Opinion of Mr Advocate General Tesauro delivered on 26 May 1993. - Bernard Le Nan v Coopérative laitière de Ploudaniel. - Reference for a preliminary ruling: Cour d'appel de Rennes - France. - Additional levy on milk - Transfer of a holding during the reference year - Condition for transfer of the reference quantity - Conditions for taking into account a different reference year. - Case C-189/92.



European Court reports 1994 Page I-00261



Opinion of the Advocate-General

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Mr President,

Members of the Court,

1. In the present proceedings, the Court is called on to interpret the Community legislation on the allocation of quantities of milk which are to be exempt from the additional levy (reference quantities) in relation to proceedings between Mr Bernard Le Nan and a milk-buying cooperative, Coopérative Laitière de Ploudaniel.

2. I refer to the Report for the Hearing for a detailed account of the relevant Community legislation but will deal here with the aspects of it most relevant to our purposes.

Council Regulation (EEC) No 856/84 of 31 March 1984 amending Regulation (EEC) No 804/68 on the common organization of the market in milk and milk products (1) introduced, in order to reduce structural surpluses of milk, an additional levy to be charged on the quantities of milk or milk equivalent exceeding a reference quantity to be determined.

In order to implement the levy scheme, the Member States may choose between two formulas: Formula A, under which the levy is payable by the producer direct, and Formula B, under which it is payable by the purchaser (cooperative or dairy), which then passes on the burden to the individual producers in proportion to the contribution to the purchaser' s reference quantity being exceeded. It should also be remembered that the reference quantities are as a rule fixed on the basis of the quantities of milk delivered in 1981 (Article 2(1)); however, the Member States are entitled to choose 1982 or 1983 as the reference year (Article 2(2)). France opted for Formula B and chose 1983 as the reference year.

The general rules for the application of the additional levy are contained in Council Regulation (EEC) No 857/84 of 31 March 1984, (2) whilst the detailed rules are laid down in Commission Regulation (EEC) No 1371/84 of 16 May 1984. (3)

3. Under Formula B, the reference quantities are established by reference not to individual producers but to the purchasers - precisely because it is to them that the additional levy is charged. The allocation of additional (individual) reference quantities is, however, provided for in Regulation No 857/84 for certain special situations, such as, for example, that of young farmers (Article 3(2) or that of producers whose milk production during the reference year was significantly reduced as a result of exceptional events (Article 3(3)).

Of more direct relevance here is Article 7(1) of the same regulation, as amended by Council Regulation (EEC) No 590/85 of 26 February 1985, (4) which is concerned with the transfer of reference quantities following a change of ownership or possession of the holding and provides in particular that "where a holding is sold, leased or transferred by inheritance, all or part of the corresponding reference quantity shall be transferred to the purchaser, tenant or heir according to procedures to be determined".

The detailed rules applicable to transfers are laid down in Article 5 of Regulation No 1371/84 which, having laid down the principle that "where an entire holding is sold, leased or transferred by inheritance, the corresponding reference quantity shall be transferred in full to the producer who takes over the holding" (subparagraph 1), provides that in the case of a partial transfer of the holding the producer in question is to be entitled to a proportional transfer of the reference quantity (subparagraph 2) and adds that those provisions (subparagraphs 1 and 2) are to apply by analogy to other cases of transfer which have comparable legal effects as far as producers are concerned, under the various national rules (subparagraph 3). The second sentence of subparagraph 3 provides that "Member States may apply subparagraphs 1 and 2 in respect of transfers taking place during and after the reference period".

Finally, under Article 6(2) of that regulation, the Member States are empowered to assign a reference quantity to persons who commenced operations after the start of the reference period (after 1 April 1984), namely those who cannot claim reference production under other provisions of the regulations in question.

