CELEX: 62007CC0241
Language: en
Date: 2008-10-23 00:00:00
Title: Opinion of Mr Advocate General Mazák delivered on 23 October 2008. # JK Otsa Talu OÜ v Põllumajanduse Registrite ja Informatsiooni Amet (PRIA). # Reference for a preliminary ruling: Riigikohus - Estonia. # EAGGF - Regulation (EC) No 1257/1999 - Community support for rural development - Support for agri-environmental production methods. # Case C-241/07.

OPINION OF ADVOCATE GENERAL
      Mazák
      delivered on 23 October 2008 (1)
      
      Case C‑241/07
      JK Otsa Talu OÜ
      v
      Põllumajanduse Registrite ja Informatsiooni Amet (PRIA)
      (Reference for a preliminary ruling from the Riigikohus (Estonia))
      (Agriculture – European Agricultural Guidance and Guarantee Fund (EAGGF) – Support for rural development)1.        In the present case, the Riigikohus (Supreme Court) (Estonia) asks the Court for a preliminary ruling on the questions relating
         to the interpretation of Council Regulation (EC) No 1257/1999 (also referred to as the ‘Rural Development Regulation’). (2) The referring court raises the questions referred for a preliminary ruling in proceedings pending before it which originated
         in a dispute between AS Agrofarm (‘Agrofarm’), whose legal successor is JK Otsa Talu OÜ (‘Otsa Talu’), and the ‘Agricultural
         Register and Information Office’, (3) concerning a refusal to grant agri-environmental support from the European Agricultural Guidance and Guarantee Fund (EAGGF).
      
      I –  Legal framework
      A –    Community law
      2.        Regulation No 1257/1999 establishes the framework for Community support for sustainable rural development.
      
      3.        Article 22 of Regulation No 1257/1999 (4) reads as follows:
      
      ‘Support for agricultural methods designed to protect the environment, maintain the countryside (agri-environment) or improve
         animal welfare shall contribute to achieving the Community’s policy objectives regarding agriculture, the environment and
         the welfare of farm animals.
      
      Such support shall promote:
      (a)      ways of using agricultural land which are compatible with the protection and improvement of the environment, the landscape
         and its features, natural resources, the soil and genetic diversity,
      
      (b)      an environmentally-favourable extensification of farming and management of low-intensity pasture systems,
      (c)      the conservation of high nature-value farmed environments which are under threat,
      (d)      the upkeep of the landscape and historical features on agricultural land,
      (e)      the use of environmental planning in farming practice,
      (f)      the improvement of animal welfare.’ 
      4.        Article 23 of Regulation No 1257/1999 states as follows:
      
      ‘1. Support shall be granted to farmers who give agri-environmental or animal welfare commitments for at least five years.
         Where necessary, a longer period shall be determined for particular types of commitments in view of their effects on the environment
         or animal welfare.
      
      2. Agri-environmental and animal welfare commitments shall involve more than the application of usual good farming practice
         including good animal husbandry practice.
      
      They shall provide for services which are not provided for by other support measures, such as market support or compensatory
         allowances.’
      
      5.        Under Article 24(1) of Regulation No 1257/1999:
      
      ‘Support in respect of an agri-environmental or animal welfare commitment shall be granted annually and be calculated on the basis of [emphasis added]:
      
      (a) income foregone,
      (b) additional costs resulting from the commitment given, and
      (c) the need to provide an incentive.
      Costs related to investments shall not be taken into account when calculating the level of annual support. Costs for non-remunerative
         investments which are necessary to comply with a commitment may be taken into account in calculating the level of annual support.’
      
      6.        Paragraphs 1, 2 and 4 of Article 37 of Regulation No 1257/1999 provide as follows:
      
      ‘1. Support for rural development shall be granted only for measures which comply with Community law. 
      2. Such measures shall be consistent with other Community policies and measures implemented thereunder.
      In particular, no measure which falls within the scope of this Regulation shall be eligible for support under other Community
         support schemes if it is incompatible with any specific condition laid down in this Regulation. 
      
      …
      4. Member States may lay down further or more restrictive conditions for granting Community support for rural development
         provided that such conditions are consistent with the objectives and requirements laid down in this Regulation.’
      
      7.        Article 39 of Regulation No 1257/1999 states:
      
      ‘1. Member States shall take all necessary steps to ensure the compatibility and consistency of rural development support
         measures pursuant to the provisions laid down in this Chapter.
      
      2. The rural development plans submitted by Member States shall include an appraisal of the compatibility and the consistency
         of the support measures envisaged and an indication of the measures taken in order to ensure compatibility and consistency.
      
      3. Support measures shall, where necessary, be subsequently revised to ensure compatibility and consistency.’
      B –    National law
      8.        The ‘ELÜPS’ (5) (Law on the implementation of the common agricultural policy of the European Union) was adopted on 24 March 2004 and entered
         into force in part on 1 May 2004 and in part on 1 January 2005. (6) The relevant provisions of that law are as follows:
      
      ‘Paragraph 42. Rules for the granting of rural development support in connection with the common agricultural policy 
      …
      (2)      The Minister for Agriculture shall determine which kinds of rural development support are to be granted and which kinds of
         activities are to be supported in each budgetary year and shall determine the allocation of the resources made available for
         rural development support.
      
