Case C‑135/13

Szatmári Malom Kft.

v

Mezőgazdasági és Vidékfejlesztési Hivatal Központi Szerve

(Request for a preliminary ruling from the Kúria)

‛Agriculture — EAFRD — Regulation (EC) No 1698/2005 — Articles 20, 26 and 28 — Support for the modernisation of agricultural holdings and support for adding value to agricultural and forestry products — Eligibility conditions — Competence of the Member States — Support for the modernisation of existing mill capacity — Mills replaced with a single new mill, with no increase in capacity — Not included — Principle of equal treatment’

Summary — Judgment of the Court (Ninth Chamber), 15 May 2014

Agriculture — Common agricultural policy — Financing by the EAFRD — Support for rural development — National legislation providing for support for adding value to agricultural products in the context of operations seeking to modernise existing mill capacity — Lawfulness — Obligation to observe the principle of equal treatment — Determination by the national court

Agriculture — Common agricultural policy — Financing by the EAFRD — Support for rural development — Improvement in the overall performance of the enterprise — Meaning — Closure of old mills and their replacement with a new mill without an increase in existing capacity — Included

Agriculture — Common agricultural policy — Financing by the EAFRD — Support for rural development — Improvement in the overall performance of the agricultural holding — Meaning — Closure of old mills and their replacement with a new mill without an increase in existing capacity — Not included

See the text of the decision. (see paras 31, 32)

Article 26(1)(a) of Regulation No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) must be interpreted as meaning that the concept of improvement in the overall performance of the agricultural holding, as referred to in that provision, cannot cover an operation whereby an undertaking whose business is the operation of mills closes old mills in order to replace them with a new mill, but with no increase in existing capacity. In fact, it follows from the distinction between, on the one hand, measures taken to modernise agricultural holdings by better use of production facilities, referred to in recital 21 and in Article 26 of that regulation, and, on the other, measures taken to add value to agricultural products, referred to in recital 23 and in Article 28 of that regulation, that the term agricultural holdings should be understood as referring to a holding that is engaged in the production of primary agricultural products. Therefore, an undertaking which does not produce primary agricultural products, but operates mills in which it processes such products, does not constitute an agricultural holding for the purposes of that provision. (see paras 33, 35-39, 41, operative part 1)

Articles 20(b)(iii) and 28(1)(a) of Regulation No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) must be interpreted as meaning that an operation consisting in the closure of old mills and their replacement with a new mill, but with no increase in existing capacity, may improve the overall performance of the enterprise for the purposes of the latter provision since it meets the objective of improving the processing of primary agricultural products by supporting investments intended to improve efficiency in the processing sector, in order to add value to agricultural products and in that way to contribute to the attainment of the objective of that regulation, which is to improve the competitiveness of the agricultural sector. (see paras 46, 48, operative part 2)

See the text of the decision. (see paras 54, 55, 60)

See the text of the decision. (see para. 65)

See the text of the decision. (see paras 66, 67)

See the text of the decision. (see para. 70)