Provisional text

JUDGMENT OF THE COURT (Seventh Chamber)

1 December 2022 ( )

(Reference for a preliminary ruling – Common agricultural policy (CAP) – European Agricultural Fund for Rural Development (EAFRD) funding – Regulation (EU) No 1305/2013 – Investment support – National legislation making the grant of the support conditional upon the person applying for support submitting a certificate of registration of a livestock facility in that person’s name and showing that, on the date of submission of the application, the output of that person’s agricultural holding is equivalent to at least EUR 8 000)

In Case C‑409/21,

REQUEST for a preliminary ruling under Article 267 TFEU from the Varhoven administrativen sad (Supreme Administrative Court, Bulgaria), made by decision of 14 June 2021, received at the Court on 2 July 2021, in the proceedings

DELID EOOD

v

Izpalnitelen direktor na Darzhaven fond ‘Zemedelie’,

THE COURT (Seventh Chamber),

composed of M.L. Arastey Sahún (Rapporteur), President of the Chamber, F. Biltgen and J. Passer, Judges,

Advocate General: G. Pitruzzella,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

– DELID EOOD, by T. Zlateva, advokat,

– the Izpalnitelen direktor na Darzhaven fond ‘Zemedelie’, by G. Sabev, advokat,

– the Bulgarian Government, by M. Georgieva and L. Zaharieva, acting as Agents,

– 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

1 This request for a preliminary ruling concerns the interpretation of Article 17 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 corrigendum OJ 2016 L 130, p. 1), as amended by Regulation (EU) 2017/2393 of the European Parliament and of the Council of 13 December 2017 (OJ 2017 L 350, p. 15) (‘Regulation No 1305/2013’).

2 The request has been made in proceedings between DELID EOOD, a single-member limited liability company governed by Bulgarian law (‘Delid’), and the Izpalnitelen direktor na Darzhaven fond ‘Zemedelie’ (Executive Director of the State Agricultural Fund, Bulgaria) (‘the Executive Director of the SAF’) concerning the latter’s refusal to grant the former funding for investment with a view to the purchase of equipment for a poultry farm.

Legal context

European Union law

Regulation (EU) No 1303/2013

3 Article 65 of Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 (OJ 2013 L 347, p. 320), entitled ‘Eligibility’, provides, in paragraph 1 thereof:

‘The eligibility of expenditure shall be determined on the basis of national rules, except where specific rules are laid down in, or on the basis of, this Regulation or the Fund-specific rules.’

Regulation No 1305/2013

4 Article 5 of Regulation No 1305/2013, entitled ‘Union priorities for rural development’, provides:

‘The achievement of the objectives of rural development, which contribute to the Europe 2020 strategy for smart, sustainable and inclusive growth, shall be pursued through the following six Union priorities for rural development, which reflect the relevant Thematic Objectives of the [Common Strategic Framework]:

…

All those priorities shall contribute to the cross-cutting objectives of innovation, environment and climate change mitigation and adaptation. Programmes may address fewer than six priorities if justified on the basis of the analysis of the situation in terms of strengths, weaknesses, opportunities and threats (“the SWOT”) and the ex ante evaluation. At least four priorities shall be addressed by each programme. When a Member State submits a national programme and a set of regional programmes, the national programme may address fewer than four priorities.

…’

5 Article 17 of that regulation, entitled ‘Investments in physical assets’, provides:

‘1. Support under this measure shall cover tangible and/or intangible investments which:

(a) improve the overall performance and sustainability of the agricultural holding;

(b) concern the processing, marketing and/or development of agricultural products covered by Annex I to the TFEU or cotton, except fishery products; the output of the production process may be a product not covered by that Annex; where support is provided in the form of financial instruments, the input may also be a product not covered by that Annex on condition that the investment contributes to one or more of the Union priorities for rural development;

(c) concern infrastructure related to the development, modernisation or adaptation of agriculture and forestry, including access to farm and forest land, land consolidation and improvement, and the supply and saving of energy and water; or

(d) are non-productive investments linked to the achievement of agri-environment-climate objectives as pursued under this regulation, including biodiversity conservation status of species and habitat as well as enhancing the public amenity value of a Natura 2000 area or other high nature value systems to be defined in the programme.