      (3)      No right to apply for and receive rural development support shall arise if provision is not made for the granting of that
         support or the supporting of that activity in the budgetary year in question on the basis of subparagraph 2 of this paragraph.
      
      Paragraph 43. Requirements for obtaining rural development support
      (1)      A person shall be entitled to apply for rural development support if he complies with the requirements laid down in this Law
         and in the programme referred to in Paragraph 42(1) of this Law.
      
      (2)      The Minister for Agriculture may determine more detailed requirements for obtaining rural development support with respect
         to the applicant and the planned activity and the list of the areas where rural development support is to be granted. Those
         requirements may be determined separately for each kind of support. 
      
      …
      Paragraph 44. Applications for rural development support and the treatment of applications 
      …
      (2)      The Minister for Agriculture shall determine the detailed rules for applying for rural development support and the treatment
         of applications, the form of the application, the grounds for reducing support and separate rates for each kind of support,
         and the grounds for refusing an application. The rules for applying for support and the treatment of applications may be determined
         separately for each kind of support.’
      
      9.        The ‘Detailed requirements for obtaining agri-environmental support and detailed rules for applying for support, treatment
         of applications and the payment of support’, (7) adopted by Regulation No 51 of the Minister for Agriculture of 20 April 2004, provided as follows, in the version in force
         until 1 May 2005:
      
      ‘Paragraph 3. Requirements for obtaining support
      (1)      Support for the activities listed in Paragraph 2 may be applied for by a natural person, legal person, association or other
         grouping of persons without the status of a legal person (“an applicant”), operating in agriculture, who or which is active
         in the sectors listed in point 9.2 of Chapter 9 of the Development Plan and meets the requirements laid down in point 9.2
         of Chapter 9 of the Development Plan, and: 
      
      …
      3.      enters into a commitment to fulfil the obligations listed in subparagraphs 1 and 2 and the requirements for obtaining agri-environmental
         support for five years from the date laid down for applying for support.’
      
      10.      By the amendment which entered into force on 1 May 2005 and applied at the time of submission of the application for support
         in question, that is to say, 26 May 2005 (‘the measure in question’), the following supplementary condition was added to the
         above:
      
      ‘Paragraph 82. Implementing provisions 
      …
      (7)      In 2005 a person may apply for support for an environmentally-friendly production activity if a decision was made in 2004
         granting the applicant support for an environmentally-friendly production activity and the applicant has entered into the
         commitment specified in Paragraph 3(1)(3).’
      
      11.      The Rural Development Plan for Estonia for 2004 to 2006, approved by the Commission of the European Communities (‘the Commission’)
         and adopted by the Government of the Republic of Estonia and the Ministry of Agriculture, provides:
      
      ‘12.6.2 Agri-environmental support
      The applications submitted shall be examined and a decision shall be taken in accordance with the criteria for obtaining support
         and with the financial resources allocated in respect of the measure in the corresponding year. If necessary, the applications
         shall be ranked in order of merit.
      
      If there are not sufficient budgetary resources to satisfy the applications that comply with the requirements, the Minister
         for Agriculture may determine a procedure for reducing agri-environmental support under which the support or total support
         is reduced proportionately for all applicants complying with the requirements for agri-environmental support payments, on
         the basis of the area of the agricultural land covered by the application or by the activities to be supported or on any other
         basis.’
      
      II –  Factual and procedural background and the questions referred 
      12.      Agrofarm made an application to the Office for area payments on 26 May 2005. Agrofarm had, in 2004, already made the necessary
         preparations for environmentally-friendly production in order to obtain agri-environmental support. (8)
      
      13.      By Decision No 1-3.13-4/74 of the director of the Office of 19 December 2005, Agrofarm’s application was rejected on the ground
         that support was not available for an area in respect of which there was no environmentally-friendly production commitment
         in force. 
      
      14.      On 1 February 2006, Agrofarm brought proceedings before the Tartu Administrative Court (Tartu Halduskohus) for the annulment
         of point 17 of the decision of the director of the Office and seeking an order for payment of the support in question. That
         court dismissed the application by judgment of 28 April 2006 and ruled, essentially, that the addition to Regulation No 51
         could not be regarded as restricting the applicant’s rights. 
      
      15.      Otsa Talu, as legal successor of Agrofarm, (9) brought an appeal before the Tartu Regional Court (Tartu Ringkonnakohus), arguing that Regulation No 1257/1999 did not give
         the power to introduce unequal provisions as regards applicants. It was not consistent with the protection of legitimate expectations
         and the principle of the rule of law for the Minister for Agriculture to decide to alter Regulation No 51 less than one month
         before the time-limit for making an application for support for 2005. That court dismissed Otsa Talu’s appeal by judgment
         of 7 September 2006, finding, in essence, that the amendment of the regulation by the Minister for Agriculture was not contrary
         to Community law. 
      
