1.

Under Community law does the expression ‘agricultural producers’ in Article 1 (1) and (3) of Regulation (EEC) No 2464/69 include industrial livestock breeders and keepers within the meaning of German tax law?

If the answer to this question is in the affirmative:

2.

Are Articles 39 and the second subparagraph of Article 40 (3) of the EEC Treaty and Article 1 of Regulation (EEC) No 2464/69 of the Council or any other provisions of Community law to be interpreted as meaning that they forbid the Federal Republic of Germany, as a Member State of the EEC to which Regulation (EEC) No 2464/69 was addressed, in the event of the grant of direct aid by way of compensation for the revaluation of the German mark in respect of agricultural products subject to an organization of the market, to exclude specific classes of agricultural producers — in this case, industrial livestock breeders and keepers within the meaning of German tax law — from the grant of aid?

3.

Is this prohibition directly applicable in the national sphere so mat an individual trader is entitled to rely upon it before the national courts?

1. 

It follows from the account of the facts that Regulation No 2464/69 was only applicable up to and including 1973. The application for tax reduction which is to be dealt with in the main action related, on the other hand, to 1974. Therefore the Council decision of 21 January 1974 is primarily the determining factor with regard to this request, so far as Community law is concerned. Accordingly, it is necessary to relate the questions which have been submitted to this Court principally to that decision. This does not however basically alter the task of the Court of Justice. In fact, the expression ‘agricultural producers’ is used in the above-mentioned decision. In addition, it is clear that the decision, which was adopted on the basis of Article 3 of Regulation No 2464/69, was intended essentially to extend the period for which the regulation was applicable and that therefore the expression ‘agricultural producers’ has the same scope as it has in Regulation No 2464/69.

2. 

So far as the interpretation of the above-mentioned expression is concerned, the plaintiff emphasizes from the outset that it should not be concluded from the use of the word ‘German’ in Article 1 of Regulation No 2464/69 that a reference is thereby made to German law. This adjective, it claims, is in fact intended only to delimit the territorial scope of the regulation; moreover, it is however necessary to assume that the expression ‘agricultural producers’ has a meaning under Community law.

In my opinion it is possible to agree with this unreservedly. In this connexion it is important that the regulation is based on Articles 42 and 43 of the EEC Treaty, in other words that it constitutes a measure adopted within the context of the common agricultural policy. It is also possible to refer to Article 3 (3) of the regulation, according to which the Council must, in the light of the development of the common agricultural policy, decide on appropriate measures to be taken, in accordance with the procedure laid down in Article 43 (2) of the Treaty. Finally, it is of interest that the Community contributes to the financing of the measures. with regard to the question of the meaning of the concept of Community law no express definition of which is contained in the regulation, the plaintiff considers that the regulation starts from the concept upon which the Treaty is based. In this connexion it refers to a number of articles of the Treaty (Articles 37 (4), 40, 42, 43 and 45) and concludes from them that the expression ‘producers’ used therein must be interpreted as meaning that it covers any person who manufactures agricultural products within the meaning of Article 38 and Annex II to the Treaty. Accordingly the method of production — within the context of a typical agricultural undertaking or of an industrial undertaking — is not important and therefore it must also be assumed that such a distinction, for which there are in addition no criteria laid down in Community law, is also irrelevant with regard to Regulation No 2464/69.

In my opinion — and in this respect I share the Commission's view — this consideration is not convincing.

First, the expression ‘agricultural producers’, which is of course used in the regulation, does not appear in the above-mentioned articles of the Treaty. The Treaty, for example Article 42, speaks of the production of agricultural products. Article 37 (4) and Article 43

Speak of the ‘producers concerned’ us referring to agricultural products the disposal of which is made easier by State monopolies (Article 37 (4)), or national market organizations for particular products (Article 43). Here we find, as in Article 40 in connexion with the prohibition on discrimination applying to the common organization of the agricultural markets, simply the expression ‘producers’ and we find, as in Article 45, the terms ‘national producers’, for whom national arrangements guarantee a market, or ‘producers within the Community’, in respect of whom discrimination must be abolished.

Secondly, I would recall that in my opinion in Case 85/77 (Società Santa Anna Azienda v instituto Nazionale della Previdenza Sociale and Servizio Contributi Agricoli Unificati, opinion of 31 January 1978, judgment of 28 February 1978) I took the view that it was worth considering deducing the concept of ‘agricultural undertaking’ upon which the Treaty is based from several factors which may be inferred from Articles 38, 39 and 42. The Court of justice did not however agree with that or with the view that the important factor is the manufacture of agricultural products within the meaning of Article 38. The judgment in Case 85/77 states that the Treaty contains no definition of the expressions ‘agriculture’ and ‘agricultural undertaking’. It is rather for the Community institutions to work out where appropriate for the purposes of the rules deriving from the Treaty such a definition and in this connexion the objectives pursued by the rules are particularly important.

