligible producers are those who have obtained a reference quantity by vir- tue of Article 5c of Regulation (EEC) N o 804/68, in the context of either formulas A or B and/or in the context of direct sales, excluding producers who have ben- efited from quantities pursuant to Article 3c of Regulation (EEC) N o 857/84.

MACON AND OTHERS v PRÉFET DE L'AISNE

Producer groups and associations thereof, recognized under Regulation (EEC) N o 1360/78 and the statutes of which provide, in respect of associated produc- ers, for the obligation referred to in the first indent of Article 6(1 )(c) of the said Regulation, shall be deemed to be producers.

(d) holding: all the production units operated by the producer and located within the geographical territory of the Community'.

1 1 In France, Article 1 of Decree N o 91/835 of 30 August 1991, concerning the grant of compensation for definitive discontinuation of milk production {Official Journal of the French Republic 1991, p. 11502), adopted pursuant to, in particular, Regu- lation N o 1637/91 and Commission Regulation (EEC) N o 1546/88 of 3 June 1988 laying down detailed rules for the application of the additional levy referred to in Article 5c of Regulation (EEC) N o 804/68 (OJ 1988 L 139, p. 12), provides:

'Any producer, as defined in the first subparagraph of Article 12(c) of Regulation (EEC) N o 857/84, as amended, excluding producers who have obtained an addi- tional milk reference quantity pursuant to Article 3 c of that regulation, who is entitled to a reference quantity on the date on which he submits his application pursuant to Article 1 of Decree N o 91/157 of 11 February 1981, may apply for the compensation for definitive discontinuation of all production with a view to selling milk or milk products introduced by this decree.'

i2 According to Article 3 of that decree, 'compensation shall be calculated for each holding on the basis of the producer's reference quantity in respect of direct sales and deliveries of milk and milk products, excluding reference quantities suspended in accordance with Articles 3(1) and (2), 3a, 3b and 4(l)(b) and (c) of Regulation (EEC) N o 857/84 and Article 5(7) of Regulation (EEC) N o 1546/88'.

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MACON AND OTHERS v PRÉFET DE L'AISNE

i7 The applicants maintain that only Article 2(2)(a) of Regulation N o 1637/91 is rel- evant when determining who is a producer within the meaning of Article 2(1). In their view, the definition of producer in Article 2(1) of Regulation N o 1637/91 and Article 12 of Regulation N o 857/84 merely defined the conditions on which pro- ducers could have a reference quantity in the future, when the provisions were implemented. So, in order to be entitled to compensation for discontinuation, it is sufficient to have a reference quantity.

is In support of their argument, the applicants refer to paragraph II.2 of Circular DEPSE/SDSA/C 91 N o 7036 of the Ministry of Agriculture and Forestry of 7 August 1991 concerning the grant of compensation for discontinuation of milk production in respect of the milk marketing year 1991/92 ('Circular N o 7036'), which states that 'All applicants who are farmers in possession of a reference quan- tity for milk and milk products and/or direct sellers may lodge an application' and 'Consequently, the applicant is not subject to any condition as to delivery or sale of milk; it is enough if he is a farmer with a milk reference quantity ...'.

i9 The French Government and the Commission point out that, under Article 2(1) of Regulation N o 1637/91, only holders of reference quantities actually operating as milk producers at the time when the application is made are eligible for compensa- tion for definitive discontinuation of milk production. The French Government and the Commission conclude from the judgment in Joined Cases 201/85 and 202/85 Klensch v Secrétaire d'État [1986] ECR 3477 that spontaneous cessation of milk production means that the producer automatically loses his reference quanti- ties, which are then added to the national reserve. The Commission also refers to the case-law of the Court precluding the right to dispose for profit of an advan- tage, such as a reference quantity, which does not derive from the assets or occu- pational activity of the person concerned.

2t That interpretation is borne out, first, by the system for granting and spontaneous abandonment of the reference quantity which a producer must possess according to the second condition laid down by Article 2(2) of Regulation N o 1637/91, namely, possession of an individual reference quantity. According to the Court's case-law, it follows from the general scheme of the provisions concerning the addi- tional levy on milk that a reference quantity can be allocated to a producer only if he has the status of a producer {Ballmann, cited above, and C-15/95 EARL de Kerhst [1997] ECR 1-1961). Moreover, in Klensch, the Court ruled that Regulation N o 857/84 precludes a Member State which has opted for formula B from adding the individual reference quantity of a producer who has ceased production to the reference quantity of the purchaser to whom the producer was supplying milk at the time when he ceased production, instead of adding it to the national reserve.

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MACON AND OTHERS v PRÉFET DE L'AISNE

25 Second, that interpretation is consistent with the objective pursued by the Com- munity rules, which is to provide financial support for the discontinuation of milk production and so grant compensation, as provided for in Regulation N o 1637/91. It is apparent from the fourth recital in the preamble to that regulation that the compensation is intended to facilitate a decrease in deliveries and direct sales and mobilization of the necessary quantities for other categories of producer. It is no longer possible to achieve that objective once milk production has been spontane- ously discontinued, so that the individual reference quantity must be returned to the national reserve.

29 The costs incurred by the French Government and the Commission of the Euro- pean Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

O n those grounds,

T H E C O U R T (Second Chamber),

in answer to the question referred to it by the Tribunal Administratif, Amiens, by judgment of 20 April 1995, hereby rules:

Article 2 of Council Regulation (EEC) N o 1637/91 of 13 June 1991 fixing com- pensation with regard to the reduction of the reference quantities referred to in Article 5c of Regulation (EEC) N o 804/68 and compensation for the definitive discontinuation of milk production must be interpreted as meaning that a farmer may be granted compensation for definitive discontinuation of all milk production only if, on the date of his application, he is producing milk in his capacity as a producer within the meaning of Article 12(c) of Council Regu- lation (EEC) N o 857/84 of 31 March 1984 adopting general rules for the appli- cation of the levy referred to in Article 5c of Regulation (EEC) N o 804/68 in the milk and milk products sector and if he possesses an individual reference quantity in respect of direct sales.

Schintgen Mancini Hirsch