      16.      Otsa Talu then brought an appeal on a point of law before the referring court. The appellant submitted that the contested
         amendment to Regulation No 51, as national law implementing Community law, was incompatible with Community law, in particular,
         with Article 24(1) of Regulation No 1257/1999, according to which agri-environmental support is to be granted annually. In
         addition, Otsa Talu submitted that Paragraph 82(7) of Regulation No 51 was contrary to point 12.6.2 of the Development Plan,
         according to which, in the event of a shortfall in budgetary resources, the total support available to all applicants meeting
         the requirements should be reduced proportionately.
      
      17.      Before the referring court, the Office maintained, essentially, that as regards the nature of the agri-environmental support
         in question, the latter should not be regarded as social support, which must be distributed on a general basis. The present
         case concerns support, the requirements for the granting of which derive from the needs and priorities of the State’s agricultural
         policy, and the State is also entitled to change those requirements.
      
      18.      The referring court considers that it is essential in the present case to establish whether it is lawful to change, during
         a support period, the requirements for applications for agri-environmental support to be paid in respect of environmentally-friendly
         production, in such a way as to restrict, compared with the situation which previously applied, the class of persons fulfilling
         the requirements. 
      
      19.      In the opinion of the referring court, it is consistent with the aim of the agri-environmental support for environmentally-friendly
         production laid down in Regulation No 1257/1999 that support should also be given under the corresponding programme in each
         budgetary year to new applicants who are prepared to enter into a commitment to environmentally-friendly production and who
         accordingly organise their production to comply with the statutory requirements. That approach would also be consistent with
         the principle of equal treatment and with the aim of guaranteeing better protection of the environment. 
      
      20.      Consequently, the referring court has doubts as to whether the additional requirements for applicants introduced by Paragraph
         82(7) of Regulation No 51 are consistent with the objectives of Community law, in particular the concept of agri-environmental
         support laid down in Regulation No 1257/1999.
      
      21.      In addition, the referring court considers that where there are no longer sufficient budgetary resources the Estonian Development
         Plan envisaged a proportional reduction of the support for all applicants originally fulfilling the requirements for agri-environmental
         support.
      
      22.      The referring court is of the view that the ‘narrowing down’ of the class of recipients was not a proportionate expedient
         for resolving the situation of insufficient budgetary means and the support should, instead, have been reduced proportionately
         for all applicants originally fulfilling the applicable requirements, as had been envisaged by the Development Plan approved
         by the Commission.
      
      23.      In the light of the foregoing, the referring court has decided to stay the proceedings and to refer the following questions
         to the Court for a preliminary ruling:
      
      ‘(1)      Is it compatible with the objective of agri-environmental support laid down in Articles 22 to 24 of [Regulation No 1257/1999]:
      (a)      to give continued support only to applicants for whom, within the framework of that programme, a decision awarding agri-environmental
         support has already been made in the previous budgetary year, and who have entered into an environmental commitment, or
      
      (b)      also to provide support in each budgetary year to new applicants who are prepared to enter into a commitment in respect of
         environmentally-friendly production and accordingly organise their production to comply with the statutory requirements?
      
      (2)      If the answer to Question 1 is variant (b), does Article 24(1), in conjunction with Article 37(4) and Article 39, of [Regulation
         No 1257/1999] authorise a Member State, if in the context of the programme it becomes clear that there are no longer sufficient
         budgetary means for granting first-time support:
      
      (a)      to amend the original rules and requirements for applications for and grants of agri-environmental support and to determine
         that support may be applied for only if the applicant has been the subject of a decision granting support in the previous
         budgetary year and an environmentally-friendly production obligation is therefore in force in his regard, or
      
      (b)      to reduce proportionately the support of all applicants meeting the requirements for agri-environmental support?’
      24.      Written observations have been submitted by the Estonian, Greek and Polish Governments as well as by the Commission. Otsa
         Talu and all of the above parties save the Polish Government made oral submissions at the hearing on 10 April 2008.
      
      III –  Assessment
      A –    Principal arguments of the parties
      25.      The Estonian Government explains the circumstances relating to the drawing up of the Development Plan as well as those of the amendments of Regulation
         No 51. It notes that a follow-up report on that Plan showed that, in 2004, about twice as many applications were made as the
         Development Plan had anticipated. Therefore, the quantitative objectives concerning the commitments originally fixed in the
         Development Plan for the year 2006 had already been fulfilled in 2004. In addition, in view of the fact that the Minister
         for Agriculture had decided against reducing the agri-environmental support in 2004, the budgetary resources provided for
         the financing of that support were not sufficient for new applications in 2005 and 2006 to be able to be accepted.
      
      26.      It was in that context that the first amendment of Regulation No 51 restricting the class of recipients of support was adopted
         in May 2005. In July 2005, however, a second amendment of that regulation was adopted which added to the class of applicants
         qualifying for support persons having at least one field in an agricultural area, all of which forms part of a NATURA 2000
         area.
      