2. Support under point (a) of paragraph 1 shall be granted to farmers or groups of farmers.

In the case of investments to support farm restructuring, Member States shall target the support to farms in accordance with the SWOT analysis carried out in relation to the Union priority for rural development “enhancing farm viability and competitiveness of all types of agriculture in all regions and promoting innovative farm technologies and sustainable management of forests”.

3. Support under points (a) and (b) of paragraph 1 shall be limited to the maximum support rates laid down in Annex II. Those maximum rates may be increased for young farmers, for collective investments, including those linked to a merger of Producer Organisations, and for integrated projects involving support under more than one measure, for investments in areas facing natural and other specific constraints as referred to in Article 32, for investments linked to operations under Articles 28 and 29 and for operations supported in the framework of the [European Innovation Partnership (EIP)] for agricultural productivity and sustainability in accordance with the support rates laid down in Annex II. However, the maximum combined support rate may not exceed 90%.

4. Support under points (c) and (d) of paragraph 1 shall be subject to the support rates laid down in Annex II.

5. Support may be granted to young farmers setting up for the first time in an agricultural holding as head of the holding in respect of investments to comply with Union standards applying to agricultural production, including occupational safety. Such support may be provided for a maximum of 24 months from the date of setting up as set out in the rural development programme, or until the actions defined in the business plan referred to in Article 19(4) are completed.

6. Where Union law imposes new requirements on farmers support may be granted for investments to comply with those requirements for a maximum of 12 months from the date on which they become mandatory for the agricultural holding.’

6 Article 19 of that regulation, entitled ‘Farm and business development’, is worded as follows:

‘…

2. Support under point (a)(i) of paragraph 1 shall be granted to young farmers.

Support under point (a)(ii) of paragraph 1 shall be granted to farmers or members of a farm household who diversify into non-agricultural activities and to micro- and small- enterprises and natural persons in rural areas.

Support under point (a)(iii) of paragraph 1 shall be granted to small farms as defined by Member States.

Support under point (b) of paragraph 1 shall be granted to micro- and small enterprises and natural persons in rural areas, as well as to farmers or members of a farm household.

Support under point (c) of paragraph 1 shall be granted to farmers eligible to participate in the small farmers scheme who, at the time of submitting their application for support, have been so eligible for at least one year and who undertake to permanently transfer their entire holding and the corresponding payment entitlements to another farmer. Support shall be paid from the date of the transfer until 31 December 2020 or calculated in respect of that period and paid in the form of a one-off payment.

…

6. The maximum amount of support under point (a) of paragraph 1 is laid down in Annex II. Member States shall define the amount of support under points (a)(i) and (a)(ii) of paragraph 1 also taking into account the socio-economic situation of the programme area.

…’

Regulation (EU) No 1307/2013

7 Article 4 of 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), entitled ‘Definitions and related provisions’, states, in paragraph 1 thereof:

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

…

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

…’

Implementing Regulation (EU) No 809/2014

8 Article 48 of Commission Implementing Regulation (EU) No 809/2014 of 17 July 2014 laying down rules for the application of Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to the integrated administration and control system, rural development measures and cross compliance (OJ 2014 L 227, p. 69), entitled ‘Administrative checks’, provides, in paragraphs 1 and 2 thereof:

‘1. Administrative checks shall be carried out on all applications for support, payment claims or other declarations required to be submitted by a beneficiary or a third party, and shall cover all elements that can be checked and are appropriate to be checked by means of administrative checks. The procedures shall require recording of the control work undertaken, the results of the verification and the measures taken in the event of discrepancies.

2. Administrative checks on applications for support shall ensure the compliance of the operation with applicable obligations established by Union or national law or by the rural development programme, including those of public procurement, State aid and other obligatory standards and requirements. …’

Regulation (EU, Euratom) 2018/1046

9 Article 63 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ 2018 L 193, p. 1), entitled ‘Shared management with Member States’, provides, in paragraph 2 thereof:

‘When executing tasks relating to budget implementation, Member States shall take all the necessary measures, including legislative, regulatory and administrative measures, to protect the financial interests of the Union, namely by:

(a) ensuring that actions financed from the budget are implemented correctly and effectively and in accordance with the applicable sector-specific rules;

…’

