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

AGRICULTURE - COMMON AGRICULTURAL POLICY - STRUCTURAL REFORM - MODERNIZATION OF FARMS - DIRECTIVE 72/159/EEC - WITHHOLDING OF THE STATUS OF ' FARMER PRACTISING FARMING AS HIS MAIN OCCUPATION ' FROM CERTAIN TYPES OF LEGAL PERSON BY REASON OF THEIR LEGAL FORM - NOT PERMISSIBLE
( COUNCIL DIRECTIVE 72/159 , ARTS 2 AND 3 ( 1 ))

ARTICLE 3 ( 1 ) OF COUNCIL DIRECTIVE 72/159 ON THE MODERNIZATION OF FARMS MUST BE INTERPRETED AS MEANING THAT MEMBER STATES , WHEN LAYING DOWN THE CRITERIA TO BE FULFILLED BY A LEGAL PERSON IN ORDER TO BE REGARDED AS
A FARMER PRACTISING FARMING AS HIS MAIN OCCUPATION , ARE NOT PERMITTED TO EXCLUDE CERTAIN TYPES OF SUCH LEGAL PERSON FROM THE SCOPE OF THE DIRECTIVE SOLELY BY REASON OF THEIR LEGAL FORM .

IN CASE 312/85
REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE TRIBUNALE AMMINISTRATIVO REGIONALE DELLA TOSCANA ( REGIONAL ADMINISTRATIVE TRIBUNAL OF TUSCANY ) FOR A PRELIMINARY RULING IN THE PROCEEDINGS PENDING BEFORE THAT COURT BETWEEN
SPA VILLA BANFI , SOCIETA PER AZIONI , A COMPANY LIMITED BY SHARES UNDER ITALIAN LAW , HAVING ITS REGISTERED OFFICE IN ROME ,
AND
REGIONE TOSCANA ( REGION OF TUSCANY ), ISPETTORATO PROVINCIALE DELL ' AGRICOLTURA ( PROVINCIAL AGRICULTURAL INSPECTORATE ), SIENA , SVELTO RICCO AND LUIGI GARELLI ,

ON THE INTERPRETATION OF THE TERM ' FARMER PRACTISING FARMING AS HIS MAIN OCCUPATION ' WITHIN THE MEANING OF ARTICLE 3 OF COUNCIL DIRECTIVE 72/159/EEC OF 17 APRIL 1972 ON THE MODERNIZATION OF FARMS ,

1 BY AN ORDER OF 23 JANUARY 1981 , RECEIVED AT THE COURT REGISTRY ON 16 OCTOBER 1985 , THE TRIBUNALE AMMINISTRATIVO REGIONALE DELLA TOSCANA ( REGIONAL ADMINISTRATIVE TRIBUNAL OF TUSCANY ) REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY A QUESTION CONCERNING THE INTERPRETATION OF ARTICLE 3 OF COUNCIL DIRECTIVE 72/159/EEC OF 17 APRIL 1972 ON THE MODERNIZATION OF FARMS ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1972 ( II ), P . 324 ).

2 THE QUESTION AROSE IN THE COURSE OF PROCEEDINGS BROUGHT BY SPA VILLA BANFI , A COMPANY LIMITED BY SHARES , TO ANNUL A REFUSAL BY THE GIUNTA REGIONALE DI TOSCANA ( REGIONAL COUNCIL OF TUSCANY ) TO ALLOW IT TO PLANT NEW VINES , ON THE GROUND THAT VILLA BANFI DID NOT , UNDER ITALIAN LAW , BELONG TO THE CATEGORY OF PERSON ENTITLED TO SUBMIT DEVELOPMENT PLANS . UNDER THE TERMS OF COUNCIL REGULATION NO 1162/76/EEC OF 17 MAY 1976 ON MEASURES DESIGNED TO ADJUST WINE-GROWING POTENTIAL TO MARKET REQUIREMENTS ( OFFICIAL JOURNAL 1976 , L 135 , P . 32 ), WHICH WAS REPLACED BY COUNCIL REGULATION NO 348/79/EEC OF 5 FEBRUARY 1979 ( OFFICIAL JOURNAL 1979 , L 54 , P . 81 ), THE ONLY NEW PLANTINGS OF VINES PERMITTED ARE THOSE WHICH GIVE EFFECT TO FARM DEVELOPMENT PLANS , SUBJECT TO THE CONDITIONS LAID DOWN BY DIRECTIVE 72/159 . ARTICLE 2 OF DIRECTIVE 72/159 INDICATES THAT A FARM IS SUITABLE FOR DEVELOPMENT WHERE , INTER ALIA , THE FARMER PRACTISES FARMING AS HIS MAIN OCCUPATION , AND ARTICLE 3 THEREOF PROVIDES THAT MEMBER STATES ARE TO DEFINE WHAT IS MEANT BY THE EXPRESSION ' A FARMER PRACTISING FARMING AS HIS MAIN OCCUPATION ' BY REFERENCE TO A NUMBER OF CRITERIA . HOWEVER , THE ITALIAN LAW IMPLEMENTING THE DIRECTIVE INCLUDES WITHIN ITS DEFINITION OF ' A FARMER PRACTISING FARMING AS HIS MAIN OCCUPATION ' , APART FROM NATURAL PERSONS , ONLY AGRICULTURAL COOPERATIVES AND FARMERS ' ASSOCIATIONS .

