A.M. v Dyrektor Z. Oddziału Regionalnego Agencji Restrukturyzacji i Modernizacji Rolnictwa (C-373/20)

Contents

Judgment of the Court (Seventh Chamber)14 October 2021^note(Reference for a preliminary ruling — Agriculture — Common agricultural policy — Common rules — Single payment scheme — Regulation (EC) No 1120/2009 — Article 2(c) — Concept of permanent pasture — Crop rotation — Natural periodic flooding of meadows and pastures situated in a special environmental protection area)In Case C‑373/20,REQUEST for a preliminary ruling under Article 267 TFEU from the Wojewódzki Sąd Administracyjny w Szczecinie (Regional Administrative Court, Szczecin, Poland), made by decision of 18 June 2020, received at the Court on 6 August 2020, in the proceedingsA.M.vDyrektor Z. Oddziału Regionalnego Agencji Restrukturyzacji i Modernizacji Rolnictwa,THE COURT (Seventh Chamber),composed of I. Ziemele (Rapporteur), President of the Sixth Chamber, acting as President of the Seventh Chamber, P.G. Xuereb and A. Kumin, Judges,Advocate General: E. Tanchev,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:– A.M., by himself,– Dyrektor Z. Oddziału Regionalnego Agencji Restrukturyzacji i Modernizacji Rolnictwa, by J. Goc-Celuch, radca prawny,– the Polish Government, by B. Majczyna, acting as Agent,– the European Commission, by M. Kaduczak and A. Sauka, acting as Agents,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following

Judgment

1This request for a preliminary ruling concerns the interpretation of Article 2(c) of Commission Regulation (EC) No 1120/2009 of 29 October 2009 laying down detailed rules for the implementation of the single payment scheme provided for in Title III of Council Regulation (EC) No 73/2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers (OJ 2009 L 316, p. 1).

2The request has been made in proceedings between A.M., a farmer, and Dyrektor Z. Oddziału Regionalnego Agencji Restrukturyzacji i Modernizacji Rolnictwa (Director of the Regional Office of the Agency for Restructuring and Modernisation of Agriculture), concerning the latter’s decision to refuse to grant A.M. certain agri-environmental payments and to order him to reimburse sums already paid in that regard, on the ground that that farmer had practised crop rotation as a result of the flooding or submersion of land classified as ‘permanent pasture’, within the meaning of Article 2(c) of Regulation No 1120/2009.

Legal context

EU law

Regulation No 1698/2005

3Article 50a of Council Regulation (EC) No 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) (OJ 2005 L 277, p. 1), as amended by Council Regulation (EC) No 74/2009 of 19 January 2009 (OJ 2009 L 30, p. 100) (‘Regulation No 1698/2005’), entitled ‘Main requirements’, provided in paragraph 1:‘A beneficiary receiving payments under Article 36(a)(i) to (v) and Article 36(b)(i), (iv) and (v) shall respect, on the whole holding, the statutory management requirements and the good agricultural and environmental condition provided for in Articles 5 and 6 of, and in Annexes II and III to, [Council] Regulation (EC) No 73/2009 [of 19 January 2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers, amending Regulations (EC) No 1290/2005, (EC) No 247/2006, (EC) No 378/2007 and repealing Regulation (EC) No 1782/2003 (OJ 2009 L 30, p. 16)].’

4Regulation No 1698/2005 was repealed by Regulation (EU) No 1305/2013 of the European Parliament and of the Council of 17 December 2013 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) (OJ 2013 L 347, p. 487).

Regulation No 73/2009

5Recital 7 of Regulation No 73/2009 stated:‘[Council] Regulation (EC) No 1782/2003 [of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and amending Regulations (EEC) No 2019/93, (EC) No 1452/2001, (EC) No 1453/2001, (EC) No 1454/2001, (EC) 1868/94, (EC) No 1251/1999, (EC) No 1254/1999, (EC) No 1673/2000, (EEC) No 2358/71 and (EC) No 2529/2001 (OJ 2003 L 270, p. 1)] recognised the positive environmental effect of permanent pasture. The measures in that Regulation aimed at encouraging the maintenance of existing permanent pasture to ensure against mass conversion to arable land should be maintained.’

