1 By orders of 28 April 1993 and 14 May 1993, received at the Court on 28 May 1993 (Case C-300/93) and 22 July 1993 (Case C-362/93) respectively, the Pretura Circondariale di Caserta (District Magistrates' Court, Caserta, Italy) referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question on the validity of Council Regulation (EEC) No 1738/91 of 13 June 1991 fixing, for the 1991 harvest, the norm and intervention prices and the premiums granted to purchasers of leaf tobacco, the derived intervention price for baled tobacco, the reference qualities, the production areas and the guaranteed maximum quantities and amending Regulation (EEC) No 1331/90 (OJ 1991 L 163, p. 13), and the regulations made for its implementation.
2 The main proceedings concern the reimbursement, following the Commission' s finding that in respect of the 1991 harvest the maximum guaranteed quantity (hereinafter "MGQ") for leaf tobacco of the "Bright" variety (Case C-133/93) and of the "Burley I" variety (Cases C-300/93 and C-362/93) had been exceeded, of part of the premium paid in advance to the plaintiffs in the main proceedings pursuant to Article 3(2) of Regulation (EEC) No 727/70 of the Council of 21 April 1970 on the common organization of the market in raw tobacco (OJ, English Special Edition 1970(I), p. 206).
3 Regulation No 727/70 provided for a support system based on norm and intervention prices, set by the Council each year for Community leaf tobacco for the crop of the following calendar year. Producers could sell their production either to the intervention agencies, which were under an obligation to purchase at the intervention price, or on the market.
4 In order to encourage purchases from growers at a price as close as possible to the norm price, Article 3(1) of that regulation provided that, subject to certain conditions, a premium would be paid to persons who purchased leaf tobacco direct from Community producers and who subjected the purchased product to first processing and market preparation. Article 3(2) extended the premium to producers who subjected their own leaf tobacco to first processing and market preparation.
5 In order to curb any increase in the Community' s tobacco production and at the same time to discourage the growing of varieties which are difficult to dispose of, Regulation No 1114/88, cited above, added the following paragraph 5 to Article 4 of Regulation No 727/70: "5. Each year and in accordance with the procedure provided for in Article 43(2) of the Treaty, the Council shall fix a maximum guaranteed quantity, in particular in the light of market requirements and the socio-economic and agricultural conditions of the regions concerned, for each variety or group of varieties of Community-produced tobacco for which prices and premiums are fixed. The overall maximum quantity for the Community shall be fixed at 385 000 tonnes of leaf tobacco for each of the 1988, 1989 and 1990 harvests. Without prejudice to Articles 12a and 13, for each 1% by which the maximum guaranteed quantity is exceeded per variety or group of varieties, the intervention prices and the premiums concerned shall suffer a reduction of 1%. A correction corresponding to the reduction of the premium shall be applied to the norm price of the harvest in question. The reductions referred to in the second subparagraph shall not exceed 5% for the 1988 harvest and 15% for the 1989 and 1990 harvests. ..."
6 The first subparagraph of the abovementioned paragraph 5, as amended by Council Regulation (EEC) No 1329/90 of 14 May 1990 amending Regulation (EEC) No 727/70 on the common organization of the market in raw tobacco (OJ 1990 L 132, p. 25), provides that: "Each year and in accordance with the procedure provided for in Article 43(2) of the Treaty, the Council shall fix a maximum guaranteed quantity, in particular in the light of market requirements and the socio-economic and agricultural conditions of the regions concerned, for each variety or group of varieties of Community-produced tobacco for which prices and premiums are fixed. The overall maximum guaranteed quantity for the Community is hereby set at 385 000 tonnes of leaf tobacco for each of the 1988 to 1993 harvests."
7 Council Regulation (EEC) No 2075/92 of 30 June 1992 on the common organization of the market in raw tobacco (OJ 1992 L 215, p. 70) substantially overhauled the Community system which had until then governed that market, and Article 9 thereof replaced the MGQ system by a system of processing quotas to be distributed by the Member States, on a transitional basis for the 1993 and 1994 harvests, to the first processors or, if they have the necessary information, directly to the producers. Case C-133/93
8 Mr Crispoltoni, a tobacco grower in Lerchi (province of Perugia), had delivered a certain quantity of leaf tobacco of the "Bright" variety harvested in 1991 to the Fattoria Autonoma Tabacchi di Città di Castello (a producers' association of which he is a member and which carries out the first processing and market preparation of leaf tobacco, hereinafter "the Fattoria").
