Opinion of Mr Advocate General Tesauro delivered on 29 April 1997. - The Queen v Ministry of Agriculture, Fisheries and Food, ex parte: Benjamin Lay, Donald Gage and David Gage. - Reference for a preliminary ruling: High Court of Justice, Queen's Bench Division - United Kingdom. - Additional levy on milk - Special reference quantity - Transfer of part of a mixed farm - Apportionment of the quota between transferor and transferee. - Case C-165/95.



European Court reports 1997 Page I-05543



Opinion of the Advocate-General

1 In the case now before the Court, the High Court of Justice, Queen's Bench Division, has referred to the Court for a preliminary ruling a question on the interpretation and validity of Articles 1(2) and 2 of Council Regulation (EEC) No 2055/93 of 19 July 1993 allotting a special reference quantity to certain producers of milk and milk products. (1) Those provisions lay down the criteria for the apportionment of that quantity between the transferor and transferee where part of a holding is transferred.

The relevant provisions

2 Let me begin by recalling that, in order to deal with the problem of overproduction of milk, Council Regulation (EEC) No 1078/77 of 17 May 1977 (2) introduced a system of premiums for the non-marketing of milk and milk products and for the conversion of dairy herds. On account of a persistent excessive imbalance between the supply and demand of products in the milk sector, Article 5c of Council Regulation (EEC) No 804/68 of 27 June 1968 on the common organization of the market in milk and milk products, (3) as amended by Council Regulation (EEC) No 856/84 of 31 March 1984, (4) introduced an additional levy on milk production. Under that provision producers are allocated a `reference quantity', calculated on the basis of their production in a given period (`reference period'): milk produced in excess of that quantity is subject to an additional levy.

General rules for the application of the levy were adopted in Council Regulation (EEC) No 857/84 of 31 March 1984. (5) That regulation was declared invalid by the Court in its judgments in Mulder and Von Deetzen (6) precisely because it did not provide for the allocation of a reference quantity to SLOM producers, (7) that is to say to those producers who, having entered into a non-marketing or conversion agreement as provided for in Regulation No 1078/77, had not produced any milk during the reference year. The Court took the view that those producers were entitled to invoke the principle of the protection of legitimate expectations in order to be authorized to resume milk production on the expiry of their non-marketing or conversion undertaking.

3 Having regard to the judgments in Mulder and Von Deetzen, the Council, by Regulation (EEC) No 764/89 of 20 March 1989, amended Regulation 857/84, (8) adding Article 3a, which lays down rules for the allocation of a special reference quantity (SLOM 1). That quantity was fixed at 60% of the quantity of milk delivered or sold by the producer in the 12 months preceding the month in which the application for the non-marketing or conversion premium was made. That provision was declared invalid by the Court in so far as it restricted the special reference quantity to 60%. (9)

The Council therefore adopted Regulation (EEC) No 1639/91 of 13 June 1991 (10) (SLOM 2) which amended Article 3a of Regulation No 857/84 in the manner required by the Court, namely by removing the ceiling of 60%.

Finally, I would note that in the meantime Regulation No 857/84 has been repealed and replaced, as from 1 April 1993, by Council Regulation (EEC) No 3950/92 of 28 December 1992. (11)

4 I must next draw attention to the provisions laying down the criteria for determining reference quantities in the case of assignment or transfer of land used for milk production.

First, according to the first subparagraph of Article 7(1) of Regulation No 3950/92, `Reference quantities available on a holding shall be transferred with the holding in the case of sale, lease or transfer by inheritance to the producers taking it over in accordance with detailed rules to be determined by the Member States taking account of the areas used for dairy production or other objective criteria and, where applicable, of any agreement between the parties. Any part of the reference quantity which is not transferred with the holding shall be added to the national reserve.' (12)

The second relevant provision is Article 7, first paragraph, (2) of Commission Regulation (EEC) No 1546/88 of 3 June 1988, (13) implementing Regulation No 857/84, according to which: `Where one or several parts of a holding are sold, leased or transferred by inheritance, the corresponding reference quantity shall be distributed among the producers operating the holding in proportion to the areas used for milk production or according to other objective criteria laid down by Member States. Member States may disregard transferred parts the area of which used for milk production is less than a minimum size which they shall determine. The part of the reference quantity corresponding to that area may be added entirely to the reserve.' (14)

5 The provisions set out above concern the determination in general of reference quantities in the case of transfer of a holding and not specifically the particular situation in which the transfer takes place during a non-marketing period. That last situation was governed by the third subparagraph of Article 3a(2) of Regulation No 857/84, according to which the transferee of a holding belonging to a SLOM producer was entitled to a SLOM 1 quota only where he had acquired the right to the original non-marketing premium. However, such a provision led to transferees of part of a holding being unable to obtain a special reference quantity, since under Article 6(2) of Regulation No 1078/77 the transferee of part of a holding does not acquire any right to premium.