3 THE CASE CAME BEFORE THE TRIBUNALE AMMINISTRATIVO REGIONALE DELLA TOSCANA , WHICH WHEN ASKED TO DECIDE WHETHER IT WAS COMPATIBLE WITH DIRECTIVE 72/159 FOR A NATIONAL LAW TO RESTRICT THE BENEFITS THEREUNDER TO AGRICULTURAL COOPERATIVES AND ASSOCIATIONS OF FARMERS PRACTISING FARMING AS THEIR MAIN OCCUPATION , STAYED THE PROCEEDINGS AND REQUESTED THE COURT OF JUSTICE TO GIVE A PRELIMINARY RULING ON THE INTERPRETATION OF THE TERM ' FARMER PRACTISING FARMING AS HIS MAIN OCCUPATION ' FOR THE PURPOSES OF ARTICLE 3 OF THE DIRECTIVE .

4 FOR A FULLER EXPOSITION OF THE NATIONAL AND COMMUNITY LAW AT ISSUE , THE FACTS OF THE CASE , THE COURSE OF THE PROCEDURE AND THE OBSERVATIONS SUBMITTED UNDER ARTICLE 20 OF THE PROTOCOL ON THE STATUTE OF THE COURT OF JUSTICE OF THE EEC , REFERENCE SHOULD BE MADE TO THE REPORT FOR THE HEARING . THEY ARE MENTIONED OR DISCUSSED HEREINAFTER ONLY IN SO FAR AS IS NECESSARY FOR THE REASONING OF THE COURT .

5 IN THE REFERENCE THE NATIONAL COURT SEEKS , IN ESSENCE , TO ASCERTAIN WHETHER ARTICLE 3 ( 1 ) OF DIRECTIVE 72/159 PERMITS MEMBER STATES , WHEN LAYING DOWN THE CRITERIA TO BE FULFILLED BY A PERSON OTHER THAN A NATURAL PERSON IN ORDER TO BE REGARDED AS A FARMER PRACTISING FARMING AS HIS MAIN OCCUPATION , TO EXCLUDE CERTAIN TYPES OF LEGAL PERSON FROM THE SCOPE OF THE DIRECTIVE SOLELY BY REASON OF THEIR LEGAL FORM .

6 IN ORDER TO ANSWER THAT QUESTION IT SHOULD FIRST BE NOTED THAT THE DIRECTIVE IN QUESTION , WHICH ACCORDING TO ARTICLE 1 THEREOF IS DESIGNED TO ' BRING ABOUT STRUCTURAL CONDITIONS CONDUCIVE TO A SIGNIFICANT IMPROVEMENT IN AGRICULTURAL INCOMES AND WORKING AND PRODUCTION CONDITIONS . . . ' , SETS UP A SYSTEM OF INCENTIVES AND AIDS FOR ' FARMS SUITABLE FOR DEVELOPMENT ' WITHOUT SPECIFYING THE LEGAL FORM WHICH SUCH A FARM SHOULD ASSUME .

7 THE MEANING OF ' A FARM SUITABLE FOR DEVELOPMENT ' IS SET OUT EXHAUSTIVELY IN ARTICLE 2 OF THE DIRECTIVE , WHICH STATES THAT THAT IS ANY FARM WHERE THE FARMER PRACTISES FARMING AS HIS MAIN OCCUPATION , POSSESSES ADEQUATE OCCUPATIONAL SKILL AND COMPETENCE , UNDERTAKES TO KEEP ACCOUNTS , AND DRAWS UP A PLAN FOR THE DEVELOPMENT OF THE BUSINESS IN ACCORDANCE WITH THE CONDITIONS LAID DOWN BY THE DIRECTIVE . IN ADDITION , THE LEVEL OF EARNED INCOME MUST BE BELOW THE LEVEL RECEIVED FOR NON-AGRICULTURAL WORK IN THE REGION .

