Opinion of Advocate General Rantos delivered on 2 September 2021.

• Jurisdiction: European Union
• ECLI: ECLI:EU:C:2021:685
• Date: 02 September 2021
• Celex Number: 62020CC0176
• Court: Court of Justice (European Union)

Provisional text

OPINION OF ADVOCATE GENERAL

RANTOS

delivered on 2 September 2021 (1)

Case C‑176/20

SC Avio Lucos SRL

v

Agenţia de Plăţi şi Intervenţie pentru Agricultură – Centrul judeţean Dolj,

Agenţia de Plăţi şi Intervenţie pentru Agricultură (APIA) – Aparat Central

(Request for a preliminary ruling from the Curtea de Apel Alba Iulia (Court of Appeal, Alba Iulia, Romania))

(Reference for a preliminary ruling – Agriculture – Common agricultural policy (CAP) – Direct support schemes – Common rules – Single area payment scheme – Regulation (EU) No 1307/2013 – Article 4(1)(a) and (c) – National legislation making direct support conditional on the farmer keeping his own animals – Article 9(1) – Concept of ‘active farmer’ – Regulation (EU) No 1306/2013 – Article 60 – Circumvention clause – Concept of ‘artificially created conditions’)

I. Introduction

1. This request for a preliminary ruling concerns the interpretation, first, of Article 4(1)(a) and (c) and of Article 9(1) of Regulation (EU) No 1307/2013, (2) which establishes rules for direct payments to farmers under support schemes within the framework of the common agricultural policy (‘the CAP’), and, second, of Article 60 of Regulation (EU) No 1306/2013 (3) on the financing, management and monitoring of the CAP.

2. The request has been made in proceedings between, on the one hand, SC Avio Lucos SRL (‘Avio Lucos’) and, on the other hand, the Agenția de Plăți și Intervenție pentru Agricultură – Centrul județean Dolj (Agency for payments and measures for agriculture – Dolj District Centre, Romania, ‘the APIA, Dolj’) and the Agenția de Plăți și Intervenție pentru Agricultură (APIA) – Aparat Central (Agency for payments and measures for agriculture, Romania, ‘the APIA’) concerning an application for annulment of a decision of the APIA, Dolj, rejecting Avio Lucos’ application for payment under the single area payment scheme for the 2015 marketing year.

3. Although the Court has already had the opportunity to interpret the two abovementioned regulations, (4) inter alia in the context of disputes involving the APIA, (5) this case relates to unresolved questions concerning the interpretation of the EU legislation on direct support measures under the CAP. More specifically, the present case, which is being dealt with in coordination with Case C‑116/20, (6)Avio Lucos, asks the Court, in essence, to clarify to what extent EU law, and in particular Regulation No 1307/2013, precludes national legislation adopted in the context of the single area payment scheme which provides, as a condition of eligibility for payments, that the grazing activities carried out on certain agricultural areas must be undertaken by animals reared by the farmer himself, thus preventing the grant of financial support to a person (natural or legal) who carries out such activities through an intermediary. In that context, the referring court also seeks to obtain clarifications on the concept of an ‘active farmer’, contained in that regulation, and on the circumvention clause provided for in Article 60 of Regulation No 1306/2013.

II. Legal context

A. EU law

1. Regulation No 1306/2013

4. Article 60 of Regulation No 1306/2013, which is entitled ‘Circumvention clause’, provides:

‘Without prejudice to specific provisions, no advantage provided for under sectoral agricultural legislation shall be granted in favour of a natural or legal person in respect of whom it is established that the conditions required for obtaining such advantages were created artificially, contrary to the objectives of that legislation.’

2. Regulation No 1307/2013

5. Recitals 3, 7 and 10 of Regulation No 1307/2013 state:

‘(3) All the basic elements pertaining to the payment of Union support to farmers should be included in this Regulation, which should also fix the conditions of access to payments which are inextricably linked to those basic elements.