Called upon to give a decision on this point, the Court held in Twijnstra that - in the event of the transfer of part of a holding covered by a non-marketing undertaking which the transferee has agreed to observe - Article 3a must be interpreted as meaning that the `reference quantity may be divided between the transferor and the transferee on the basis of the proportion of the land transferred'. (15)

6 As a result of the Twijnstra judgment the Council adopted Regulation No 2055/93 (`the Regulation'), on which this case turns, and in which it amended the rules relating to the criteria for allocating and dividing special reference quantities (SLOM 3).

Article 1(2) of the Regulation lays down the criteria for apportioning between transferor and transferee a reference quantity already allocated pursuant to Article 3a of Regulation No 857/84. That subparagraph provides, so far as is relevant for the purposes of this case, that `the reference quantity shall be shared between the transferor and the part transferee (...) in proportion to the areas under forage referred to in Article 1(1)(d) of Regulation (EEC) No 1391/78 and transferred in accordance with the provisions of Article 7 of Regulation (EEC) No 3950/92'.

Article 2 of the Regulation, on the other hand, is concerned with cases in which the special reference quantity has not yet been allocated and provides that that quantity: `shall be established by the Member State in accordance with objective criteria in proportion to the area under forage referred to in Article 1(1)(d) of Regulation (EEC) No 1391/78 which the producer was using on the date of his application and on the basis of the quantity in respect of which the premium was calculated (...)'.

The facts and the questions submitted by the national court

7 The applicants in the main proceedings are cattle farmers who respectively have purchased (Mr Lay) and leased (Messrs Gage) minority shares in mixed holdings subject in their entirety to non-marketing undertakings. When they took over from the original owners, the applicants entered into similar undertakings with the Ministry of Agriculture, Fisheries and Food (`MAFF'), concerning the part of the holding transferred, without obtaining a non-marketing premium in return.

On the applicants' request, MAFF granted them, between 1993 and 1994, a special reference quantity of milk, calculated in proportion to the area of the holding purchased or leased. Before the High Court, the applicants challenged the ministerial measures, complaining that the quantity allocated to them had been determined without taking into account the fact that the original owners had carried on the rearing of cattle for milk production almost exclusively in the part of the holdings taken over by the applicants.

8 The national court considered that in order for it to give a decision it was necessary to ascertain the exact meaning of the term `areas under forage' used in the Regulation, and therefore referred the following questions to the Court for a preliminary ruling:

`(1) In determining a part transferee's entitlement to a reference quantity under Articles 1(2) and 2 of Council Regulation (EEC) No 2055/93, must a Member State, having regard to Regulation 2055/93 and the general principles of Community law on legitimate expectation, proportionality and respect for property, apportion the reference quantity between transferor and part transferee by ascertaining what proportion of the holding was used for milk production at the time the transferor entered into the non-marketing undertaking and then apportioning the reference quantity between the transferor and transferee in proportion to the percentage of land used for milk production transferred to the part transferee?

(2) If the answer to Question 1 is in the negative, are Articles 1(2) and 2 of Council Regulation (EEC) No 2055/93 invalid as contravening the general principles of Community law on legitimate expectation, proportionality and respect for property?

(3) If the answers to Questions 1 and 2 are in the negative, in determining a part transferee's entitlement to a reference quantity under Articles 1(2) and 2 of Council Regulation (EEC) No 2055/93 is a Member State entitled to apportion the reference quantity between transferor and part transferee in proportion to that part of the transferor's holding transferred to the transferee?'