9 Subsequently, the Fattoria claimed reimbursement of an amount corresponding to the 15% reduction of the premiums which had been paid to Mr Crispoltoni pursuant to Article 3 of Regulation No 727/70, after the Commission had found, in Commission Regulation (EEC) No 2178/92 of 30 July 1992 determining, for tobacco from the 1991 harvest, the quantity actually produced and the prices and premiums payable under the system of maximum guaranteed quantities (OJ 1992 L 217, p. 75), that the MGQ for the variety in question for the 1991 harvest had been exceeded.
10 Before the District Magistrates' Court of Perugia, Mr Crispoltoni disputes the validity of that claim, pleading that Regulation No 1114/88 is invalid.
11 The national court observes that, although the intention of the MGQ system is to reduce the financial costs of intervention measures by limiting tobacco production, that system as here described causes harm in situations where Community law should afford protection, namely where the producers in question are not responsible for the excess production of tobacco. Only by setting individual quotas would penalties fall solely on those responsible for the overproduction.
12 The Council accordingly acted ultra vires by misuse of its powers in that the MGQ system was not appropriate to attain the objective sought.
13 In those circumstances, the District Court of Perugia decided to stay the proceedings and to seek a preliminary ruling from the Court of Justice on the validity of Regulation No 1114/88 and of the regulations made for its implementation. Admissibility
14 The Council observes that the order for reference nowhere specifies the harvest year or the variety of tobacco in question in the main proceedings or even whether the action concerns the grant of the premium.
15 The Council considers that in those circumstances there should be no ruling on the question referred, since the court making the reference has failed to provide any information on the factual background to the question, contrary to its duty of collaboration with the Court of Justice which is the basis of the procedure established by Article 177 of the Treaty.
16 That argument cannot be accepted.
17 It is sufficient to note that the order for reference indicates clearly the doubts of the national court as to the validity of Regulation No 1114/88 and is set in a legal and factual context which is already substantially known by reason of a previous preliminary reference (Case C-368/89 Crispoltoni v Fattoria Autonoma Tabbacchi di Città di Castello [1991] ECR I-3695) made by the same court and concerning the same producer.
18 In those circumstances, the brevity of the order for reference cannot be considered to have deprived the interested parties, and in particular the Council, of the possibility of submitting observations relevant to answering the question referred to the Court.
19 A declaration of inadmissibility, wholly unjustified in this case, would accordingly be incompatible with the spirit of collaboration which must govern a reference for a preliminary ruling. Substance
20 Mr Crispoltoni submits that Regulation No 1114/88 (hereinafter "the Regulation") is invalid on the ground that it is vitiated by a misuse of powers. The Greek Government shares that view and considers furthermore that the Regulation is contrary to the principle of equality and the principle of the protection of legitimate expectations. Finally, the Italian Government considers that the Regulation is contrary to the principle of proportionality.
21 The Council and the Commission dispute the validity of those arguments. A ° The alleged misuse of powers
22 Mr Crispoltoni submits first that misuse of powers can be reduced to two main instances, namely where an objective is pursued other than that which should lawfully have been pursued by the author of the measure at issue and where, as in this case, the measure is manifestly inappropriate to the objective pursued.
23 He observes that his complaints concern neither the objective of curbing tobacco production nor the mechanism for reducing premiums where MGQs have been exceeded but the incomplete nature of the system in that it does not provide for individual production quotas to be set. Exceeding MGQs gives rise to a penalty ° reduction of prices and premiums ° which affects all producers, including those who have not increased their production, and which arises after production choices have been made.
24 Mr Crispoltoni adds that the recent reform of the tobacco sector by Regulation No 2075/92, cited above, specifically provided for such a system of individual quotas.
25 The Greek Government also considers that the contested legislation is vitiated by irregularities which it characterizes as misuse of powers. It notes that the objectives stated in the Regulation, namely curbing the increase in tobacco production and encouraging varieties which are not difficult to dispose of, cannot be pursued, as in this case, to the detriment of the fundamental objective of the common agricultural policy, stated in Article 39(1)(b) of the Treaty, namely to ensure fair earnings for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture, and of the principle of non-discrimination enshrined in Article 40(3) of the Treaty.
