1 BY ORDER OF 9 DECEMBER 1976 , WHICH REACHED THE COURT ON 17 MARCH 1977 , THE CORTE SUPREMA DI CASSAZIONE OF ITALY HAS REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY TWO QUESTIONS CONCERNING THE INTERPRETATION OF THE EXPRESSION ' PRODUCERS OF OLIVE OIL ' , CONTAINED IN CERTAIN PROVISIONS OF REGULATION NO 136/66/EEC OF THE COUNCIL OF 22 SEPTEMBER 1966 ON THE ESTABLISHMENT OF A COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS ( OJ , ENGLISH SPECIAL EDITION 1965-1966 , P . 221 ) AND OF REGULATION NO 754/67/EEC OF THE COUNCIL OF 26 OCTOBER 1967 ON OLIVE-OIL SUBSIDIES ( JO NO 260 OF 27 . 10 . 1967 , P . 2 ).
2 THE FIRST QUESTION REFERRED BY THE NATIONAL COURT IS WHETHER THE EXPRESSION ' PRODUCERS OF OLIVE OIL ' IS EQUIVALENT TO THE EXPRESSION ' OLIVE PRODUCERS ' FOR THE PURPOSES OF REGULATIONS NOS 136/66 AND 754/67 .
3 BY ITS SECOND QUESTION IT ASKS WHETHER A PERSON WHO , HAVING ACQUIRED OLIVES ON THE TREE WHICH ARE ALREADY RIPE , HAS THEM HARVESTED AND EXTRACTS THE OIL FROM THEM , IS ALSO A PRODUCER OF OLIVE OIL .
4 THE COURT ' S FILE SHOWS THAT THOSE QUESTIONS HAVE BEEN REFERRED IN THE CONTEXT OF PROCEEDINGS BETWEEN THE MANAGER OF AN OIL PRODUCING UNDERTAKING , THE RESPONDENT IN THE MAIN ACTION , WHO TOOK A LEASE DURING THE 1967/68 OIL MARKETING YEAR OF CERTAIN OLIVE GROVES WHERE THE OLIVES HAD ALREADY RIPENED AND WHO PRODUCED OLIVE OIL FROM THE OLIVES WHICH HE HARVESTED HIMSELF , AND THE AZIENDA DI STATO PER GLI INTERVENTI SUL MERCATO AGRICOLO ( AIMA ), THE ITALIAN INTERVENTION AGENCY , THE APPELLANT IN THE MAIN ACTION WHICH , IN RELIANCE ON NATIONAL LEGISLATIVE PROVISIONS PROVIDING , INTER ALIA , FOR PAYMENT OF THE SUBSIDY TO PRODUCERS OF OLIVES , REFUSED TO GRANT THE RESPONDENT THE SUBSIDY PROVIDED FOR BY ARTICLE 10 OF REGULATION NO 136/66 ON THE GROUND THAT HE WAS NOT THE PRODUCER OF THE OLIVES .
5 THE QUESTION TO BE DETERMINED BY THE NATIONAL COURT IS WHO IS ENTITLED TO THE SUBSIDY PROVIDED FOR BY THOSE RULES PURSUANT TO THE RELEVANT COMMUNITY PROVISIONS .
6 SINCE THE MAIN ACTION IS CONCERNED WITH THE 1967/68 OIL MARKETING YEAR IT IS APPROPRIATE TO CONSIDER THE PROVISIONS IN FORCE AT THAT TIME , NAMELY THE BASIC REGULATION NO 136/66 AND REGULATION NO 754/67 .
7 REGULATION NO 136/66 ESTABLISHED A COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS AND APPLIES , INTER ALIA , TO OIL SEEDS AND OLEAGINOUS FRUIT ( INCLUDING OLIVES ) AND THEIR OILS .
8 THE FOURTH RECITAL OF ITS PREAMBLE STATES THAT ' OLIVE GROWING AND OLIVE-OIL PRODUCTION ARE OF SPECIAL ECONOMIC IMPORTANCE IN CERTAIN REGIONS OF THE COMMUNITY . . . ' .
9 THE FIFTH RECITAL OF THE PREAMBLE TO THE REGULATION INDICATES THAT THE LEVEL OF INCOME REGARDED AS BEING FAIR FOR COMMUNITY PRODUCERS MAY BE ' DETERMINED BY A PRODUCTION TARGET PRICE IN THE CASE OF OLIVE OIL AND BY A TARGET PRICE IN THE CASE OF OIL SEEDS ' .
