JUDGMENT OF 28. 2. 1978 — CASE 85/77 SANTA ANNA AZIENDA AVICOLA v INPS
In Case 85/77 REFERENCE to the Court under Article 177 of the EEC Treaty by the Tribunale di Roma for a preliminary ruling in the action pending before that court between
THE COURT composed of: H. Kutscher, President, M. Sørensen and G. Bosco (Presidents of Chambers), A. M. Donner, P. Pescatore, Lord Mackenzie Stuart and A. Touffait, Judges, Advocate General: G. Reischl Registrar: A. Van Houtte
gives the following
JUDGMENT
Facts and issues
The facts of the case, the course of the procedure and the observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC may be summarized as follows:
I — Facts and procedure
1. The Società Santa Anna Azienda Avicola, whose business is the raising of poultry and laying hens, brought an action on 5 January 1973 before the Tribunale Civile di Roma against the Istituto Nazionale della Previdenza Sociale (hereinafter referred to as ‘the Istituto’) for a declaration that it was entitled to be classified as an agricultural holding and accordingly to pay to the Servizio Contributi Agricoli Unificati (hereinafter referred to as ‘the Servizio’) only insurance contributions in respect of the labour it employed.
2. The investigating magistrate, acceding to an application made by the Società Santa Anna gave leave on 4 December 1973 for the Servizio to be joined as defendant. After being joined the Servizio confirmed that it considered the classification of the Società Santa Anna as an agricultural holding to be correct.
3. At the hearing on 28 April 1977 the Società Santa Anna applied for the proceedings to be stayed and the case referred to the Court of Justice of the European Communities for a preliminary ruling under Article 177 of the EEC Treaty. The Servizio joined in this application while the Istituto was content to leave the matter to the court's discretion. By order of 19 May 1977 the investigating magistrate stayed the proceedings and ordered the case to be referred to the Court for a preliminary ruling on the interpretation of Article 38 (1), (3) and (4) of the Treaty establishing the EEC in relation to Annex II (list referred to in Article 38 of the Treaty), Regulation No 70/66/EEC of 14 June 1966 published on 24 June 1966 in the Journal Officiel de la Communauté No 112, in so far as the following points are concerned: ‘“Agricultural holding” means a farm business situated within a limited geographical area, operated as a single unit, under a single management and producing … cereals, vegetables,…, and with regard to animals: cattle, horses, sheep, goats, pigs, hens and chickens, other poultry, rabbits, game, silk-worms, bees and chicks’. (Article 2 (a) and Annex I); ‘Businesses where the agricultural area is less than one hectare and those without any agricultural area utilized for farming also constitute agricultural holdings’ (Article 3 (a) and (b); and Regulation No 91/66/EEC of 29 June 1966 (Official Journal, English Special Edition 1965-1966, p. 112) in so far as the following points are concerned: ‘“Agricultural holding” means a farm business situated within a limited geographical area, operated as a single unit, under a single management and producing … cereals … hens and cockerels, other poultry… chicks’. In addition an answer to the following questions is sought: 1 (a) Does the concept of an agricultural holding provided in the Treaty by express reference to goods produced through the establishment and running of a business, clarified by regulations separating such business from any territorial connexion (precisely where provision is made for agricultural holdings with an agricultural area less than one hectare and agricultural holdings without any agricultural area) apply only within the institutions of the EEC and is it accordingly not binding upon the Member States who are thus free to define agricultural holdings with reference to criteria differing from or contrary to the criteria adopted by the Treaty of Rome and by the said regulations? 1 (b) Has the Community adopted a Community concept of an agricultural holding which applies in the individual Member States for the purposes of identifying holdings of this nature and are the Member States accordingly obliged to employ the concepts provided in the Treaty and the said regulations in order to identify the agricultural holdings to which must then be applied the principles laid down at Community level and those evolved by the various national legal systems with regard to social security? If Question 1 (b) is answered in the affirmative, 2 (a) Can the individual Member States adopt provisions or maintain a practice derogating therefrom? 2 (b) Is the concept of an agricultural holding provided in the Treaty and in the regulations binding and directly applicable within the Italian legal system for the purposes laid down in the Community provisions and the said Italian legal system? If Question 2 (b) is answered in the affirmative, 3 (a) Has the concept of an agricultural holding adopted by the EEC and incorporated into the several legal systems of the Member States established for individual holdings, defined and identified as agricultural, individual rights which may be related to this classification and which the national courts must protect? If Question 3 (a) is answered in the affirmative, 4 (a) Are the individual rights related to the duty of the Member States not to impose upon agricultural holdings charges which, although unconnected, according to the national legal systems, with the nature of agricultural holdings as defined with reference to the criteria supplied by the Treaty and by the Community regulations, are nevertheless capable of discriminating, for social security purposes, between Italian agricultural holdings raising poultry and such holdings in other countries in the Community?
