Case C‑684/13

Johannes Demmer

v

Fødevareministeriets Klagecenter

(Request for a preliminary ruling from the Vestre Landsret)

‛References for a preliminary ruling — Agriculture — Common agricultural policy — Single payment scheme — Regulation (EC) No 1782/2003 — Article 44(2) –Regulation (EC) No 73/2009 — Article 34(2)(a) — Concept of ‘eligible hectare’ — Areas surrounding runways, taxiways and stopways — Agricultural use — Lawfulness — Recovery of agricultural aid unduly allocated’

Summary — Judgment of the Court (First Chamber), 2 July 2015

Agriculture — Common agricultural policy — Direct support schemes — Common rules — Single payment scheme — Recovery of aid unduly allocated — No obligation to repay in the case of aid paid following an error by the competent authority which could not have been detected by the farmer — Concept of error which could have been detected — Criteria for assessment

Agriculture — Common agricultural policy — Direct support schemes — Common rules — Single payment scheme — Recovery of aid unduly allocated — Entitlements allocated on the basis of an application by the farmer containing errors which could reasonably have been detected by the farmer — Obligation to give up those entitlements to the national reserve

Article 44(2) of Regulation No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and Article 34(2)(a) of Regulation 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 an agricultural area made up of airfield safety areas surrounding runways, taxiways and stopways which are subject to specific rules and restrictions is an area eligible for the aid concerned, provided that: (i) the farmer using that area enjoys a sufficient degree of autonomy with regard to its use for the purposes of his or her agricultural activity; and (ii) the farmer is able to carry out the agricultural activity on that area despite restrictions arising from the pursuance of a non-agricultural activity on those same areas. With regard to the restrictions applicable to the freedom to use an area, as long as those restrictions do not hamper the farmer concerned from pursuing his agricultural activities on the areas used, which it is for the referring court to assess, there are no grounds for considering that those areas do not form part of his holding. Although the concept of management does not imply that the farmer has unlimited power over the area in question when using it for agricultural purposes, he is nevertheless not fully subject to the instructions of the lessor. Thus, the farmer must, inter alia, have a certain amount of discretion in the conduct of his agricultural activities on the areas in question and not only follow the lessor’s instructions in that regard, which it is also for the referring court to assess, having regard to the overall circumstances of the dispute. (see paras 59-62, 73, operative part 1)

In order to be eligible for aid under Article 44(2) of Regulation No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and Article 34(2)(a) of Regulation No 73/2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers, the agricultural areas must be used for used for agricultural activities or, where they are used as well for non-agricultural activities, predominantly used for agricultural activities. Should the areas in question have been used both for agricultural activities and non-agricultural activities, under Article 3c of Regulation No 795/2004 laying down detailed rules for the implementation of the single payment scheme provided for in Regulation No 1782/2003, those areas will fall to be considered as having been used predominantly for agricultural activities for the purposes of Article 34(2)(a) of Regulation No 73/2009, if the agricultural activity in question has been able to be exercised without being significantly hampered by the intensity, nature, duration or timing of the non-agricultural activity. In that assessment, account must be taken of the overall set of facts linked to the various uses to which the areas in question have been put. The agricultural activity in question can be regarded as having been significantly hampered on the areas in question when the farmer meets with actual — and not inconsequential — difficulties or obstacles due to the simultaneous pursuit of another type of activity. (see paras 63, 69, 70)

Although Article 73a of Regulation No 796/2004 laying down detailed rules for the implementation of cross-compliance, modulation and the integrated administration and control system provided for in Regulation No 1782/2003, as amended by Regulation No 2184/2005, provides that payment entitlements granted to farmers under Article 43 thereof must be given up to the national reserve, Article 137(1) of Regulation No 73/2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers nevertheless provides that payment entitlements unduly allocated before 1 January 2009 are to be deemed legal and regular as from 1 January 2010. Article 137(2) of that regulation provides that Article 137(1) is not to apply to payment entitlements allocated on the basis of factually incorrect applications except in cases where the error could not reasonably have been detected by the farmer. Thus, since the rationale for Article 137 of Regulation No 73/2009 is the principle of the protection of legitimate expectations, a farmer who was informed prior to 1 January 2010 that payment entitlements were allocated to him or her unduly may not rely on that article for the purpose of having those entitlements regularised. (see paras 76, 78, 94, operative part 2)

Pursuant to Article 73(4) of Regulation No 796/2004 laying down detailed rules for the implementation of cross-compliance, modulation and the integrated administration and control system provided for in Regulation No 1782/2003, as amended by Regulation No 2184/2005, a farmer is not, as a rule, required to repay aid unduly paid to him if the payment was made by error of the competent authority or of another authority and if the error could not reasonably have been detected by the farmer. In order to determine whether such an error could have been detected, it must be remembered that farmers, in their professional capacity, are supposed to exercise particular care in applying for aid and are supposed to be aware of the conditions of its allocation. A farmer ought reasonably to have detected as ineligible for aid areas in respect of whose use he or she has no discretion for the purpose of carrying out his or her agricultural activity and/or on which he or she is unable to carry out agricultural activity due to restrictions arising from the pursuance of a non-agricultural activity on those same areas. In order to assess whether an error behind the payment of the aid could reasonably have been detected by the farmer concerned, the relevant moment is the time of the payment of the aid. Moreover, since the aid is paid for a single year at a time and since the circumstances relevant for determining whether the areas concerned are eligible for aid may vary over the course of time, the assessment under Article 73(4) must be conducted separately for each of the years concerned. (see paras 81, 84, 89, 90, 94, operative part 2)