CELEX: 61977CC0002
Language: en
Date: 1977-06-22
Title: Opinion of Mr Advocate General Mayras delivered on 22 June 1977. # Hoffmann's Stärkefabriken AG v Hauptzollamt Bielefeld. # Reference for a preliminary ruling: Finanzgericht Münster - Germany. # Case 2-77.

OPINION OF MR ADVOCATE-GENERAL MAYRAS
   DELIVERED ON 22 JUNE 1977 (
         1
      )
   
      Mr President,
   
      Members of the Court,
   The German undertaking Hoffmann's Stärkefabriken, which as its business name indicates manufactures starch, claimed on 1 April 1975 from the Hauptzollamt Bielefeld the sum of DM 375228.68 as a production refund on maize for the 1974/1975 marketing year. It relied upon Article 1 (1) of Regulation No 1132/74 of the Council of 29 April 1974 which provides:
   ‘Member States shall grant a production refund on maize and common wheat for the manufacture of starch equal to the difference per 100 kg between the threshold price for each of these products, less any accession compensatory amount applicable, and 8.20 u.a..’
   The Hauptzollamt Bielefeld met this claim on 8 April 1975 but only to the extent of DM 186986.05. It relied upon Article 1 of Regulation No 3113/74 of the Council of 9 December 1974 which provides that from 1 April 1975 the reference figure shall be fixed at 10.31 u.a. The customs administration considered that pursuant to this provision it was bound to effect this calculation which resulted in a substantial reduction in the amount of the production refund on maize starch.
   The Finanzgericht Münster, before which the plaintiff in the main action disputed the decision rejecting its administrative complaint, brought before the Court on 20 December 1976 the question of the validity of Article 1 of Regulation No 3113/74.
   In order to clarify my views on this point I shall consider the various submissions upon which the applicant undertaking relied before the national court against this provision which was alleged to be illegal because it was contrary to:
   
            (1)
         
         
            Article 7 of Regulation No 1132/74,
         
      
            (2)
         
         
            Article 11 of Regulation No 120/67,
         
      
            (3)
         
         
            the principle that agricultural prices shall not be changed during the marketing year.
         
      Further, the national court itself raises a final question:
   The production refund on potato starch, which is equal to the average amount of the refund granted during the same marketing year per 161 kg of maize for starch manufacture (Article 2 of Regulation No 1132/74) was not altered.
   Since the Commission, when it adopted Regulation No 231/75 of 30 January 1975, considered that it must observe the principle of not prejudicing already existing rights, it decided that it was inappropriate to apply with retroactive effect the alteration in the amount of the production refund on starch to the amount already paid to potato-starch manufacturers although they were in competition with maize-starch manufacturers.
   This violates the principle that the amount of the refund to which maize-starch manufacturers and potato-starch manufacturers are entitled shall be the same and constitutes a discrimination prohibited by the second subparagraph of Article 40 (3) of the Treaty.
   As the first three submissions made against the contested provision concerned the granting of the production refund on starch and the conditions under which the amount thereof was altered I should like to survey some of the general features of the granting of refunds on starch products of agricultural origin and to sketch the background of the regulation complained of.
   
            I —
         
         
            Under the system provided for by basic Regulation No 120/67 of the Council of 13 June 1967, which system came into operation from 1 July 1967, the Council shall fix before 1 August of each year, for the marketing year beginning during the following calendar year, which runs from 1 August to 31 July, a number of basic prices for cereals, including maize.
            Since starch manufacturers using raw materials of agricultural origin must charge prices which are competitive with those charged by manufacturers of synthetic products made from raw materials of non-agricultural origin, Article 11 (1) of Regulation No 120/67 provides that a production refund shall be granted so that basic agricultural products (maize, common wheat) for the manufacture of starch may be made available to the starch industry at a lower price than that which would be obtained through applying the rules of the common organization of the market for the relevant products.
            In fact when the basic regulation entered into force, that is to say on 1 July 1967, there was, and still is, a shortage of maize in the Community and imported maize was subject to a levy because world prices were below the Community price. On the other hand the price of oil, the raw material for industries manufacturing synthetic products which compete with starch in certain applications escaped because the dramatic increase in price did not occur until later.
            However, this system of refunds spread through infection, at it were, to maize and to common wheat used in the manufacture of quellmehl because this product may be applied as an additive in certain preparations intended for human consumption and because it might encounter competition in the above-mentioned applications from ‘puffed starch’.
            The system of refunds was also extended to cover the production of maize groats and meal (gritz) used in the brewing industry because gritz itself may also encounter competition in this application from starch.
            Finally, because of the possibilities of substitution as between maize starches and potato starches a production ‘refund’ was granted and continues to be granted in respect of the latter.
            This complex system was summarized in Article 1 (1) of Regulation No 120/67:
            ‘A production refund shall be granted:
            