…

(7) In order to ensure legal certainty, the power to adopt certain acts should be delegated to the Commission in respect of establishing the framework within which Member States are to define … the minimum activities to be carried out on areas naturally kept in a state suitable for grazing or cultivation …

…

(10) Experience acquired in the application of the various support schemes for farmers has shown that support was in a number of cases granted to natural or legal persons whose business purpose was not, or was only marginally targeted at an agricultural activity. To ensure that support is better targeted, Member States should refrain from granting direct payments to certain natural and legal persons unless such persons can demonstrate that their agricultural activity is not marginal. Member States should also have the possibility of not granting direct payments to other natural or legal persons whose agricultural activity is marginal. However, Member States should be allowed to grant direct payments to smaller part-time farmers, since those farmers contribute directly to the vitality of rural areas. Member States should also refrain from granting direct payments to natural or legal persons whose agricultural areas are mainly areas naturally kept in a state suitable for grazing or cultivation and who do not carry out a certain minimum activity.’

6. Article 4 of that regulation, which is entitled ‘Definitions and related provisions’, provides:

‘1. For the purposes of this Regulation, the following definitions shall apply:

(a) “farmer” means a natural or legal person, or a group of natural or legal persons, regardless of the legal status granted to such group and its members by national law, whose holding is situated within the territorial scope of the Treaties, as defined in Article 52 TEU in conjunction with Articles 349 and 355 TFEU, and who exercises an agricultural activity;

(b) “holding” means all the units used for agricultural activities and managed by a farmer situated within the territory of the same Member State;

(c) “agricultural activity” means:

(i) production, rearing or growing of agricultural products, including harvesting, milking, breeding animals, and keeping animals for farming purposes,

(ii) maintaining an agricultural area in a state which makes it suitable for grazing or cultivation without preparatory action going beyond usual agricultural methods and machineries, based on criteria established by Member States on the basis of a framework established by the Commission, or

(iii) carrying out a minimum activity, defined by Member States, on agricultural areas naturally kept in a state suitable for grazing or cultivation;

…

2. Member States shall:

…

(b) where applicable in a Member State, define the minimum activity to be carried out on agricultural areas naturally kept in a state suitable for grazing or cultivation, as referred to in point (c)(iii) of paragraph 1;

…

3. In order to ensure legal certainty, the Commission shall be empowered to adopt delegated acts in accordance with Article 70 establishing:

…

(b) the framework within which Member States shall define the minimum activity to be carried out on agricultural areas naturally kept in a state suitable for grazing or cultivation, as referred to in point (c)(iii) of paragraph 1;

…’

7. Article 9 of the Regulation, which is entitled ‘Active farmer’, provides, in paragraphs 1 to 3:

‘1. No direct payments shall be granted to natural or legal persons, or to groups of natural or legal persons, whose agricultural areas are mainly areas naturally kept in a state suitable for grazing or cultivation and who do not carry out on those areas the minimum activity defined by Member States in accordance with point (b) of Article 4(2).

2. No direct payments shall be granted to natural or legal persons, or to groups of natural or legal persons, who operate airports, railway services, waterworks, real estate services, permanent sport and recreational grounds.

Where appropriate, Member States may, on the basis of objective and non-discriminatory criteria, decide to add to the list in the first subparagraph any other similar non-agricultural businesses or activities, and may subsequently decide to withdraw any such additions.

A person or group of persons falling within the scope of the first or second subparagraph shall, however, be regarded as an active farmer if it provides verifiable evidence, in the form that is required by Member States, which demonstrates any of the following:

(a) that the annual amount of direct payments is at least 5% of the total receipts that it obtained from non-agricultural activities in the most recent fiscal year for which such evidence is available;

(b) that its agricultural activities are not insignificant;

(c) that its principal business or company objects consist of exercising an agricultural activity.

3. In addition to paragraphs 1 and 2, Member States may decide, on the basis of objective and non-discriminatory criteria, that no direct payments are to be granted to natural or legal persons, or to groups of natural or legal persons:

(a) whose agricultural activities form only an insignificant part of their overall economic activities; and/or

(b) whose principal activity or company objects do not consist of exercising an agricultural activity.

…’

8. Under Article 74 of Regulation No 1307/2013, that regulation became applicable on 1 January 2015.

3. Delegated Regulation No 639/2014

9. Recitals 4, 6, 10 and 16 of Delegated Regulation (EU) No 639/2014 (7) state:

‘(4) In line with the case-law of the Court of Justice of the European Union …, it is appropriate to clarify that Member States, when adopting measures to implement Union law, should exercise their discretion in compliance with certain principles, including in particular the principle of non-discrimination.

…

(6) In accordance with Article 4(1)(c) of Regulation [No 1307/2013], an “agricultural activity” does not require production, rearing or growing of agricultural products. Farmers may instead...