Court of Justice of the European Communities (including Court of First Instance Decisions)

AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - BEEF AND VEAL - YOUNG MALE BOVINE INTENDED FOR FATTENING - IMPORT QUOTA AT A REDUCED RATE OF LEVY - BENEFICIARIES - AGRICULTURAL PRODUCERS - CONCEPT - DEFINITION BY MEMBER STATES - RESTRICTION TO FARMERS PRACTISING FARMING AS THEIR MAIN OCCUPATION - PERMISSIBILITY
( COMMISSION REGULATION ( EEC ) NO 2902/77 , ART . 1 ( 5 ), COUNCIL DIRECTIVE NO 72/159 )

UNDER COMMISSION REGULATION ( EEC ) NO 2902/77 OF 22 DECEMBER 1977 FIXING THE QUANTITY OF YOUNG MALE BOVINE ANIMALS WHICH MAY BE IMPORTED ON SPECIAL TERMS IN THE FIRST QUARTER OF 1978 THE MEMBER STATES CONCERNED WERE ENTITLED TO SPECIFY THE CATEGORIES OF AGRICULTURAL PRODUCERS WHO MIGHT BENEFIT FROM THE IMPORT QUOTA OF YOUNG MALE BOVINE ANIMALS UNDER PARTIAL OR TOTAL SUSPENSION OF THE LEVY WITHIN THE FRAMEWORK OF A POLICY INTENDED TO HELP TO IMPROVE CATTLE REARING AND BEEF AND VEAL PRODUCTION STRUCTURES .

TO ALLOW ONLY FARMERS PRACTISING FARMING AS THEIR MAIN OCCUPATION SO TO BENEFIT IS IN ACCORDANCE WITH THE OBLIGATIONS ON THE MEMBER STATES ARISING FROM COUNCIL DIRECTIVE NO 72/159 OF 17 APRIL 1972 ON THE MODERNIZATION OF FARMS .

IN CASE 121/78
REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE PRETURA DI CECINA ( ITALY ) FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN
GIUSEPPE BARDI , A FARMER , RESIDING AT CECINA/LIVORNO , ITALY ,
AND
AZIENDA AGRICOLA PARADISO , A FARMING UNDERTAKING , SITUATED AT CASTAGNETO CARDUCCI/DONORATICO ,

ON THE INTERPRETATION OF CERTAIN PROVISIONS OF THE COMMUNITY RULES RELATING TO THE IMPORTATION , SUBJECT TO SPECIAL CONDITIONS , OF YOUNG BOVINE ANIMALS FROM NON-MEMBER COUNTRIES ,

1BY AN ORDER OF 13 MAY 1978 , WHICH WAS RECEIVED AT THE COURT ON 27 MAY 1978 , THE PRETURA DI CECINA REFERRED TO THE COURT OF JUSTICE FOR A PRELIMINARY RULING PURSUANT TO ARTICLE 177 OF THE EEC TREATY TWO QUESTIONS ON THE INTERPRETATION OF COMMISSION REGULATION ( EEC ) NO 2902/77 OF 22 DECEMBER 1977 , FIXING THE QUANTITY OF YOUNG MALE BOVINE ANIMALS WHICH MAY BE IMPORTED ON SPECIAL TERMS IN THE FIRST QUARTER OF 1978 ( OFFICIAL JOURNAL L 338 , P . 12 ), IN CONJUNCTION , ON THE ONE HAND , WITH ARTICLE 13 OF REGULATION ( EEC ) NO 805/68 OF THE COUNCIL OF 27 JUNE 1968 ON THE COMMON ORGANIZATION OF THE MARKET IN BEEF AND VEAL , AS AMENDED BY COUNCIL REGULATION ( EEC ) NO 425/77 OF 14 FEBRUARY 1977 ( OFFICIAL JOURNAL L 61 , P . L ), AND ALSO WITH COMMISSION REGULATION ( EEC ) NO 585/77 OF 18 MARCH 1977 ON THE SYSTEM OF IMPORT AND EXPORT LICENCES FOR BEEF AND VEAL ( OFFICIAL JOURNAL L 75 , P . 5 ) AND , ON THE OTHER HAND , WITH THE COUNCIL DIRECTIVES OF 17 APRIL 1972 RELATING TO VARIOUS STRUCTURAL QUESTIONS IN THE FIELD OF AGRICULTURE , IN PARTICULAR WITH COUNCIL DIRECTIVE NO 72/159 ON THE MODERNIZATION OF FARMS ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1972 ( II ), P . 324 ).