                     (a)
                  
                  
                     for maize and common wheat used by the starch industry for the manufacture of starch and quellmehl;
                  
               
                     (b)
                  
                  
                     for potato starch;
                  
               
                     (c)
                  
                  
                     for maize used in the maize industry for the manufacture of maize groats and meal (gritz) used by the brewing industry’.
                  
               For the sake of completeness I should like to add that after the establishment of the common organization of the market in rice, broken rice used by the starch industry and by the brewing industry has come under the same system.
            The Council, acting by a qualified majority on a proposal from the Commission, adopted rules for calculating the amount of the refund and fixed the amount thereof.
            Article 1 of Regulation No 371/67 of the Council of 25 July 1967 provides:
            (1)   From 1 July 1967 Member States shall grant a production refund on maize and common wheat for the manufacture of starch and quellmehl equal to the difference per 100 kg between the threshold price for each of these products and 6.80 u.a…
            The amount of the production refund on maize starch was thus equal to the difference between the Community threshold price and a ‘supply price’ fixed at 6.80 u.a. which means that any increase in the supply price, and also any reduction in the threshold price, necessarily entailed a proportionate reduction in the amount of the refund.
            The conditions on which the supply price might be altered were laid down in Article 2:
            ‘(1)   If prices of the basic products mentioned in Article 1 show appreciable and persistent variations on the world market in relation to the amounts specified in that article of 6.80 u.a. for maize and common wheat and 8.30 u.a. for broken rice, these amounts may be altered by the Council, acting in accordance with the voting procedure laid down in Article 43 (2) of the Treaty on a proposal from the Commission.’
            A rise in world prices could, furthermore, lead to the introduction of a levy:
            
                     ‘(2)
                  
                  
                     If world prices for the basic products appreciably and persistently exceed the amounts which have been fixed, an export levy to offset the difference between prices within the Community and on the world market may be introduced in accordance with the procedure provided in Article 26 of Regulation No 120/67 and in Article 26 of Regulation No 359/67.’
                  
               
      
            II —
         
         
            When the common organization of the market in cereals entered into force the average prices of basic products on the world market were between 10 % and 15 % below the supply price fixed by Regulation No 371/67 for the maize required by the Community starch industry; for a long period the supply price remained fixed at 6.80 u.a. per 100 kg.
            After December 1972 the prices on the world market for maize, the main cereal for production refunds, exceeded 6.80 u.a. per 100 kg. Owing to the world shortage of protein the price of maize has constantly increased on the world market reaching 11.95 u.a. on 12 January 1974, that is 75 % more than the Community supply price fixed for maize for the manufacture of starch.
            In the same period the threshold prices fixed for cereals gradually increased (an increase of 8.1 % for wheat in 1972/1973 in relation to 1967/1968; 13.9 % for maize; 15.9 % for broken rice).
            Since the refund is equal to the difference between the threshold price and the supply price there was a corresponding increase in the refund so that the costs of the Guarantee Section of the European Agricultural Guidance and Guarantee Fund, which finances the production refunds, increased from year to year.
            This increase in world rates, together with the varying effects which it had on the competitive conditions of the various processing industries using either subsidized products or ‘free’ products again raised the question of the use of and the justification for this complex system of refunds and gave rise to a ‘radical review’.
            In its memorandum to the Council of 31 October 1973 the Commission confirmed this reversal in the state of the world market. It accordingly proposed to establish a better grading of Community prices for the various cereals so that more account might be taken of their nutritional value, in particular by increasing the prices of barley and of maize.
            It noted, secondly, that the Commission had never been able to observe the general rule contained in the various agricultural regulations which lays down that the Council, acting on a proposal from the Commission, shall fix before 1 August for the Community for the marketing year beginning during the following calendar year all the agricultural prices which, under the common organizations, require to be fixed.
            It consequently proposed to take 1 January preceding the relevant marketing year as the date for fixing the prices applicable during the marketing year.
            In the meantime it suggested, as a ‘technical adjustment’ of the common organization of the market intended to make for more flexible administration, a modification of the starting date for maize. The justification which it gave for this was as follows: the agricultural cycle for maize in the Community differs clearly from that of other cereals. The unity of the marketing year for all cereals encourages maize to be used at the beginning of the marketing year for barley, which runs from 1 August to 31 July, thereby causing at this point in the marketing year intervention measures on an unusual scale with regard to barley. The alteration of the date from the beginning of the marketing year for maize would mean that the competitive position of barley, from July to September, would be improved; on the other hand maize stocked at the end of the marketing year would come under the same system of compensatory allowances as the other cereals.
            Thirdly, the Commission proposed an ‘adjustment’ of the system of production refunds as a whole. In fact the prices of the basic products referred to in Article 2 (1) of Regulation 371/67 had undergone appreciable variations on the world market which gave every sign of persisting.
            In January 1974 the Commission stated its proposals to the Council. The Community system was to be amended so that:
            