9 In spite of the somewhat complex nature of the applicable legislation, the basic question upon which the Court is called upon to give a ruling appears to be relatively simple. The questions referred by the national court seek to ascertain whether the term `areas under forage' includes the parts of the holding actually used by the transferor for milk production or whether it refers to all the land comprised in the holding (Question 1). In the second case the Court is asked to give a ruling on the validity of the provisions in question from the point of view of breach of the principles of the protection of legitimate expectations, proportionality and respect for property (Question 2). Finally, should the Court conclude that the provisions in question are valid and that special reference quantities need not necessarily be determined in proportion to the area actually given over to milk production, the national court asks whether the Member States are entitled, on the basis of those provisions, to apportion the reference quantity in proportion simply to the area of land transferred (Question 3).

Since Questions 1 and 3 are closely linked, the answers to them turning on the interpretation of the same provisions, I consider it appropriate to deal with them together.

Interpretation of Articles 1(2) and 2 of the Regulation (Questions 1 and 3)

10 Under the two provisions which the Court is asked to interpret the special reference quantity is to be apportioned (Article 1(2)) and allocated (Article 2) `in proportion to the areas under forage referred to in Article 1(1)(d) of Regulation (EEC) No 1391/78'. For the purposes of those provisions of Commission Regulation (EEC) No 1391/78 of 23 June 1978, (16) area under forage means `the total agricultural area farmed by a producer within the meaning of Article 5(a) of Regulation (EEC) No 1078/77'; that provision defines the term `producer' in its turn as `a farmer ... who ... raise[s] cattle'.

Those definitions are not, to my mind, such as to make clear once and for all what is meant by `areas under forage'. While it is true that the reference to `the total agricultural area farmed' could support the conclusion, suggested by the Council, the Commission and the United Kingdom, that this is a definition of general scope which refers to the entire area of an agricultural holding, it is equally true that reference to the term `producer', as defined in Regulation No 1078/77, would seem, as the applicants (17) maintain, ineluctably to link that concept to the raising of cattle and hence to the productive use to which the land is put. (18) Nor is the United Kingdom's argument that the expression in issue is in substance to be equated with the word `holding' used in Article 12(c) of Regulation No 857/84 capable of altering the terms of the problem: the definition of producer contained in Regulation No 1078/77 and relevant for our purposes is not in fact the same as the definition in Regulation No 857/84. (19)

11 The relevance of the actual use of the land would appear to be further substantiated by the fact that Article 1(2) of the Regulation expressly refers to the `areas under forage (...) transferred in accordance with Article 7 of Regulation (EEC) No 3950/92'. According to that latter provision, I would remind the Court, `reference quantities available on a holding shall be transferred with the holding in case of sale, lease or transfer by inheritance to the producers taking it over in accordance with detailed rules to be determined by the Member States taking account of the areas used for dairy production or other objective criteria and, where applicable, of any agreement between the parties (...)'.

It is impossible not to regard the explicit reference to the provision quoted above as permitting SLOM quantities to be treated in the same way as `ordinary' quantities, when dealing with the apportionment of reference quantities where part of a holding is transferred. Nor do I believe that a different conclusion can be drawn from the fact that, unlike Article 1(2) of the Regulation, Article 2 does not contain any reference to Article 7 of Regulation No 3950/92. In the first place, I would point out that Article 2 is concerned not with the apportionment of a previously allocated quantity but with the allocation of the quantity, with the result that it operates in a different factual situation. Second, that article provides that the reference quantity is to be established by the State in accordance with objective criteria in proportion to the areas under forage which the producer was using on the date of his application and on the basis of the quantity in respect of which the premium was calculated, which would seem to confirm in this case as well that the quantity must be shared in proportion to the areas used for milk production. Last, as is moreover maintained by all the parties in the case and by the national court, the expression `areas under forage' cannot be interpreted in the same way in both the provisions under consideration.

12 But that is not all. As may be seen from the fifth and eighth recitals in the preamble to the Regulation, the provisions at issue were adopted in order to comply with the principles laid down in Twijnstra with regard to the question of apportioning reference quantities between SLOM producers. In that judgment the Court held that `the entire system of reference quantities is based on the general principle, laid down in Article 7 of Regulation (EEC) No 857/84 and in Article 5 of Commission Regulation (EEC) No 1371/84 of 16 May 1984 laying down detailed rules for the application of the additional levy referred to in Article 5c of Regulation (EEC) No 804/68, which provides that in the case of partial transfer of a holding the reference quantity is to be granted to the transferee in proportion to the land transferred. It does not appear from the statement of the reasons on which the regulation in question is based that the Community legislature intended to derogate from that general principle.' (20)

While the term `areas under forage' used in the relevant provisions does admittedly appear to be different from the term `areas used for dairy production' used in the provisions cited in that judgment, to my mind similar reasoning can and must be applied in this case. In fact, the general principle to which the Court refers, namely apportionment of the quantity, informs, as the Court stated, the entire system of special reference quantities.