2THE COURT ' S FILE SHOWS THAT GIUSEPPE BARDI , THE PLAINTIFF IN THE MAIN ACTION , THE MANAGER OF A FARM WITHIN THE COMMUNE OF CECINA ( PROVINCE OF LIVORNO ), ENTERED INTO A CONTRACT ON 20 FEBRUARY 1978 WITH AZIENDA AGRICOLA PARADISO ( HEREINAFTER REFERRED TO AS ' ' AZIENDA ' ' ), A LIMITED PARTNERSHIP ENGAGED IN CATTLE-REARING , WHOSE FARM IS WITHIN THE COMMUNE OF DONORATICO ( PROVINCE OF LIVORNO ), FOR THE SUPPLY TO THE SAID PARTNERSHIP OF 40 QUINTALS OF MAIZE FOR ANIMAL FEED .

3IT WAS A CONDITION OF THAT CONTRACT THAT THE ORDER WOULD BE ' ' DEEMED TO HAVE BEEN CANCELLED IF IT WERE TO PROVE IMPOSSIBLE FOR THE CONTRACTING PARTY AZIENDA TO OBTAIN AN IMPORT LICENCE FOR 100 CALVES FROM NON-MEMBER COUNTRIES PURSUANT TO THE EEC REGULATIONS IN FORCE ' ' .

4AZIENDA , BY A LETTER DATED 10 MARCH 1978 , NOTIFIED MR BARDI THAT THE ORDER OF 20 FEBRUARY 1978 WAS TO BE REGARDED AS CANCELLED IN VIEW OF THE FACT THAT IT HAD BEEN INFORMED THAT IT COULD NOT APPLY FOR AN IMPORT LICENCE FOR CALVES FROM EAST EUROPEAN COUNTRIES HAVING REGARD TO THE PROVISIONS OF A CIRCULAR OF THE MINISTRY FOR FOREIGN TRADE DATED 28 FEBRUARY 1970 .
5MR BARDI THEN ISSUED A SUMMONS AGAINST AZIENDA TO APPEAR BEFORE THE PRETURA WITH A VIEW TO OBTAINING AN ORDER FOR SPECIFIC PERFORMANCE OF THE CONTRACT AND CONSEQUENTLY AN ORDER AGAINST AZIENDA TO TAKE DELIVERY OF THE 40 QUINTALS OF MAIZE WHICH IT HAD ORDERED .

6IT IS CLEAR FROM THE ARGUMENTS OF THE PARTIES BEFORE THE PRETURA AND THE PARTICULARS SUPPLIED TO THE COURT THAT THE CALVES WHICH AZIENDA INTENDED TO BUY AND FOR THE FATTENING OF WHICH IT PLACED THE ORDER FOR 40 QUINTALS OF MAIZE WITH MR BARDI WERE TO HAVE BEEN IMPORTED AS PART OF AN IMPORT QUOTA AT A REDUCED RATE OF LEVY ALLOCATED TO ITALY BY REGULATION NO 2902/77 .
7AZIENDA DOES NOT APPEAR TO HAVE MADE ANY APPLICATION FOR THIS PURPOSE TO THE COMPETENT AUTHORITIES , CONSIDERING THAT IT WAS PRECLUDED FROM QUALIFYING AS A BENEFICIARY OF THAT IMPORT QUOTA BY CIRCULAR NO 1/170332 OF THE MINISTRY FOR FOREIGN TRADE DATED 28 FEBRUARY 1978 .
8IN FACT , AS PROVIDED FOR IN THAT CIRCULAR , THE BENEFIT OF IMPORTS AT A REDUCED RATE OF LEVY WAS RESERVED FOR AGRICULTURAL PRODUCERS FULFILLING THE CONDITIONS LAID DOWN BY ARTICLE 12 ( 1 ) OF LAW NO 153 OF 9 MAY 1975 IMPLEMENTING THE DIRECTIVES OF THE COUNCIL OF THE EUROPEAN COMMUNITIES ON THE REFORM OF AGRICULTURE ( GAZZETTA UFFICIALE 1975 , P . 3298 ).

9THE PRESUMED EFFECT OF THE REFERENCE IN THE CIRCULAR TO THAT LEGISLATIVE PROVISION IS TO RESERVE THE BENEFIT OF THE IMPORT QUOTA IN QUESTION TO INDIVIDUAL FARMERS WHO PERSONALLY DEVOTE MOST OF THEIR TIME TO FARMING , A CONDITION WHICH AZIENDA CANNOT FULFIL BECAUSE ITS LEGAL FORM IS THAT OF AN AGRICULTURAL COMPANY .