The question which has been raised can therefore only correctly be answered by attempting to discover from the wording, purpose and history of the origins of Regulation No 2464/69 what is meant by the expression ‘agricultural producers’. Applying the method described the Commission reached the view that the above-mentioned expression does not include industrial producers of agricultural products. If you will permit me to say so immediately, it will certainly be necessary to agree with this point of view.

The history of the origins of the provision indicate this quite clearly. In this connexion I have already mentioned that the Federal Republic of Germany originally sought a compensatory amount payable at the frontier, in other words a measure related to products. No decision could be reached to adopt such a measure but only to adopt the less far-reaching measure consisting in the grant of aid. This however also gives cause to interpret narrowly the concept of ‘agricultural producers’ which is decisive with regard to the gram of aid, in accordance with the principle that it is necessary to interpret restricitvely rules which derogate from the general law laid down in the Treaty. In addition, it not only became clear in the deliberations that in the calculation of the loss of income spoken of in the regulation only actual agricultural undertakings were envisaged. On the contrary it was, what is more, expressly made clear that the grant of aid must be restricted to agricultural undertakings within the meaning of German tax law. In this connexion I would refer to the minutes of the Council meeting of 9 December 1969 which have been produced to this Court. They contain a corresponding clear statement by the former member of the Commission, Mr Mansholt; directly afterwards the members of the Council of Minister gave their consent on that basis.

An important fact is also however that because, according to the case-law referred to by the plaintiff, reservations and explanations which have remained internal — the minutes of meetings of the Council are not published — cannot by themselves determine the interpretation of a provision, the restriction which has been identified is sufficiently expressed in the regulation itself. In this connexion it is of interest that the regulation uses the expression ‘agricultural producers’, in contrast to the Treaty which speaks of the production of agricultural products, in other words places the emphasis on the products. In fact the use of the adjective ‘agricultural’ makes one think of typical agricultural production and the fact that Article 3 of the regulation speaks of German agriculture might well also indicate this.

in the same way it seems to me to be of importance that the recitals of the preamble to the regulation state that it is possible to ensure the continuation of lid through measures of social or structural policy. In this connexion the first factor, measures of social policy, reveals the social character of the compensation for the revaluation of the German mark: it is intended to mitigate the loss of income for sectors of the population who are organized chiefly as small-scale or medium-scale farmers and who can only adapt slowly to developments in the monetary situation. In addition, reference can be made to the opinion of the Parliament which was also referred to in the recitals of the preamble to the regulation. It was prepared by the report drawn up by Mr Vredeling on behalf of the Committee on Agriculture (European Parliament, Working Documents 1969-1970, Document 165). In my opinion the fact that it speaks of the increase in the purchasing power of the income of German farmers and of the improvement in the social and economic situation of German farmers is just as interesting as the fact that the expression ‘German agriculture’ and ‘farmers’ were used in the resolution adopted by the Parliament (Official Journal 1969, C 160, p. 37 et seq .) and that reference was made to the social and economic situation of German agriculture.

Finally, the objective of the regulation, as revealed in the recitals of the preamble thereto, is also of interest. According to those recitals it concerns compensation for loss of income for German agriculture, which loss is precisely evaluated. In establishing that loss of income the positive effects of the revaluation — the reduction in the price of imported feeding-stuffs and resources — were evidently also an important factor. It is however certain that this is of greater importance in the case of industrial livestock keepers, who only use purchased feeding-stuffs and primary products, than in the case of farmers who use primarily their own products. In the case of industrial livestock keepers, the losses caused by revaluation — a general view justifies this assumption — were therefore less serious because of their different structure and greater flexibility; in their case there was not such a marked emergency that it must have seemed imperative to include them in the rules on compensation.

For all these reasons I consider that the term ‘agricultural producers’ used in Regualation No 2464/69 and in the Council decision of 21 January 1974 can only be interpreted as meaning that it does not cover industrial producers. In the present case we must adhere to this fact. On the other hand, without precise knowledge of all details of the case, it is now impossible to attach any importance to the fact that a similar authorization in favour of the Netherlands contained in a Council Regulation of 19 November 1973 was evidently interpreted in that country, as may be deduced from a law of 19 December 1973 and a decree of 7 December 1973, as meaning that industrial producers also enjoy the benefit of aid.

3. 

In view of this conclusion an examination of the further questions referred to the Court might seem superfluous as they were only raised in case the first question was answered in the affirmative, in other words if it were answered to the effect that industrial livestock keepers must also be deemed to be agricultural producers within the meaning of the regulation. I should like however to continue the examination of the remaining questions from two aspects:

This gives rise to the following considerations:

4. 

Finally I propose that the questions put by the Finanzgericht Münster should be answered as follows: