1 By order of 15 November 1990, received at the Court Registry on 26 February 1991, the Bundesverwaltungsgericht referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question concerning the interpretation of Article 5(2) 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 (OJ 1984 L 132, p. 11) and of Article 7(2) of Commission Regulation (EEC) No 1546/88 of 3 June 1988 laying down detailed rules for the application of the additional levy referred to in Article 5c of Regulation (EEC) No 804/68 (OJ 1988 L 139, p. 12).
2 2 That question arose in proceedings between Walter Knuefer and the Director of the Landwirtschaftskammer Rheinland, on the one hand, and Walter Buchmann on the other, concerning a reference quantity under the scheme imposing an additional levy on milk.
3 3 Walter Knuefer operated a dairy farm which had been leased to his family since the last century. The lease was terminated on 1 November 1986 and the holding was surrendered on 5 November 1986. On 14 October 1986 the owner of the holding, the father of Walter Buchmann, transferred the entire landed property to the latter by contract. The transfer took effect once the contract had been approved by the Landwirtschaftsgericht on 17 December 1986.
4 4 Walter Buchmann then applied to the Landwirtschaftskammer Rheinland for a certificate showing that the reference quantity granted to Mr Knuefer in respect of the holding in question had been transferred to Mr Buchmann by reason of the expiry of the farm lease and his taking-over of the holding. As this application was only partially granted, Mr Buchmann brought an action against the partial rejection of his application.
5 5 Taking the view that its decision depended on the interpretation of Community law, the Bundesverwaltungsgericht, hearing the application for review on a point of law, stayed the proceedings and referred the following question to the Court for a preliminary ruling: "Does the expression 'areas used for milk production' in Article 5(2) of Regulation (EEC) No 1371/84 include the yard, buildings and road areas of the holding, as that term is used in that provision?"
6 6 In the grounds of the order for reference the Bundesverwaltungsgericht states that if it is not Regulation No 1371/84 but Regulation No 1546/88 which has to be applied in the main proceedings, the Court is invited to reply to the question bearing in mind that the abovementioned expression has been incorporated in Article 7(2) of the latter regulation.
7 7 Reference is made to the Report for the Hearing for a more detailed account of the facts of the case, the Community provisions at issue, the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.
8 The first point to note is that Article 7(1) of Council Regulation (EEC) No 857/84 of 31 March 1984 adopting general rules for the application of the levy referred to in Article 5c of Regulation (EEC) No 804/68 in the milk and milk products sector (OJ 1984 L 90, p. 13) provides 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".
9 The rules for applying the aforesaid provision are set out in Article 5 of Regulation No 1371/84, subparagraph (2) of which states that "where one or several parts of a holding is 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". According to Article 5(3), the above provisions "shall also be applicable in other cases of transfer which, under the various national rules, have comparable legal effects as far as producers are concerned".
10 As the Court stated in paragraph 15 of its judgment in Case 5/88 Wachauf v Germany [1989] ECR 2609, the surrender of a tenanted holding upon the expiry of a lease has comparable legal effects, within the meaning of Article 5(3) of Regulation No 1371/84, to those brought about by the transfer of the holding upon the grant of the lease, for both transactions entail a change in the possession of the production units in question within the contractual relations created by the lease.
11 The provisions of Article 5(2) and (3) of Regulation No 1371/84 were incorporated verbatim in Article 7(2) and (3) of Regulation No 1546/88, which replaced Regulation No 1371/84 with effect from 4 June 1988. The interpretation given by the Court in these proceedings for a preliminary ruling will consequently apply to the aforesaid provisions of those two regulations.
12 It is apparent from the wording of the provisions under consideration that Member States are indeed free to lay down their own criteria for the distribution of reference quantities relating to holdings of which only a part has been transferred, provided they are objective criteria, and that they may disregard transferred parts the area of which used for milk production is less than a minimum size to be determined. However, where they have not availed themselves of that possibility the provisions in question must be applied in accordance with the principles already laid down by the Court in the judgment in Case 121/90 Posthumus v Oosterwoud [1991] ECR I-5833, paragraph 9, so that the reference quantities are distributed strictly in proportion to the size of the respective areas of the holding which are used for milk production, without its being possible to make any distinction according to the nature of the use to which those areas are put.
13 For the purpose of distributing the reference quantities, all the surface areas of the holding which contribute directly or indirectly to the milk production thereof must be taken into consideration, including the yard, the buildings and the road areas of the holding, provided that they contribute directly or indirectly to the milk production of the holding.
14 This interpretation, which is based on the wording of the legislation, is in conformity with its purpose. The aim of the provisions in question is, save in the case of express derogations by Member States, that there should be laid down, in order to ensure both legal certainty and the effectiveness of the system, clear and precise rules the application of which by the national authorities does not presuppose on their part the exercise of any power of discretion (see in that regard the Posthumus judgment, cited above, paragraph 10).
15 For those reasons, the answer to the question submitted must be that the expression "areas used for milk production" in Article 5(2) of Regulation No 1371/84 and in Article 7(2) of Regulation No 1546/88 must be interpreted as also comprising the yard, buildings and road areas of the holding, provided that they contribute directly or indirectly to the milk production of the holding.