6Articles 4 to 6 of Regulation No 73/2009 were included in Chapter 1, entitled ‘Cross compliance’, of Title II thereof, entitled ‘General provisions on direct payments’, and related to the requirements to be complied with by any farmer receiving direct payments.

7Annex II to Regulation No 73/2009, entitled ‘Statutory management requirements referred to in Articles 4 and 5’, mentioned in particular Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (OJ 1992 L 206, p. 7).

8Annex III to that regulation, entitled ‘Good agricultural and environmental condition referred to in Article 6’, provided, inter alia, with regard to the minimum level of maintenance, that it was necessary to retain landscape features, including, where appropriate, hedges, ponds, ditches, trees in line, in group or isolated, and field margins.

9Regulation No 73/2009 was repealed by Regulation (EU) No 1307/2013 of the European Parliament and of the Council of 17 December 2013 establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy (OJ 2013 L 347, p. 608).

Regulation No 1120/2009

10Article 2 of Regulation No 1120/2009, entitled ‘Definitions’, provided:‘For the purposes of Title III of Regulation [No 73/2009] and of this Regulation, the following definitions shall apply:…(c) “permanent pasture” means land used to grow grasses or other herbaceous forage naturally (self-seeded) or through cultivation (sown) and that has not been included in the crop rotation of the holding for five years or longer, excluding areas set aside …; and to this end, “grasses or other herbaceous forage” means all herbaceous plants traditionally found in natural pastures or normally included in mixtures of seeds for pastures or meadows in the Member State (whether or not used for grazing animals). Member States may include arable crops listed in Annex I;…’

11Regulation No 1120/2009 was repealed by Commission Delegated Regulation (EU) No 639/2014 of 11 March 2014 supplementing Regulation No 1307/2013 and amending Annex X to that Regulation (OJ 2014 L 181, p. 1).

Polish law

12Article 5 of the Ustawa o wspieraniu rozwoju obszarów wiejskich z udziałem środków Europejskiego Funduszu Rolnego na rzecz Rozwoju Obszarów Wiejskich w ramach Programu Rozwoju Obszarów Wiejskich na lata 2007-2013 (Law of 7 March 2007 on support for rural development involving funds provided by the European Agricultural Fund for Rural Development under the 2007-2013 Rural Development Programme) provides:1.The programme shall be implemented on Polish territory and shall comprise the following measures:…(14) an agri-environmental programme;…’

13Article 18a of that law provides:‘Where the grant of aid is subject to the cross-compliance rules and criteria referred to in Regulation [No 73/2009] …, and in the provisions of EU law adopted pursuant to that regulation, “rules and criteria” shall mean those defined in the provisions on payments under direct support schemes.’

14Article 1 of the Rozporządzenie Ministra Rolnictwa i Rozwoju Wsi w sprawie szczegółowych warunków i trybu przyznawania pomocy finansowej w ramach działania „Program rolnośrodowiskowy” objętego Programem Rozwoju Obszarów Wiejskich na lata 2007-2013 (Regulations of the Minister for Agriculture and Rural Development of 13 March 2013 concerning the detailed rules and procedure for the grant of financial aid within the framework of the ‘Agri-Environmental Programme’ included in the 2007-2013 Rural Development Programme) (‘the agri-environmental regulations’), is worded as follows:‘The present regulations lay down the detailed rules and procedures for the granting, payment and reimbursement of financial aid (“agri-environmental payment”), awarded pursuant to the measure “Agri-Environmental Programme” included in the 2007-2013 Rural Development Programme (“the programme”), and in particular:…(5) the manner of assessing the importance of non-compliance referred to in Article 54(1)(c) of [Commission] Regulation (EC) No 1122/2009 [of 30 November 2009 laying down detailed rules for the implementation of Regulation No 73/2009 as regards cross-compliance, modulation and the integrated administration and control system, under the direct support schemes for farmers provided for [by] that Regulation, as well as for the implementation of Council Regulation (EC) No 1234/2007 as regards cross-compliance under the support scheme provided for the wine sector (OJ 2009 L 316, p. 65)], …, where the minimum requirements for the use of fertilisers and plant protection products are not complied with;(6) the percentage reduction of the agri-environmental payment on the basis of the assessment of the importance of the non-compliance found, as well as cases of non-compliance considered minor, as referred to in Article 24(2) of Regulation [No 73/2009];…’