      27.      The Estonian Government maintains that the restriction of the recipients of support provided for by the amended Regulation
         No 51 is in conformity both with the objectives of Regulation No 1257/1999 (as mentioned in its 31st recital) and with the
         principle of equal treatment. 
      
      28.      In view of the above considerations, the Estonian Government proposes that the questions referred should be answered as follows.
         If the quantitative objectives of the Development Plan are fulfilled and if it appears that, in the context of that programme,
         there are no longer sufficient budgetary resources for first-time support to be granted, the combined provisions of Articles
         24(1), 37(4) and 39 of Regulation No 1257/1999 authorise a Member State to amend the rules for applications for and grants
         of agri-environmental support and to introduce conditions which restrict the class of recipients of support. Such conditions
         may, as regards one or more relevant periods, prevent any new potential recipients from applying.
      
      29.      The Greek Government emphasises that the Community legislature has acknowledged the need for flexibility not only during the planning phase but
         also during the implementation phase of rural development support programmes. It submits that the criteria governing recipients
         may be amended a posteriori provided that to do so does not entail any discrimination or unjustified restriction. 
      
      30.      Consequently, the Greek Government proposes to answer the first question as follows: the grant of annual support only to recipients
         already participating in the programme is authorised by the provisions of Regulation No 1257/1999. The inclusion, on an annual
         basis, of new recipients in the programme is, therefore, permissible but not obligatory.
      
      31.      As regards the second question, the Greek Government submits that if a Member State observes, during the implementation of
         the programme, that budgetary resources are not sufficient it may, in accordance with Regulation No 1257/1999, amend the national
         provisions in question so as to fulfil the obligations it has already undertaken and refuse to accept new applications for
         agri-environmental support.
      
      32.      The Polish Government considers that the objectives of Regulation No 1257/1999, both as regards agri-environmental support as well as other forms
         of support, can, in principle, be met only when the support is granted to all applicants complying with the requirements.
         Otherwise it would be possible for the Member States to limit, in their entire discretion, the granting of such support during
         a given budgetary period.
      
      33.      Therefore, the Polish Government suggests that the answer to the first question should be that it is consistent with the objective
         of agri-environmental support, laid down in Articles 22 and 24 of Regulation No 1257/1999, for the support also to be granted
         each year to new recipients who have entered into a commitment regarding environmentally-friendly production and who, consequently,
         organise their production so as to comply with the required conditions.
      
      34.      With regard to the second question, the Polish Government considers that, where budgetary resources are insufficient, a refusal
         to grant support to new applicants allows the objectives of agri-environmental support to be fulfilled and does not constitute
         a breach of Community or national law.
      
      35.      Thus it proposes that the second question should be answered as follows. If in the context of the programme it becomes clear
         that there are no longer sufficient budgetary resources for granting first-time support, Article 24(1), in conjunction with
         Articles 37(4) and 39 of Regulation No 1257/1999, allow a Member State to determine that support may be applied for only if
         the applicants have been subject of a decision granting support in the previous budgetary year and an environmentally-friendly
         production obligation is therefore in force in their regard.
      
      36.      Finally, the Commission notes that Regulation No 1257/1999 does not define how annual support payments are to be calculated. Therefore it considers
         that Member States may choose between fixing the annual payment amounts at the beginning of the five-year period, on the one
         hand, and modifying that amount each year – according to the available budgetary resources and the number of recipients participating
         in the programme – on the other.
      
      37.      The Commission submits that both options are consistent with Regulation No 1257/1999 and both provide incentives to farmers.
      
      38.      In view of the above, the Commission proposes that the answer to the questions should be that the condition providing that
         the agri-environmental support referred to in Articles 22, 23 and 24 of Regulation No 1257/1999 may be awarded only to applicants
         in respect of whom, within the framework of the programme, a decision awarding support has already been made in the previous
         budgetary year is compatible with that regulation.
      
      B –    Admissibility
      39.      It would appear that the Estonian Government seeks to call into question the admissibility of the questions referred. That
         government considers that, in view of the amendments to Regulation No 51, (10) the presumption on which the referring court’s questions are based is not correct. It follows, in that government’s view,
         that the questions referred by the national court do not fully reflect the national measures in force in 2005 and are accordingly
         theoretical in nature. None of the other parties have raised that objection in their observations or taken a position in that
         respect.
      
      40.      The Court held in Unión General de Trabajadores de La Rioja (11) that ‘it is clear from both the wording and the scheme of Article 234 EC that a national court … is not empowered to bring
         a matter before the Court of Justice by way of a reference for a preliminary ruling unless a case is pending before it in
         which it is called upon to give a decision which is capable of taking account of the preliminary ruling’. 
      