4. Let us now consider the facts. In October 1983 Bernard Le Nan bought a holding which had been used for milk production until the first half of that year, that is to say until the date on which the lessee (a milk producer) of the holding had terminated the lease and ceased production. Mr Le Nan resumed milk production as from 1 April 1984 and on the same date, with his father (who is also a milk producer), set up a Groupement Agricole d' Exploitation en Commun (GAEC), to which they each contributed their land.

However, Coopérative Laitière de Ploudaniel refused to assign to the GAEC, in addition to the reference quantity due to Mr Le Nan senior, a quantity for the holding acquired in 1983 by Mr Le Nan junior. The latter brought proceedings - unsuccessfully - first before the Tribunal Administratif, Rennes, and then before the Tribunal de Grande Instance, Brest, which dismissed the action on the ground that milk deliveries had been temporarily suspended following changes in the ownership and possession of the holding in question.

Mr Le Nan appealed against that decision to the Cour d' Appel, Rennes, which then made a reference to this Court, asking essentially whether or not Mr Le Nan is entitled to transfer of the reference quantity which would have been attributable to the previous producer, having regard to the fact that milk deliveries were interrupted for several months. The national court also wishes to know, in the event of the plaintiff being entitled to transfer of the quantity in question, whether the fact that the producer who had previously leased the land delivered milk only in the first half of 1983, the year chosen by France as the reference year, may mean that the reference quantity due to Mr Le Nan must be determined on the basis of the deliveries made in 1982 rather than those made in 1983.

5. The circumstances just described provide a basis, having regard to the legislation referred to earlier, for a number of preliminary considerations: (a) as a young farmer, Mr Le Nan could receive a (specific) additional reference quantity, as appears to have happened in the present case; (5) (b) even if Mr Le Nan was not a milk producer on 1 April 1984, as contended by the defendant, and, more generally, if he had not been entitled to transfer of the reference quantity, he could obtain an individual quantity under Article 6(2) of Regulation No 1371/84, provided that the national legislation so allows.

But let us consider the questions as formulated by the national court and, first of all, the question of Mr Le Nan' s entitlement or otherwise to transfer of the reference quantity on the basis of the deliveries made by the lessee of the holding bought by him. Let me say straight away that it is undeniable, as is apparent from Article 7(1) of Regulation No 857/84, that here is a link between the land and milk production. Moreover, in its judgment in Wachauf, (6) the Court expressly inferred from the terms of Article 7 that "the Community legislature intended that at the end of the lease the reference quantity should in principle return to the lessor who retakes possession of the holding". But, as the Court held in Kuehn, (7) Article 7 relates only to the case where a reference quantity has always been assigned to a person, that is to say the case where a transfer of the holding has occurred after the entry into force of the additional levy scheme.

6. However, that is certainly not the case where Mr Le Nan is concerned. He acquired the holding in question before the entry into force of the additional levy scheme and, according to him, he commenced milk production on the very day on which that scheme came into operation. It follows that in the present case it is inappropriate to rely on Article 7 of Regulation No 857/84 or Article 5 of Regulation No 1371/84. On the other hand, the second paragraph of Article 5 is relevant, in that under it the Member States may apply the provisions on transfers of reference quantities also where there are changes in the management of a holding occurring during and after the reference period, that is to say before the entry into force of the scheme in question.

Furthermore, in its judgment in Kuehn, which I mentioned earlier, the Court stated, in relation to a case similar to the present one, that, from a reading of Article 7 of Regulation No 857/84 and Article 5 of Regulation No 1371/84, it is apparent that "transfers of holdings before the entry into force of the additional levy scheme give rise to the transfer of the corresponding reference quantities only where the Member State concerned has provided for this in exercise of the power given to it in the second sentence of subparagraph 3 of Article 5 of Regulation No 1371/84. It is only to that extent that deliveries of milk made during the reference year used by the Member State concerned by the lessee who previously managed the undertaking must be taken into consideration when determining the reference quantity assigned to the new lessee" (paragraph 24 of the decision).