                     (1)
                  
                  
                     the supply price of raw materials would be increased;
                  
               
                     (2)
                  
                  
                     the production refund for quellmehl would be abolished;
                  
               
                     (3)
                  
                  
                     the production of glucose through direct hydrolysis would be included in the system of production refunds because of competition from glucose manufactured from starch, which qualifies for a production refund. In order to adjust the supply prices to the maize, common wheat and broken rice for sale on the world market and at the same time to lighten the financial burden borne by the European Agricultural Guidance and Guarantee Fund, the Commission proposed to reduce the refund granted on starch products to a level broadly equal to the amount granted at the time of the entry into force of the common organization of cereals and rice, on 1 July 1967.
                  
               
      
            III —
         
         
            These proposals were put into effect in the following provisions:
            
                     (1)
                  
                  
                     Regulation (EEC) No 1125/74 of the Council, adopted in accordance with the opinion of the European Parliament, abolished the production refund on quellmehl from 1 August 1974.
                     This refund was abolished as a result of the amendment of Article 11 (1) of Regulation No 120/67 which was replaced from 1 August 1974, pursuant to Article 5 of Regulation No 1125/74, by the following words:
                     ‘(1)   A production refund shall be granted:
                     
                              (a)
                           
                           
                              for maize and common wheat used in the Community for the manufacture of starch;
                           
                        
                              (b)
                           
                           
                              for potato starch;
                           
                        
                              (c)
                           
                           
                              for maize groats and meal (gritz) used in the Community for the manufacture of glucose by direct hydrolysis;
                           
                        
                              (d)
                           
                           
                              for maize used in the Community by the maize industry for the manufacture of maize groats and meal (gritz) used in the Community brewing industry for the production of beer.’
                           
                        The plaintiff in the main action complains of the infringement of this provision in the wording which it was given after the adoption of Regulation No 1125/74.
                  
               
                     (2)
                  
                  
                     The same regulation, at Article 2 and Article 3 (3), fixes the beginning of the marketing year for maize at 1 October and the end at 30 September and at the same time fixes the duration of the next marketing year at 14 months (1 August 1974 to 30 September 1975).
                     This amendment was confirmed by Regulation No 1996/74 of the Council of 29 July 1974, adopted in accordance with the opinion of the European Parliament; however, as we shall see, as early as 4 March 1975 the Council, by Regulation No 665/75, also adopted in accordance with the opinion of the European Parliament, refrained from fixing the marketing year for maize in accordance with the agricultural cycle for maize and treated the marketing year for maize exactly the same as that for other cereals from 1 August 1975.
                  
               
                     (3)
                  
                  
                     Regulation No 367/71 (refunds for the brewing industry) and Regulation No 371/67 (refunds for the maize-starch industry and the potato-starch industry) adopted pursuant to articles which were practically identical in Regulations Nos 120/67 and 359/67 were repealed and revised from the 1974/1975 marketing year, taking the form of an identical passage contained in Regulation No 1132/74 adopted by a qualified majority on the proposal from the Commission.
                     Article 7 of this regulation, the infringement of which also forms the basis for the application in the main action, adopts in substance the wording of the former Article 2 of Regulation No 371/67.
                     It provides:
                     
                              ‘(1)
                           
                           
                              If the prices of the basic products mentioned in Articles 1, 4 and 5 show appreciable and persistent variations on the world markets in relation to the amounts specified in the said Articles, namely 8.20 u.a. for maize and common wheat and 10.20 u.a. for broken rice, these amounts may be altered by the Council acting on a qualified majority on a proposal from the Commission.
                           