26 The Court of Justice has held that a measure may amount to a misuse of powers only if it appears, on the basis of objective, relevant and consistent factors, to have been taken with the exclusive purpose, or at any rate the main purpose, of achieving an end other than that stated or evading a procedure specifically prescribed by the Treaty for dealing with the circumstances of the case (see, in particular, the judgment in Case C-331/88 The Queen v The Minister for Agriculture, Fisheries and Food and the Secretary of State for Health, ex parte: Fedesa and Others [1990] ECR I-4023, paragraph 24).
27 According to the first recital in the preamble to the Regulation, the aim of the MGQ system is to curb any increase in the Community' s tobacco production and at the same time to discourage the growing of varieties which are difficult to dispose of. The second recital adds that the Regulation seeks to continue to implement a policy aimed at encouraging the most sought-after varieties and to take account of specific socio-economic and regional features of tobacco production.
28 It has not been argued that the MGQ system sought to attain objectives which differed from those for which it was designed by the Council and which are set out in the preamble to the Regulation.
29 The Greek Government' s argument to the effect that the Regulation is incompatible with the objectives of the common agricultural policy set out in Article 39 of the Treaty is not valid.
30 The Community institutions have a wide discretionary power in regard to the common agricultural policy which reflects the responsibilities which the Treaty imposes on them (see, for example, the judgment in Case C-350/88 Delacre and Others v Commission [1990] ECR I-395, paragraph 32).
31 In pursuing the objectives of the common agricultural policy set out in Article 39 of the Treaty, the Community institutions must secure the permanent harmonization made necessary by any conflicts between those aims taken individually 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 (see, for example, the judgment in Case 5/73 Balkan-Import-Export v Hauptzollamt Berlin-Packhof [1973] ECR 1091, paragraph 24). That harmonization must preclude the isolation of any one of those objectives in such a way as to render impossible the realization of other objectives (see, in particular, the judgment in Joined Cases 197 to 200, 243, 245 and 247/80 Ludwigshafener Walzmuehle v Council and Commission [1981] ECR 3211, paragraph 41).
32 As is clear from the first recital of the Regulation, the aim of establishing the MGQ system was, in accordance with one of the objectives of the common agricultural policy set out in Article 39 of the Treaty, to stabilize the raw tobacco market which is characterized by over-production.
33 In addition, 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 characterized by excess production the realization of the abovementioned objective of stabilizing the relevant market.
34 As for Mr Crispoltoni' s argument, it is based on the assumption that a misuse of powers may consist in the manifest unsuitability of a measure to the objective pursued, which will be considered below.
35 It follows from the above that the alleged misuse of powers has not been established. B ° The alleged breach of the principle of proportionality
36 Mr Crispoltoni and the Italian Government consider that the MGQ system was inappropriate to achieve the objective pursued and that this is confirmed by the reform effected by Regulation No 2075/92, cited above.
37 They submit that the system instituted by the Regulation did not in reality ensure compliance with the MGQ for any harvest and that the eighth recital in Regulation No 2075/92 moreover explicitly states that "to ensure that the guarantee thresholds are observed" a system of individual quotas must be instituted.
38 According to the Italian Government, the Community legislation at issue allowed the premium to be reduced without distinction and at a flat rate for all recipients, regardless of their individual conduct, which might have been irreproachable, and thus also for producers who did not increase their production compared to previous years. Such a system, the result of which was a certain loss of responsibility on the part of producers and processors, is contrary to the principle of proportionality.
39 Before assessing the validity of those arguments, certain principles which can be extracted from the case-law must be noted.
40 The principle of proportionality, which is one of the general principles of Community law, requires that measures adopted by Community institutions do not exceed the limits of what is appropriate and necessary in order to attain the objectives legitimately pursued by the legislation in question; when there is a choice between several appropriate measures recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued (see, for example, the judgment in Fedesa and Others, cited above, paragraph 13).
41 With regard to judicial review of compliance with the abovementioned conditions, in matters concerning the common agricultural policy the Community legislature has a discretionary power which corresponds to the political responsibilities given to it by Articles 40 to 43 of the Treaty. Consequently, the legality of a measure adopted in that sphere can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institution is seeking to pursue (paragraph 14 of the same judgment).
42 The legality of a Community act cannot depend on retrospective considerations of its efficacy (judgment in Case 40/72 Schroeder v Germany [1973] ECR 125, point 14). Where the Community legislature is obliged to assess the future effects of rules to be adopted and those effects cannot be accurately foreseen, its assessment is open to criticism only if it appears manifestly incorrect in the light of the information available to it at the time of the adoption of the rules in question (judgment in Joined Cases C-267 to 285/88 Wuidart and Others v Laiterie Coopérative Eupenoise, a cooperative society, and Others [1990] ECR I-435, paragraph 14).