10 AS THE COUNCIL EXPRESSLY REFERRED TO ' OLIVE GROWING AND OLIVE-OIL PRODUCTION ' AND DECLARED THAT IT INTENDED TO INTRODUCE A REGULATORY SYSTEM FOR INCOMES BASED ON THE PROCESSED PRODUCT CONSTITUTED BY OLIVE OIL - IN COMPLETE CONTRAST , MOREOVER , TO THE SYSTEM PROPOSED FOR OLEAGINOUS FRUIT , WHICH IS CENTRED ON THE BASIC PRODUCT - IT DREW A CLEAR DISTINCTION BETWEEN TWO ECONOMIC ACTIVITIES .
11 THAT DISTINCTION IS NOT AFFECTED BY THE FACT , WHICH HAS BEEN ACCEPTED BY THE APPELLANT IN THE MAIN ACTION AS WELL AS BY THE COMMISSION , THAT WHEN THE REGULATION ENTERED INTO FORCE OLIVE OIL WAS IN THE ORDINARY COURSE PRODUCED BY THE OLIVE GROWER OR ON HIS BEHALF .
12 FURTHERMORE , THAT DISTINCTION HAS BEEN CONFIRMED BY THE EUROPEAN PARLIAMENT WHICH , IN ITS OPINION ON A DRAFT REGULATION ON THE COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS ( JO NO 119 OF 3 . 7 . 1965 , P . 2040/65 ), PROPOSED THAT THE REGULATION BE SUPPLEMENTED BY A PROVISION ALLOWING OLIVE PRODUCERS AND PROCESSORS TO ENTER INTO SPECIAL AGREEMENTS FOR THE PURPOSE OF ENSURING THAT OLIVE GROWERS BENEFIT FROM THE SUBSIDY - A PROPOSAL WHICH THE COUNCIL DID NOT ACCEPT .
13 UNDER THE SYSTEM INTRODUCED BY THE ORGANIZATION OF THE MARKET ESTABLISHED BY THE REGULATION THE INCOME CONSIDERED TO BE FAIR FOR PRODUCERS OF OLIVE OIL IS TO BE EARNED PARTLY ON THE MARKET AND PARTLY BY MEANS OF A SUBSIDY EQUIVALENT TO THE DIFFERENCE BETWEEN THE PRODUCTION TARGET PRICE , BEING THE PRICE WHICH ENSURES THAT FAIR INCOME , AND THE MARKET TARGET PRICE , WHICH IS THE PRICE PERMITTING NORMAL MARKETING TO BE CARRIED OUT .
14 SINCE THE MARKET TARGET PRICE OF OLIVE OIL CANNOT ACHIEVE ITS OBJECTIVE UNLESS THE PRICE ACTUALLY RULING ON THE MARKET IS AS CLOSE AS POSSIBLE TO THE MARKET PRICE , THE REGULATION PROVIDES FOR STABILIZING MACHINERY IN THE FORM OF INTERVENTION ON THE DOMESTIC MARKET AND OF A LEVY ON IMPORTS FROM THIRD COUNTRIES .
15 THE SUBSIDY REFERRED TO ABOVE IS PROVIDED FOR IN ARTICLE 10 ( 1 ) OF REGULATION NO 136/66 WHICH READS :
' WHERE THE PRODUCTION TARGET PRICE IS HIGHER THAN THE MARKET TARGET PRICE RULING AT THE BEGINNING OF THE MARKETING YEAR , A SUBSIDY EQUAL TO THE DIFFERENCE BETWEEN THESE TWO PRICES SHALL BE GRANTED TO PRODUCERS OF OLIVE OIL EXTRACTED WITHIN THE COMMUNITY FROM OLIVES HARVESTED WITHIN THE COMMUNITY . . . ' .
16 ARTICLE 10 ( 2 ) THEREOF PROVIDES THAT THE PRINCIPLES GOVERNING THE GRANT OF THE SUBSIDY PROVIDED FOR IN PARAGRAPH ( 1 ) SHALL BE DEFINED BY THE COUNCIL ACTING IN ACCORDANCE WITH THE VOTING PROCEDURE LAID DOWN IN ARTICLE 43 OF THE TREATY AND THAT ACTING IN ACCORDANCE WITH THE SAME PROCEDURE , THE COUNCIL SHALL ADOPT MEASURES TO ENSURE THAT OLIVE-OIL PRODUCERS RECEIVE THIS SUBSIDY ONLY IN RESPECT OF OILS WHICH MEET THE CONDITIONS SET OUT IN PARAGRAPH ( 1 ).
