Zamestnik izpalnitelen direktor na Darzhaven fond 'Zemedelie' v IW (C-329/22)

Contents

Judgment of the Court (Tenth Chamber)7 December 2023^note(Reference for a preliminary ruling — Agriculture — European Agricultural Fund for Rural Development (EAFRD) funding — Regulation (EU) No 1305/2013 — Support for rural development — Article 29(3) — Organic farming — Financial support for organic in-conversion production — Concepts of initial period and conversion period — Regulation (EC) No 889/2008 — Organic beekeeping — Minimum conversion period — Article 38(3) — Regulation (EC) No 834/2007 — Article 17 — Conversion)In Case C‑329/22,REQUEST for a preliminary ruling under Article 267 TFEU from the Varhoven administrativen sad (Supreme Administrative Court, Bulgaria), made by decision of 27 April 2022, received at the Court on 17 May 2022, in the proceedingsZamestnik izpalnitelen direktor na Darzhaven fond ‘Zemedelie’vIW,THE COURT (Tenth Chamber),composed of Z. Csehi (Rapporteur), President of the Chamber, M. Ilešič and D. Gratsias, Judges,Advocate General: A.M. Collins,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:– the Zamestnik izpalnitelen direktor na Darzhaven fond ‘Zemedelie’, by I.B. Zareva,– IW, by D. Ormanov, advokat,– the European Commission, by G. Koleva 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 the second sentence of Article 29(3) of 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) and repealing Council Regulation (EC) No 1698/2005 (OJ 2013 L 347, p. 487), and of Article 36(1), Article 37(1) and Article 38 of Commission Regulation (EC) No 889/2008 of 5 September 2008 laying down detailed rules for the implementation of Council Regulation (EC) No 834/2007 on organic production and labelling of organic products with regard to organic production, labelling and control (OJ 2008 L 250, p. 1).

2The request has been made in proceedings between the Zamestnik izpalnitelen direktor na Darzhaven fond ‘Zemedelie’ (Deputy Executive Director of the State Fund For Agriculture, Bulgaria) (‘the Deputy Executive Director’) and IW, registered as a farmer, concerning the refusal of financial aid under Measure 11 ‘Organic Agriculture’ of the Bulgarian Rural Development Programme for the period 2014-2020 (‘the measure in question’), on the ground that IW, as an applicant for that aid, had not complied with the obligation not to exceed the minimum periods for conversion to organic farming.

Legal context

European Union law

Regulation (EC) No 834/2007

3Recital 25 of Council Regulation (EC) No 834/2007 of 28 June 2007 on organic production and labelling of organic products and repealing Regulation (EEC) No 2092/91 (OJ 2007 L 189, p. 1) states:‘It is … considered appropriate to limit the use of the EU-logo to products which contain only, or almost only, organic ingredients in order not to mislead consumers as to the organic nature of the entire product. It should therefore not be allowed to use it for the labelling of in-conversion products …’

4Entitled ‘Definitions’, Article 2 of that regulation provides:‘For the purposes of this Regulation, the following definitions shall apply:(a) “organic production” means the use of the production method compliant with the rules established in this Regulation, at all stages of production, preparation and distribution;…(f) “livestock production” means the production of domestic or domesticated terrestrial animals (including insects);…(h) “conversion” means the transition from non organic to organic farming within a given period of time, during which the provisions concerning the organic production have been applied;…’

5Entitled ‘Conversion’, Article 17 of that regulation states:1.The following rules shall apply to a farm on which organic production is started:(a) the conversion period shall start at the earliest when the operator has notified his activity to the competent authorities and subjected his holding to the control system in accordance with Article 28(1);(b) during the conversion period all rules established by this Regulation shall apply;(c) conversion periods specific to the type of crop or animal production shall be defined;…(f) animals and animal products produced during the conversion period referred to in subparagraph (c) shall not be marketed with the indications referred to in Articles 23 and 24 used in the labelling and advertising of products.…’

Regulation No 889/2008

6Recital 23 of Regulation No 889/2008 is worded as follows:‘The conversion to the organic production method requires certain periods of adaptation of all means in use. Depending on the previous farm production, specific time periods for the various production sectors should be laid down.’