13 I would add that it is curious, to say the least, for the institutions to deduce from the fact that in Twijnstra the Court ruled that the special reference quantity is to be shared between transferor and transferee `in proportion to the land retained and the land transferred' (paragraph 27) that where SLOM quotas are concerned the principle takes the form of division in proportion merely to the area of land transferred and not, as required by Article 7 of Regulation No 3950/92 and Article 7 of Regulation No 1546/88, (21) in proportion to the `areas used for dairy production'.

On this point two considerations will, I believe, suffice. First, in Twijnstra the Court had no need at all to specify the use to which the land transferred was put, since in that case the holding in question was entirely given over to milk production. (22) Second, it is certainly not possible to infer from the judgment in question, as the institutions which have intervened assert, the need for or in any event the confirmation of different systems for SLOM and non-SLOM quotas. That argument is contradicted by the fact that in that judgment the Court specifically invoked the general provisions concerning the sharing of reference quantities where part of a holding is transferred, provisions which, as I recall, explicitly state that the reference quantity must be allocated in proportion to the `areas used for dairy production'.

14 The foregoing observations make it plain that the submission of the United Kingdom Government and the institutions which have intervened in the case that the rules governing the apportionment of SLOM quantities must be presumed to be different from those governing non-SLOM quantities is not in any way confirmed by Twijnstra. Nor, furthermore, does that submission find any support in the specific provisions of the relevant legislation, since for such a purpose it is assuredly not enough to pray in aid the use of expressions which differ in part (`areas under forage' instead of `areas used for dairy production') (23) but to which in actual fact a like meaning could, it would appear, be legitimately attributed.

Nor, finally, does it seem to me that it can reasonably be maintained that the submission in question is supported by the overall rationale of the system, which would rather suggest that the fundamental principle, as laid down in the legislation and clarified in the case-law, (24) must be the same in relation both to SLOM quantities and non-SLOM quantities. I would add that I am not in the least persuaded by the argument of the Council and Commission to the effect that the interests of the transferor and transferee can be reconciled only if division is carried out in proportion to the areas of land transferred, the productive use to which the land is put being irrelevant, thereby at the same time ensuring that the quantities shared between them do not exceed the total quantity to which the owner would have been entitled if he had not transferred part of the holding. (25) If it is necessary to select the criterion for apportionment which, ultimately, makes it possible to ensure that the reference quantity available is not exceeded, that is to say the quantity to which the owner would have been entitled if he had not transferred part of the holding, I do not understand the reason for rejecting specifically the criterion which, since it is based on the areas actually used for milk production, not only attains that objective but also satisfies the requirement of fairness and a balanced adjustment of interests.

15 It remains to ascertain whether the interpretation suggested here runs the risk of proving impractical, as the United Kingdom Government claims, that is to say whether it is such as to render impossible any form of verification of the actual use of the land before the non-marketing premium was granted. Indeed, considering that Regulation No 1078/77 does not, for the purposes of the grant of the premium, require information making it possible to deduce which part of the holding was used for milk production, the authorities can legitimately claim that they are not in possession of the relevant particulars, which in this case go back to 1980. (26)

First of all, I would remark that as a matter of principle problems of verification, where they exist, must be tackled and resolved by the national authorities and cannot justify an incorrect interpretation of Community law. I recognize, however, that it cannot be completely ruled out that, where the Member State has no relevant information and the transferor is unable to provide documentary proof, it might be impossible to establish the use to which the land transferred was put at the time when the non-marketing premium was awarded. In such a situation, the State in question must be authorized to carry out the apportionment between transferor and transferee on the basis of other criteria, provided that they are objective, if need be in proportion simply to the area of land transferred, whatever its actual use.

