CELEX: 61991CJ0190
Agricultural conversion
Restructuring aid

Grounds
1 By order of 3 May 1991 received at the Court on 25 July 1991, the Tribunale Amministrativo Regionale per il Veneto (Regional Administrative Court for the Veneto) referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation of Council Regulation (EEC) No 797/85 of 12 March 1985 on improving the efficiency of agricultural structures (OJ 1985 L 93, p. 1), amended by Council Regulation (EEC) No 1760/87 of 15 June 1987 (OJ 1987 L 167, p. 1), both amended by Council Regulation (EEC) No 1094/88 of 25 April 1988 (OJ L 106, p. 28), and of Commission Regulation (EEC) No 4115/88 of 21 December 1988 laying down detailed rules for applying the aid scheme to promote the extensification of production (OJ 1988 L 361, p. 13).
2 Those questions were raised in proceedings brought by Mr A. Lante against a decision of the Instituto Regionale per l' Agricoltura di Verona (Regional Agricultural Institute, Verona) of 19 September 1990 rejecting an application by Mr Lante for the grant of aid for the extensification of beef production in accordance with the said regulations.
3 Since Mr Lante owned an intensive beef cattle farm, the Regione Veneto refused his application on the ground that aid could not be given to an intensive farm in which less than a quarter of the fodder for the livestock came from the land in the farm.
4 The Tribunale Amministrativo Regionale per il Veneto considered that an interpretation of the abovementioned regulations was necessary to enable it to give judgment; it stayed the proceedings and referred the following questions to the Court for a preliminary ruling:
"1. Must Article 1b(3)(a) of Regulation No 1094/88 be interpreted as allowing the Member States, when laying down conditions for the grant of aid to promote the extensification of production in accordance with the procedure laid down by their domestic public law, to exclude certain categories of activities such as, for example, livestock rearing which is 'intensive' (that is to say, not carried out in connection with agricultural land) from the benefit of the aid on the basis that that type of aid is intended exclusively for agricultural holdings?
Is that interpretation permissible in view of the general objectives of the policy on agricultural structures pursued by Regulation No 797/85 (and its subsequent amendments and supplements) and by present trends in the common agricultural policy, as discerned from Community legislation, of the fact that it is impossible to find in Community law any general uniform definition of 'agricultural holding' (judgment of the Court of Justice of 28 February in Case 85/77 Società Santa Anna Azienda v INPS [1977] ECR 527) and, finally, in view of the fact that Article 2 and Annex 1 of Commission Regulation No 4115/88 provide that 'cattle (beef/veal)' are eligible for the aid in question?
2. If the preceding question is answered in the affirmative, can the second indent of Article 10(3) of Regulation No 4115/88, which provides that fodder production areas should continue to be used for the livestock on the holding, be interpreted as meaning that farms on which cattle are reared on feed of which less than a quarter is obtained from the holding are ineligible for the aid for the promotion of extensification of production, whose detailed rules are also laid down in Regulation No 4115/88?"
5 Reference is made to the Report for the Hearing for a fuller account of the facts in the main proceedings, the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.
6 The main proceedings relate to the manner in which the relevant national authorities apply the Community rules whose purpose is to reduce excess production in the beef and veal sector.
7 By its questions the national court seeks essentially to ascertain whether Article 1b (3)(a) of Regulation (EEC) No 1094/88 must be interpreted as allowing a Member State, when laying down the conditions for the grant of aid for the extensification of beef and veal production, to exclude from that aid certain categories of undertakings, such as intensive livestock farms.
8 It should be noted that by Regulation No 797/85, as last amended by Regulation No 1094/88, the Council imposed on the Member States an obligation to establish a system of aid to promote extensification of production in various sectors where there is excess production, including the beef and veal sector; extensification is a reduction of at least 20%, for a period of at least 5 years, in the output of the product concerned without any increase in other surplus production capacity.
9 Under Article 1b(3) of that regulation, Member States are to determine the conditions for granting the aid, including those for reducing output, the amount of the aid, the reference period for the product concerned for the purposes of calculating the reduction, and the undertaking to be given by the beneficiary for the purposes, in particular, of verifying that production has in fact been reduced.
10 In Regulation No 4115/88 the Commission laid down detailed rules for applying the aid scheme to promote the extensification of production. Article 10(3) of that regulation provides that where extensification is applied to livestock farming, the producer must undertake to see that production capacity released as a result of extensification is not used either by the farmer or by any third party to increase the output of the products referred to in Annex 1 or of pigmeat or poultry products, and that fodder production areas continue to be used to provide feed for the livestock on the holding.
11 With respect to the potential beneficiaries of the aid, the regulations in question contain no specific provisions relating to the various types of production.
12 The question thus arises whether the Member States' power to determine the conditions for granting the aid, including the conditions for reducing output, includes the possibility for a Member State to exclude from the scope of the aid scheme beef producers who do not have sufficient fodder production for feeding their livestock.
13 Under the Community rules in question, the Member States' authority is confined to questions of a technical nature and they are not permitted to determine the class of beneficiaries. Their authority extends only to the practical application of the aid scheme, that is to say, its adaptation to local situations, and more particularly the specific conditions for reducing production.
14 That Member States have no authority to restrict the class of beneficiaries is confirmed by Article 4(3) of Regulation No 4115/88, which states that the Commission may authorize Member States to determine specific conditions for the granting of aid in areas where production or production systems are already extensive. That provision gives Member States the specific authority to make rules if extensification has already been implemented in certain areas, so that with the exception of that particular case Member States are not entitled to restrict the granting of aid by reference to other criteria.
15 Although there might be other possible means, from the economic or the legal point of view, of bringing about a reduction of excess meat production, it is nevertheless the case that the Community legislature chose as an instrument for implementing that reduction only the extensification of meat production. It follows that if the Member States had authority to restrict the class of beneficiaries of the aid, that would be incompatible with that choice by the Community legislature, in the present case.
16 Moreover, if the Member States had a discretion to define the categories of beneficiaries of the aid, that could give rise to unjustified discrimination between producers in different Member States, contrary to Article 40(3) of the Treaty.
17 The answer to the questions put by the Tribunale Amministrativo Regionale per il Veneto must therefore be that Article 1b(3)(a) of Regulation No 1094/88 is to be interpreted as not authorizing a Member State, when determining the conditions for the granting of aid for extensification of beef and veal production, to exclude certain categories of undertakings, such as intensive livestock farms, from that aid.
Decision on costs
Costs
18 The costs incurred by the Italian Government and by the Commission of the European 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 action pending before the national court, the decision on costs is a matter for that court.
Operative part
On those grounds,
THE COURT (Sixth Chamber)
in answer to the questions referred to it by the Tribunale Amministrativo Regionale per il Veneto by order of 3 May 1991, hereby rules:
Article 1b(3)(a) of Council Regulation (EEC) No 1094/88 of 25 April 1988 amending Regulations (EEC) No 797/85 and (EEC) No 1760/87 as regards the set-aside of arable land and the extensification and conversion of production must be interpreted as not authorizing a Member State, when determining the conditions for the granting of aid for extensification of beef and veal production, to exclude certain categories of undertakings, such as intensive livestock farms, from that aid.