‘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?

2.

If the first question is answered in the affirmative: Are Article 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 the German tax law — from the grant of aid?

3.

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

1.

In the previous reference for a preliminary ruling on the question of the possibility of different treatment of industrial and agricultural livestock keepers for purposes of revaluation compensation the Court assumed that agricultural livestock breeders and keepers mainly used the products of their own undertakings as fodder. In view of the general nature of the question in the order for a preliminary ruling referring simply to industrial livestock keepers and breeders, the Court gave a comprehensive judgment embracing all livestock keepers (breeders of beef-cattle, pigs, poultry, calves and so forth).

Nowhere in the second order making reference to the Court or in the observations of the parties to the proceedings is it however said that this comprehensive judgment is inappropriate. The decisive basis for the second order to the effect that in its judgment in the first reference for a preliminary ruling the Court assumed wrong facts is accordingly not tenable. For this reason alone it is possible to criticize the claim that the Finanzgericht Münster is not bound by the decision in the first reference and hold that the second application is inadmissible.

2.

It further has to be stressed, and this relates to the narrower question in the second order for a preliminary ruling concerning only calf fatteners, that the question of calf fattening was in particular discussed in the first reference for a preliminary ruling. In the statement of facts there was express mention of the plaintiff's claim that on the structural and economic plane there was no difference between industrial calf fattening on the one hand and agricultural calf fattening on the other. Naturally the Commission took pains to refute this claim.

If however, although clearly conscious of the actual problem in the main proceedings, the Court nevertheless did not go into it further but contented itself with the comprehensive finding mentioned above, this can mean only that it considered a general assessment of livestock keeping justified and saw no cause to refer on the question of equal treatment to the special economic sector of calf fattening. From this point of view therefore there is also no need to deal with the second reference for a preliminary ruling.

3.

If this course is not adopted and it is considered in principle admissible to make a second reference to the Court out of the same proceedings on the ground that the legal assessment in the preliminary ruling is open to challenge, then it would be necessary in the first place to consider whether for such criticism of the judgment new factors have been put forward which could in fact justify reconsideration of the earlier judgment.

This is not the case. In fact it may. be thought that all the basic considerations which have been put forward in the present proceedings were already canvassed in the first reference for a preliminary ruling and that at most some issues have been supplemented and explored further. I do not need to give details of that now but may refer to the documents and the minutes of the hearing. Here again there is justification for the conclusion that the second reference should be declared inadmissible or, if such strict treatment is not considered appropriate, there should at least be a declaration that no new factors have become apparent which could give cause for a change in the first preliminary ruling.

4.

It is of course possible to take the view that in the first reference for a preliminary ruling the Court gave a general answer in view of the general question contained in the order making the reference to the Court and that it did not tacitly deal with the specific problem of calf fatteners but rather disregarded it. This view does not seem to me very reasonable having regard to the constant endeavour of the Court to assist the national courts to the full in coming to their decisions. If nevertheless this view is taken then there is basically no objection to there being a second order for a preliminary ruling on the facts in the main action in which the question to be investigated is more restricted and to the raising of a specific question in the present case regarding the treatment of industrial calf fatteners with regard to revaluation compensation.

Nevertheless if this view is taken another problem immediately arises. The question now put to us concludes with the clause: ‘if agricultural calf fatteners use the same industrially produced feeding-stuffs for fattening calves as industrial calf fatteners’. In this respect it is stated in the grounds of the order making the reference to the Court: ‘In fact, however, for fattening calves “agricultural” calf fatteners within the meaning of German tax law use the same feeding-stuffs as “industrial” calf fatteners within the meaning of German tax law, that is to say, solely industrially-produced milk-based substitute feedingstuffs such as that which the plaintiff itself produces and also uses for fattening its calves. Both agricultural and industrial calf fatteners must use exclusively manufactured milk-based substitute feedingstuffs for fattening calves in order to obtain “white” meat which has a special market value and which alone is sold as “veal”. In theory certain agricultural calf fatteners can (also) fatten their calves with feeding-stuffs from their own agricultural production. In that case, however, they produce red meat which is sold as beef.’

As is known the Commission has vigorously challenged these findings both in its pleading and at the hearing. It is convinced that there is evidence that agricultural calf fatteners to a considerable extent use feeding-stuffs other than industrial feeding-stuffs, namely their own products which presuppose the working of the land. In support the Commission refers to facts obtained from the rules existing since 1969 on aids for the use of milk in animal feeds and on statistics on the use of full-cream milk and skimmed milk as animal feeds in the Federal Republic of Germany which were put forward at the hearing. It is clear from this that large quantities of full-cream and skimmed milk are fed to animals and that a very large part, namely more than half, goes to calves as is apparent from a breakdown of figures made since 1978. From this it may be assumed that a third, previously probably even more, of feed for calves consists of milk and that the findings in the preliminary ruling in Case 139/77 apply quite clearly to calf fatteners, if to a somewhat lesser extent.