16 To my mind, authority to do so may well be found both in the relevant general provisions, which expressly empower the Member States to adopt different criteria, and in the provisions which are of specific importance in this case: Article 1(2) of the Regulation, as we have already seen, contains a reference to Article 7 of Regulation No 3950/92, while Article 2 expressly states that the reference quantity `shall be established by the Member State in accordance with objective criteria'. Naturally, those criteria must meet the requirements laid down by the Court, which are that they should be `objectively verifiable criteria of general application laid down in advance which are beyond the control of the operators concerned and which relate to the properties of the holding involved or of the agricultural activities carried out on it'. (27)

The solution suggested, irrespective of the provisions just referred to, must be strictly confined to cases in which it is not possible to determine what the land transferred was actually used for at the time when the non-marketing premium was granted. The fundamental principle which informs the entire legislation remains that of division in proportion to the areas used for milk production: it is only where the transferee, who bears the burden of proof, is unable to adduce proof of the use to which the land transferred to him was put at the time when the non-marketing premium was granted that the Member State concerned will be able to have recourse to division of the available quantity in proportion to the land transferred.

17 In short, I consider that from a literal and systematic analysis of the provisions in point in this case the conclusion may reasonably be drawn that, where part of a holding subject to a non-marketing undertaking is transferred, the special reference quantity is to be shared in proportion to the areas actually used for milk production, these being understood, as the case-law makes clear, as including all areas which contribute, directly or indirectly, to milk production. (28)

The Member States are, however, authorized to carry out the division between transferor and transferee on the basis of the extent of the land retained and transferred respectively where they are not in possession of the necessary information and the transferee is not in a position to establish what was the productive use to which the land transferred to him was put at the time when the non-marketing premium was granted.

Validity of Articles 1(2) and 2 of the Regulation (Question 2)

18 The conclusions I have reached concerning the interpretation of the provisions at issue make it unnecessary for me to consider whether they may be invalid from the point of view of breach of the principles of protection of legitimate expectations, proportionality and respect for property. I shall accordingly examine the matter very cursorily.

I shall start by observing that, if it were to be held that a special reference quantity could legitimately be apportioned between transferor and transferee without any account being taken of the actual use of the land in the holding, this could give rise to situations which are manifestly inconsistent and, let me say, of doubtful legality. Let us imagine, for example, a mixed farm 10% of whose total area is given over to milk production and the other 90% is used for other purposes (e.g. agricultural crops the fruits of which the producer sells wholesale): the United Kingdom Government and the institutions which have submitted observations in this case would have it that the purchaser of the 10% used for milk production was entitled to only 1/10th of the reference quantity attaching to the holding, the greater part being retained by the transferor. I very much doubt whether such a solution can be regarded as compatible with the fundamental principles of Community law, particularly with respect to the legitimate expectations of the transferee who, having bought or leased the part of the transferor's holding given over to milk production, could legitimately expect to start up that activity again on the expiry of the non-marketing period.

19 Here, I might usefully point out that, again in the Twijnstra judgment, and thus in relation to SLOM producers, the Court has explicitly stated that `the transferee may legitimately expect, like the producers referred to in the Mulder and Von Deetzen judgments, to be able to re-use the land transferred for the purpose of milk production once the non-marketing period has ended. To exclude the transferee from that possibility would be to ignore the principle of protection of legitimate expectations.' (29)

None the less, the Council, the Commission and the United Kingdom Government maintain that it would not be correct to transpose that statement of the Court to the present case. First, they consider that the criteria used for apportioning the available quantity between transferor and transferee have ab initio been different for SLOM producers. Second, the provision which states that division should take place on the basis of the `areas used for dairy production' entered into force only after the applicants took over part of the holding. Third, the contested provisions are nothing other than a faithful application of the principles laid down by the Court in Twijnstra, with the result that operators in that sector should have expected rules similar to those in question. Last, there is no way in which the applicants may invoke the principle of protection of legitimate expectations, especially having regard to the wide discretion conferred on the Community legislature in the sphere of agricultural policy.

20 I would note at the outset that the institutions and the United Kingdom Government appear to have a very narrow conception of the principle of protection of legitimate expectations. The fact that the criterion for division in proportion to areas used for milk production entered into force after the applicants had taken over part of the holdings involved is by no means decisive. It is sufficient to point out that the quota system itself did not come into force until later, which is proof, if proof were needed, that the amendment or introduction of a new legislative provision can certainly not of itself make it impossible to invoke, in order to take up milk production again, the principle of protection of legitimate expectations. Although the Community legislature enjoys wide discretion in this sphere, it is at least equally true that such discretion may in no circumstances be used in such a way as to breach a fundamental principle of Community law such as that of protection of legitimate expectations.

