Report for the Hearing delivered in Case C-67/89

I — Facts and written procedure

1. The relevant Community legislation

2. The German legislation implementing the Community legislation

The system establishing the additional levy on milk was implemented in the Federal Republic of Germany by the Verordnung über die Abgaben im Rahmen von Garantiemengen im Bereich der Marktorganisation für Milch und Milcherzeugnisse (Milch-Garantiemengen-Verordnung) (Regulation on levies in connection with guaranteed quantities in the organization of the market in milk and milk products — Milk (Guaranteed Quantities) Regulation) of 25 May 1984 (Bundesgesetzblatt 1984 I, p. 720), as amended for the first time by the regulation of 27 September 1984 {Bundesgesetzblatt 1984 I, p. 1255).

Paragraph 1 of that regulation lays down the principle that in Germany it is the producer and not the purchaser who must pay the levy. According to Paragraph 4(2), the reference quantity shall be equal to the quantity of milk delivered by the milk producer to a purchaser during the 1983 calendar year, less 4%. That rate of abatement shall be increased if the quantity delivered during the 1983 calendar year is greater than the quantity delivered during the 1981 calendar year, in accordance with the following formula:

but not by more than five percentage points ... .

3. The main proceedings

Mr Alfons Berkenheide, a farmer, delivered to the cooperative dairy Münsterland eG 114406 kg of milk in 1980, 105970 kg in 1981, 102472 kg in 1982 and 121721 kg in 1983. On the basis of the deliveries made in 1983, the dairy allocated to Mr Berkenheide a delivery reference quantity of 110900 kg. The dairy arrived at that figure by reducing the quantity of milk delivered in the 1983 calendar year by the basic abatement rate of 4% (first sentence of Paragraph 4(2) of the Milch-Garan-tiemengen-Verordnung) followed by a further abatement of 4.9% (second sentence of Paragraph 4(2) of the Milch-Garan-tiemengen-Verordnung) on the ground that in the 1983 calendar year Mr Berkenheide had delivered a greater quantity of milk than in 1981.

By letter of 17 February 1986, Mr Berkenheide requested the Hauptzollamt Münster to recalculate the delivery reference quantity without taking into account the 4.9% abatement based on the increase in production. That request was refused by decision of 31 July 1986.

Mr Berkenheide challenged that decision on the ground that his case was exceptional within the meaning of Article 3(3) of Regulation No 857/84, since an epizootic had led to a reduction in the quantity of milk delivered in 1981 and 1982. The competent Chamber of Agriculture confirmed that an exceptional event had occurred but at the same time drew attention to the fact that the applicable German legislation precluded that factor from being taken into account.

The Hauptzollamt Münster dismissed the objection on the ground that the second sentence of Paragraph 4(2) of the Milch-Garantiemengen-Verordnung did not allow the delivery reference quantities to be calculated in any other way.

In the proceedings instituted by him before the Finanzgericht Düsseldorf, Mr Berkenheide maintains that in calculating the reference quantities for milk the Hauptzollamt was wrong to take into account a 4.9% abatement based on the increase in production. His farm, he argues, did not contribute to an increase in milk production between 1981 and 1983. He therefore claims that he should be allocated a delivery reference quantity of 116900 kg of milk.

The Hauptzollamt Münster contends that it was impossible in this case to allocate a higher delivery reference quantity by refraining from applying the abatement rate based on the increase in production or by taking as a basis a modified abatement rate since milk production was not appreciably affected by an exceptional event in 1983. In any event, only the quantity of milk actually produced in another calendar year within the 1981 to 1983 period could have been taken into consideration.

By order of 1 February 1989 the Finanzgericht Düsseldorf stayed the proceedings in that dispute and asked the Court to give a preliminary ruling pursuant to Article 177 of the EEC Treaty on the following question:

4. Procedure before the Court

The order for reference was received at the Court Registry on 6 March 1989.

In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the European Communities, written observations were submitted by the Government of the Federal Republic of Germany, represented by Martin Seidel, and by the Commission of the European Communities, represented by its Legal Adviser Dierk Booss.

On hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry.

By decision of 17 January 1990 the Court assigned the case to the Third Chamber pursuant to Article 95 of the Rules of Procedure.

II — Written observations submitted to the Court

The German Government and the Commission of the European Communities agree that the question submitted for a preliminary ruling calls for an affirmative answer inasmuch as in calculating the Steigerungsabzug (abatement based on the increase in production) it is impossible to take as a basis an assessment of the quantity which the producer would have obtained in 1981 if the exceptional event in question had not occurred.

1. The German Government points out that Article 3(3) of Regulation No 857/84 applies only where the quantity of milk delivered by a milk producer was reduced on account of an exceptional event occurring in the reference year chosen by the Member State. The rule in Article 3(3) is designed to release the milk producer from the risk of having to declare during the reference year, because of an exceptional event, low milk deliveries on the basis of which the reference quantity will be calculated. Accordingly, it is only if a dairy farmer's milk production in 1983 is affected by an exceptional event that the producer may substitute for the quantity of milk delivered in 1983 that delivered in 1981 or in 1982. If, on the other hand, as in this case, milk production was not affected by an exceptional event in 1983, Article 3(3) does not apply, irrespective of whether milk production was affected by such an event in 1981 or 1982.

2. The Commission takes the view that the question submitted for a preliminary ruling seeks in substance to ascertain whether, when reference quantities are determined in accordance with Article 3(3) of Regulation No 857/84 and Article 3 of Regulation No 1371/84, an exceptional event occurring in 1981 must be taken into consideration even where 1983 was chosen as the reference year.

III — Answers to questions put by the Court

1. In answer to a question from the Court, the German Government points out that the question submitted by the Finanzgericht must be set in the context of Article 2(2) of Regulation No 857/84. According to that provision, the Member States may reduce the quantity calculated for a reference year in accordance with various procedures.

2. In reply to a question from the Court, the Commission explains that the question submitted for a preliminary ruling can also be construed as seeking to ascertain whether Article 2(2) of Regulation No 857/84 can be interpreted as meaning that in calculating the percentage referred to it is necessary to take into account an exceptional event which cannot be considered pursuant to Article 3(3).

1 Language of the case: German.