4. After 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 enquiry.
II — Summary of observations submitted under Article 20 of the Protocol on the Statute of the Court
Observations of Santa Anna Azienda Avicola s.r.l.*
Submissions relating to the facts
The Santa Anna company states that the action pending before the Tribunale Civile di Roma is one of a number of actions pending before various Iulian courts all relating to an issue of extreme importance since they closely affect the economic interests of poultry farms, namely whether they are to be regarded as agricultural or industrial undertakings. The different classification involves serious economic consequences.
Poultry holdings were always regarded as agricultural on the basis of Article 2135 of the Iulian Codice Civile which from 1942 (the date of its entry into force) has expressly included animal husbandry (including poultry) and ancillary activities in the general definition of the work of ‘farmers’. As a result in relation to the national provisions applicable to insurance contributions poultry holdings were always regarded as agricultural in every respect and therefore subject exclusively to the payment of the unified agricultural contributions laid down for all agricultural holdings.
Subsequently as the result of the modernization of poultry and egg production and the introduction of more advanced technical improvements the Istituto claimed poultry holdings were industrial in order to make them subject to insurance contributions laid down for the industrial sector. Since however the classification for the purposes of insurance contributions is today still the characteristic feature of an undertaking (that is to say whether it must be regarded as agricultural or industrial and whether in consequence all the facilities allowed by the rules relating to taxes, finances, subsidies and so forth do or do not apply) it is clear that for holdings which have expended considerable effort in rationalizing their production the question whether they are to remain classified as agricultural becomes very important.
Santa Anna refers to an opinion given by the Iulian Consiglio di Stato on 24 October 1972 in which the Consiglio di Stato considered it ought to refer to the Community rules to resolve the problem of interpretation in question. According to that opinion the three Iulian ministries directly concerned in resolving the point at issue, that is to say the Ministry of Labour, the Ministry for Agriculture and the Ministry for Finance considered that on the basis of Anide 2135 of the Iulian Codice Civile poultry farms should be treated as agricultural in all respects and as a result subject to the contributions laid down for such undertakings. On the other hand the Istituto sought to impose its own views by referring to an antiquated discretionary criterion which made the classification as an agricultural (or industrial) undertaking depend on the relationship between the amount of animal feeding-stuffs and fodder produced in the undertaking and the amount of animal feeding-stuffs and fodder purchased on the market. This notion is diametrically opposed to that contained in the Community rules intended to encourage the economic development of agriculture within the framework of the principles and objectives set out in Article 39 of the EEC Treaty.
After drawing attention to the conflicting opinions of Italian courts on the classification of agricultural holdings the Santa Anna company expresses the hope that clarification by the Court of Justice will avoid discrimination on the basis of outmoded criteria operating to the detriment of holdings which have sought to modernize and improve technically in pursuit of the objectives laid down in Article 39 of the Treaty. It lists a whole series of cases of discrimination especially in tax and financial matters as well as insurance contributions and subsidies which poultry farms would have to suffer if they were regarded as non-agricultural holdings as the Istituto maintains.