                        
                              (2)
                           
                           
                              If the world market price of, on the one hand, maize or common wheat, and, on the other, broken rice appreciably and persistently exceeds 8.20 and 10.20 u.a., respectively, an export levy to compensate for the difference between prices on the world market and supply prices for these basic products within the Community shall be introduced for products falling within heading 11.08 A, 11.09, 17.02 B II, 17.05 B and 23.03 A I of the Common Customs Tariff. The Commission shall fix the export levy.’
                           
                        Regulation No 1132/74, in Article 1, thus fixed the following supply prices:
                     
                              —
                           
                           
                              8.20 u.a. per 100 kg for maize and common wheat from 1 August 1974 (as against 8.60 u.a. proposed by the Commission);
                           
                        
                              —
                           
                           
                              10.20 u.a. for broken rice from 1 September 1974 (as against 10.80 u.a. proposed by the Commission).
                           
                        By applying the relationship which was adopted by Regulation No 371/67 as the basis for fixing the supply price of potatoes for starch manufacture at 8.18 u.a. per 100 kg the supply price of potato starch was fixed at 10.45 u.a. per 100 kg (as against 11.08 u.a. proposed by the Commission (Article 3 (1)).
                  
               
      
            IV —
         
         
            However, this was not the end of the alterations to the system of refunds on starch products. The Council considered that it was necessary, ‘by way of exception … and in derogation from the principle of fixing prices annually’ to amend agricultural prices so as to bring them up to date with the increase in the price of products required by farmers and on 2 October 1974 adopted in accordance with the opinion of the European Parliament Regulation No 2496/74 which applied from 7 October 1974 a general increase of 5 % to agricultural prices for the 1974/1975 marketing year or for the remaining part of that marketing year.
            On the one hand the target prices and intervention prices for cereals were increased; on the other, ‘the amounts laid down in Article 1 … of Regulation No 1132/74 … [that is to say the amounts of the production refunds] shall be amended so that, for the remainder of the 1974/75 marketing year, the refunds to producers laid down in that regulation shall be maintained at the level resulting from the implementation of the rules which were valid when the present regulation entered into force’ (Article 1 (2)). Pursuant to Article 4 ‘Detailed rules for the application of Article 1 … and the alterations to be made as a result of this regulation to other prices and amounts fixed within the context of the common agricultural policy shall be adopted in accordance with the procedure laid down in Article 26 of Regulation No 120/67 …where appropriate by derogation from the rules for fixing contained in the regulations concerned to the extent and for the duration strictly necessary to take into account this regulation’.
            It is not very easy to understand what the Council meant by the ‘alteration’ of such amounts so that the refunds were ‘maintained at the level resulting from the implementation of the rules which were valid when the present regulation entered into force’.
            However, the Commission, which is the authoritative interpreter of the Council's line of thought, defined by Regulation No 2518/74 of 4 October 1974 the measures to be adopted; since after 7 October 1974 the prices of cereals, including the threshold price, were affected by the levy of 5 % the supply prices of the industry were adjusted to maintain the production refund ‘at the level resulting from the implementation of the rules which were valid when’ Regulation No 2496/74 ‘entered into force’. The amount of 8.745 u.a. was substituted for the amount of 8.20 u.a. fixed by Regulation No 1132/74 (10.907 u.a. for broken rice and 11.309 u.a. for potato starch).
            Thus, although the Council, acting by a qualified majority, fixed the amount of 8.20 u.a., the Commission fixed the amount of 8.745 u.a., this latter amount remaining valid ‘for the remainder of [the] normal period of validity’ (Article 1 (1) of Regulation No 2518/74).
            The plaintiff in the main action did not object to this alteration in the prices and other amounts in the course of the marketing year although it affects Regulation No 1132/74 of the Council and although it was adopted by the Commission acting in accordance with the management committee procedure, no doubt because the threshold price had also been increased and because in the end the production refund on maize starch had not been reduced.
         