7Entitled ‘Plant and plant products’, Article 36 of that regulation, which appears in Chapter 5, entitled ‘Conversion rules’, of Title II of that regulation, provides, in paragraph 1:‘For plants and plant products to be considered organic, the production rules as referred to in Articles 9, 10, 11 and 12 of Regulation [No 834/2007] and Chapter 1 of this Regulation and where applicable the exceptional production rules in Chapter 6 of this Regulation must have been applied on the parcels during a conversion period of at least two years before sowing, or, in the case of grassland or perennial forage, at least two years before its use as feed from organic farming, or, in the case of perennial crops other than forage, at least three years before the first harvest of organic products.’

8Entitled ‘Specific conversion rules for land associated with organic livestock production’, Article 37 of that regulation states, in paragraph 1:‘The conversion rules as referred to in Article 36 of this Regulation shall apply to the whole area of the production unit on which animal feed is produced.’

9Entitled ‘Livestock and livestock products’, Article 38 of the same regulation provides:1.Where non-organic livestock has been brought onto a holding in accordance with Article 14(1)(a)(ii) of Regulation [No 834/2007] and Article 9 and/or Article 42 of this Regulation and if livestock products are to be sold as organic products, the production rules as referred to in Articles 9, 10, 11 and 14 of Regulation [No 834/2007] and in Chapter 2 of Title II and where applicable in Article 42 of this Regulation must have been applied for at least:(a) 12 months in the case of equidae and bovines, including bubalus and bison species, for meat production, and in any case at least three quarters of their lifetime;(b) six months in the case of small ruminants and pigs and animals for milk production;(c) 10 weeks for poultry for meat production, brought in before they are three days old;(d) six weeks in the case of poultry for egg production.2. Where non-organic animals exist on a holding at the beginning of the conversion period in accordance with Article 14(1)(a)(iii) of Regulation [No 834/2007] their products may be deemed organic if there is simultaneous conversion of the complete production unit, including livestock, pasturage and/or any land used for animal feed. The total combined conversion period for both existing animals and their offspring, pasturage and/or any land used for animal feed, may be reduced to 24 months, if the animals are mainly fed with products from the production unit.3. Beekeeping products can be sold with references to the organic production method only when the organic production rules have been complied with for at least one year.4. The conversion period for apiaries does not apply in the case of application of Article 9(5) of this Regulation.5. During the conversion period the wax shall be replaced with wax coming from organic beekeeping.’

Regulation No 1305/2013

10Recital 23 of Regulation No 1305/2013 provides:‘Payments to farmers for the converting to, or maintaining, organic farming should encourage them to participate in such schemes thereby responding to the increasing demand of society for the use of environmentally friendly farm practices and for high standards of animal welfare. In order to increase synergy in biodiversity, benefits delivered by the organic by the organic farming measure … should be encouraged … In order to avoid a large-scale return by farmers to conventional farming support should be given to both conversion and maintenance measures. Payments should contribute to covering additional costs incurred and income foregone as a result of the commitment and should cover only commitments that go beyond relevant mandatory standards and requirements. Member States should also ensure that payments to farmers do not lead to double funding under this Regulation and 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 and repealing Council Regulation (EC) No 637/2008 and Council Regulation (EC) No 73/2009 (OJ 2013 L 347, p. 608)]. In order to ensure the effective use of [European Agricultural Fund for Rural Development (EAFRD)] resources, support should be limited to active farmers within the meaning of Article 9 of Regulation [No 1307/2013].’