17 ACCORDING TO THOSE PROVISIONS , WHICH REFER TO THE END PRODUCT , NAMELY OLIVE OIL , AND WHICH ARE FURTHER CORROBORATED BY THE ABOVEMENTIONED CLEAR DISTINCTION BETWEEN OLIVE PRODUCERS AND PROCESSORS , THE EXPRESSION ' PRODUCERS OF OLIVE OIL ' CAN ONLY BE INTERPRETED AS REFERRING TO THOSE PERSONS WHO EXTRACT THE OLIVE OIL AND IT IS THEREFORE THE PRODUCERS OF THE PROCESSED PRODUCT WHO ARE ENTITLED TO THE SUBSIDY .
18 THIS FINDING IS CONFIRMED BY THE WORDING OF REGULATION NO 754/67 ON OLIVE-OIL SUBSIDIES WHICH WAS ADOPTED PURSUANT TO ARTICLE 10 ( 2 ) OF REGULATION NO 136/66 .
19 INDEED , THAT REGULATION PROVIDES , AT ARTICLE 1 , THAT ' THE SUBSIDY SHALL BE GRANTED FOR OLIVE OIL ' AND , AT ARTICLE 3 , THAT ' WHILE AWAITING THE ESTABLISHMENT OF A COMMUNITY CONTROL SYSTEM EACH PRODUCER MEMBER STATE SHALL INTRODUCE AN ADMINISTRATIVE CONTROL SYSTEM TO ENSURE THAT THE PRODUCT REFERRED TO IN ARTICLE 1 QUALIFIES FOR THE SUBSIDY ' .
20 FURTHERMORE , THE RECITALS OF THE PREAMBLE TO THE SAID REGULATION STATE , INTER ALIA , THAT THE PRINCIPLES ACCORDING TO WHICH THE SUBSIDY IS GRANTED TO OLIVE-OIL PRODUCERS MUST BE DEFINED AND THAT MEASURES MUST BE ADOPTED WHICH ARE TO ENSURE THAT THAT SUBSIDY IS GRANTED ONLY FOR OLIVE OIL WHICH IS PRODUCED WITHIN THE COMMUNITY FROM OLIVES HARVESTED IN THE COMMUNITY , AND THEY STIPULATE THAT IT IS APPROPRIATE TO RESTRICT THE GRANT OF SUBSIDIES TO THE QUANTITIES OF OIL TO WHICH THE APPLICATIONS MADE IN THE OIL PRODUCING AREAS REFER .
21 SINCE REGULATION NO 754/67 PROVIDES THAT THE SUBSIDY SHALL BE GRANTED IN RESPECT OF OLIVE OIL IT DRAWS THE SAME DISTINCTION BETWEEN THE BASIC PRODUCT AND THE PROCESSED PRODUCT AS DOES THE BASIC REGULATION .
22 IT IS CLEAR FROM THE FOREGOING THAT THE ANSWER TO THE FIRST QUESTION MUST BE THAT THE EXPRESSION ' PRODUCERS OF OLIVE OIL ' WITHIN THE MEANING OF ARTICLE 10 OF REGULATION NO 136/66 AND OF REGULATION NO 754/67 MUST BE INTERPRETED AS REFERRING TO PRODUCERS OF THE PROCESSED PRODUCT , NAMELY OLIVE OIL , AND THE OLIVE OIL SUBSIDY FOR THE 1967/68 OIL MARKETING YEAR MUST THEREFORE BE GRANTED TO THOSE PRODUCERS .
23 CONSEQUENTLY THE SECOND QUESTION IS NO LONGER RELEVANT .
COSTS
24 THE COSTS INCURRED BY THE GOVERNMENT OF THE ITALIAN REPUBLIC AND THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE .
25 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 REFERRED TO IT BY THE CORTE SUPREMA DI CASSAZIONE OF ITALY BY ORDER OF 9 DECEMBER 1976 , HEREBY RULES :
THE EXPRESSION ' PRODUCERS OF OLIVE OIL ' WITHIN THE MEANING OF ARTICLE 10 OF REGULATION NO 136/66 ON THE ESTABLISHMENT OF A COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS AND OF REGULATION NO 754/67 ON OLIVE-OIL SUBSIDIES MUST BE INTERPRETED AS REFERRING TO PRODUCERS OF THE PROCESSED PRODUCT , NAMELY OLIVE OIL , AND THE OLIVE-OIL SUBSIDY FOR THE 1967/68 OIL MARKETING YEAR MUST THEREFORE BE GRANTED TO THOSE PRODUCERS .