The fact that, by contrast with the Kuehn case, there were two transfers in this case (from the lessee milk producer to the owner and from the latter to Mr Le Nan) is not such as to alter the terms of the problem. Article 7(1) of Regulation No 857/84 and subparagraph 2 of Article 5 of Regulation No 1371/84 give the Member States the power - but certainly not the obligation - to assign to a new producer, be he a lessee or an owner, who has resumed milk production on a holding already used for that activity and following a transfer taking place before the entry into force of the additional levy scheme, a reference quantity which takes account of the deliveries made during the reference year by the person who managed the holding before the entry into force of the scheme.

The allocation or otherwise of a reference quantity in the event of a change of management occurring before the entry into force of the additional levy scheme is thus dependent on whether or not national legislation has been adopted under Article 5 of Regulation No 1371/84. It is therefore wholly irrelevant that production was temporarily suspended because of a change, or even several successive changes, of ownership or possession of the holding in question. Indeed, such a circumstance only affects the magnitude of the quantity to be assigned to the producer concerned.

7. That brings us to the second part of the preliminary question, by which the national court seeks to establish whether the Community legislation in question allows a producer to choose a reference year different from that chosen by the Member State in question - merely because deliveries during the reference period decreased as a result of a change of management.

The only relevant provision here is Article 3(3) of Regulation No 857/84, which provides for such a possibility for those producers whose production underwent a considerable reduction in the reference year as a result of exceptional events. The second subparagraph of Article 3(3) enumerates the situations which may justify the use of a reference year other than the one chosen. However, that list does not include a situation of the kind with which we are concerned in this case.

As the Court stated in its judgment in Leukhardt, (8) "the structure and purpose of the regulations concerned indicate that they contain an exhaustive list of the situations in which reference quantities or individual quantities may be granted and set out precise rules concerning the determination of those quantities". Since the situation under review is not included in the list, there is no possibility of taking account of a reference year other than the one chosen. Moreover, in its judgment in Kuehn, (9) the Court stated that a change of management, with a consequent reduction in production and therefore of milk deliveries, could not enable account to be taken of a reference year other than that chosen by the Member State concerned.

8. In the light of the foregoing considerations, I therefore propose that the Court give the following answers to the questions submitted by the Cour d' Appel, Rennes:

"(1) Council Regulation (EEC) No 857/84 of 31 March 1984, in particular Article 7(1) thereof, and Commission Regulation (EEC) No 1371/84 of 16 May 1984, in particular Article 5 thereof, must be interpreted as meaning that the Member States are entitled, but are not under an obligation, to provide for the allocation to the new owner and milk producer, who acquired a holding used for such production before the entry into force of the additional levy scheme, of a reference quantity which takes account of the deliveries made during the reference period by the previous producer.

(2) Council Regulation (EEC) No 857/84 of 31 March 1984 must be interpreted as not allowing a producer to have taken into consideration a reference year other than that chosen by the Member State concerned merely because, during that reference year, there was a change or changes of management of the holding and therefore a reduction in milk deliveries; that situation is not included in the exhaustive list contained in the first subparagraph of Article 3(3) of that regulation."

(*) Original language: Italian.

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

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

(3) - OJ 1984 L 132, p. 11.

(4) - OJ 1985 L 68, p. 1.

(5) - The French Government in fact stated that the GAEC would receive an additional reference quantity of 11 500 litres of milk because of Bernard Le Nan' s status as a young farmer.

(6) - Case 5/88 Wachauf v Bundesamt fuer Ernaehrung und Forstwirtschaft [1989] ECR 2609, paragraph 13.

(7) - Case C-177/90 Kuehn v Landwirtschaftskammer Weser-Ems [1992] ECR 35, paragraph 22.

(8) - Case 113/88 Leukhardt v Hauptzollamt Reutlingen [1989] ECR 1991, paragraph 13.

(9) - Cited above, paragraphs 10 and 11.