11Entitled ‘Organic farming’, Article 29 of Regulation No 1305/2013 states:1. Support under this measure shall be granted, per hectare of agricultural area, to farmers or groups of farmers who undertake, on a voluntary basis, to convert to or maintain organic farming practices and methods as defined in Regulation [No 834/2007] and who are active farmers within the meaning of Article 9 of Regulation [No 1307/2013].…3. Commitments under this measure shall be made for a period of five to seven years. Where support is granted for conversion to organic farming Member States may determine a shorter initial period corresponding to the period of conversion. Where support is granted for the maintenance of organic farming, Member States may provide in their rural development programmes for annual extension after the termination of the initial period. For new commitments concerning maintenance that directly follow the commitment performed in the initial period, Member States may determine a shorter period in their rural development programmes.…’

Bulgarian law

12Article 11(5) of Naredba No 4 za prilagane na myarka 11 ‘Biologichno zemedelie’ ot Programata za razvitie na selskite rayoni za perioda 2014-2020 (Ordinance No 4 on the application of measure 11 ‘Organic farming’ of the Rural Development Programme 2014-2020) of 24 February 2015 (‘Ordinance No 4’) provides:(5) The supported persons shall receive payments under paragraph 1 for a period not exceeding the minimum periods for conversion to organic farming which are laid down in [Article] 36(1), [Article] 37(1) and [Article] 38 of Regulation [No 889/2008].’

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

13IW submitted an application for financial support for the year 2016, for the second consecutive year, under the ‘Organic farming’ aspect of the measure in question. That application concerned 150 bee colonies converted to organic beekeeping, the beehives being located in the village of Belitsa (Bulgaria).

14The Deputy Executive Director issued a notification letter under the measure in question for the year 2016, which, in essence, rejected that application.

15IW challenged that letter before the Administrativen sad Sliven (Administrative Court, Sliven, Bulgaria), which annulled that letter and referred the case back to the Deputy Executive Director for a new decision on IW’s application for financial support.

16Following a re-examination of that application, the Deputy Executive Director issued a second letter of notification in respect of the measure in question for the year 2016, by which, again, the Deputy Executive Director refused to grant the support requested (‘the second letter of notification’). That letter stated that, for the bee colonies declared in the application for support for 2016, under the measure in question, 2016 had to be regarded as the second year since IW’s last commitment in respect of the ‘Organic farming’ aspect, and that the obligation not to exceed the minimum conversion periods laid down, in essence, in Article 11(5) of Ordinance No 4 had not been complied with.

17IW brought an action against the second letter of notification before the Administrativen sad Sliven (Administrative Court, Sliven), which referred the case back to the Administrativen sad Haskovo (Administrative Court, Haskovo, Bulgaria).

18That court annulled that second letter of notification and referred the case back to the Deputy Executive Director for a new decision.

19The Deputy Executive Director brought an appeal in cassation against the judgment of the Administrativen sad Haskovo (Administrative Court, Haskovo) before the Varhoven administrativen sad (Supreme Administrative Court, Bulgaria), which is the referring court.

20The referring court has doubts as to the interpretation of the second sentence of Article 29(3) of Regulation No 1305/2013 and of Article 36(1), Article 37(1) and Article 38 of Regulation No 889/2008, which it considers necessary in order to resolve the case before it.

21In those circumstances, the Varhoven administrativen sad (Supreme Administrative Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:(1) Must the second sentence of Article 29(3) of Regulation [No 1305/2013] be interpreted as precluding a national provision such as Article 11(5) (formerly Article 11(4)) of [Ordinance No 4] under which the possibility of receiving financial support for organic production during conversion is limited to a period not exceeding the minimum conversion periods under Article 36(1), Article 37(1) and Article 38 of Regulation [No 889/2008]?(2) If the first question is answered in the affirmative, must the second sentence of Article 29(3) of Regulation [No 1305/2013] be interpreted as meaning that the Member States are authorised to lay down by statute a maximum period for the granting of support for conversion to organic farming on the sole basis of the type of production and not on the basis of the particularities of each individual case?(3) How must the phrase “may determine a shorter initial period corresponding to the period of conversion” ([second] sentence of Article 29(3) of Regulation [No 1305/2013]) be interpreted? Are the terms “initial period” and “period of conversion” used interchangeably or do they have different meanings?(4) Must the phrase “may determine a shorter initial period corresponding to the period of conversion” in the [second] sentence of Article 29(3) of Regulation [No 1305/2013] be interpreted as meaning that the entire “organic farming” measure applies to activities for “conversion” to organic farming for a period shorter than that referred to in the first sentence of Article 29(3) of that regulation, or must that phrase be interpreted as meaning that, within the framework of the overall commitment to “organic farming”, there is an initial period for activities during the conversion to organic farming?’