Submissions of law
1. Unique Community meaning of the terms and wording used by the Treaty and secondary law
After observing that the EEC Treaty does not expressly define a ‘holding’ nor, directly and expressly, define in the abstract ‘agriculture’ the Santa Anna company submits that the Treaty's silence nevertheless does not mean that concepts relating to holdings concerned in agriculture may be defined according to criteria alien to Community law. In particular the Treaty's silence does not permit the assumption of lacunae nor in consequence the notion that it is right to have recourse to the legal systems of Member States. On the contrary the meaning of these terms must be sought in the Community legal system. Moreover if the meaning, content and limits of terms such as ‘agricultural holding’ are supplied solely by Community law it is also necessary to admit that they have the same meaning wherever they are used unless it is specifically stated otherwise.
This unique Community nature of the term agricultural holding is confirmed in various measures of the institutions. Thus the preamble to Decision No 682 of the Commission of 2 October 1975 (Official Journal L 301, p. 8 of 20 November 1975) states that ‘the definition of the term “agricultural holding” should be uniform throughout the European Economic Community’. Council Directive No 159 of 17 April 1972 (Official Journal, English Special Edition 1972 (II), p. 324), which contains provisions in favour of ‘farms suitable for development’ expresses the same Community meaning. It adopts a double system, namely (a) it states ‘a farm shall be considered suitable for development’ (Article 2) where it complies with certain minimum requirements which constitute the criteria (Article 3) and (b) it entrusts the Member States with supplementing the criteria of definition which it has adopted solely to ensure the better application of its rules in certain social and economic situations in which the farms function.
The necessity of affording Community law exclusive validity in the sense referred to above it is even more obvious in a sector such as the one in question which completely covers two common organizations of markets: that of poultry meat (Regulation (EEC) No 2777/75, Official Journal L 282, p. 77) and that of eggs (Regulation (EEC) No 2771/75, Official Journal L 282, p. 49). This necessity arises from the fact that since it is a question of common organizations of markets the principle of the ‘single market’ and that of the ‘exclusive jurisdiction of the Community institutions’ to govern it applies to them.
2. Community meaning of ‘agricultural holding’
From among the various expressions used by Community law in the sphere of agriculture the Santa Anna company considers those which such law uses to refer to the agricultural activity of the holding. It claims that this activity allows holdings which are engaged in it and which may effectively be classified as agricultural holdings to be placed in a single ‘category’.
There are two signs contained in Article 38 of the Treaty pointing in this direction. On the one hand paragraph 1of that article states that ‘agricultural products’ means ‘the products of the soil, of stockfarming and of fisheries and products of first-stage processing directly related to these products.’ Further paragraph 3 of the same article refers to the special list to determine the agricultural products which are to be included in the definition which it is possible to derive from Article 38 (1). It is possible to infer from these two signs that the business of a holding is an activity of an agricultural nature according to the kind of products with which it is concerned. In turn agricultural activity is such as concerns the production of certain goods which the Treaty considers as agricultural products.
This concept of the agricultural holding may also be found in Article 40 and in the application which the Community institutions have made of it. Article 40 (2), which provides that ‘in order to attain the objectives set out in Article 39 a common organization of agricultural markets shall be established’, shows that all holdings concerned with production or the first-stage processing of raw materials in the commercial sector covered by an organization of markets are agricultural holdings within the meaning of the Treaty and that once again it is the agricultural product, the subject-matter of their activity, which determines the agricultural nature of the activity of the holding.
In support of this argument the Santa Anna company cites certain measures adopted by the Community institutions in the sectors in question which in its view all relate to the agricultural product. This is at the centre of all the Community rules.
The concept of agricultural holding assumed by the Treaty does not agree with that adopted by internal laws. In particular the concept of agriculture to be inferred from Article 38 et seq. diverges from the ‘national’ concepts which make the classification of agricultural activity depend on ‘working the soil’.