10THE PLAINTIFF SHARES THE VIEW OF THE DEFENDANT COMPANY THAT A CIRCULAR OF THE MINISTRY FOR FOREIGN TRADE COULD NOT VALIDLY RESTRICT IN THIS WAY THE CATEGORY OF FARMERS WHO MAY BE ENTITLED TO THE ADVANTAGE PROVIDED FOR BY REGULATION NO 2902/77 .
11HE INFERS FROM THIS THAT AZIENDA ' S OBLIGATION TOWARDS HIM UNDER THE CONTRACT REMAINS INTACT .

12IN THE CONTEXT OF THIS DISPUTE THE PRETURA IS OF THE OPINION THAT THE DETERMINATION OF THE ISSUE BEFORE IT DEPENDS UPON THE INTERPRETATION OF CERTAIN PROVISIONS OF COMMUNITY LAW .

13IN ITS VIEW THE ACTUAL QUESTION TO BE DETERMINED IS WHETHER THE RESTRICTION OF THE BENEFITS GRANTED TO ALL FARMERS BY REGULATION NO 2902/77 SOLELY TO PERSONS ' ' PRACTISING FARMING AS THEIR MAIN OCCUPATION ' ' WITHIN THE MEANING OF ARTICLE 2 ( 1 ) OF LAW NO 153 OF 9 MAY 1975 MAY NOT BE CONTRARY TO THE SPIRIT AND THE LETTER OF THE COMMUNITY PROVISIONS RELATING TO THE SPECIAL IMPORT ARRANGEMENTS IN QUESTION .

14IT IS IN ORDER TO DISPEL THIS DOUBT THAT THE PRETURA HAS REFERRED TO THE COURT THE TWO QUESTIONS WORDED AS FOLLOWS :
( 1 ) WHETHER THE NATIONAL AUTHORITIES , WITHIN THE FRAMEWORK OF THE SPECIAL ARRANGEMENTS FOR THE IMPORTATION OF YOUNG MALE BOVINE ANIMALS FOR FATTENING LAID DOWN IN ARTICLE 13 OF REGULATION ( EEC ) NO 805/68 , WHICH ARRANGEMENTS WERE LAST AMENDED BY REGULATIONS ( EEC ) NOS 585/77 AND 2902/77 , MAY EXTEND AND SUPPLEMENT AT THEIR DISCRETION THE CONDITIONS FOR ADMISSION TO THE BENEFIT THEREOF , IN PARTICULAR BY RESTRICTING THE ISSUE OF IMPORT LICENCES TO CERTAIN CATEGORIES OF PERSONS UNILATERALLY DISTINGUISHED FROM THE GENERALITY OF AGRICULTURAL PRODUCERS ; OR WHETHER ON THE OTHER HAND THE ABOVE-MENTIONED COMMUNITY PROVISIONS CONFER UPON ALL PROPRIETORS , WHETHER NATURAL OR LEGAL PERSONS , OF AGRICULTURAL UNDERTAKINGS , IN PARTICULAR PERSONS WHO ARE ENGAGED IN STOCK-FARMING , THE RIGHT TO APPLY IN ALL CASES FOR AN IMPORT LICENCE WHICH THE NATIONAL AUTHORITIES OF THE MEMBER STATE HAVE NO DISCRETIONARY POWER TO REFUSE .

( 2 ) ON THE ASSUMPTION THAT THE MEMBER STATES MAY IMPOSE FURTHER AND MORE RESTRICTIVE CONDITIONS UPON ADMISSION TO THE CATEGORY OF AGRICULTURAL PRODUCER , WHETHER THE NATIONAL AUTHORITIES MAY DETERMINE THE PERSONS ENTITLED TO BENEFIT ACCORDING TO THE CRITERIA ON WHICH THEY RELY IN IMPLEMENTING THE COMMUNITY DIRECTIVES ON THE MODERNIZATION OF AGRICULTURAL STRUCTURES ( DIRECTIVES NOS 72/159 , 160 AND 161/EEC ), THAT IS , WITH A VIEW TO A SORT OF STATE INTERVENTION THE MEANS AND OBJECTIVES OF WHICH ARE ENTIRELY DISTINCT FROM AND INDEPENDENT OF THOSE ADOPTED IN CONNEXION WITH THE MARKETING OF INDIVIDUAL AGRICULTURAL PRODUCTS - THE SAID CRITERIA BEING MOREOVER ENTIRELY UNRELATED TO THE ACTUAL PRACTICE OF STOCK-FARMING AND SUCH AS TO ENTAIL THE UNJUSTIFIED EXCLUSION OF A VERY LARGE NUMBER OF STOCK-FARMING UNDERTAKINGS , INCLUDING ALL THOSE HAVING THE STRUCTURE OF A FIRM OR COMPANY .