As to the effect of the judgment in Twijnstra, I think it sufficient to refer to the line of argument set out earlier, (30) and to confine myself to repeating that different systems for SLOM and non-SLOM producers in relation to the apportionment of the available reference quantity did not in any way find acceptance in that judgment. The Court was guided, in arriving at the solution set out, by the principle of division in proportion to the areas used for milk production, as laid down in Article 7 of Regulation No 857/84 (now Article 7 of Regulation No 3950/92) and Article 5 of Regulation No 1371/84 (now Article 7 of Regulation No 1546/88), that is to say in provisions which lay down general rules for the apportionment of the reference quantity where part of a holding is transferred.

Finally, I scarcely need add that the interpretation proposed by the institutions, as we have seen, is by no means the only one appropriate for ensuring the stability of the system and that the total reference quantity to which the owner would have been entitled if he had not transferred part of the holding is not exceeded, given that those objectives can also be attained by accepting the interpretation I have proposed. (31)

21 To sum up, it must in my view be acknowledged that the provisions in question are contrary to the principle of protection of legitimate expectations if they are interpreted as requiring the Member States, always and in any event, even where the actual use of the area of the holding transferred has been proved, to share the available reference quantity between transferor and transferee in proportion merely to the areas of land retained and transferred respectively. This conclusion makes it unnecessary to consider the other grounds of invalidity put forward by the applicants in the main proceedings. (32)

Conclusion

22 In the light of the foregoing, I propose that the Court should reply as follows to the questions referred to it by the national court:

(1) Articles 1(2) and 2 of Regulation (EEC) No 2055/93 must be interpreted as meaning that where part of a holding is transferred the special reference quantity must be shared between the transferor and the transferee in proportion to the part of the property used directly or indirectly for milk production at the time when the transferor entered into the non-marketing undertaking.

Articles 1(2) and 2 of Regulation (EEC) No 2055/93 authorize the Member States to share the quantity between transferor and transferee in proportion to the areas of land retained and transferred respectively, and thus irrespective of the actual use to which they were put at the time when the transferor entered into the non-marketing undertaking, only where the Member State concerned does not have the necessary information and the transferee is not in a position to provide relevant evidence.

(2) Consideration of Articles 1(2) and 2 of Regulation (EEC) No 2055/93, as thus interpreted, has not revealed any factor of such a kind as to affect their validity.

(1) - OJ 1993 L 187, p. 8.

(2) - OJ 1977 L 131, p. 1.

(3) - OJ, English Special Edition 1968 (I), p. 176.

(4) - OJ 1984 L 90, p. 10.

(5) - OJ 1984 L 90, p. 13.

(6) - Case 120/86 Mulder v Minister van Landbouw en Visserij [1988] ECR 2321 and Case 170/86 Von Deetzen v Hauptzollamt Hamburg-Jonas [1988] ECR 2355.

(7) - The Dutch acronym SLOM stands for the Dutch `slachtoffers omschakeling', which literally means `victims of reconversion'.

(8) - OJ 1989 L 84, p. 2.

(9) - Case C-189/89 Spagl v Hauptzollamt Rosenheim [1990] ECR I-4539 and Case C-217/89 Pastätter v Hauptzollamt Bad Reichenhall [1990] ECR I-4585.

(10) - OJ 1991 L 150, p. 35.

(11) - OJ 1992 L 405, p. 1.

(12) - Emphasis added. This provision reproduces and amends Article 7 of Regulation No 857/84.

(13) - OJ 1988 L 139, p. 12. That regulation repealed and replaced Commission Regulation (EEC) No 1371/84 of 16 May 1984 (OJ 1984 L 132, p. 11) which, for the purposes of this case, contained provisions similar to Article 5.

(14) - Emphasis added. Regulation No 1546/88 has in its turn been repealed by Commission Regulation (EEC) No 536/93 of 9 March 1993 (OJ 1993 L 57, p. 12) but in part remains in force by virtue of Article 9.

(15) - Case C-81/91 Twijnstra v Minister van Landbouw, Natuurbeheer en Visserij [1993] ECR I-2455, paragraph 29.