      41.      In Ritter-Coulais, (12) the Court stated that ‘it is settled case-law that the procedure provided for by Article 234 EC is an instrument of cooperation
         between the Court of Justice and national courts … In the context of that cooperation, the national court seised of the dispute,
         which alone has direct knowledge of the facts of the main action and must assume responsibility for the subsequent judicial
         decision, is in the best position to assess, having regard to the particular features of the case, whether a preliminary ruling
         is necessary to enable it to give judgment and the relevance of the questions which it refers to the Court … That does not
         alter the fact that it is for the Court, where necessary, to examine the circumstances in which the case was referred to it
         by the national court in order to assess whether it has jurisdiction and, in particular, determine whether the interpretation
         of Community law that is sought bears any relation to the facts of the main action or its purpose, so that the Court is not
         obliged to deliver advisory opinions on general or hypothetical questions. If it appears that the question raised is manifestly
         irrelevant for the purposes of deciding the case, the Court must declare that there is no need to proceed to judgment.’
      
      42.      It follows that in the present case there clearly are proceedings pending before the referring court for the resolution of
         which the latter needs an answer from the Court of Justice. There is nothing in the documents before the Court that would
         indicate that the reference for a preliminary ruling is theoretical or hypothetical in nature. I conclude from the above that
         the questions referred are admissible.
      
      C –    Substance 
      43.      By its two questions, which should be considered together, the Riigikohus is essentially asking whether it is compatible with
         Regulation No 1257/1999 for a Member State to restrict, because of insufficient budgetary resources, the class of applicants
         for agri-environmental aid to farmers already subject to a decision granting support in the previous budgetary year.
      
      44.      The Commission correctly refers to the Court’s case-law to the effect that while Member States’ development programmes are
         approved by the Commission – after satisfying itself that those programmes comply with Regulation No 1257/1999 and after determining
         the nature of the measures eligible for part-financing and the total amount of expenditure linked to their financing – Commission
         approval of a national aid programme does not in any way have the effect of conferring on that programme the nature of a measure
         of Community law. In those circumstances, where, for instance, an aid contract is incompatible with the programme approved
         by the Commission, it is for the national courts to draw the appropriate inferences from that incompatibility by having regard
         to national law, taking account at the same time of the relevant Community law in applying national law. (13)
      
      45.      In that connection, the Court has held that ‘it is … for the national authorities to implement the Community regulations and
         to take the necessary individual decisions regarding the traders concerned. In doing so, the Member States act in accordance
         with the rules and procedures laid down in national legislation, subject to the limits imposed by Community law.’ (14)
      
      46.      Community law and Regulation No 1257/1999 in particular (or Commission Regulation (EC) No 817/2004 (15) for that matter) do not regulate in any detail the allocation of agri-environmental support to be granted each year.
      
      47.      Articles 37(4) and 39(3) of Regulation No 1257/1999 suggest that Member States dispose of a relatively wide margin of discretion
         when implementing their development plans. Those articles respectively provide that ‘Member States may lay down further or
         more restrictive conditions for granting Community support for rural development provided that such conditions are consistent
         with the objectives and requirements laid down in [that] Regulation’ (16) and that ‘support measures shall, where necessary, be subsequently revised [by Member States] to ensure compatibility and
         consistency’.
      
      48.      However, it may be inferred from the Court’s judgment in Huber that while the implementation of development plans in connection with EU structural aid is within the competence of the Member
         States, national measures must not affect the scope and effectiveness of Community law. (17)
      
      49.      In the order for reference, the national court expresses the view that the term ‘annually’ in Article 24(1) of Regulation
         No 1257/1999 should be understood as meaning that a person must be able to apply each year for the same kind of support, regardless
         of whether support of that kind has already been granted to that person previously. This is also Otsa Talu’s submission.
      
      50.      I, however, cannot subscribe to that interpretation. Rather, I consider – as, essentially, the Commission and the Estonian
         and Polish Governments also do – that that article does not deal with the above issue and merely provides that, during the
         multi-annual programme, support payments are to take the form of annual instalments.
      
      51.      Thus, the interpretation that, on the basis of Article 24(1) of Regulation No 1257/1999, the programme should be open to new
         commitments each year must be rejected. Indeed, that also follows from Article 66(5) of Regulation No 817/2004 which provides
         that: ‘where support is multi-annual, payments subsequent to that made in the year an application was submitted shall be made
         in response to an annual application for payment, except where the Member State has introduced an effective annual verification
         procedure as referred to in Article [67(1)]’.
      
      52.      That point having been made, it is now necessary to establish whether the ‘further or more restrictive’ conditions provided
         for in Article 37(4) and laid down by Estonia in the case in the main proceedings are consistent with the objectives and requirements
         laid down in Regulation No 1257/1999. 
      
      53.      In the following two points, I set out the recitals in the preamble to Regulation No 1257/1999 that are relevant to the case
         in the main proceedings.
      