In support of this argument the Santa Anna company cites Article 38 (1) of the Treaty which refers to stockfarming without any other qualification and this, in its view, means that the stockfarming to which this provision refers covers all kinds of animals including those for which land is not required. This Community concept of agricultural holding (also including holdings which produce agricultural products industrially without exploiting the Und) finds support among legal commentators (Kommentar zum EWG-Vertrag by von der Groeben, von Boeck and Thiesing, Second Edition, Vol. II, p. 327) and especially in a number of measures adopted by the Community institutions to obtain various data for the purpose of applying the common agricultural policy. Although these measures in defining agricultural holdings did so expressly only for the purposes of their application it nevertheless follows clearly from their wording that the institutions did not include any reference to land in their definition of agricultural holdings. Thus for example it may be inferred from Article 4 of Regulation No 79/65 of the Council of 15 June 1965 (Official Journal, English Special Edition 1965-1966, p. 70) that after the initial period referred to in Article 4 (2) (a) the ‘field of survey’ of the institutions would be extended also to holdings which did not have a cultivatable area exceeding five hectares and thus also agricultural holdings which do not have any agricultural Und at all. The same concept may be found in Article 3 of Regulation No 70/66 of the Council of 14 June 1966 (Journal Officiel No 112 of 24 June 1966) which provides for the ‘field of survey’ to cover ‘agricultural holdings … without any agricultural area utilized’. Just as significant, precisely because it makes no reference to land, is Article 1 of Regulation No 91/66 of the Council of 29 June 1966 (Official Journal, English Special Edition 1965-1966, p. 112) which provides that ‘“agricultural holding” means a farm business situated within a limited geographical area, operated as a single unit, under a single management and producing products appearing on the list given in Annex I’ (this Annex includes both products of poultry farming and cattle farming products). Finally it appears from Annex I to Commission Decision No 75/682 of 2 October 1975 (Official Journal L 301 of 20 November 1975, p. 8et seq.) that ‘An agricultural holding is thus defined by the following characteristics: 1.1 Output of agricultural products … 1.2 Single management… 1.3 A single unit technically and economically …’ The same Annex provides that agricultural holdings which form part of industrial enterprises are simply a ‘special case’ falling within the general definition.
3. The legal equality of subjective situations falling under the general concept of agricultural holding
In the view of the Santa Anna company the Tribunale di Roma raised a number of questions relating to the issue whether the Community concept of agricultural holding, as set out above, is applicable in the various Member States to identify this type or, more particularly, whether this concept is directly applicable in the Italian legal system. However these questions raise additional problems relating to the application of the prohibition of discrimination. In spite of their abstract nature they are still considered as phases of an intellectual process enabling it to be specifically ascertained whether a certain treatment coming within the ambit of the Treaty, such as the imposition of insurance charges on particular undertakings, does or does not involve discrimination prohibited by Community law. They draw attention to the fact that the non-discriminatory application of Community law (or in other words the equal treatment which such law aims to guarantee in certain situations) depends to a Urge extent on the definition of the abstract cases formulated by its rules and in particular on the definition of subjective and objective situations falling within the scope of its various rules.
After elaborating this argument at length the Santa Anna company concludes that the problem which the Tribunale di Roma has raised related solely to the possibility of Italian national law derogating from Community law, that is to say of Italian national law creating, without authority, specific classifications of agricultural holdings and, on the basis of the characteristics of certain holdings covered by such classifications, adopting rules differing from those applying to holdings which are of the same nature in the eyes of Community law so that the prohibition of discrimination is violated.
There is no doubt that this possibility must be ruled out. If it were acceptable it would give Member States ‘an absolute weapon’ to nullify the fundamental principle of Community law expressed in the prohibition of discrimination.
It is best understood by considering the facts of the case. Classification of a holding as non-agricultural for the payment of insurance contributions discriminates against it and deprives it of the benefit of various provisions of a fiscal, financial and economic nature. The Istituto by classifying a holding as agricultural or non-agricultural upsets the whole economic sector of poultry farming by altering the conditions of competitive equality of the holdings engaged in the market. Moreover the consequence of this situation is likely to be that the Community directives adopted to encourage the modernization of agriculture would be applied in Italy only to holdings classified as agricultural according to the antiquated and uneconomic national criteria adopted by the Istituto. In this way in the absence of a uniform Community definition of agricultural holding the correa application of the Community rule in the context of the Common rket would be compromised.