Consideration of the questions referred

22By its questions submitted for a preliminary ruling, the referring court requests the interpretation of several provisions of EU law, in particular Article 29(3) of Regulation No 1305/2013, and of Article 36(1), Article 37(1) and Article 38 of Regulation No 889/2008.

23As a preliminary point, it must be noted that, according to settled case-law, questions on the interpretation of EU law referred by a national court in the factual and legislative context which that court is responsible for defining, and the accuracy of which is not a matter for the Court to determine, enjoy a presumption of relevance (judgment of 26 March 2020, Miasto Łowicz and Prokurator Generalny, C‑558/18 and C‑563/18, EU:C:2020:234, paragraph 43 and the case-law cited).

24However, it has also been consistently held that the procedure provided for in Article 267 TFEU is an instrument of cooperation between the Court of Justice and the national courts, by means of which the Court provides the national courts with the points of interpretation of EU law which they need in order to decide the disputes before them. The justification for a reference for a preliminary ruling is not that it enables advisory opinions on general or hypothetical questions to be delivered but rather that it is necessary for the effective resolution of a dispute (judgment of 26 March 2020, Miasto Łowicz and Prokurator Generalny, C‑558/18 and C‑563/18, EU:C:2020:234, paragraph 44 and the case-law cited).

25As is apparent from the actual wording of Article 267 TFEU, the question referred for a preliminary ruling must be ‘necessary’ to enable the referring court to ‘give judgment’ in the case before it (judgment of 26 March 2020, Miasto Łowicz and Prokurator Generalny, C‑558/18 and C‑563/18, EU:C:2020:234, paragraph 45 and the case-law cited).

26It is clear that Article 36(1) and Article 37(1) of Regulation No 889/2008, as referred to in the first question referred for a preliminary ruling, concern the conversion rules relating, respectively, to plants and plant products and to land linked to organic livestock production. Thus, those provisions do not appear to be directly relevant for the purposes of resolving the dispute in the main proceedings, which concerns an application for financial aid for the conversion of beehives to organic beekeeping.

27Therefore, the first question referred for a preliminary ruling must be declared inadmissible in so far as it relates to Article 36(1) and Article 37(1) of Regulation No 889/2008.

28Article 38 of that regulation appears to be directly relevant for the purposes of resolving the dispute in the main proceedings, in so far as paragraph 3 thereof lays down the minimum conversion period for beekeeping products.

29Consequently, it must be held that, by its questions, which it is appropriate to examine together, the referring court asks, in essence, whether the second sentence of Article 29(3) of Regulation No 1305/2013 must be interpreted as meaning that, first, it does not preclude a national provision which limits the possibility of receiving financial support for the conversion of beehives to organic beekeeping to the minimum conversion period referred to in Article 38(3) of Regulation No 889/2008, secondly, Member States may set a maximum duration for the grant of support for conversion to organic farming, solely and exclusively on the basis of the type of production and not on the basis of the specific features of each individual case, and, thirdly, Member States may decide that conversion to organic farming may give rise to support for a period shorter than that of five to seven years provided for in the first sentence of Article 29(3) of Regulation No 1305/2013.

30According to settled case-law, in interpreting a provision of EU law, it is necessary to consider not only its wording but also the context in which it occurs and the objectives pursued by the rules of which it is part (judgment of 22 January 2020, Ursa Major Services, C‑814/18, EU:C:2020:27, paragraph 49 and the case-law cited).

31As regards the wording of the second sentence of Article 29(3) of Regulation No 1305/2013, it should be recalled that, according to that provision, ‘where support is granted for conversion to organic farming Member States may determine a shorter initial period corresponding to the period of conversion’.

32First of all, it must be observed that the concept of ‘conversion’ is defined in Article 2(h) of Regulation No 834/2007 as the transition from non organic to organic farming within a given period of time, during which the provisions concerning organic production have been applied.

