Opinion of Mr Advocate General
Mr President,
Members of the Court,
1. The Vredegerecht for the judicial district of Brasschaat has asked the Court a question on the validity of two Commission Regulations, Regulation (EEC) No 2324/88 and Regulation (EEC) No 3779/88, both of which were adopted pursuant to the Court's judgment of 29 June 1988 in Case 300/86 Van Landschoot v Mera [1988] ECR 3443, 3456.
2. This new reference for a preliminary ruling arises from the same dispute as that which had given rise to the proceedings in Case 300/86. I shall give a brief outline of the circumstances of the case. On 16 September 1986, Mr Landschoot, the owner of a mixed farm engaged in the cultivation of cereals and breeding of livestock, sold to NV Mera, a processing undertaking, a quantity of cereals (4925 kg), paying the co-responsibility levy thereon (equal to BFR 1242). Seven days later Mr Van Landschoot purchased from Mera animal feed containing a virtually identical quantity (4575 kg) of cereals of the same quality as those previously sold.
3. In its judgment the Court declared the second subparagraph of Article 1(2) of that regulation invalid in so far as it exempts from the co-responsibility levy the first-stage processing of cereals carried out on the producer's own agricultural holding by means of the machinery of the farm, provided that the products of the processing are used on that holding, but does not provide for such exemption for first-stage processing carried out off the producer's agricultural holding or by means of machinery which does not form part of the agricultural installations of the farm, where the products of the processing are used on that farm.
4. Following that judgment, the Commission adopted two measures. First of all, it altered the scope of the levy by means of Regulation No 2324/88, according to which the levy is payable in respect of the quantities of cereals placed on the market, where placing on the market means sales (including barter operations) by producers (see Article 1 of Regulation No 2324/88). On the other hand, producers who have first-stage processing operations carried out by a third party with a view to the subsequent use of the processed product on their holdings are exempted from the levy (second recital in the preamble to Regulation No 2324/88).
5. The Vredegerecht is now asking the Court whether that difference of treatment is lawful.
6. Both parties to the dispute in the main proceedings, the national court and the Italian Government consider that exemption from the levy should be granted not only in the case of processing under contract but also where the cereals are sold and then bought back by the producer in the form of animal feed: to restrict the exemption solely to the first of those situations, on the other hand, would give rise to discrimination which is incompatible with Community law and, in particular, would be contrary to the unequivocal wording of the judgment in Case 300/86.
7. The core of the argument advanced by the parties referred to above therefore consists in the assertion that the Community legislature disregarded the nature and scope of the judgment in Case 300/86. Hence it is necessary to consider first of all what criterion for exemption from the levy was laid down by the Court in that judgment, and then to ascertain whether it has been properly applied by the contested rules.
8. That being so, it is indisputable, in my view, that the contested rules constitute a faithful transposition of the criterion laid down in the judgment. There is no doubt that if the cereals are processed by an industrial processor, on account of the producer, neither the cereals nor the resultant animal feed are placed on the market. The cereals themselves remain the property of the producer throughout the processing operation until they are used, whilst the processing undertaking merely provides a service with a view to processing the cereals into animal feed.
9. However, it would be difficult to find any justification for extending the exemption to the situation forming the subject-matter of the dispute in the main proceedings, given the objective difference which, from the point of view of the effect on the market, exists between that situation and processing on account of the producer.
10. It is clear, moreover, that a different solution would also drastically affect the system of applying the co-responsibility levy. If the reasoning of the parties to the main proceedings were taken to its logical conclusion, it would have to be acknowledged that the levy is not payable, and must therefore be reimbursed, independently of the time which has elapsed between the sale of cereals and the purchase of animal feed and, in the final analysis, even where the producer purchases animal feed from a processing undertaking other than that to which he sold the cereals; in any event, he would use on his own holding cereals of the same quality as those previously placed on the market and would therefore contribute, albeit after a time, to finding an outlet for the cereals produced and marketed by himself. Such consequences clearly seem contrary to the rationale behind the levy system which, at least in its present form, aims essentially to reduce income from sales of cereals and thereby discourage the marketing of cereal production.
11. In the light of those considerations, I propose that the question submitted by the national court should be answered as follows: consideration of the question raised has not disclosed any factors of such a kind as to invalidate Commission Regulations Nos 2324/88 and 3779/88.
1 Original language: Italian.
2 OJ 1988 L 202, p 39 and OJ 1988 L 332, p. 17.
3 OJ 1986 L 173, p. 65
4 OJ 1988 L 131, p. 37.
5 See the Opinion in Case C-8/89 Zardi [1990] ECR I-2515.