15Article 2 of the agri-environmental regulations is worded as follows:1.A farmer, within the meaning of Article 2(a) of Regulation No 73/2009 (‘the farmer’), shall be granted an agri-environmental payment, if:…(3) he or she implements a five-year agri-environmental commitment, provided for in Article 39 of Regulation [No 1698/2005] (“the agri-environmental commitment”) which includes requirements going beyond the basic requirements, in the framework of specific packages and their variants, in accordance with the agri-environmental action plan;…’

16Article 4 of the agri-environmental regulations provides:1.The agri-environmental commitment shall be implemented in the framework of one or more of the following packages:…(2) Package 2. Organic farming;(3) Package 3. Extensive permanent pasture;…2.A farmer who implements an agri-environmental commitment:(1) maintains on the agricultural holding permanent pasture – within the meaning of Article 2(c) of Regulation [No 1120/2009] (“permanent pasture”) – existing on that holding and identified in the agri-environmental activity plan, as well as the features of the agricultural landscape not used for agricultural purposes which constitute refuges for wild fauna, existing on that holding and identified in that plan;…’

17Article 38(6) of the agri-environmental regulations provide:‘If the farmer has not maintained any permanent pasture or any agricultural landscape feature not used for agricultural purposes existing on the holding and identified in the agri-environmental activity plan, within the meaning of Article 4(2)(1), the agri-environmental payment shall be due to that farmer up to an amount reduced by 20% in the year in which that breach was found.’

18Annex 3 to the agri-environmental regulations, entitled ‘Requirements in respect of individual packages and their variants’, includes the following details:‘…II. Package 2. Organic farming…(2) in the case of simultaneous implementation on the same agricultural land:Package 3. Extensive permanent pasture – mowing within an appropriate period set out in Part III.…III. Package 3. Extensive permanent pasture.…2. Additional requirements for the package in the case of mowing of permanent pasture:…’

19Article 3(1) of the Rozporządzenie nr 14/2005 Wojewody Zachodniopomorskiego w sprawie Ińskiego Parku Krajobrazowego (regulations No 14/2005 of the Governor of West Pomerania Province of 27 July 2005 concerning Ińsko Landscape Park) provides:‘The following prohibitions shall apply to the park:…(8) the filling, in-filling and transformation of bodies of water and wetlands;…’

20Article 2(1) of the Rozporządzenie nr 36/2005 Wojewody Zachodniopomorskiego w sprawie planu ochrony Ińskiego Parku Krajobrazowego (regulations No 36/2005 of the Governor of West Pomerania Province of 10 November 2005 concerning the Ińsko Landscape Park protection plan) (‘regulations No 36/2005’) provides:‘The protection of the park is intended to preserve, disseminate and promote its natural, historical and cultural assets and its landscape features in conditions of sustainable development, and in particular:…(3) to conserve the populations of rare and protected species of mushrooms, plants and animals as well as their habitats, in particular wild birds and their habitats in the Natura 2000 special protection area for birds Ostoja Ińska PLB 320008;…2.The objectives referred to in paragraph 1 shall be achieved by:(1) conservation and, in the case of unmaintained or damaged natural features, restoration:…(c) of forest stands situated in fields, at the roadside and alongside water, as well as of ponds located in fields or forests,…’

21Article 3(1) of regulations No 36/2005 is worded as follows:‘The following natural conditions are to be identified for the purposes of implementing the park’s protection objectives:…(4) the park is crossed by the watershed between the Rega river basin and Ina river basin, and almost the entire area of the park is situated in the catchment area of the Ina river;…(6) the park hosts natural habitats listed in 14 categories of Annex I to Directive [92/43];…’