Bulgarian law

10 Under Article 8 of naredba n° 9 za prilagane na podmyarka 4.1 ‘Investitsii v zemedelski stopanstva’ ot myarka 4 ‘Investitsii v materialni aktivi’ ot Programata za razvitie na selskite rayoni za perioda 2014-2020 (Regulation No 9 on the application of Submeasure 4.1 ‘Investments in agricultural holdings’ of Measure 4 ‘Investments in physical assets’ of the Rural Development Programme for the period 2014 – 2020) of 21 March 2015 (DV No 22 of 24 March 2015), in the version applicable to the events in the main proceedings (‘Naredba No 9/2015’):

‘(1) On the date of submission of the application for support, farmers within the meaning of Article 7(1)(1) [of this Regulation] must satisfy the following conditions:

1. they must be registered as farmers …

2. the minimum standard output for their agricultural holding must not be less than the equivalent in [leva (BGN)] of EUR 8 000;

…

(2) Evidence of the minimum standard output for an agricultural holding within the meaning of Article 1(2) shall be provided by means of:

1. the registration, in the integrated administration and control system, of the land farmed by [the person applying for support], and the animals reared, as well as a (model) declaration in respect of the calculation of the minimum standard output of the holding for the financial year which is ongoing at the time of submission of [the application for support]; or

2. a document showing ownership or use of the land which is a calculation factor or orders concerning it …, as well as a (model) declaration in respect of the calculation of the minimum standard output of the holding for the financial year which is ongoing at the time of submission of [the application for support] …

…’

11 Under Article 26 of Naredba No 9/2015:

‘Project-related activities and investments, the performance or implementation of which requires a licence, a permit and/or registration under Bulgarian legislation, shall not be eligible for support unless the corresponding licence, permit and/or certificate of registration is submitted.’

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

12 Having been registered, on 17 April 2015, as a farmer with the Oblastna direktsia ‘Zemedelie’ (Provincial Directorate of Agriculture) in Plovdiv (Bulgaria), Delid submitted, on 28 May 2015, an application for support concerning investments with a view to the ‘purchase of equipment for a poultry farm’, with a value of BGN 2 933 745 (around EUR 1 500 000), under Submeasure 4.1 ‘Investments in agricultural holdings’ of Measure 4 ‘Investments in physical assets’ of the Rural Development Programme for the period 2014-2020.

13 In support of its application, Delid indicated that it reared ducks at a livestock facility located in Manole (Bulgaria), leased on 15 May 2014 from Business park Manole OOD, and that it was aiming for a standard output in an amount of EUR 20 451.68.

14 Following a check carried out by the Direktsia ‘Protivodeystvie na izmamite’ kam Darzhaven fond ‘Zemedelie’ – Razplashtatelna agentsia (Paying Agency of the Anti-Fraud Directorate of the State Agricultural Fund, Bulgaria) at the livestock facility in April and May 2016, it was found that, at the time of the check, that facility was neither operational nor registered in Delid’s name, and that there were no birds there, the last ones having been sold on 7 March 2016. In particular, the check revealed that, besides Delid, two other companies which had submitted applications for support had indicated that they reared ducks at the same livestock facility under lease agreements.

15 In those circumstances, the Executive Director of the SAF, by decision of 10 July 2018, refused to grant the application for support submitted by Delid, on the ground that that application did not fulfil the eligibility criteria laid down in Article 8 of Naredba No 9/2015.

16 Delid brought an action against that decision before the Administrativen sad Plovdiv (Administrative Court, Plovdiv, Bulgaria).

17 By judgment of 10 March 2020, that court dismissed that action.

18 Delid brought an appeal on a point of law against that judgment before the Varhoven administrativen sad (Supreme Administrative Court, Bulgaria), the referring court.

19 Taking the view that the resolution of the dispute before it requires an interpretation of the provisions of Regulation No 1305/2013, 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) Is it consistent with Article 17 of Regulation No 1305/2013 for a national provision such as Article 26 of [Naredba No 9/2015], which establishes an eligibility condition for applicants for financial aid under Submeasure 4.1 “Investments in agricultural holdings” of the measure “Investments in physical assets” of the Rural Development Programme for the period 2014 – 2020, to require that a certificate of registration of a livestock facility in the name of the applicant must be submitted as proof of the exercise of a livestock activity carried out prior to the application for financing in a holding set up by the applicant within the meaning of Article 4 of Regulation No 1307/2013, or is it sufficient for the purposes of the regulation for the farmer to prove that he or she is in the process of obtaining the required registration of a livestock facility in his or her name?