      54.      The 14th recital in the preamble to Regulation No 1257/1999 provides that ‘… eligibility criteria for rural development support
         should not go beyond what is necessary to achieve the objectives of rural development policy’. (18)
      
      55.      The 31st recital in the preamble to Regulation No 1257/1999 then goes on to state that ‘the agri-environmental aid scheme
         should continue to encourage farmers to serve society as a whole by introducing or continuing the use of farming practices
         compatible with the increasing need to protect and improve the environment, natural resources, soil and genetic diversity
         and to maintain the landscape and the countryside’. (19)
      
      56.      On the basis of those recitals and of the whole content of Chapter VI of Regulation No 1257/1999 (that is to say, Articles
         22 to 24, cited in points 3 to 5 of this Opinion), I consider that Estonia was not, on determining that insufficient budgetary
         resources were available to it, prevented by Regulation No 1257/1999 from deciding to address the fact that those resources
         were insufficient by adopting the measure in question. (20)
      
      57.      I agree with the Estonian Government that the fact that support is guaranteed in respect of agricultural areas which were
         already the subject of multi-annual commitments contributes to the continuity of the agri-environmental measure. Otherwise,
         the result would be that farmers would have no certainty as to the amount of support to be granted to them on a yearly basis.
         That would either discourage them from applying to participate in the aid scheme or lead them to abandon the scheme in a year
         in which their support was reduced.
      
      58.      In that context, it may be pointed out that the amount of support is not established at random or in an arbitrary manner.
         Instead, as explained above in this Opinion, it is calculated according to the objective criteria laid down in Article 24(1)
         of Regulation No 1257/1999.
      
      59.      However, if Estonia were to reduce all the payments proportionately, it would, vis-à-vis the compliant applications accepted
         in 2004, fail in its ‘contractual’ obligation to satisfy the full amount of support anticipated.
      
      60.      In fact, the Member State in question has commitments vis-à-vis recipients already included in the support programme, not
         least as those recipients, in turn, have themselves entered into long-term commitments.
      
      61.      At the same time, I agree with the Commission that a Member State may decide to adopt the alternative solution mentioned in
         the questions referred and to reduce the support proportionately in respect of all applicants meeting the requirements for
         agri-environmental support. Under that alternative, farmers would be encouraged to introduce the use of environmentally-friendly
         farming practices, regardless of whether or not they were already the subject of a decision granting support in the previous
         budgetary year. In other words, each year new recipients would be encouraged to introduce and apply such farming practices.
         In that case, however, the Member State would have to prove that the objectives of the agri-environmental aid scheme were
         indeed met at the same level, even if the amount of support was revised in each year.
      
      62.      Having regard to the discretion vested in the Member States, the measure in question would not appear to be inconsistent with
         Regulation No 1257/1999 which seeks to promote agri-environmental and rural development in general.
      
      63.      Now, it must be assessed whether Estonia exercised its discretion in conformity with Community law.
      
      1.      The alleged breach of general principles of Community law
      64.      The Court stated in Piek (21) that ‘it is settled case-law that, when adopting measures to implement Community legislation, national authorities must exercise
         their discretion in compliance with the general principles of Community law, which include the principle of proportionality’.
         Those principles also include the principles of the protection of legitimate expectations and of equal treatment.
      
      65.      Otsa Talu claimed at the hearing, in essence, that the introduction of the measure in question is not consistent with the
         principle of the protection of legitimate expectations.
      
      66.      The Court has held that ‘the principle of the protection of legitimate expectations is unquestionably one of the fundamental
         principles of the Community’. (22)
      
      67.      In my view, Otsa Talu cannot be held to have had a legitimate expectation that an existing situation, which could be altered
         by decisions taken by national authorities implementing Community regulations within the limits of their discretionary powers,
         would be maintained, particularly in an area such as Common Agricultural Policy, where adjustments to meet changes in the
         economic situation are required. (23)
      
      68.      In addition, the notion of legitimate expectations presupposes that the person concerned entertains hopes based on specific
         assurances given to him by the administration. (24) In the case in the main proceedings, however, neither the ELÜPS nor Regulation No 51 specifically provided that all applications
         would be accepted.
      
      69.      Finally, it follows from the documents before the Court that Otsa Talu was aware at the time of making the application for
         area payments on 26 May 2005 of the existence of Paragraph 82(7) of Regulation No 51, so that the amendment to the regulation
         could not be said to infringe its legitimate expectation that it would receive support.
      
      70.      Therefore, the principle of the protection of legitimate expectations has not been infringed.
      
      71.      Next, with regard to the principle of equal treatment, as the Court stated in Belgium v Commission, (25) ‘according to settled case-law, the principle of equal treatment and non-discrimination requires that comparable situations
         must not be treated differently and that different situations must not be treated in the same way unless such treatment is
         objectively justified’.
      
      72.      In my view, when Otsa Talu applied for support, it clearly was not in a comparable situation vis-à-vis those recipients who
         were already part of the scheme and who had entered into a multi-annual commitment to environmentally-friendly production.
         Otsa Talu could only be in a comparable situation with farmers who were likewise in the position of merely intending to apply
         for support and were not (yet) party to the scheme. 
      
      73.      Thus, the introduction of the measure in question could not infringe the principle of equal treatment in relation to Otsa
         Talu, since it would appear that it was treated equally with all others in the same circumstances (that is to say, applicants
         for support in 2005) and on the same conditions.
      