43 In this case, a comparison of the MGQs fixed for each variety of tobacco for the 1989, 1990 and 1991 harvests with the quantities of those varieties actually produced shows that the MGQs were not exceeded for the majority of the varieties at issue, so that it cannot in any event be argued that the system at issue was manifestly inappropriate for the objective pursued.
44 Finally, as the Advocate General has shown in paragraphs 49 to 52 of his Opinion, there is nothing to support the conclusion that at the time when the system at issue was introduced the Community legislature made a manifestly incorrect assessment of the effects of that system.
45 As the Commission observed, when the Council adopted the Regulation it was entitled to consider, without making any manifest error of assessment, that the MGQ system was less onerous for tobacco growers than an individual quota system, since under the former the production of those concerned was not limited, in that they could always sell their products to the intervention agencies, although at a price or premium reduced by a maximum of 15%, while under the latter the growers receive no support for that part of their production which exceeds their individual quota. The mere fact that the system has proved insufficiently effective is not enough to justify the conclusion that the Regulation is invalid.
46 It must accordingly be concluded, in concurrence with the Commission, that the Council in this case acted not only in compliance with the principle of proportionality, in that it did not choose a measure which was manifestly inappropriate having regard to the objective pursued, but also in accordance with the need to effect the appropriate adjustments by degrees prescribed by Article 39(2)(b) of the Treaty.
47 The alleged breach of the principle of proportionality has accordingly not been established. C ° The alleged discrimination
48 The Greek Government considers that the system at issue breaches the principle of equality before the law, enshrined in Article 40(3) of the Treaty, since the effect of that system was that all growers and processing concerns without differentiation, and therefore even those which had not increased the volume of their production or of their operations, were affected by the measures reducing prices and premiums. Only a system of individual quotas could have avoided such unfair consequences.
49 As the Court of Justice has held, the prohibition of discrimination laid down in Article 40(3) of the Treaty is merely a specific enunciation of the general principle of equality which is one of the fundamental principles of Community law (see, for example, the judgment in Wuidart, cited above, paragraph 13).
50 There is discrimination not only when comparable situations are treated differently but also when different situations are treated in the same way, unless such treatment is objectively justified (judgment in Case 106/83 Sermide v Cassa Conguaglio Zucchero [1984] ECR 4209, paragraph 28).
51 The Court of Justice has already held that the principle of non-discrimination does not preclude a Community regulation which introduced a system of guarantee thresholds for the entire Community involving a reduction in the production aid of the relevant producers of all the Member States, even if exceeding those thresholds was not due to an increase in production in all those States. It ruled that in a common organization of markets with no system of national quotas all Community producers, regardless of the Member State in which they are based, must together, in an egalitarian manner, bear the consequences of the decisions which the Community institutions are led to adopt, in the exercise of their powers, in order to respond to the risk of an imbalance which may arise in the market between production and market outlets (judgment in Case C-27/90 SITPA v Oniflhor [1991] ECR I-133, paragraph 20).
52 The same consideration applies to a system such as that in point in this case.
53 The alleged infringement of Article 40(3) of the Treaty has accordingly not been established either. D ° The alleged breach of the principle of the protection of legitimate expectations
54 The Greek Government considers that the Regulation is also contrary to the principle of the protection of legitimate expectations.
55 First, the object or effect of implementing a new regulation cannot be to prejudice the fundamental objective of the common agricultural policy which consists in ensuring fair earnings for producers.
56 It should be noted that whilst the protection of legitimate expectations is one of the fundamental principles of the Community, traders cannot have a legitimate expectation that an existing situation which is capable of being altered by the Community institutions in the exercise of their discretionary power will be maintained; this is particularly true in an area such as the common organization of the markets whose purpose involves constant adjustments to meet changes in the economic situation (see, in particular, the judgment in Delacre and Others v Commission, cited above, paragraph 33).
57 It follows that traders cannot claim a vested right to the maintenance of an advantage which they derive from the establishment of the common organization of the markets and which they enjoyed at a given time (paragraph 34 of that judgment).
58 A possible reduction in their earnings cannot therefore be contrary to the principle of the protection of legitimate expectations.
59 The Greek Government nonetheless considers that that principle has been breached because the fact that no individual quotas were set prevented tobacco growers from planning their production.