(2) Is a condition in a national provision such as Article 8(1)(2) of [Naredba No 9/2015], according to which applicants must provide evidence of a minimum standard output for the agricultural holding concerned that may not be less than the equivalent in leva (BGN) of EUR 8 000 at the time of the application for aid, to be regarded as compatible with the objective of the support under the measure “Investments in physical assets” pursuant to Article 17 of Regulation No 1305/201[3], with the European Union’s rural development priorities under Article 5 of Regulation No 1305/2013 and with the concept of standard output of a holding within the meaning of the repealed Commission Regulation [(EC)] No 1242/2008 of 8 December 2008 establishing a Community typology for agricultural holdings [(OJ 2008 L 335, p. 3)]?

(3) If the second question is answered in the affirmative, is it to be assumed that farmers that are newly registered at the time of the application for aid under the “Investments in physical assets” measure are to be excluded from financial support under Regulation No 130[5]/2013?’

Admissibility of the request for a preliminary ruling

20 The Executive Director of the SAF and the Bulgarian Government dispute the admissibility of the present request for a preliminary ruling because (i) it does not contain a brief statement of the reasons which led the referring court to question the interpretation or the validity of provisions of EU law and does not state the connection made by that court between those provisions and the national legislation at issue in the main proceedings, (ii) the order for reference is based on new findings of fact which could not be examined by the competent administrative authority, and (iii) the referring court should have followed the approach which it had already adopted in other similar cases and ruled on the merits of the dispute instead of making a reference to the Court of Justice for a preliminary ruling.

21 In that regard, it should be borne in mind that, as is apparent from the settled case-law of the Court, it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine, in the light of the particular circumstances of the case, both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court, which enjoy a presumption of relevance. Therefore, where the question submitted concerns the interpretation or validity of a rule of EU law, the Court is, in principle, required to give a ruling, unless it is quite obvious that the interpretation sought bears no relation to the actual facts of the main action or its purpose, the problem is hypothetical, or the Court does not have before it the factual or legal material necessary to give a useful answer to the question submitted to it (judgment of 5 May 2022, Zagrebačka banka, C‑567/20, EU:C:2022:352, paragraph 43 and the case-law cited).

22 In this instance, it must be held that, in so far as the questions referred concern the interpretation of provisions of EU law, specifically provisions of Regulation No 1305/2013, it is not quite obvious that the interpretation sought with regard to those questions, taken as a whole, bears no relation to the dispute in the main proceedings or that the issue raised is of a hypothetical nature.

23 Consequently, the present request for a preliminary ruling is admissible.

Consideration of the questions referred

The first question

24 By its first question, the referring court seeks to ascertain, in essence, whether Article 17 of Regulation No 1305/2013 is to be interpreted as precluding a piece of national legislation which makes the grant of the support referred to in that provision conditional upon the person applying for support submitting a certificate of registration of a livestock facility in that person’s name.

25 In that regard, it should be borne in mind that the Member States implement Regulation No 1305/2013 through their rural development support programmes (judgment of 6 October 2021, Lauku atbalsta dienests (Business start-up aid in agriculture), C‑119/20, EU:C:2021:817, paragraph 54) and that that regulation leaves it open to the Member States to adopt a set of measures to meet the Union priorities for rural development (see, to that effect, judgment of 28 April 2022, Piltenes meži, C‑251/21, EU:C:2022:311, paragraph 63).

26 Each Member State must therefore 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 Union priorities for rural development (judgment of 6 October 2021, Lauku atbalsta dienests (Business start-up aid in agriculture), C‑119/20, EU:C:2021:817, paragraph 55).

27 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 (judgment of 6 October 2021, Lauku atbalsta dienests (Business start-up aid in agriculture), C‑119/20, EU:C:2021:817, paragraph 56).

28 That margin of discretion may concern, inter alia, the criteria for selecting projects, in order to ensure that financial resources for rural development are used in the best possible manner and to target measures under rural development programmes in accordance with the Union priorities for rural development, and with a view to ensuring the equal treatment of applicants (judgment of 6 October 2021, Lauku atbalsta dienests (Business start-up aid in agriculture), C‑119/20, EU:C:2021:817, paragraph 58).