33Entitled ‘Conversion’, Article 17 of Regulation No 834/2007 lays down the rules applying to holdings which commence organic production, stating, first, in paragraph 1(a), that the ‘conversion period’ is to start at the earliest when the operator has notified his or her activity to the competent authorities and subjected his or her holding to the control system in accordance with Article 28(1) of that regulation, and, secondly, in paragraph 1(b) of that article, that all the rules laid down by the same regulation are to apply during the conversion period.

34Under Article 17(1)(c) of that regulation, conversion periods specific to the type of crop or animal production are to be defined.

35It is apparent from Article 17(1)(f) of that regulation, read in conjunction with Articles 23 and 24 of the same regulation, that, during the conversion period, although the provisions on organic production methods apply, farmers are not authorised to market animals and animal products produced during that period by using terms in the labelling and advertising referring to organic production methods.

36Regulation No 889/2008, laying down detailed rules for the implementation of Regulation No 834/2007, defines, in Chapter 5, entitled ‘Conversion rules’, of Title II, specific conversion periods by type of crop or animal production.

37Article 38(3) of Regulation No 889/2008, which appears in Chapter 5, provides that ‘beekeeping products can be sold with references to the organic production method only when the organic production rules have been complied with for at least one year’.

38It is clear from the wording of that provision that the harmonised conversion period provided for therein is a minimum period before the expiry of which beekeeping products cannot be sold with a reference to organic production. The specific case in which that obligation to comply with a minimum conversion period may not be applied is laid down in Article 38(4) of that regulation.

39Next, as regards the expression ‘initial period’ in the second sentence of Article 29(3) of Regulation No 1305/2013, it should be noted that, although it is used several times in that regulation, it is not defined therein. Nor is it defined in Regulation No 834/2007 or in Regulation No 889/2008. Therefore, it must be interpreted taking into account its usual meaning and the context in which it is generally used (see, by analogy, judgments of 16 July 2009, Horvath, C‑428/07, EU:C:2009:458, paragraph 34, and of 27 February 2014, van der Ham and van der Ham-Reijersen van Buuren, C‑396/12, EU:C:2014:98, paragraph 32).

40In that regard, the expression ‘initial period’ usually refers to a starting period. The first sentence of Article 29(3) of Regulation No 1305/2013 provides that ‘commitments under this measure shall be made for a period of five to seven years’. However, the second sentence of that provision provides that, when granting aid for conversion to organic farming, Member States ‘may’ determine a ‘shorter initial period corresponding to the period of conversion’.

41It must therefore be held that, in the light of the context of the second sentence of Article 29(3) of Regulation No 1305/2013, the concept of ‘initial period’ refers to a period during which farmers make commitments under that provision and which may be shorter than the period of five to seven years referred to in the first sentence of that paragraph.

42Those commitments are, according to Article 29(1) of Regulation No 1305/2013, voluntary commitments entered into by farmers or groups of farmers in order to obtain the aid granted under the ‘organic farming’ measure. These are commitments to maintain or adopt organic farming practices and methods as defined in Regulation No 834/2007.

43It follows that the concepts of ‘initial period’ and of ‘conversion period’ in the second sentence of Article 29(3) of Regulation No 1305/2013 do not have the same meaning, since the ‘initial period’ refers to the first commitment made by the beneficiary of support granted under that provision, whereas the second concept is defined in Article 17 of Regulation No 834/2007.

44It should also be borne in mind that the Member States implement Regulation No 1305/2013 through their rural development support programmes and that that regulation leaves it open to them to adopt a set of measures to meet the EU priorities for rural development. Each Member State must thereby establish a national rural development programme covering all its territory, a series of regional programmes or both a national programme and a series of regional programmes, which implement a strategy to meet the European Union’s priorities for rural development. It follows that Regulation No 1305/2013 allows the Member States a margin of discretion as to the arrangements for implementing the aid for which it provides. That margin of discretion may concern putting national rural development programmes in place and the implementation of the limitations in that regulation (see judgment of 1 December 2022, DELID, C‑409/21, EU:C:2022:946, paragraphs 25 to 27 and 29 and the case-law cited).