4. The application of the prohibition of discrimination to the treatment of subjective situations inherent in the concept of agricultural holding
The Santa Anna company considers that the questions raised by the Tribunale di Roma require above all clarification of the question whether the prohibitions of discrimination contained in Community law also affect the imposition of different para-fiscal revenue charges applicable to agricultural holdings producing the same product and of the same nature. To answer these questions it may suffice to observe that any national measure which imposes on certain classes of holdings the payment of a tax or a para-fiscal charge in the end affects their costs and their competitive capacity in the market. The manipulation of fiscal charges or parafiscal charges thus has an effect on the economic activity which comes within the scope of the Treaty according to Article 2 thereof. Unequal treatment in fiscal or para-fiscal matters thus also comes under the prohibition of discrimination contained in Article 7 or Article 40 (3). More particularly even in fiscal matters the Member States cannot create discrimination between the various agricultural holdings, belonging to the same specific class having regard to the activity engaged in, according to their relationship to the soil or its products.
5. Conclusions
The Santa Anna company proposes that answers should be given to the same problem raised by the Tribunale di Roma but with a different approach which has regard more to the specific facts than the letter of the law; this will bring into prominence the injustice of the discrimination affecting poultry-farming undertakings which are regarded as industrial because they adopt modern or progressive systems.
It states that in spite of the methods and technology adopted the most modern poultry-farming undertakings have not removed themselves from the ‘farming’ social and economic context in which the traditional agricultural undertaking works. None of the most modern poultry-farming holdings has left the rural environment to establish itself in the areas of large industrial concentrations. Moreover another reason for the identity between traditional poultry-farming holdings and modern poultry-farming holdings may be observed if they are seen in the light of the objectives of the Common Agricultural Policy. The modern agricultural holding achieves all the objectives of this policy which are specified in Article 39 of the Treaty.
Observations of the Istituto
The Istituto considers that the question raised is irrelevant and that the Court of Justice has no jurisdiction to give a ruling in the matter.
There is no doubt that the EEC regulations cited by the Santa Anna company and referred to by the Tribunale di Roma in its order also cover holdings of the kind such as the Santa Anna company manages, but only as regards the objectives stated in them and as regards the clauses of the Treaty.
The objectives of the Common Agricultural Policy specified in Article 39 of the Treaty affect only production and trade in agricultural products and not the identification of agricultural holdings for different purposes.
Article 40 lays down means which can be implemented by the Community, namely: (a) common rules on competition; (b) compulsory coordination of the various national market organizations; and (c) a European market organization. Here again it is a question of means relating solely to the marketing of products and not to a quite different objective such as classifying the holding for the purpose of determining its insurance contributions. Moreover the second paragraph of Article 40 (3) stipulates that the means shall be limited to pursuit of the objectives set out in Article 39.
Regulation No 70/66/EEC of the Council provides a definition of agricultural holding ‘for the purposes of this regulation’. Not only is the scope of the regulation limited as provided in Title II of Part two of the Treaty but its purpose is market research. It cannot therefore constitute an authority to settle the question in the present case.
In the same way the other regulations or Community measures cited in the order for a preliminary ruling relate to matters or concepts concerning only aspects of agricultural production and trade but not the nature of holdings considered from the angle of insurance contribution.
The Istituto then considers Community legislation on insurance and states that this legislation nowhere contemplates the classification of holdings for the purpose of contributions.
The Treaty is concerned only with encouraging the free movement of workers within the Community by aiming to guarantee that from the point of view of insurance all periods of work completed in the various Member States are taken into consideration and that insurance benefits are paid as provided for in such States.
It is no accident that Regulation (EEC) No 1408/71, which constitutes the Community legislative basis in social security, applies (Article 2) to workers and their survivors but does not concern employers, rules for whom are left entirely to national legislation.
In reliance on the case-law of the Court (judgment of 13 October 1976 in Case 37/76 Saieva [1976] ECR 1523, and judgment of 17 December 1975 in Case 93/75 Adlerblum [1975] ECR 2147) the Istituto contends that the Court has no jurisdiction to rule on a matter which falls exclusively within national law. A fortiori this must be the case where the ruling could only be effective within the confines of the legal system of the particular Member Sute.
The Istituto contends that the Court should:
1) Primarily declare that it has no jurisdiction where the determination of the character of a holding for the purpose of fixing the amount of the social security contributions does not depend on Community rules but on national law.