29 The margin of discretion may also concern putting national rural development programmes in place and the implementation of the limitations in Regulation No 1305/2013, in particular as regards the size of eligible holdings, as referred to in the third subparagraph of Article 19(2) of that regulation, or the amount of the aid, as is apparent from paragraph 6 of that article (judgment of 6 October 2021, Lauku atbalsta dienests (Business start-up aid in agriculture), C‑119/20, EU:C:2021:817, paragraph 59).

30 In this instance, it must be held that the requirement, laid down by the national legislation, according to which the grant of the support referred to in that provision is conditional upon the person applying for support submitting a certificate of registration of a livestock facility in that person’s name, falls within the margin of discretion available to the Member States under the case-law cited in paragraphs 27 to 29 of the present judgment. In addition, that requirement supports the implementation of administrative checks, in accordance with Article 48 of Implementing Regulation No 809/2014, and helps to ensure, in accordance with Article 63(2)(a) of Regulation 2018/1046, that actions financed from the budget of the Union are implemented correctly and effectively.

31 Having regard to all of the foregoing, the answer to the first question is that Article 17 of Regulation No 1305/2013 must be interpreted as not precluding a piece of national legislation which makes the grant of the support referred to in that provision conditional upon the person applying for support submitting a certificate of registration of a livestock facility in that person’s name.

The second question

32 By its second question, the referring court seeks to ascertain, in essence, whether Article 17 of Regulation No 1305/2013 is to be interpreted as precluding a piece of national legislation which makes the grant of the support referred to in that provision conditional upon the person applying for support showing that, on the date of submission of the application for support, the output of that person’s agricultural holding is equivalent to at least EUR 8 000.

33 In order to answer that question, it should be borne in mind at the outset that, as is apparent from the case-law cited in paragraphs 27 and 28 of the present judgment, Regulation No 1305/2013 allows the Member States a margin of discretion as to the arrangements for implementing the aid for which it provides, and that that margin of discretion may concern, inter alia, the criteria for selecting projects, in order to ensure that financial resources for rural development are used in the best possible manner.

34 A condition such as that at issue in the main proceedings, according to which the applicant for support must show that, on the date of submission of the application for support, the output of that person’s agricultural holding is equivalent to at least EUR 8 000, falls, in view of the documents in the file before the Court in the present case, within the margin of discretion available to the Member States when implementing Article 17 of Regulation No 1305/2013.

35 Accordingly, the answer to the second question is that Article 17 of Regulation No 1305/2013 must be interpreted as not precluding a piece of national legislation which makes the grant of the support referred to in that provision conditional upon the person applying for support showing that, on the date of submission of the application for support, the output of that person’s agricultural holding is equivalent to at least EUR 8 000.

The third question

36 By its third question, the referring court seeks to ascertain, in essence, whether Article 17 of Regulation No 1305/2013 is to be interpreted as precluding farmers who are newly registered on the date of submission of the application for support from being excluded from the possibility of receiving the support provided for in that provision.

37 In that regard, it should be borne in mind that the justification for making a request for a preliminary ruling is not for advisory opinions to be delivered on general or hypothetical questions, but rather that it is necessary for the effective resolution of a dispute concerning EU law (judgment of 7 April 2022, Autonome Provinz Bozen, C‑102/21 and C‑103/21, EU:C:2022:272, paragraph 57 and the case-law cited).

38 In this instance, it is not apparent from the order for reference that Delid was refused the support at issue in the main proceedings because, on the date of submission of its application for support, that company was a newly registered farmer.

39 In those circumstances, it must be held that the third question is hypothetical and is, accordingly, inadmissible.

Costs

40 Since 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.

On those grounds, the Court (Seventh Chamber) hereby rules:

1. Article 17 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, as amended by Regulation (EU) 2017/2393 of the European Parliament and of the Council of 13 December 2017,

must be interpreted as not precluding a piece of national legislation which makes the grant of the support referred to in that provision conditional upon the person applying for support submitting a certificate of registration of a livestock facility in that person’s name.

2. Article 17 of Regulation No 1305/2013, as amended by Regulation 2017/2393,

must be interpreted as not precluding a piece of national legislation which makes the grant of the support referred to in that provision conditional upon the person applying for support showing that, on the date of submission of the application for support, the output of that person’s agricultural holding is equivalent to at least EUR 8 000.

[Signatures]