22Article 4 of regulations No 36/2005 provides:‘The identification and definition of the means of eliminating or reducing existing and potential internal and external threats, as well as their effects, are set out in the table below:…“Means of eliminating or reducing threats and their effects”:…13– Implementation of agri-environmental programmes and of the code of good agricultural practice … Protection of forest stands situated in fields, ponds and other natural uncultivated land. Creation or extension of ‘buffer’ areas nearby:bodies of water of at least 20 m in width…21 – Exclusion of new flood protection installations used exclusively for drainage purposes. Improvement of water retention by slowing down the flow of water by using thresholds limiting water flow, abandonment of the maintenance of drainage ditches, … blocking of the flow of water promoted by drainage devices on uncultivated land in fields (ponds, peat bogs and wetlands).’

The dispute in the main proceedings and the question referred for a preliminary ruling

23In 2009, A.M., a farmer, began to implement a five-year agri-environmental commitment for the period 2009 to 2013 in the framework of package 2 (organic farming) and package 3 (extensive permanent pasture) of Annex 2 to the agri-environmental regulations. During the period 2009 to 2011 that farmer received, on that basis, payments for the surface areas declared.

24In 2012, the first-instance administrative authority, on the basis of the application of the farmer – who had reduced the declared surface areas for the purposes of payment due to long-standing flooding and submersion of those areas which had made it impossible to mow the meadows and pastures within the required timeframes – granted him a reduced payment.

25In 2013, the reference year in the dispute in the main proceedings, A.M. submitted an application for agri-environmental payments, declaring, in the framework of the above packages, areas identical to those declared during the period 2009 to 2011; he argued that the reduction of the area declared in 2012 cannot affect the area declared in 2013, since, first, the flooding and submersion concerned was not his fault and, secondly, he had mown the meadows and pastures at a date later than that prescribed. That mowing was carried out in October 2012, which was confirmed by the inspection by the first-instance administrative authority on 15 October 2012.

26However, the first-instance administrative authority took the view, in the sixth decision on the facts giving rise to the dispute in the main proceedings, that, as regards the surface area which had been subject to flooding and submersion, the continued use of the land as permanent pasture had been interrupted. It also considered that even if it was possible to restore that land to agricultural production within a relatively short period, it could not, however, be regarded as permanent pasture, since A.M. had practised crop rotation as a result of the flooding or submersion of the land classified as permanent pasture.

27Following unsuccessful appeals brought before the second-instance administrative authority, A.M. brought an action before the referring court, the Wojewódzki Sąd Administracyjny w Szczecinie (Regional Administrative Court, Szczecin, Poland), pleading, inter alia, infringement of Article 2(c) of Regulation No 1120/2009.

28The referring court notes that the question whether permanent pasture loses its characteristics and purpose when it is subject to crop rotation, as interpreted by the national authorities, that is to say when it is subject to flooding or submersion, is not without uncertainty.

29In those circumstances the Wojewódzki Sąd Administracyjny w Szczecinie (Regional Administrative Court, Szczecin) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:‘Is the national authorities’ interpretation of the definition of “permanent pasture” – set out in Article 2(c) of [Regulation No 1120/2009] – as meaning that the natural periodic flooding or submersion of meadows and pastures situated in a special environmental protection area (Natura 2000 Area; Ińsko Landscape Park) makes those areas of land subject to “crop rotation”, resulting in an interruption of the period of five years (or more) of not being subject to that “crop rotation”, with the result that it also constitutes a ground for withdrawing or reducing agri-environmental payments to the farmer, as well as further financial consequences connected with the interruption of the continuity of the five-year period for the implementation of an agri-environmental programme, correct?’

Consideration of the question referred

30By its question, the referring court asks, in essence, whether Article 2(c) of Regulation No 1120/2009 must be interpreted as meaning that meadows or pasture situated in a special protection area and which are subject to natural periodic flooding or submersion are excluded from the concept of ‘permanent pasture’, within the meaning of that provision, on the ground that such flooding or submersion causes a ‘crop rotation’ on the land concerned, within the meaning of that same provision.