2) Alternatively, if it considers itself unable to decline jurisdiction, rule whether the principles laid down by the Treaty and by Community regulations in relation to agriculture apply also to the legislation of Member States in insurance matters.
Observations of the Italian Government
The Italian Government queries the practical importance of the question referred for a preliminary ruling on the interpretation of the provisions of Regulation No 70/66/EEC of the Council and Regulation No 91/66/EEC of the Commission and further queries what possible doubt there may be in the definitions contained in these provisions. It is difficult to understand how it is possible to conceive a general and absolute definition of agricultural holding from these provisions which are •contained in regulations adopted with the sole objective of statistical surveys and which contain definitions laid down expressly ‘for the purposes of this regulation’.
Nor can a ‘Community’ definition of agricultural holding be found in the provisions of the Treaty or, as the national court suggested, in the list contained in Annex II to the Treaty relating to agricultural products. In any event even accepting the possibility of inferring a common definition of agricultural holding from such particulars, this definition cannot be held to be relevant and binding if it is not expressly limited to the sector intended by the Community legislation, namely agriculture. The validity of this conclusion is obvious if it is considered that under the same legal system institutions and definitions may vary in scope and acceptance according to the branch of law for which each time they are being considered.
The Italian Government furthermore takes the view that it is not possible to hold that the fact of limiting the relevance of a Community definition of an agricultural holding, assuming this definition is accepted, to the agricultural sector does not lead to the adverse discrimination to which the last question raised by the national court makes reference.
In the first place there can be no question of the existence of discrimination from the point of view of Community law where as in the present case it is a question whether a particular class of nationals is subject to ‘more onerous’ charges under the general system of social security.
Further, ‘discrimination’ of the kind to which the national court seems to refer, on the basis of an erroneous view, and hence discrimination connected with a more or less onerous tax or social security contributions paid by the nationals of various Member States is not only inevitable here but also obviously compatible with the Community rules. The regulation of national taxation is reserved to the exclusive jurisdiction of each Member State and therefore the effective burden of charges affecting the nationals of the Community can properly vary according to their nationality.
It is therefore apparent that of the numerous questions raised in the reference for a preliminary ruling the only relevant one is that which asks whether any (possible) Community definition of agricultural holding is binding on the Member States as regards the national rules on social security in view of the fact that the answer to this question seems to cover and render superfluous any other possible questions.
Since it is the question of a sector which has not been transferred by the Treaty to the jurisdiction of the Community institutions it is not for the Court, especially in the absence of a directive seeking to harmonize national legislative provisions, to check and lay down whether these definitions must be adopted by the various authorities of each Member State when they issue particular rules in social security matters.
The specific and analytical rules contemplated in Regulations Nos 3 and 1408/71 of the Council are not the expression of independent Community rules but fulfil the requirement of pursuing the objective referred to in Article 51 of the Treaty. They therefore seek to ensure in the context of freedom of movement for workers of the Member States — and certainly not in the agricultural sector — the coordination of the various systems of social security for the purpose of ensuring the aggregation of periods of work and the payment of benefits to which the workers are entitled. And the many definitions to be found in these regulations relate, and are moreover restricted, to the rules provided for there and have no effect on the various systems of social security, which moreover differ inter se, adopted in the various Member States.
A fortiori, definitions (possibly) laid down for the purposes of the Common Agricultural Policy must not be allowed to govern national social security systems which are within the jurisdiction of the Member States.
On the basis of the above considerations and limiting its discussion in any event to the question put at the end of No 1 (b) of the order for reference, which covers and renders superfluous all the others, the Italian Government proposes that, if the Court does not declare the questions raised to be inadmissible as being obviously unnecessary, it should rule that it has no jurisdiction in view of the fact that the questions relate to rules of national law or alternatively that it should limit itself to declaring that the definitions which must be considered in applying the national systems of social security are determined by the provisions of national law.
Observations of the Commission
The Commission observes that the question raised relates essentially to the scope of the definitions of agricultural holding contained in the Community regulations mentioned in the order for reference; more particularly, are the definitions of a general nature applicable to the whole of the agricultural policy, including moreover social security, or on the contrary are they definitions with a specific and limited objective?