15AS PROVIDED FOR IN ARTICLE 13 ( 1 ) OF REGULATION NO 805/68 , AS AMENDED BY REGULATION NO 425/77 , THE LEVY TO BE APPLIED TO YOUNG MALE BOVINE ANIMALS INTENDED FOR FATTENING MAY BE TOTALLY OR PARTIALLY SUSPENDED UNDER THE CONDITIONS LAID DOWN IN THAT ARTICLE , TAKING INTO ACCOUNT THE SUPPLY SITUATION AND THE FORESEEABLE TREND OF PRICES .

16UNDER PARAGRAPH ( 2 ) OF THE SAID ARTICLE THE COUNCIL SHALL DRAW UP EACH YEAR AN ESTIMATE OF YOUNG MALE BOVINE ANIMALS WHICH MAY BE IMPORTED UNDER THE PREFERENTIAL ARRANGEMENTS LAID DOWN IN PARAGRAPH ( 1 ).

17FINALLY , PARAGRAPH ( 4 ) OF THE SAID ARTICLE PROVIDES THAT DETAILED RULES FOR THE APPLICATION OF THE ARRANGEMENTS IN QUESTION SHALL BE DETERMINED IN ACCORDANCE WITH THE PROCEDURE LAID DOWN IN ARTICLE 27 OF THAT REGULATION , THAT IS TO SAY BY THE COMMISSION ACTING IN ACCORDANCE WITH THE SO-CALLED ' ' MANAGEMENT COMMITTEE ' ' PROCEDURE .

18FOR THE PERIOD UNDER CONSIDERATION THE DETAILED RULES FOR THE PREFERENTIAL ARRANGEMENTS IN QUESTION WERE DEFINED BY COMMISSION REGULATION NO 2902/77 AS A 50% REDUCTION OF THE LEVY .

19ACCORDING TO THE FIFTH RECITAL IN THE PREAMBLE TO THAT REGULATION THE REDUCTION OF THE LEVY WAS SPECIFICALLY INTENDED TO ' ' HELP IMPROVE CATTLE REARING AND BEEF AND VEAL PRODUCTION STRUCTURES IN ITALY ' ' .

20THE SAME RECITAL ALSO GOES ON TO STATE THAT THAT OBJECTIVE CAN BE ACHIEVED ' ' BY GIVING AGRICULTURAL PRODUCERS AND THEIR ORGANIZATIONS PRIORITY ' ' WHEN ISSUING THE LICENCES CONFERRING ENTITLEMENT TO BENEFIT FROM THOSE PARTICULAR IMPORT ARRANGEMENTS .

21ARTICLE 1 ( 1 ) OF THE REGULATION IN QUESTION FIXED THE IMPORT QUOTA AT A MAXIMUM OF 50 000 HEAD OF YOUNG MALE BOVINE ANIMALS , OF WHICH AT LEAST 45 000 WERE TO BE IMPORTED INTO AND FATTENED IN ITALY .

22ARTICLE 1 ( 5 ) OF THE SAID REGULATION STATES THAT WITHIN THE QUANTITY RESERVED FOR ITALY , IMPORT LICENCES MAY BE ISSUED DIRECTLY TO AGRICULTURAL PRODUCERS OR THEIR ORGANIZATIONS IN RESPECT OF A MAXIMUM OF 30 000 HEAD AND THAT ' ' ITALY SHALL , FOR THIS PURPOSE , SPECIFY THE CATEGORIES OF APPLICANTS ' ' .

23THOSE PROVISIONS INDICATE THAT THE ARRANGEMENTS FOR IMPORTATION AT A REDUCED RATE OF LEVY WERE INTENDED , AS A MATTER OF PRIORITY , DURING THE PERIOD UNDER CONSIDERATION , TO ENABLE ITALY TO IMPROVE ITS CATTLE REARING AND BEEF AND VEAL PRODUCTION STRUCTURES AND THAT THAT MEMBER STATE WAS EXPRESSLY EMPOWERED FOR THAT PURPOSE TO SPECIFY THE CATEGORIES OF PRODUCERS ENTITLED TO BENEFIT FROM THAT MEASURE .