      74.      Consequently, in my view, the principle of equal treatment has not been infringed.
      
      75.      In Viamex Agrar Handel and ZVK, (26) the Court held that ‘first of all, the principle of proportionality, which is a general principle of Community law and has
         been affirmed on numerous occasions in the case-law of the Court of Justice, in particular with regard to [the] common agricultural
         policy … must be observed as such both by the Community legislature and by the national legislatures and courts which apply
         Community law’. By analogy, that principle must also be observed by the competent national authorities in the application
         of Regulation No 1257/1999.
      
      76.      The question is whether, in the circumstances of the case in the main proceedings, the measure in question taken by Estonia,
         in the exercise of the discretion which it is recognised as enjoying, does in fact have the purpose of promoting rural development (27) and whether it is appropriate and necessary to achieve that aim.
      
      77.      In that regard it is necessary to establish whether the measure in question is appropriate to achieve the desired end.
      
      78.      As I said in points 58 to 61 of this Opinion, I consider that, having regard to the insufficiency of budgetary resources,
         the measure in question was both suitable and necessary to achieve the purpose of promoting rural development and did not
         impose a burden on the individual that was excessive in relation to the objective sought to be achieved. At the same time,
         in my view, the alternative option of reducing all the payments proportionately would appear to be less suitable to achieve
         that purpose, since Estonia would run the risk of failing in its ‘contractual’ obligation to satisfy the full amount of support
         envisaged, and if reduced to a certain point it would be likely to make it impossible for recipients already participating
         in the support programme to continue with environmentally-friendly production. (28)
      
      79.      In view of the above, I consider that, on balance, it appears from the documents in the file that, in the circumstances of
         the case in the main proceedings, the introduction of the measure in question did not constitute a breach of the principle
         of proportionality.
      
      IV –  Conclusion
      80.      I am therefore of the opinion that the Court should give the following answer to the questions referred by the Riigikohus:
      
      National legislation, such as the legislation at issue in the main proceedings, laying down a condition which provides that,
         by reason of insufficient budgetary resources, continued support is to be given only to applicants for whom a decision awarding
         agri-environmental support of the kind referred to in Articles 22 to 24 of Council Regulation (EC) No 1257/1999 of 17 May
         1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) and amending and
         repealing certain Regulations, has already been made in the previous budgetary year, and who have entered into an environmental
         commitment, does not, in principle, prevent the attainment of the objectives of that regulation.
      
      1 –	Original language: English.
      
      2 –	Regulation of 17 May 1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF)
         and amending and repealing certain Regulations (OJ 1999 L 160, p. 80), partially repealed by 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), (‘Regulation No 1257/1999’).
      
      3 –	Põllumajanduse Registrite ja Informatsiooni Amet (PRIA), a government body within the jurisdiction of the Ministry of Agriculture
         of the Republic of Estonia, whose mandate is inter alia to organise the grant of State support and EU support for agriculture
         and rural development (‘the Office’).
      
      4 –	Articles 22, 23 and 24 of Regulation No 1257/1999 are set out here as amended by Council Regulation (EC) No 1783/2003 of
         29 September 2003 amending Regulation (EC) No 1257/1999 (OJ 2003 L 270, p. 70).
      
      5 –	Euroopa Liidu ühise põllumajanduspoliitika rakendamise seadus.
      
      6 –	RT (Official Gazette) I 2004, 24, 163.
      
      7 –	Põllumajandusliku keskkonnatoetuse saamise täpsemad nõuded ning toetuse taotlemise, taotluse menetlemise ja toetuse maksmise
         täpsem kord (RTL (Supplement to the Official Gazette) 2004, 51, 879).
      
      8 –	The order for reference specifies that Agrofarm had, in 2004, already obtained the necessary seed for sowing in the spring
         of 2005, thereby making preparations for environmentally-friendly production.
      
      9 –	Agrofarm merged with Otsa Talu.
      
      10 –	See points 25 and 26 of this Opinion.
      
      11 –	Joined Cases C‑428/06 to C‑434/06 [2008] ECR I‑0000, paragraph 39, citing, to that effect, Joined Cases C‑422/93 to C‑424/93
         Zabala Erasun and Others [1995] ECR I‑1567, paragraph 28; Case C‑314/96 Djabali [1998] ECR I‑1149, paragraph 18; and Case C‑225/02 García Blanco [2005] ECR I‑523, paragraph 27.
      
      12 –	Case C‑152/03 [2006] ECR I‑1711, paragraphs 13 to 15 and the case-law cited.
      
      13 –	See, to that effect, Case C‑336/00 Huber [2002] ECR I‑7699, paragraphs 39 and 40.
      
      14 –	See Joined Cases 89/86 and 91/86 L’Étoile commerciale and CNTA v Commission [1987] ECR 3005, paragraph 12. See also, for example, Joined Cases 205/82 to 215/82 Deutsche Milchkontorand Others [1983] ECR 2633, and Case 262/87 Netherlands v Commission [1989] ECR 225. See also Mögele, R., ‘The financing system of the Common Agricultural Policy and its legal framework’, Irish Journal of European Law, Round Hall Sweet & Maxwell, 2 (1995), p. 139 and 140: ‘whilst establishing the rules of the CAP is largely a matter of Community
         legislation ..., it is up to the Member States and their authorities to implement and apply these rules, according to the
         general principles governing the institutional structure of the Community and the relations between the Community and its
         Member States’; and McMahon, J.A., EU Agricultural Law, Oxford University Press, 2007, p. 30: ‘changes in this area, which has established a Community framework for good agricultural
         and environmental conditions, still vest a degree of discretion with the Member States’ and the case-law cited.
      