The Commission considers that a perusal of the regulations permits a clear answer to this question: agricultural holding is defined in Article 2 of Regulation No 70/66 ‘for the purposes of this regulation’. Moreover this regulation concerns ‘the organization of a basic survey as part of the programme of surveys on the structure of agricultural holdings’. The definition given there is binding on the Member States for the purpose of this statistical survey but not for other purposes.
This also applies to the definition in Regulation No 91/66/EEC of the Commission of 29 June 1966: this definition also concerns only the selection of returning holdings for the purpose of determining incomes for statistical purposes. Nevertheless this regulation adds a new class of agricultural holdings to that contemplated by Regulation No 70/66, namely ‘market-oriented agricultural holdings’. There is an almost identical definition, but again for statistical purposes, in Council Directive No 75/108/EEC of 20 January 1975 and in Council Regulation (EEC) No 3228/76 of 21 December 1976 on the organization of a survey on the structure of agricultural holdings.
The Commission observes that there are different definitions of agricultural holding in other Community measures even in the statistical sphere. By way of example it cites Article 2 of Council Regulation (EEC) No 1035/76 of 30 April 1976 relating to the organization of a survey on the earnings of permanent workers employed in agriculture (Official Journal L 118 of 5 May 1976).
In other instances Community law leaves it partly to the national legislatures to define who is to benefit from certain measures: this is the case for example with Article 3 (1) of Council Directive No 72/159/EEC of 17 April 1972 on the modernization of farms (Official Journal, English Special Edition 1972 (II) p. 324).
There is yet another definition for a specific purpose (grant of an allowance) in Article 6 of Council Directive No 75/268/EEC of 28 April 1975 on mountain and hill farming and farming in certain less-favoured areas (Official Journal L 128 of 19 May 1975, p. 1).
In view of the variety of the definitions of agricultural holdings and of farmers it does not seem possible to draw any inference from the provisions of the EEC Treaty to which the order refers (Article 38 and Annex II). These provisions define agricultural products or the purposes of the Common Agricultural Policy and are to this extent binding on Member States. It would however be quite arbitrary to seek to infer that a holding which produces such products must be regarded for all purposes, including for example bankruptcy, as an agricultural holding.
The conclusion which the Commission draws from this analysis, namely that there are several specific definitions of agricultural holding according to the objectives pursued by the Community rules, is supported in the Commission's view by the lack of any Community provision of a general nature relating to the conditions for belonging to systems of social security since the Member States are free to determine the criteria for belonging to the various systems. Moreover Article 51 of the Treaty in providing that measures should be adopted in the field of social security to provide freedom of movement for workers thus assumes that the various national systems will be maintained and simply coordinated.
In conclusion the Commission suggests that the Court should answer Questions 1 (a) and 1 (b) of the order for reference by the Tribunale di Roma as follows and that this answer will render the other questions superfluous:
‘The Community has not adopted a general definition of agricultural holding for all purposes; outside the cases expressly provided for by the Community rules, Member States remain free to treat a holding as an agricultural or an industrial undertaking.’
III — Oral procedure
At the hearing on 12 January 1978 oral observations were made by the Santa Anna company, represented by G. Ubertazzi and F. Capelli of the Milan Bar, the Istituto represented by A. Giallombardo and G. Romoli of the Bar at the Corte di Cassazione, Rome, and the Commission of the European Communities represented by its Agent, Mr Prozzillo.
The Advocate General delivered his opinion at the hearing on 31 January 1978.
Decision
1. By order of 19 May 1977 received at the Court on 5 July 1977 the Tribunale Civile di Roma made a reference for a preliminary ruling under Article 177 of the EEC Treaty on the interpretation of Article 38 (1), (3) and (4) of the EEC Treaty in relation to Annex II of the Treaty and of certain provisions of Regulation No 70/66/EEC of the Council of 14 June 1966 (Journal Officiel No 112, p. 2065) and Regulation No 91/66/EEC of the Commission of 29 June 1966 (Official Journal, English Special Edition 1965-1966, p. 112) and referred a number of questions on the definition of agricultural holding at a Community level and the possible consequences of this in the legal systems of the Member States.