60 The system at issue, whose distinguishing features are that for a given variety MGQs are set and known in advance by the growers, that support is guaranteed for their entire production and that a ceiling is set for the reduction of prices and premiums, satisfies the requirements of the principle of the protection of legitimate expectations.
61 The alleged breach of the principle of the protection of legitimate expectations has therefore not been established.
62 For all the above reasons, it should be stated in reply to the question from the national court that consideration of the question referred has disclosed no factor of such a kind as to affect the validity of Regulation No 1114/88 or, consequently, of the regulations made for its implementation. Cases C-300/93 and C-362/93
63 Mr Natale (C-300/93) and Mr Pontillo (C-362/93) each run an agricultural business in the province of Caserta. They had sold their 1991 harvest of tobacco of the "Burley I" variety to the tobacco-processing undertaking Donatab S.r.l. in Caserta (hereinafter "Donatab"), which sought and obtained, subject to the lodging of a security, payment of the premium referred to in Article 3 of Regulation No 727/70 from the Azienda di Stato per gli Interventi nel Mercato Agricolo ° Settore Tabacco (intervention agency for the relevant sector, hereinafter "the AIMA").
64 After it had been found, in Regulation No 2178/92, cited above, that the MGQ of the 1991 harvest for tobacco of the "Burley I" variety had been exceeded, Donatab was under an obligation to reimburse the amounts reflecting the reduction of the premium rates. It subsequently claimed from Mr Natale and Mr Pontillo repayment of a sum equal to the percentage by which the premium had been reduced.
65 Considering that the reduction of the premium was unlawful because the regulations concerning the setting of prices, premiums and the MGQs for the 1991 marketing year were invalid, Mr Natale and Mr Pontillo brought proceedings against Donatab before the District Magistrates' Court of Caserta, seeking a declaration that the reduction in question was not recoverable as between them and Donatab.
66 The District Magistrates' Court of Caserta notes that Regulation No 1738/91 ° which set the MGQs, prices and premiums for varieties or groups of varieties of tobacco for the 1991 harvest ° was published on 26 June 1991, namely, for tobacco of the "Burley I" variety, after the tobacco had already been sown in the seedbeds prepared for it, which was in February 1991, and after the period for planting out the tobacco plants in the fields, which had to be done before April 1991. At the date when the regulation was published, the contracts with the first processing industry, a condition for the grant of the premium, had already been made and recorded by the AIMA.
67 Accordingly, setting the MGQ for the 1991 harvest for the "Burley I" variety had a retroactive effect in that it concerned production which had already been started on the basis of irreversible choices.
68 The national court adds that it is moreover clear from the wording of the first subparagraph of Article 4(5) of Regulation No 727/70, as amended by Article 1 of Council Regulation (EEC) No 1251/89 of 3 May 1989 amending Regulation (EEC) No 727/70 on the common organization of the market in raw tobacco (OJ 1989 L 129, p. 16), that the Council is to lay down every year, for each tobacco variety or group of varieties produced in the Community, MGQs for the following year' s harvest.
69 On those grounds, the District Magistrates' Court of Caserta decided to stay the proceedings in the two abovementioned cases and to seek a preliminary ruling from the Court of Justice on the validity of Regulation No 1738/91.
70 In answer to the points raised by the court making the reference, it suffices to note, as the Council and the Commission have pointed out, that the MGQ for the 1991 harvest for the "Burley I" variety had already been fixed by Annex V to Council Regulation (EEC) No 1331/90 of 14 May 1990 fixing, for the 1990 harvest, the norm and intervention prices and the premiums granted to purchasers of leaf tobacco, the derived intervention prices for baled tobacco, the reference qualities, the production areas and the guaranteed maximum quantities for the 1991 harvest and amending Regulation (EEC) No 1252/89 (OJ 1990 L 132, p. 28).
71 Although Annex V to Regulation No 1738/91, pursuant to Article 4 thereof, replaced for the intervening period Annex V to Regulation No 1331/90, it did not alter the MGQ for the 1991 harvest for the "Burley I" variety.
72 The latter regulation was published in the Official Journal of the European Communities of 23 May 1990, that is to say, well before the growers in question had to take their decisions concerning the 1991 harvest.
73 The alleged breach of the principle of the protection of legitimate expectations has therefore not been established.
74 It should accordingly be stated in reply that consideration of the question referred has disclosed no factor of such a kind as to affect the validity of Regulation No 1738/91 or, consequently, of the regulations made for its implementation.