      15 –	Regulation of 29 April 2004 laying down detailed rules for the application of Council Regulation (EC) No 1257/1999 on support
         for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) (OJ 2004 L 153, p. 30) (‘Regulation
         No 817/2004’).
      
      16 –	In my view, it follows from that article that the fact that the measure in question was not originally foreseen in the
         Estonian Development Plan for the years 2004 to 2006 is not decisive.
      
      17 –	See Huber, cited in footnote 13, paragraphs 61 to 64. See also the Opinion of Advocate General Alber in that case, points 74 to 76
         and the case-law cited. In Deutsche Milchkontor and Others, cited in footnote 14, the Court held at paragraph 22 that ‘the application of national law must not affect the scope and
         effectiveness of Community law’. 
      
      18 –	See also the 4th recital in the preamble to Regulation No 817/2004. In addition, the 11th recital provides that ‘as regards
         support for agri-environment ..., the minimum requirements to be met by farmers in connection with the various agri-environment
         ... commitments should ensure a balanced application of support that takes account of the objectives and will thus contribute
         to sustainable rural development’.
      
      19 –	I may add that the 29th recital in the preamble to Regulation No 1257/1999 states that ‘... a prominent role should be
         given to agri-environmental instruments to support the sustainable development of rural areas and to respond to society’s
         increasing demand for environmental services’.
      
      20 –	That is to say, the amendment of Regulation No 51 which added a supplementary condition that in 2005 a person might apply
         for support for environmentally-friendly production if a decision was made in 2004 granting the applicant such support and
         the applicant had entered into a commitment to fulfil the obligations and requirements for obtaining agri-environmental support
         for a period of five years.
      
      21 –	Case C‑384/05 [2007] ECR I‑289, paragraph 34 and the case-law cited. Concerning the area of agriculture and the general
         principles of Community law, see, for instance, Bianchi, D., La politique agricole commune (PAC), Bruylant, Brussels, 2006, p. 62 to 69; McMahon, J.A., EU Agricultural Law, cited in footnote 14, pp. 28 to 33.
      
      22 –	Case C‑17/03 VEMW and Others [2005] ECR I‑4983, paragraph 73 and the case-law cited.
      
      23 –	See, by analogy with regard to Community institutions, Case C‑63/93 Duff and Others [1996] ECR I‑569, paragraph 20: ‘[the] principle [of the protection of legitimate expectations], which is part of the Community
         legal order …, is the corollary of the principle of legal certainty, which requires that legal rules be clear and precise,
         and aims to ensure that situations and legal relationships governed by Community law remain foreseeable. It is settled case-law
         that in the sphere of the common organisation of the markets, whose purpose involves constant adjustments to meet changes
         in the economic situation, economic agents cannot legitimately expect that they will not be subject to restrictions arising
         out of future rules of market or structural policy’ and the case-law cited in that paragraph. See also Case C‑310/04 Spain v Council [2006] ECR I‑7285, paragraph 81 and the case-law cited.
      
      24 –	See, by analogy, order in Case T‑195/95 Guérin Automobiles v Commission [1996] ECR II‑171, paragraph 20.
      
      25 –	Case C‑110/03 [2005] ECR I‑2801, paragraph 71, citing Case C‑304/01 Spain v Commission [2004] ECR I‑7655, paragraph 31; and Case C‑210/03 Swedish Match [2004] ECR I‑11893, paragraph 70. See also Joined Cases C‑133/93, C‑300/93 and C‑362/93 Crispoltoni and Others [1994] ECR I‑4863, paragraph 50 and the case-law cited.
      
      26 –	Joined Cases C‑37/06 and C‑58/06 [2008] ECR I‑0000, paragraphs 33 and 35.
      
      27 –	To recall the 31st recital in the preamble to Regulation No 1257/1999, the purpose of ‘continuing to encourage farmers
         to serve society … by introducing or continuing the use of [environmentally-friendly] farming practices …’.
      
      28 –	See with regard to Community institutions, Spain v Council, cited in footnote 23, where the Court concluded at paragraph 134 that ‘the information submitted by the Community institutions
         [did] not enable the Court to ascertain whether the Community legislature was able, without exceeding the bounds of the broad
         discretion it enjoys in the [Common Agricultural Policy], to reach the conclusion that fixing the amount of the specific aid
         for cotton at 35% of the total existing aid under the previous support scheme would suffice to guarantee the objective set
         out in the 5th recital in the preamble to Regulation No 864/2004, namely to ensure the profitability and hence the continuation
         of that crop, an objective reflecting that laid down in paragraph 2 of Protocol 4’.