2. It appears from the order for reference that the plaintiff company in the main action which carries on in Italy the business of raising poultry and laying hens brought an action in the national court against the Istituto della Previdenza Sociale (hereinafter referred to as ‘the Istituto’) for a declaration of its right to be classified for the purpose of social security contributions in respect of the labour it employs as an agricultural and not industrial undertaking and therefore to make payment only to the Servizio dei Contributi Agricoli Unificati of the above-mentioned contributions at the rates applicable to agricultural undertakings which it seems are less than those applicable to industrial undertakings and demanded of the plaintiff company by the Istituto.
3. First it is necessary to consider Question 1 (b) put by the national court which asks whether the Community has adopted a Community concept of an agricultural holding for the purposes of identifying holdings of this nature and whether the Member States are accordingly obliged to employ the concepts provided in the Treaty and the said regulations in order to identify the agricultural holdings to which the principles laid down at Community level and those evolved by the various national legal systems with regard to social security.
4. An answer in the negative to the first part of this question would render the other questions superfluous.
5. Article 38 (1) of the Treaty provides that ‘the Common Market shall extend to agriculture and trade in agricultural products’.
6. The article continues ‘“Agricultural products” means the products of the soil, of stockfarming and of fisheries and products of first-stage processing directly related to these products’, all of which are listed in Annex II of the Treaty.
7. Article 39 (2) of the Treaty provides that in working out the common agricultural policy and the special methods for its application, account shall be taken of the particular nature of agricultural activity, which results from the social structure of agriculture and from structural and natural disparities between the various agricultural regions.
8. On the other hand since the Treaty contains no precise definition of agriculture and still less of agricultural holding, it is for the Community institutions to work out, where appropriate, for the purposes of the rules deriving from the Treaty such a definition of agricultural holding.
9. Although the words ‘agricultural holding’ are used in various places in the Community rules, including the regulations referred to in the order for reference, adopted by the Council or in certain cases by the Commission, in the sphere of agriculture, the definition of these words is far from being uniform throughout these rules, which are in any case heterogeneous, but on the contrary varies according to the specific objectives pursued by the Community rules in question.
10. Even in the restricted area of statistics to which the regulations mentioned in the order for reference refer, the definitions of agricultural holding contained in the Community measures are not identical.
11. Thus by way of example Article 2 of Regulation No 70/66, on the organization of the basic survey as part of the programme of surveys into the structure of agricultural holdings states that ‘for the purposes of this regulation’ agricultural holding means a farm business situated within a limited geographical area, operated as a single unit, under a single management and producing products appearing on the list given in Annex I to that regulation.
12. Regulation No 91/66 concerning the selection of returning holdings for the purpose of determining incomes of agricultural holdings while adopting for the purposes of its application the above-mentioned definition adds a new class of agricultural holdings to those referred to in Regulation No 70/66, namely ‘market-oriented’ agricultural holdings.
13. On the other hand Article 2 of Council Regulation (EEC) No 1035/76 of 30 April 1976 relating to the organization of a survey on the earnings of permanent workers employed in agriculture (Official Journal L 118, p. 3) restricts the scope of the survey to all holdings which engage in activities as specified and defined under class'01 of the General Nomenclature of Economic Activities in the European Communities and consequently excludes first-stage processing industries considered for other purposes as agricultural activities.
14. It follows from the above that it is impossible to find in the provisions of the Treaty or in the rules of secondary Community law any general uniform Community definition of ‘agricultural holding’ universally applicable in all the provisions laid down by law and regulation relating to agricultural production.
15. Since in the absence of such a definition the above-mentioned question must be answered in the negative, it becomes unnecessary to answer the other questions put by the national court.
Costs
16. The costs incurred by the Government of the Italian Republic and the Commission of the European Communities which submitted observations to the Court are not recoverable.
17. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court.
On those grounds, THE COURT in answer to the questions submitted to it by the Tribunale Civile di Roma by order of 5 July 1977, hereby rules: