Opinion of Mr Advocate General Van Gerven
Mr President,
Members of the Court,
1. The College van Beroep voor het Bedrijfsleven (administrative court of last instance in matters of trade and industry), The Hague, has requested the Court for a preliminary ruling on the interpretation of Article 3(1) of Council Regulation (EEC) No 857/84. This provision reads as follows :
2. In its observations the Netherlands Government has stressed the importance of the case. Out of a total of 33000 requests for an additional reference quantity, 6600 (20%) concerned Article 11 of Beschikking Superheffing (Super-Levy Decree), by which the aforesaid provision was implemented in the Netherlands.
3. In the meantime, the Court has already interpreted Article 3(1) of Regulation No 857/84 in its judgment of 11 July 1989 in the Cornée case. The Cornée case concerned producers with a development plan which was still being implemented in 1983, the reference year chosen by France, and to which the first indent of the first subparagraph of Article 3(1) of Regulation No 857/84 applied. Mr Spronk, however, is a producer whose development plan was implemented in 1983, the reference year chosen by the Netherlands. From the order for reference it is clear in particular that the cowshed constructed by Mr Spronk was actually put into service before the end of 1983. The situation in the main proceedings therefore requires an appraisal on the basis of the second indent of the first subparagraph of Anicle 3.
4. As regards the facts of the main proceedings, the legislation applicable and the observations submitted to the Court, I would refer to the Report for the Hearing.
Power or obligation?
5. By the first question the national court asks primarily whether Article 3(1) of Regulation No 857/84 merely creates a power for the Member States to grant a special reference quantity to producers who lodged a milk production development plan under Directive 72/159 before 1 March 1994.
6. The Court has already answered this question in its judgment in Contée. In paragraph 13 of its judgment, it actually stated with regard to the first indent of the first subparagraph of Article 3(1) of Regulation No 857/84 (that is to say, where the plan is still being implemented) as follows:
Limits of the power
7. By the first and second questions the national court further seeks to establish the limits within which Member States must remain if they decide, in accordance with the aforesaid discretionary power, to grant a special reference quantity to producers with a development plan.
8. In answering this question it should be remembered that the principal aim of the additional levy introduced in the milk sector is to curb the increase in milk production. In accordance with that aim, Article 5 of Regulation No 857/84 requires the Member States, in granting additional reference quantities to various categories of priority producers referred to in Articles 3 and 4 of the regulation, to remain within the limits of the guaranteed total quantity referred to in Article 5c of Regulation No 804/68. These additional quantities must be drawn from a reserve constituted by the Member State within the guaranteed quantity. The size of the reserve depends chiefly on the percentage reduction which the Member State applies pursuant to Article 2(3) of Regulation No 857/84 to the reference quantities to be granted to non-priority producers. It is clear from all these provisions that the allocation of additional quantities to one category of producers is bound to reduce the quantities which may be granted to other categories. The Member States must therefore balance two conflicting interests: first, those of priority producers and non-priority producers and, secondly, as between the priority producers.
9. Amongst the priority producers, producers with a development plan are an important category. In its judgment in Cornée the Court stated, however, that the implementation of a development plan does not confer on the producer concerned the right to produce the quantity of milk corresponding to the plan's objective (paragraph 26) and that they cannot rely on any alleged legitimate expectation based on the implementation of the plan in order to oppose any reduction in their reference quantities, provided that the reductions are permitted under the relevant Community rules and do not relate specifically to the reference quantities of that category of producer (paragraph 27).
10. From the foregoing observations it may be concluded that the Member States have a wide discretionary power as regards the allocation of reference quantities to producers with a development plan. This does not, however, mean that if, after balancing the interests in question, the Member States decide to grant a special quantity to this category of producers, they are entirely free to determine the condition and its size. They must consider the aim of Article 3(1) of Regulation No 857/84, which is to offer an opportunity to producers who have invested in their holding to make a return on their investments (see paragraph 12 of the judgment in Cornée).
11. As regards the first indent, the Court states in Cornée that the words taking account must be interpreted as meaning that the quantity granted must bear a relation to the production objective of the development plan (paragraph 14). From that the Court inferred that the allocation of a single fixed quantity to all producers is incompatible with the regulation (paragraph 15). The Court goes on to state, however, that the Member States are not required to observe a strict proportionality between the objective of the plan and the quantity to be granted. In other words, although the objective of the plan is the main criterion, other objective criteria may be applied as well (paragraph 16).
12. Under the second indent the Member States are required to take into account the milk quantities which the producers in question delivered in the year during which the plan was completed.
13. In its observations the Commission pointed out that the Member States must exercise the power conferred on them by Article 3(1) of Regulation No 857/84 in accordance with the general principles of Community law and in particular with the principles of equal treatment and non-discrimination, the protection of legitimate expectations and the prohibition of any misuse of powers. This goes without saying and, consequently, I do not consider that it should be stated in the reply to the national court.
