Federal Constitutional Court - Press office -

Press release no. 10/2009 of 3 February 2009

Judgment of 3 February 2009 – 2 BvL 54/06 –

Duties collected for the Agricultural Marketing Fund
incompatible with the Basic Law


The Agricultural Marketing Fund was established in 1969 pursuant to the
Agricultural Marketing Fund Act as an institution under public law for
the marketing of the German farming and food industry; for the exercise
of its functions, it avails itself of the German Agricultural Marketing
Board (Centrale Marketinggesellschaft der deutschen Agrarwirtschaft mbH
– CMA) and of the Central Market and Price Reporting Bureau for
Agricultural, Forestry and Food Products GmbH (Zentrale Markt- und
Preisberichtstelle für Erzeugnisse der Land-, Forst- und 
Ernährungswirtschaft GmbH – ZMP) (see German press release no. 75/2008
of 16 July 2008). The funding of these institutions is essentially
based on duties which are collected from certain farming and food
businesses. These duties collected pursuant to the Agricultural
Marketing Fund Act were the subject of a Federal Constitutional Court
ruling already in 1990 (Order of 31 May 1990, Decisions of the Federal
Constitutional Court (Entscheidungen des Bundesverfassungsgerichts –
BVerfGE) 82, 159). Under the conditions at that time, the Federal
Constitutional Court only regarded the Agricultural Marketing Fund Act
as unconstitutional to the extent that it included forestry businesses
in the group of those liable to make payment.

The Second Senate of the Federal Constitutional Court now decided that
the provisions of the Agricultural Marketing Fund Act on the levying of
duties have at any rate since 1 July 2002 been incompatible with the
Basic Law (Article 12 in conjunction with Article 105 and Article 110)
and are hence void. The duty is an impermissible special levy because a
responsibility of the German farming and food industry for providing
the funding of the state-organised marketing is missing.

In essence, the decision is based on the following considerations:

The duty collected pursuant to § 10 of the Agricultural Marketing Fund
Act is a special levy whose function is to provide funding; it is
subject to the strict permissibility requirements which constitutional
law places on such special levies. The duty collected pursuant to § 10
of the Agricultural Marketing Fund Act does not meet these
requirements. It is not a tax because it is not imposed as a shared
burden; instead, those liable to make payment are, as a defined group
of business enterprises, assigned a special responsibility for funding
due to their special proximity to the function for which funding is to
be provided. 

Pursuant to the Federal Constitutional Court’s established case-law,
special levies are subject to narrow boundaries; in contrast to taxes,
their imposition must remain a rare exception. The legislature may
avail itself to a levy only when pursuing an objective which goes
beyond mere fundraising. Only a homogeneous group which has a specific
relationship (factual proximity) to the objective which is pursued by
the collection of the duty and which can therefore be attributed a
special responsibility for funding can be considered as its addressee.
The yield from the duty must be used for the benefit of the group. In
the interest of democratic parliamentary legitimisation and control,
the legislature must in addition fully document pursuant to budgetary
law the special levies collected. 

According to these standards, the duty for the Agricultural Marketing
Fund is a constitutionally impermissible special levy because there is
no justifying connection between group homogeneity and factual
proximity on the one hand and a special responsibility of those liable
to make payment for providing the funding for the exercise of the
function on the other hand. 

This duty is not a special levy which takes up the idea of causation
when special burdens are attributed to those liable to make payment and
which finds its justification in a responsibility for the consequences
of group-specific circumstances or behaviour. Instead, it is a
promotion measure which is carried out compulsorily, the funding of
which is imposed on the group of those liable to make payment only for
reasons of a benefit which the legislature has intended for this group.
Here, the state actively intervenes in the economic system on the basis
of the Agricultural Marketing Fund Act through promotion measures which
it justifies by giving economic policy reasons; it assigns the need for
funding, which arises from these measures in the first place, to the
businesses that are burdened with the duty to make payment. From the
perspective of those liable to make payment, this financial burden
arising from the state’s exercising of functions that takes the place
of individual entrepreneurial activities as the result of a sovereign
decision appears not only as a special burden that must be paid in
addition to taxes and which requires justification, but also as a
curtailment of their entrepreneurial freedom, which is protected by
Article 12.1 of the Basic Law, and it requires specific justification
also in this respect. The freedom-restricting nature of the duty
becomes especially apparent as regards the advertisement campaigns for
agriculture-based products, which are the focus of activities pursued
under the Agricultural Marketing Fund Act, as the financial burden
which such advertisement campaigns constitute can also be regarded as a
curtailment of the enterprise’s own advertising budget.

Constitutionally permissible agricultural and food policy objectives
and possible positive effects of state advertising measures for a
specific branch of industry are not alone sufficient for establishing a
tangible benefit for the group which would justify funding by special
levies instead of tax funding. This also applies because no sufficient
indications exist for the assumption of an added value in case of
state-organised advertising as compared to privately organised
advertising. If a responsibility for providing funding on the part of
those liable to make payment can virtually exclusively be justified
with a view to the objective and the effect of state-organised
promotion measures for the burdened group, stricter requirements exist
as regards the use for the benefit of the group. There must be an
evident benefit for the group. It is true that this can be the case if
state-organised promotion measures are necessary for averting, or
compensating for, considerable impairments or special disadvantages,
for instance also those which arise in transnational competition. Such
a justification, which initially was essential for the Agricultural
Marketing Fund Act, has been missing at any rate since 2002, the year
under dispute in the original proceedings. 

Whilst the Federal Constitutional Court’s decision passed in 1990 could
still justifiably assume the existence of disadvantages in intra-
Community competition that had to be averted, the situation of the
German farming and food industry has since stabilised so markedly that
a necessity of averting considerable impairments of the competitiveness
of the German farming and food industry is now out of the question. 


This press release is also available in the original german version.