Against this the plaintiff in the main action accuses the Commission of wrongly confusing the sectors of calf breeding and calf fattening for which different methods of feeding apply and the products of which do not compete with one another. It is clear, and for this reference may be made to the German animal feeds regulation of 16 June 1976 and the relevant literature, that owing to its low fat content skimmed milk does not come into question for calf fattening or does so only if enriched with other feeding-stuffs which have to be purchased. Moreover this issue is irrelevant for the preliminary ruling since as the relevant case-law of the Court shows the Court is bound by the facts as established by the national court. In answering the question put the Court must therefore in any event proceed on the basis of the facts which the Finanzgericht has set out in its order for reference to the Court.

5.

I do not however wish to leave the matter there. In conclusion, in case the Court does not agree with my arguments so far, I should like to add a few words on the question put in the second order for reference to the Court. In view of all that I have already said, I shall confine myself to some few observations which at the same time should further clarify the interpretation of the first preliminary ruling which I gave at the outset, should that interpretation prove correct.

Basically I take the view that in 1969 on the adoption of the Law on compensation for revaluation which had quickly to come into force, no distinction was to be made according to economic sectors within livestock keeping as the plaintiff is now claiming. It seems to me quite proper, and for this there are objective grounds relating to the prohibition of discrimination, that a system of aid, created for this purpose and applying to a large number of those concerned, should be based on the categories of agricultural undertakings keeping livestock. The system was partly integrated into the turnover tax law and the categories had been introduced long ago in tax law for practical reasons. It was therefore sufficient to recognize that agricultural keepers of livestock in general use their own products to a considerable extent and therefore were affected by the revaluation in a quite different way from that in which purely industrial keepers of livestock were affected.

The plaintiff now thinks that such a general system was no longer justified, at least in 1974, because by then there had been sufficient time for a differentiated system, namely one taking account of the fact that agricultural and industrial calf fatteners were in the same position. In this respect I should like to recall that, as I have already intimated in my opinion in the first reference for a preliminary ruling by the Finanzgericht Münster, that had this been done, then because of the trend in veal prices of which the Commission spoke at the last hearing, it would very probably have meant that the compensation for revaluation for calf fatteners would have had to be abolished and this would certainly not have helped the plaintiff to obtain such compensation for 1974.

It is however possible to take the view that still in 1974, assuming the basic admissibility of the compensation for revaluation, there were objective grounds for simply excluding industrial livestock, keepers and not making a difference according to economic sectors. Nevertheless it should not be overlooked that the monetary compensatory amount which had already been introduced at this time, linked to the product though it is, is largely flat-rate and time and again this has not been objected to in the case-law. So far as calf fatteners in particular are concerned, it seems to me mistaken to compare inter se only specialized undertakings, be they agricultural or purely industrial, for the calf market must be considered as a whole. This however shows that fatteners in the agricultural sector, even though they may in fact use the same feeding-stuffs as industrial calf fatteners, frequently have a different working structure, partly connected with the size of holding and partly due to less flexibility. It seems quite reasonable to have regard to this in a system of aid which must be strictly limited.

Finally, and this is closely connected with what has just been said, the social aspect related to the compensation for revaluation should be remembered. As I have already stated in my first opinion, it finds expression in mention of ‘measures of social or structural policy’ in the statement of reasons in the preamble to Regulation No 2464/69 of the Council. This did not at all mean, as the plaintiff thinks, that the size of holding had to be taken into account in relation to the compensation for revaluation — something which could well have involved considerable administrative work. This however probably justifies not considering a clear separation of the economic sectors, which the plaintiff is seeking for calf fattening, but instead having regard to the place of this sector in agriculture as a whole in so far as it is relevant to agriculture. In this respect reference may be made to guidelines which find expression in Article 39 (2) (a) and (1) (b) of the EEC Treaty. If this line is adopted then a ground for a proper distinction is seen to be that agricultural holdings concerned with calf fattening have suffered losses in connexion with agricultural yields and milk production through the revaluation of the German mark, whereas industrial calf fatteners have profited because imported feeding-stuffs and intervention products have become cheaper as a result of revaluation.

Without going into the question whether the case-law of the Bundesverfassungsgericht cited by the plaintiff on the limits of acceptable categories can provide relevant criteria in the area which concerns us here, the opinion is perfectly tenable that in the light of Community law, especially having regard to the purpose of Regulation No 2464/69 of the Council and the agricultural provisions of the Treaty, there is no objection to the exclusion of industrial calf fatteners from compensation for revaluation and this applies too in the circumstances set out by the Finanzgericht.

6.

In conclusion I propose in the first place that it should be held that the Finanzgericht Münster has not sufficiently shown the necessity and justification of the second order for a preliminary ruling and thus that there is no cause to deal with the reference for a preliminary ruling of 19 January 1979.

In the alternative I propose that it be held that no grounds have been disclosed to give cause to amend the preliminary ruling in Case 139/77 in so far as concerns the exclusion of industrial calf fatteners from compensation for revaluation.