Keywords

Summary



Keywords

1 Agriculture - Common organisation of the markets - Raw tobacco - System of maximum guaranteed quantities - General reduction in intervention prices and the premium granted to purchasers where quantities are exceeded - Whether compatible with the objectives of the common agricultural policy - Infringement of the principles of proportionality or non-discrimination - No infringement

(EC Treaty, Art. 39; Council Regulation No 1114/88)

2 Agriculture - Common organisation of the markets - Raw tobacco - System of maximum guaranteed quantities - 1989 harvest quantities fixed for certain varieties after they had been planted - Infringement of the principle of the protection of legitimate expectations - No infringement - Retroactive effect required by the objective to be achieved - Determination, for the harvest in question, of actual production as well as the resulting prices and premium - Whether lawful

(Council Regulations Nos 1114/88 and 1252/89; Commission Regulation No 2046/90)

3 Agriculture - Common organisation of the markets - Raw tobacco - System of maximum guaranteed quantities - Principle of fixing by varieties each year for the harvest in the following year - Application without retroactive effect - Entry into force of the corresponding regulation after that of the regulation allocating the maximum guaranteed quantities for the harvest in course - Whether lawful

(Council Regulations Nos 1251/89 and 1252/89)

4 Agriculture - Common organisation of the markets - Raw tobacco - System of maximum guaranteed quantities - Excess production - Repayment of the amounts corresponding to the reduction in prices and premium - Obligation devolving on the processor - Renegotiation of the sales price with producers - Option provided by the standard cultivation contract

(Council Regulation No 727/70, Art. 4(5); Commission Regulation No 4263/88, annex)

Summary

5 In so far as it fixes overall maximum guaranteed quantities and provides for a general reduction in intervention prices and premiums for purchasers if those quantities are exceeded, irrespective of the production volume of each producer and without distinguishing between the different tobacco varieties, Regulation No 1114/88 amending Regulation No 727/70 on the common organisation of the market in raw tobacco is not incompatible with the objectives of the common agricultural policy and does not infringe the principle of proportionality or that of non-discrimination.

With regard to the various objectives of the common agricultural policy set out in Article 39 of the Treaty, which may prove to be contradictory, the Community institutions must secure a permanent harmonisation between those objectives and, where necessary, allow any one of them temporary priority in order to satisfy the demands of the economic factors or conditions in view of which their decisions are made, on condition, however, that such harmonisation does not have the effect of rendering impossible the realisation of the other objectives. Pursuing the sole objective of ensuring a fair standard of living for producers and processors of raw tobacco, in particular by increasing their individual earnings, would involve a serious risk of rendering impossible, in a market characterised by excess production, the realisation of the objective of stabilising the market in raw tobacco pursued through the introduction of the system of maximum guaranteed quantities by Regulation No 1114/88, in accordance with one of the objectives of the common agricultural policy set out in Article 39.

So far as the principle of proportionality is concerned, the Council, in adopting Regulation No 1114/88, acted in compliance with that principle inasmuch as it did not choose a measure which was manifestly inappropriate having regard to the objective pursued, and also in accordance with the need to effect the appropriate adjustments by degrees prescribed by Article 39(2)(b) of the Treaty. When it adopted that regulation, the Council was entitled to consider, without making any manifest error of assessment, that the system of maximum guaranteed quantities was less onerous for tobacco growers than an individual quota system, the mere fact that this system proved insufficiently effective not being enough to justify the conclusion that the regulation was invalid.

With regard, finally, to the principle of non-discrimination, this does not preclude a Community regulation which introduces a system of guarantee thresholds for the entire Community market involving a reduction in the production aid of all the producers concerned, even if the exceeding of those thresholds was not due to an increase in their production. In such a system, all Community producers must together bear equally the consequences of the decisions which the Community institutions are led to adopt in order to respond to the risk of an imbalance which may arise on the market between production and outlets.

6 In so far as it established the maximum quantities for the Mavra and Tsebelia varieties harvested in 1989 but came into force only on 11 May 1989, Regulation No 1252/89, allocating for each variety or group of varieties of tobacco the overall maximum guaranteed quantity fixed by Regulation No 1114/88 for the 1989 harvest throughout the Community, does not infringe the principle of the protection of legitimate expectations, and it was necessary for it to have retroactive effect in order for it to achieve its objective.

In the first place, even though investment programming by the traders concerned was no longer possible when the regulation entered into force and overproduction of the varieties concerned could no longer be avoided, the fixing of the quantities in question was not unforeseeable for those traders, who must have anticipated, in view of the fact that the regulation forms part of a corpus of measures, in force since 1988, designed to limit tobacco production in the Community, that the quantity for the two varieties in question would be further reduced for the 1989 harvest.

Second, the objectives pursued by Regulation No 1114/88, which consisted in limiting, for the various harvests, Community tobacco production to a given quantity and in discouraging production of varieties, such as Mavra and Tsebelia, which were difficult to dispose of, made it necessary to fix, even retroactively, a maximum guaranteed quantity for the 1989 harvest of those varieties.

Furthermore, and in so far as Regulation No 1252/89 is not invalid, the Commission could reasonably determine, in Regulation No 2046/90, the exact amount of the prices and premiums received by the producers on the basis of whether or not the quantities by varieties fixed by Regulation No 1252/89 had been exceeded and consequently reduce the prices and premium for the 1989 harvest of the varieties concerned.

7 It follows from the provisions of Regulation No 1251/89, under which the maximum guaranteed quantities for each of the varieties or groups of varieties of tobacco produced in the Community are fixed each year for the harvest in the following year, that, according to the legislature, the principle of fixing those quantities one year before the harvest was to be applied only prospectively, and for the first time in the 1990 harvest. The Council thus did not retroactively apply Regulation No 1251/89, with the result that, by fixing the entry into force of that regulation at a date later than that of the entry into force of Regulation No 1252/89 fixing the maximum quantities for the 1989 harvest, it did not exceed the broad discretion which it enjoys in matters relating to the common agricultural policy or give improper reasons for its choice.

8 In the context of the common organisation of the market in raw tobacco, established by Regulation No 727/70, it is the processing undertaking which is required to repay, in so far as it receives them, the amounts corresponding to the reduction in the intervention prices and the premium granted to producers decided on pursuant to Article 4(5) of that regulation, as amended by Regulations Nos 1114/88 and 1251/89, in the event that the maximum guaranteed quantities are exceeded for the relevant varieties of tobacco produced in the Community. In such a case, however, the second paragraph of clause 8 of the standard cultivation contract set out in the annex to Regulation No 4263/88 allows the contract price to be renegotiated between the processing undertaking and the tobacco producers in line with the reduction in the prices and premium, such renegotiation being consistent with the fact that, in a system of maximum guaranteed quantities, all Community producers must together bear equally the consequences of the decisions which the Community institutions are led to adopt in order to respond to the risk of an imbalance which may arise on the market between production and outlets.