      
            V —
         
         
            This Regulation No 2518/74 of the Commission was never formally repealed and it is really against its replacement, as regards the fixing of the amount of the refund by a third and last alteration concerning the present case, the alteration effected by Regulation No 3113/74 of the Council, that the plaintiff in the main action complains.
            As early as 11 November 1974 the Commission submitted to the Council a draft regulation amending Regulation No 1132/74 (and thus its own Regulation No 2518/74) in order to reduce by approximately 50 % from 1 December 1974 the production refund on starch products made from cereals and rice and to fix a new price for producers of potatoes for the manufacture of starch. It proposed, as a supply price, the figure of 10.09 u.a. for maize and common wheat (12.74 u.a. for broken rice). It gave as the reason for this proposal the appreciable variations which had occurred in prices of basic products on the world market. It considered that the amount of the former level of the refund was thus no longer economically justified and that it moreover involved an excessive financial burden for the European Agriculture Guidance and Guarantee Fund.
            From this proposal originated Regulation No 3113/74 of the Council of 9 December 1974 which has been impugned.
            This regulation is less favourable to processors than that proposed by the Commission since the amount of the supply price is fixed at 10.31 u.a. (instead of the proposed figure of 10.09 u.a.) for maize; the supply price for broken rice is 12.74 u.a.; the amount fixed in Article 3 (1) of Regulation No 1132/74 was reduced to 12.16 u.a.. But the regulation goes much further than those proposals since it takes 1 April 1975 and not 1 December 1974 as the date on which it shall apply.
            Since Regulation No 3113/74, which was adopted by a qualified majority, had to respect the principle of maintaining the refunds to producers at the level resulting from the implementation of the rules following from Article 7 (1) of Regulation No 1132/74 (Article 1 (2) of Regulation No 2496/74 of the Council) and since in addition it was only adopted on 9 December 1974, that is to say, after the date on which the Council originally suggested it should enter into force (1 December 1974), the Council was prompted to enact Article 2:
            ‘Where transitional measures prove necessary, in particular for determining production refunds to be granted during the marketing year 1974/75, such measures shall be adopted in accordance with the procedure laid down in Article 26 of Regulations Nos 126/67/EEC and 395/67/EEC.’
            The Commission itself had not foreseen this situation as it thought that its proposal would be adopted in good time.
            Those measures were enacted by Regulation No 231/75 of the Commission of 30 January 1975 in order to preserve only the rights acquired by potato-starch producers, as I shall indicate, below.
            Subsequently — although this no longer directly concerns the present case — in February 1975 the Commission suggested that the beginning of the maize marketing year should no longer be fixed at a different date from that for other cereals, and thus that the normal dates should be restored for the maize marketing year. A departure from the principle of having the same annual validity of the marketing year for all products is liable to cause serious difficulties when an endeavour is made to establish a better grading of prices and more flexible markets. The existence of a common policy, and particularly of a uniform price system, is liable to be jeopardized by alterations in the dates of marketing years for products which are indeed manufactured from plants with different agricultural cycles but whose ultimate use cannot be distinguished or which are fully interchangeable.
            In the system established by Regulation No 2727/75 of the Council of 29 October 1975, the new basic regulation for cereals, the principle that the marketing year shall be the same for all products is thus maintained for all cereals but prices are fixed at different dates according to the product and according to the stage at which they are used.
            The Commission also suggested that the granting of a production refund should ‘remain’ optional (that is to say, really, become optional) and it considered that for the 1975/1976 marketing year this refund should be fixed at nil.
            Those proposals were adopted in regulations of the Council No 665/75 of 4 March 1975 and No 1955/75 of 22 July 1975 which entered into force on 1 August 1975. The former regulation, which the Court will require to consider in greater detail in the cases which were argued yesterday again amends the wording of Article 11 (1) of Regulation No 120/67: the refund for maize and common wheat used in the manufacture of starch is optional; the same applies to potato starch and, lastly, to gritz used for the manufacture of glucose by direct hydrolysis. The refund on maize used to manufacture gritz for the brewing industry is abolished. Regulation No 1955/75 repeals Regulation No 1132/74. It establishes a system whereby the Council fixes the refund, but no longer fixes the supply price to the starch industry: the difference between the threshold price and this refund represents the supply price which is thus based directly on the amount of the refund (Article 1). The amount of the refund depends upon variations in the prices of basic products on the world market in relation to the supply price so calculated (Article 6).
         