24IT IS APPARENT THEREFORE THAT THE ITALIAN AUTHORITIES WERE EMPOWERED TO RESERVE THE BENEFIT OF THAT IMPORT QUOTA TO FARMS THE DEVELOPMENT OF WHICH THEY INTEND TO ENCOURAGE AS PROVIDED FOR IN THE LAW OF 9 MAY 1975 , WHICH HAS THE AIM OF IMPLEMENTING IN ITALY THE OBJECTIVES LAID DOWN BY THE COMMUNITY DIRECTIVES OF 17 APRIL 1972 ON THE REFORM OF AGRICULTURAL STRUCTURES .

25SPECIAL REFERENCE SHOULD BE MADE TO ARTICLES 1 , 2 AND 3 OF COUNCIL DIRECTIVE NO 72/159 , FROM WHICH IT EMERGES THAT THE MEMBER STATES HAVE UNDERTAKEN TO INTRODUCE A SYSTEM OF SELECTIVE INCENTIVES TO FARMS , GIVING PRIORITY SPECIFICALLY TO FARM BUSINESSES THE HEADS OF WHICH PRACTICE FARMING AS THEIR MAIN OCCUPATION .

26THAT UNDERTAKING HAS BEEN REFLECTED IN ARTICLES 11 AND 12 OF THE ITALIAN LAW NO 153 OF 9 MAY 1975 TO WHICH REFERENCE IS MADE IN THE CIRCULAR OF 28 FEBRUARY 1978 .
27THEREFORE THE ANSWER TO THE QUESTIONS REFERRED MUST BE THAT UNDER COMMISSION REGULATION ( EEC ) NO 2902/77 OF 22 OCTOBER 1977 THE MEMBER STATES CONCERNED , AND MORE PARTICULARLY THE ITALIAN REPUBLIC , WERE ENTITLED TO SPECIFY THE CATEGORIES OF AGRICULTURAL PRODUCERS WHO MIGHT BENEFIT FROM THE IMPORT QUOTA OF YOUNG MALE BOVINE ANIMALS UNDER PARTIAL OR TOTAL SUSPENSION OF THE LEVY WITHIN THE FRAMEWORK OF A POLICY INTENDED TO HELP IMPROVE CATTLE REARING AND BEEF AND VEAL PRODUCTION STRUCTURES AND THAT TO ALLOW ONLY FARMERS PRACTISING FARMING AS THEIR MAIN OCCUPATION SO TO BENEFIT IS IN ACCORDANCE WITH THE OBLIGATIONS ON THE MEMBER STATES ARISING FROM COUNCIL DIRECTIVE NO 72/159 OF 17 APRIL 1972 ON THE MODERNIZATION OF FARMS .

COSTS
28THE COSTS INCURRED BY THE GOVERNMENT OF THE ITALIAN REPUBLIC AND BY THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE .

29AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , IN THE NATURE OF A STEP IN THE ACTION PENDING BEFORE THE PRETURA DI CECINA , THE DECISION AS TO COSTS IS A MATTER FOR THAT COURT .

ON THOSE GROUNDS ,
THE COURT ,
IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE PRETURA DI CECINA BY AN ORDER OF 13 MAY 1978 , HEREBY RULES :
UNDER COMMISSION REGULATION ( EEC ) NO 2902/77 OF 22 DECEMBER 1977 FIXING THE QUANTITY OF YOUNG MALE BOVINE ANIMALS WHICH MAY BE IMPORTED ON SPECIAL TERMS IN THE FIRST QUARTER OF 1978 THE MEMBER STATES CONCERNED , AND MORE PARTICULARLY THE ITALIAN REPUBLIC , WERE ENTITLED TO SPECIFY THE CATEGORIES OF AGRICULTURAL PRODUCERS WHO MIGHT BENEFIT FROM THE IMPORT QUOTA OF YOUNG MALE BOVINE ANIMALS UNDER PARTIAL OR TOTAL SUSPENSION OF THE LEVY WITHIN THE FRAMEWORK OF A POLICY INTENDED TO HELP IMPROVE CATTLE REARING AND BEEF AND VEAL PRODUCTION STRUCTURES .

TO ALLOW ONLY FARMERS PRACTISING FARMING AS THEIR MAIN OCCUPATION SO TO BENEFIT IS IN ACCORDANCE WITH THE OBLIGATIONS ON THE MEMBER STATES ARISING FROM COUNCIL DIRECTIVE NO 72/159 OF 17 APRIL ON THE MODERNIZATION OF FARMS .