The discretionary power in this case
14. By the third question the national court seeks to establish whether Article 3(1) of Regulation No 857/84 permits the Member States to adopt rules such as those contained in Article 11 of the Super-Levy Decree as regards producers who have incurred investment obligations.
15. The first feature of Article 11 of the Super-Levy Decree which should be noted is that the rules which it lays down are applicable both to producers who have made investments as part of an approved development plan (such as Mr Spronk) and producers who have invested without such a plan.
16. A further feature of the Netherlands rules is that the special quantity to be allocated is calculated on the basis of milk production in a period of approximately one calendar year before the investment obligations were incurred. To this quantity is added a special quantity calculated in accordance with the following formula: a fixed quantity of milk (5500 kg) is allocated for each extra stall constructed; three proportionate reductions are, however, applied to this additional quantity: first, a reduction of 20% applicable to all producer-investors, with the exception of new dairy farmers for whom a reduction of 10% applies; secondly, a reduction of one-third for producers such as Mr Spronk who have actually put the new stalls into service in 1983 (for producers who put the stalls into use after 1983 but before 1 April 1985 the reduction is two-thirds); thirdly, a reduction of 8.65% which corresponds to the percentage reduction applicable to all producers. The quantity to be granted may never, however, be lower than the quantity resulting from the application of the general rules applicable to producers.
17. Producers like Mr Spronk who actually put new stalls into service in 1983 and whose development plan is therefore completed may thus claim a special reference quantity which bears some relation to the number of stalls constructed. This seems to me to be an objective criterion which means that the quantity to be granted takes account of production capacity obtained after investment and which is therefore consistent with the second indent of Article 3(1) of Regulation No 857/84 as I have interpreted it above (in point 12). It is true that under the Netherlands rules a fixed quantity of 5500 kg of milk is allocated for each additional stall. This fixed quantity — which according to the Netherlands Government corresponds to average national production in 1983 and which is also the same as that taken into account in Mr Spronk's development plan — plays the part here of a unit of account, which enables reference quantities to be calculated without it being necessary to await the figures for actual production per stall. It does not mean that each producer is granted the same fixed reference quantity. By applying this criterion the Netherlands therefore has not exceeded its discretionary power.
18. As I have already stated, Article 11 of the Super-Levy Decree provides that, for purposes of the calculation of the quantity to be granted to producers other than new producers, the number of additional stalls constructed must be reduced by 20%. According to the Netherlands Government, this reduction was introduced because of the need to freeze production at 1983 levels, in view of the necessarily limited scope of the national reserve within the total national quota. These factors compelled the Netherlands authorities to adopt a restrictive policy as regards the allocation of additional quantities, especially as the general reduction percentage was not increased because this would have a disproportionate effect on other producers.
19. Another restriction under the Netherlands rules concerns the reduction by one-third or two-thirds of the quantity calculated on the basis of the number of additional stalls constructed, according to the time at which the new stalls were actually put into service.
20. The national court states that the restrictions inherent in the Netherlands rules may mean that no special quantity is granted to producers with a development plan (which is not, however, the case of Mr Spronk) or may be granted a quantity which is (substantially) lower than the production objective stated in the plan.
21. The order for reference lists further conditions to which Article 11 of the Super-Levy Decree subjects the granting of special quantities: investment obligations incurred before 1 September 1981 are disregarded; investments in stalls for dairy cows and cows in calf must attain certain minimum amounts; a minimum percentage is fixed for the increase in the number of stalls for dairy cows and cows in calf. From the order for reference it is clear, however, that Mr Spronk satisfies these conditions. They should therefore not be examined here.
Conclusion
22. In view of the foregoing considerations I propose that the questions should be answered as follows:
1 Original language: Dutch.
2 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).
3 Council Directive 72/159/EEC of 17 April 1972 on the modernization of farms (OJ, English Special Edition 1972 (II), p. 324).
4 Beschikking Superheffing of the Minister van Landbouw en Visserij (Minister for Agriculture and Fisheries) of 18 April 1984 {Staatscourant 1984, p. 79).
5 Judgment in Joined Cases 196/88 to 198/88 Cornée and Others v Copali and Others [1989] ECR 2309. See also my Opinion in those Joined Cases.
6 Thus it is stated in the order for reference that the cowshed was put into use in November 1983. Furthermore, it is clear from the order that the reference quantity allocated to Mr Spronk was calculated pursuant to Arude 11(4)(a) of the Super-Levy Decree, which applies where stalls are actually put into use in 1983.
7 See Anicie 5c(l) of Regulation (EEC) No 804/68 of the Council of 27 June 1968 on the common organization of the market in milk and milk products (OJ, English Special Edition 1968 (I), p. 176), as amended by Council Regulation (EEC) No 856/84 of 31 March 1984 (OJ 1984 L 90, p. 10).
8 In the Netherlands this percentage reduction was 8.65% in the first year.
9 Thus in the case of Mr Spronk it was based on the quantity of milk delivered in 1982.
10 Slightly different rules apply if the number of cows available to the holding in the year before the investment obligations were incurred is higher than the number of stalls before expansion.