      
            VI —
         
         
            This survey of the background to the provisions which I have just conducted shows, if indeed it was necessary, the difficulty of securing and retaining a balance in agriculture and the variations to which ideas and techniques are subject: the application of a particular solution is dependent upon the analysis of a body of complex economic facts, the appraisal of which falls outside the ambit of review by the Court of Justice in delivering a preliminary ruling, except in a case of manifest error or manifest failure to observe the provisions of the Treaty and of the Community regulations.
            A long practice, which led the plaintiff in the main action to believe that it enjoyed an inalienable right to a refund, was succeeded by a group of measures presenting the appearance of hand-to-mouth expedients rather than a coherent long-term policy and I can conceive that the plans of starch manufacturers were completely upset thereby. However, did this practice confer upon the plaintiff in the main action an absolute right that the amount of the refund should remain unchanged and did it prevent the Council from observing, as it claims to have done, the wording of Article 7 of Regulation No 1132/74? I think not.
            The rules for determining prices and amounts are indeed normally applied at the beginning of the marketing year for the relevant product (second recital in the preamble to Regulation No 2518/74 of the Commission), but when the world economic situation is changeable and difficult the principle of the annual fixing of agricultural prices and amounts is not sacrosanct.
            As soon as it is recognized that the Council is entitled in the course of a marketing year to alter the dates of that marketing year and that it has power to depart from the principles of the validity for periods of one year and of the unity of the marketing year in order to obtain a better grading of prices — which the plaintiff does not dispute and which the Court of Justice itself has admitted in the cane-sugar cases (Judgment of 31 March 1977 in Joined Cases 54 to 60/76 — Compagnie Industrielle et Agricole du Comté de Loheac and Others v Council and Commission) it is also reasonable to recognize the Council's right to bring up to date in the course of a marketing year target and intervention prices, along with threshold prices which constitute one of the factors on which the refund is calculated, to decide the dates on which such alterations in price shall occur in order to take account of developments in world prices and to take into consideration the effect of such development on supply prices, the more so since this alteration of the supply price was established by the Council acting by a qualified majority (Article 43 (2)) and not by the Commission alone acting in accordance with the management committee procedure.
            I consider that the Court may not substitute its appraisal for that of the Council and the Commission, acting in concert, of the appreciable and persistent nature of the variations in the world prices of the basic products, at least in the absence of a manifest error.
            The survey which I have carried out shows, I think, that the criteria established mutatis mutandis by the Council in order to find that the threshold price has been appreciably exceeded by the cif price and to appraise whether such a situation is perhaps persistent (Regulation No 1968/73 of 19 July 1973) were observed when Regulation No 3113/74 was adopted.
            Until November 1974 the world rates for maize rose; the appreciable nature of this increase is confirmed by the introduction, in accordance with Article 7 (2) of Regulation No 1132/74, of an export levy on processed products and by the fact that until the beginning of 1975, apart from May, June and July 1974, no import levy was imposed on maize.
            The fact that the world rates had progressed in this fashion would certainly have given ground for a much earlier adaptation of supply prices. However, there was complete justification for such an adjustment when the Commission, on 12 November 1974, submitted its proposal to the Council.
            Examination of the tables produced by the Commission and by the plaintiff in the main action show that from December 1974 the world rates, expressed in US-dollars, began to fall and that between the time when Regulation No 3113/74 entered into force (15 December 1974) and the time when it was applied (1 April 1975) the trends in prices of basic products had reversed so that the fixing of the amount of the refund which was effected at this date was even more justified on the basis of Regulation No 1955/75 than on the basis of Regulation No 1132/74.
            Such discrepancies between the movement of prices and action by the Community authorities are unfortunately frequent. However, the plaintiff in the main action cannot complain of the postponed application of the Council's regulation, which was introduced in the interests of the plaintiff, and which meant that the trends in world prices had changed when the alteration announced on 9 December 1974 was applied but which permitted it to enjoy until 1 April 1975 a refund amounting to 24.60 u.a per metric ton.
            From April 1975 the supply price to the industry was increased (10.31 u.a.) but it remained constant until August 1975 so that the amount of the refund, which is equal to the difference between the threshold price (itself increasing) and the supply price, increased in relative value so reflecting in some measure the fall in world prices. Since the Community is short of maize there is nothing unusual in the fact that its European supply price aligned with the threshold price and not with the target price, still less with an under-valued intervention price.
            In sum, before 9 December 1974 the world rates had indeed undergone appreciable and persistent variations within the meaning of Article 7 (1) of Regulation No 1132/74 and the supply price which the plaintiff in the main action enjoyed for the 1974/1975 marketing year as a whole does not seem to me unfair.
            Maize-starch manufacturers had no inalienable right to a refund of a guaranteed amount. Sufficient notice of the reduction was given by Regulation No 3113/74. When account is taken of the period of three months during which there was official supervision (Regulations of the Commission No 2012/74 of 31 July 1974 and No 10/75 of 31 December 1974) the effect of this reduction could easily have been absorbed.
            None of the first three complaints submitted against the contested provision seems to me well founded.
         