45Consequently, it must be held that, in the light of the wording and context of the second sentence of Article 29(3) of Regulation No 1305/2013, if commitments relating to the maintenance or voluntary adoption of organic farming practices and methods are made for a period of five to seven years, Member States have the option, where support is granted for conversion to organic farming, to determine an initial period, during which that commitment is given, which is shorter, provided that they align it with the relevant conversion period rationae materiae, as harmonised by Regulation No 889/2008. The present case concerns the minimum one-year conversion period laid down for conversion to organic beekeeping under Article 38(3) of Regulation No 889/2008.

46It follows from the foregoing that the Member States may provide that the applicable minimum conversion period, as harmonised and laid down by Regulation No 889/2008, coincides, on their territory, with a maximum period for the grant of financial support for conversion to organic farming.

47As regards the question, in essence, whether the conversion periods can be determined solely on the basis of the type of production and not on the basis of each individual case, it is sufficient to point out that the Member State must comply with Article 17(1)(c) of Regulation No 834/2007, according to which specific conversion periods are defined by type of crop or animal production, and with Regulation No 889/2008 laying down detailed rules for the implementation of Regulation No 834/2007, which defines those specific conversion periods by type of crop or animal production, in Chapter 5 of Title II of that regulation. It is apparent from Article 38(3) of Regulation No 889/2008 that there is a specific conversion period for beekeeping products.

48It should be recalled that those regulations are binding in their entirety and directly applicable in all Member States. A Member State cannot therefore set different conversion periods for the harmonised conversion periods as provided for in Regulation No 889/2008.

49The foregoing considerations are borne out by the objectives of the legislation of which the second sentence of Article 29(3) of Regulation No 1305/2013 forms part.

50According to recital 23 of that regulation, in order to avoid a large-scale return by farmers to conventional farming, support should be given to both conversion to organic farming measures and to maintenance of organic farming measures. Furthermore, payments should contribute to covering additional costs incurred and income foregone as a result of the commitment and should cover only commitments that go beyond relevant mandatory standards and requirements. Finally, Member States should also ensure that payments to farmers do not lead to double funding under Regulation No 1305/2013 and Regulation No 1307/2013.

51In the light of all the foregoing considerations, the answer to the questions raised is that the second sentence of Article 29(3) of Regulation No 1305/2013 must be interpreted as meaning that:– it does not preclude a national provision which limits the possibility of receiving financial support for conversion to organic beekeeping to the minimum conversion period referred to in Article 38(3) of Regulation No 889/2008;– in that way, Member States may set a maximum duration for the grant of support for conversion to organic farming, by aligning themselves with the specific conversion period which, in accordance with Article 17(1)(c) of Regulation No 834/2007, is defined by EU legislation solely on the basis of the type of crop or animal production;– Member States may thus decide that conversion to organic farming may give rise to support for a period shorter than that of five to seven years provided for in the first sentence of Article 29(3) of Regulation No 1305/2013.

Costs

52Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring 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 (Tenth Chamber) hereby rules: The second sentence of Article 29(3) of 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) and repealing Council Regulation (EC) No 1698/2005must be interpreted as meaning that:– it does not preclude a national provision which limits the possibility of receiving financial support for conversion to organic beekeeping to the minimum conversion period referred to in Article 38(3) of Commission Regulation (EC) No 889/2008 of 5 September 2008 laying down detailed rules for the implementation of Council Regulation (EC) No 834/2007 on organic production and labelling of organic products with regard to organic production, labelling and control;– in that way, Member States may set a maximum duration for the grant of support for conversion to organic farming, by aligning themselves with the specific conversion period which, in accordance with Article 17(1)(c) of Council Regulation (EC) No 834/2007 of 28 June 2007 on organic production and labelling of organic products and repealing Regulation (EEC) No 2092/91, is defined by EU legislation solely on the basis of the type of crop or animal production;– Member States may thus decide that conversion to organic farming may give rise to support for a period shorter than that of five to seven years provided for in the first sentence of Article 29(3) of Regulation No 1305/2013.