31Under Article 2(c) of Regulation No 1120/2009, ‘permanent pasture’ means ‘land used to grow grasses or other herbaceous forage naturally (self-seeded) or through cultivation (sown) and that has not been included in the crop rotation of the holding for five years or longer, excluding areas set aside’.

32As is apparent from the wording of that definition, two conditions must be fulfilled in order for land to fall within the concept of ‘permanent pasture’ within the meaning of that provision: first, the land must be used to grow herbaceous forage and, secondly, it must not have been included in the crop rotation for at least five years.

33In the present case, as regards the first condition, it is common ground that the land concerned is used to grow herbaceous forage and that, therefore, that condition is fulfilled.

34As regards the second condition, the referring court seeks to ascertain whether it is possible to consider that a crop rotation is brought about by natural periodic flooding or submersion of meadows and pasture situated in a special protection area. If that were to be the case, it would have to be found that those meadows and pasture are excluded from the concept of ‘permanent pasture’, referred to in Article 2(c) of Regulation No 1120/2009.

35It should be noted that the concept of ‘crop rotation’ is not defined either in Regulation No 1120/2009, which lays down the detailed rules for the implementation of the single payment scheme provided for in Title III of Regulation No 73/2009, or in Regulation No 73/2009.

36According to settled case-law, in interpreting a provision of EU law, it is necessary to consider not only its wording, by considering the latter’s usual meaning in everyday language, but also the context in which the provision occurs and the objectives pursued by the rules of which it is part (see, to that effect, judgments of 24 June 2010, Pontini and Others, C‑375/08, EU:C:2010:365, paragraph 58, and of 29 July 2019, Pelham and Others, C‑476/17, EU:C:2019:624, paragraph 28 and the case-law cited).

37In the first place, as regards the wording of Article 2(c) of Regulation No 1120/2009, it should be noted that the concept of ‘crop rotation’, in its usual meaning, designates an agricultural practice whereby various crops are grown in succession on the same parcel of land over a certain period in order to maintain soil fertility and to reduce the effects caused by harmful organisms.

38It cannot be considered that natural periodic flooding or submersion of meadows and pasture, a fortiori when they are, as the referring court points out, of limited duration, can be regarded as such an ‘agricultural practice’, since they are independent of the will of the farmer concerned and are the result of natural periodic phenomena, which are often unforeseeable. In addition, such phenomena do not lead to a succession of different ‘crops’ on the same parcel of land, since the concept of ‘crop’ itself implies, in its usual meaning, the action of cultivating the land for the purpose of producing plants.

39In that regard, the Court has moreover held, in the judgment of 2 October 2014, Grund (C‑47/13, EU:C:2014:2248, paragraph 33), that ‘crop rotation’, within the meaning of Article 2(c) of Regulation No 1120/2009, takes place only where a crop other than herbaceous forage is grown.

40As the Court also pointed out in that judgment, what is important for the classification as ‘permanent pasture’ within the meaning of Article 2(c) of Regulation No 1120/2009 is the actual use of the land in question. By contrast, the change of variety of grass or even the technical procedure used, such as ploughing up or scarification with overseeding, are, like the type of vegetation covering the agricultural area concerned, irrelevant for the purposes of that classification (see, to that effect, judgments of 2 October 2014, Grund, C‑47/13, EU:C:2014:2248, paragraph 35, and of 30 April 2020, Greece v Commission (Permanent pasture), C‑797/18 P, EU:C:2020:340, paragraph 63 and the case-law cited).

41As the Polish Government and the European Commission note, in essence, natural periodic flooding or submersion of land in a special protection area does not in itself affect the classification of the land concerned as permanent pasture within the meaning of that provision. Although such phenomena are liable to affect the time of mowing, they do not alter the use of that land or cause a ‘crop rotation’ within the meaning of Article 2(c) of Regulation No 1120/2009. In particular, they do not in any way entail the production, by any technical procedure, of any ‘other crop’.

42In the second place, such an interpretation is borne out by the objectives pursued by the legislation concerned, and by its context.