      
            VII —
         
         
            It remains to consider the complaint of discrimination in comparison with potato-starch manufacturers.
            It is conceded that, all things being equal, the manufacture of starch from maize is cheaper and more straightforward than the manufacture of starch from potatoes. Nevertheless the potato-starch industry uses potatoes produced in the Community which constitutes an important source of income for certain regions. There were two possible techniques for keeping potato starch competitive in relation to maize starch, for which a refund was still available after 1 July 1967: either to pay a direct aid to potato producers or to intervene in potato-starch production by also granting a ‘production refund’. As we have seen this latter procedure was laid down by basic Regulation No 120/67.
            Since starch producers cannot buy maize below the minimum price which constitutes the intervention price, the balance between maize starch and potato starch required that a minimum price should also be fixed for potatoes for the starch industry. This minimum price for potatoes is calculated on the basis of the price for potato starch which is itself derived from the price for maize starch, including the production refund, and with account taken of all the processing costs, estimated at a fixed amount (Article 3 of Regulation No 371/67).
            If Regulation No 3113/74 had entered into force on 1 December 1974 as the Commission suggested the supply prices of potato-starch producers would also have increased and the production refund on potato starch would have been reduced since the production year for potato starch had begun. Postponement of the application of this regulation to 1 April 1975 could not on the other hand call in question the validity of already existing rights established once the marketing year for potato starch had ended.
            The Commission considered that it must uphold the maintenance of already existing rights by adopting Regulation No 231/75 of 30 January 1975.
            The plaintiff in the main action maintains that since Regulation No 3113/75 of the Council was applied from 1 April 1975 although the maize marketing year had not yet ended, the alteration of the amounts appearing in Articles 1, 5 and 7 of Regulation No 1132/74, effected by Regulation No 3113/74, should have entailed a corresponding reduction of the amount provided for in Article 2 of Regulation No 1132/74 (refund on potato starch) because of the fact that the refund for the potato-starch industry constitutes the arithmetic mean of the refunds granted for maize starch during the maize-marketing year.
            It seems to me that this complaint or discrimination against maize-starch producers in relation to potato-starch producers is not well founded.
            First, potato producers, not potato-starch producers, should be compared since the refund granted to the latter must ultimately be passed on to potato producers whilst the refund granted to maize starch producers remains their property and they are in no way obliged to pass it on to producers of maize, which is to a large extent imported from third countries. It appears to me that this factor is of itself sufficient to show that the complaint of discrimination is unfounded: in fact the producers of the raw material operate on a different level from that of the processors.
            The production of potatoes does not come under a common organization of the market although it is in all respects subject to the rules applicable to industrial products (as the Court held in its judgments of 17 February 1976, Miritz and Rewe-Zentrale and of 16 March 1977, Commission v France).
            
            In addition, after 23 March 1975 the plaintiff, like the other maize-starch producers, had new and profitable outlets for its starch — for which a refund continued to be granted, albeit at a lower level — as an alternative to the quellmehl or gritz used in the brewing industry, for which the production refund was to be abolished from 1 August 1975.
            A ruling in favour of the plaintiff in the main action would risk setting off a chain reaction: it would reinforce the complaints which the Court heard yesterday by producers of quellmehl and gritz for the brewing industry. It would again jeopardize a fragile compromise between the outright abolition of all refunds and maintaining intact the amount thereof, the purpose of this compromise being to bring about a balanced relationship between the price og synthetic products of non-agricultural origin and the price of maize starch on the one hand, and between the price of maize starch and the price of other starch products on the other.
         
      I am therefore of the opinion that the consideration of the questions raised has disclosed no factor of such a kind as to affect the validity of Article 1 (1) of Regulation No 3113/74 of the Council of 9 December 1974.
   (
         1
      )	Translated from the French.