8 ARTICLE 3 ( 1 ) REQUIRES MEMBER STATES TO DEFINE WHAT IS MEANT BY ' A FARMER PRACTISING FARMING AS HIS MAIN OCCUPATION ' , BUT CALLS FOR THE OBSERVANCE OF CERTAIN MINIMUM REQUIREMENTS IN THE CASE OF A NATURAL PERSON . THOSE REQUIREMENTS MUST ENSURE , AT LEAST , THAT THE FARMER DERIVES NOT LESS THAN 50% OF HIS INCOME FROM FARMING AND DEVOTES TO IT MORE THAN HALF OF HIS WORKING TIME - MEMBER STATES BEING AT LIBERTY TO IMPOSE STRICTER CONDITIONS ON THOSE TWO POINTS . IT IS IN THE LIGHT OF THOSE CRITERIA IN PARTICULAR THAT MEMBER STATES ARE REQUIRED BY ARTICLE 3 ( 1 ) TO DEFINE THE AFORESAID TERM IN RELATION TO A PERSON OTHER THAN A NATURAL PERSON .

9 IN SETTING OUT THE COMMUNITY ' S DEFINITION OF ' A FARM SUITABLE FOR DEVELOPMENT ' , ARTICLES 2 AND 3 DELIMIT THE CLASS OF PERSON BENEFITING UNDER THE SYSTEM INTRODUCED BY THE DIRECTIVE , WITHOUT LEAVING MEMBER STATES ANY LATITUDE FOR WITHHOLDING THE BENEFITS FROM FARMS WHICH FULFIL THE CONDITIONS .

10 IT SHOULD THUS BE NOTED THAT THE DIRECTIVE NOT ONLY DOES NOT EXCLUDE LEGAL PERSONS BUT EXPRESSLY INCLUDES THEM WITHIN ITS SCOPE PROVIDED THAT THEY FULFIL THE CONDITIONS OF ARTICLE 2 AND MEET THE DEFINITION OF ' A FARMER PRACTISING FARMING AS HIS MAIN OCCUPATION ' LAID DOWN IN IMPLEMENTATION OF ARTICLE 3 ( 1 ). SINCE THOSE CONDITIONS ARE UNRELATED TO THE FORM IN WHICH A LEGAL PERSON IS CONSTITUTED , THE INFERENCE TO BE DRAWN IS THAT MEMBER STATES ARE NOT PERMITTED TO WITHHOLD FROM LEGAL PERSONS THE BENEFIT OF PROVISIONS OF THE DIRECTIVE SOLELY BECAUSE THEY HAVE ASSUMED A SPECIFIC LEGAL FORM . DIFFERENTIAL TREATMENT SUCH AS THAT WOULD , IN ANY EVENT , CONFLICT WITH THE PRINCIPLE OF NON-DISCRIMINATION ENSHRINED IN ARTICLE 40 ( 3 ) OF THE EEC TREATY WHICH MEMBER STATES MUST OBSERVE WHEN GIVING EFFECT TO THE COMMON AGRICULTURAL POLICY .

11 CONSEQUENTLY , THE ANSWER TO BE GIVEN IS THAT ARTICLE 3 ( 1 ) OF COUNCIL DIRECTIVE 72/159/EEC MUST BE INTERPRETED AS MEANING THAT MEMBER STATES , WHEN LAYING DOWN THE CRITERIA TO BE FULFILLED BY A PERSON OTHER THAN A NATURAL PERSON IN ORDER TO BE REGARDED AS A FARMER PRACTISING FARMING AS HIS MAIN OCCUPATION , ARE NOT PERMITTED TO EXCLUDE CERTAIN TYPES OF LEGAL PERSON FROM THE SCOPE OF THE DIRECTIVE SOLELY BY REASON OF THEIR LEGAL FORM .

COSTS
12 THE COSTS INCURRED BY THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAS SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE . AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , IN THE NATURE OF A STEP IN THE PROCEEDINGS BEFORE THE NATIONAL COURT , THE DECISION ON COSTS IS A MATTER FOR THAT COURT .

ON THOSE GROUNDS ,
THE COURT ( FIRST CHAMBER ),
IN ANSWER TO THE QUESTION REFERRED TO IT BY THE TRIBUNALE AMMINISTRATIVO REGIONALE DELLA TOSCANA BY ORDER OF 23 JANUARY 1981 , HEREBY RULES :
ARTICLE 3 ( 1 ) OF COUNCIL DIRECTIVE 72/159/EEC OF 17 APRIL 1972 ON THE MODERNIZATION OF FARMS MUST BE INTERPRETED AS MEANING THAT MEMBER STATES , WHEN LAYING DOWN THE CRITERIA TO BE FULFILLED BY A PERSON OTHER THAN A NATURAL PERSON IN ORDER TO BE REGARDED AS A FARMER PRACTISING FARMING AS HIS MAIN OCCUPATION , ARE NOT PERMITTED TO EXCLUDE CERTAIN TYPES OF LEGAL PERSON FROM THE SCOPE OF THE DIRECTIVE SOLELY BY REASON OF THEIR LEGAL FORM .