43In that regard, first, recital 7 of Regulation No 73/2009 states that, due to the positive environmental effect of permanent pasture, measures aimed at encouraging the maintenance of existing permanent pasture to ensure against mass conversion to arable land should be adopted (see also, to that effect, judgments of 2 October 2014, Grund, C‑47/13, EU:C:2014:2248, paragraph 36, and of 9 June 2016, Planes Bresco, C‑333/15 and C‑334/15, EU:C:2016:426, paragraph 45).

44To exclude such land from the classification as ‘permanent pasture’, within the meaning of Article 2(c) of Regulation No 1120/2009, solely on the ground that it periodically undergoes natural flooding or submersion would run counter to the objective of such maintenance (see, by analogy, judgment of 2 October 2014, Grund, C‑47/13, EU:C:2014:2248, paragraph 38).

45Secondly, the Court has held that environmental protection, one of the essential objectives of the European Union, must be regarded as forming part of the common agricultural policy and, more specifically, that it forms part of the objectives of the single payment scheme (judgment of 9 June 2016, Planes Bresco, C‑333/15 and C‑334/15, EU:C:2016:426, paragraph 46 and the case-law cited).

46In that context, the referring court pointed out that the meadows and pasture concerned are located in a special protection area (Natura 2000 site; Ińsko landscape park; natural habitats listed in 14 categories of Annex I to Directive 92/43). It follows that, as the Polish Government states, the land concerned is, therefore, subject to a series of restrictions arising from regulatory requirements.

47In the present case, those restrictions included the restrictions laid down in Article 50a(1) of Regulation No 1698/2005, under which a beneficiary receiving, inter alia, ‘Natura 2000’ payments must respect, on the whole holding, certain statutory management requirements and the good agricultural and environmental condition referred to, inter alia, in Annexes II and III to Regulation No 73/2009. In that regard, while Annex II to Regulation No 73/2009 laid down, as regards the statutory management requirements referred to in Articles 4 and 5 of that regulation, the obligation to comply with the requirements of Directive 92/43, Annex III to Regulation No 73/2009, relating to the good agricultural and environmental condition referred to in Article 6 of that regulation, required the retention of landscape features, including, where appropriate, hedges, ponds, ditches, trees in line, in group or isolated, and field margins.

48Such requirements also arise from regulations No 36/2005 of the West Pomerania Province on the protection plan for the Ińsko landscape park, which excludes new flood protection installations used exclusively for drainage purposes and provides, in particular, for the improvement of water retention, the abandonment of the maintenance of drainage ditches or the blocking of water flow.

49An interpretation of the concept of ‘crop rotation’, such as that advocated by the Director of the Regional Office of the Agency for Restructuring and Modernisation of Agriculture, so as to encompass natural periodic flooding or submersion of land in a special protection area – thereby excluding the land concerned from the concept of ‘permanent pasture’ and thus depriving farmers of direct payments even though they have complied with the applicable environmental requirements laid down by regulation – would run counter to the objective set out in paragraph 45 above, and could dissuade those farmers from using land in a special protection area as permanent pasture, even though the sites concerned host several types of natural habitat listed in Annex I to Directive 92/43, which make it possible to maintain populations of species of wild fauna and flora.

50In the light of all the foregoing considerations, the answer to the question referred is that Article 2(c) of Regulation No 1120/2009 must be interpreted as meaning that meadows or pasture situated in a special protection area and which are subject to natural periodic flooding or submersion are not excluded from the concept of ‘permanent pasture’, within the meaning of that provision, since such flooding or submersion cannot, in themselves, cause a ‘crop rotation’ on the land concerned, within the meaning of that same provision.

Costs

51Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

Operative part

On those grounds, the Court (Seventh Chamber) hereby rules: Article 2(c) of Commission Regulation (EC) No 1120/2009 of 29 October 2009 laying down detailed rules for the implementation of the single payment scheme provided for in Title III of Council Regulation (EC) No 73/2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers must be interpreted as meaning that meadows or pasture situated in a special protection area and which are subject to natural periodic flooding or submersion are not excluded from the concept of ‘permanent pasture’, within the meaning of that provision, since such flooding or submersion cannot, in themselves, cause a ‘crop rotation’ on the land concerned, within the meaning of that same provision.