(16) - OJ 1978 L 167, p. 45.

(17) - On the other hand, in contrast to the arguments put forward by the applicants, I do not think that it is possible to take the use of the word `forage' in the provision in question to be decisive. Indeed, while I recognize that the use of a word whose definition is `vegetable products used as fodder for cattle' is highly significant, especially in the light of its context, the fact none the less remains that the reference to `areas under forage' in the provisions in question makes it necessary to study the definition given in Article 1(1)(d) of Regulation No 1391/78.

(18) - On this point, I cannot support the argument put forward during the proceedings to the effect that since a producer is, according to Article 5 of Regulation No 1078/77, a person who raises `cattle' and not specifically dairy cows, it is in any event inconceivable that that provision should envisage only land used for milk production. As a matter of fact, the premium system established by Regulation No 1078/77 is applicable both to farmers `who cease to market milk and milk products' and to those `who convert their dairy herds to meat production'. The use of the wider term `dairy cattle' would therefore seem to be justified by the need to define a single example of a producer which can be used in both situations.

(19) - According to that regulation, the producer is defined as a person selling or supplying milk and not as a farmer raising cattle. In any event, it may well be helpful to add that the Court has quite recently reaffirmed that the definitions of `holding' and `producer' in Regulation No 857/84 refer to the whole set of production units operated by the producer for the purposes of milk production (Case C-463/93 Katholische Kirchengemeinde St Martinus Elten [1997] ECR I-0000, in particular paragraph 17).

(20) - Twijnstra, cited above in footnote 15, paragraph 25.

(21) - I would observe that those provisions replaced Article 7 of Regulation No 857/84 and Article 5 of Regulation No 1371/84 respectively, that is to say the provisions which, in its judgment in Twijnstra, the Court took as the basis for its conclusion that the quantity should, in accordance with the general principle laid down in those provisions, be shared in proportion to the land transferred.

(22) - It is crystal clear that where the entire farm is used for milk production, the proportion between the reference quantity transferred and the total quantity will be equal to the ratio between the area transferred and the total area of the holding.

(23) - However, it is precisely on the basis of the fact that the relevant provisions use the expression `areas under forage' whereas Article 7 of Regulation No 3950/92 refers to `areas used for dairy production' that the Council and Commission and also the United Kingdom Government claim that different sets of rules are concerned.

(24) - See Twijnstra, cited above in footnote 15, paragraph 25; also, more generally, Case C-121/90 Posthumus [1991] ECR I-5833, in which the Court held that `distribution must be effected strictly in proportion to the size of the areas of the respective holdings in question which are used for milk production' (paragraph 9; emphasis added).

(25) - On this point, those institutions have in fact merely claimed, without however supplying any adequate explanation, that their interpretation is consistent with the global framework of the system established by the Community legislature, which, they maintain, consciously differentiated the special reference quantity scheme from the `ordinary' scheme.

(26) - However, the United Kingdom Government acknowledges that it does possess those particulars concerning the holding taken over by Mr Lay, precisely because the owner of that holding inserted them, voluntarily, in his application for grant of the non-marketing premium.

(27) - Posthumus, cited above in footnote 24, paragraph 14. I hardly need point out that the lastmentioned criterion puts the emphasis fair and square on the productive use to which the land is put, so that it might well be considered that Member States cannot in any event refrain, or at least not entirely, from giving appropriate consideration to the extent of the land used for milk production.

(28) - To this effect, see Case C-79/91 Knüfer [1992] ECR I-6895, paragraph 13.

(29) - Twijnstra, cited at footnote 15, paragraph 23; emphasis added.

(30) - See, above, points 12 and 13.

(31) - See, above, point 14.

(32) - I would add only that it does not seem to me possible to exclude out of hand that the application of different criteria for apportionment in the case of SLOM producers may discriminate unjustifiably against them. While it is true, as the Court has reiterated on many occasions, that the principle of non-discrimination between producers or consumers, laid down in the second subparagraph of Article 40(3) of the Treaty, requires that comparable situations are not to be treated differently unless such different treatment is objectively justified (to this effect, see most recently Case C-22/94 Irish Farmers Association [1997] ECR I-0000, paragraph 34), it is reasonable to consider that the `subjective' difference on which the parties have insisted is not sufficient to justify different treatment for SLOM and non-SLOM producers.