Court of Justice of the European Communities (including Court of First Instance Decisions)

(Community aid schemes Regulation (EEC) No 3887/92 Beef and veal sector Regulation (EC) No 1254/1999 Available forage area Definition Special premium Conditions for granting Parcel of land temporarily under water during the period in question)

In Case C-34/05,

REFERENCE for a preliminary ruling under Article 234 EC from the College van Beroep voor het bedrijfsleven (Netherlands), made by decision of 26 January 2005, received at the Court on 31 January 2005, in the proceedings

Maatschap J. en G.P. en A.C. Schouten

v

Minister van Landbouw, Natuur en Voedselkwaliteit,

composed of C.W.A. Timmermans, President of the Chamber, J. Klučka, R. Silva de Lapuerta, J. Makarczyk and G. Arestis (Rapporteur), Judges,

Advocate General: P. Léger,

Registrar: R. Grass,

having regard to the written procedure,

after considering the observations submitted on behalf of:

Maatschap J. en G.P. en A.C. Schouten, by S. Dul, accountant adviseur,

the Netherlands Government, by H.G. Sevenster and C. ten Dam, acting as Agents,

the Greek Government, by G. Kanellopoulos, acting as Agent,

the French Government, by G. de Bergues and A. Colomb, acting as Agents,

the Commission of the European Communities, by F. Erlbacher and T. van Rijn, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 22 June 2006

gives the following

1. This reference for a preliminary ruling concerns the interpretation of Article 12(2)(b) of Council Regulation (EC) No 1254/1999 of 17 May 1999 on the common organisation of the market in beef and veal (OJ 1999 L 160, p. 21) and Article 2(1)(c) of Commission Regulation (EEC) No 3887/92 of 23 December 1992 laying down detailed rules for applying the integrated administration and control system for certain Community aid schemes (OJ 1992 L 391, p. 36).
2. The reference was submitted in the course of proceedings between the company of farmers Maatschap J. en G.P. en A.C. Schouten ('Schouten') and the Minister van Landbouw, Natuur en Voedselkwaliteit (Minister for Agriculture, Nature and Food Quality, 'the Minister') concerning the latter's refusal to grant Schouten the special premium payable for the holding of male bovine animals which it had applied for previously.

Legal context

3. Regulation No 1254/1999 establishes a comprehensive scheme for direct payments to producers of beef and veal. One of those direct payments consists in a special premium for holding male bovine animals.
4. In that regard, Article 4 of the regulation provides:

'1. A producer holding male bovine animals on his holding may qualify, on application, for a special premium. It shall be granted in the form of an annual premium per calendar year and per holding within the limits of regional ceilings for not more than 90 animals for each of the age brackets referred to in paragraph 2.

2. ...

3. To qualify for the special premium:

(a) any animal covered by an application shall be held by the producer for fattening for a period to be determined,

...'

5. In subsection 5, entitled 'Stocking density', Article 12(1) and (2) of Regulation No 1254/1999 provides:

'1. The total number of animals qualifying for the special premium and the suckler cow premium shall be limited by the application of a stocking density on the holding of two livestock units (LU) per hectare and calendar year. This stocking density shall be expressed in LU per unit of forage area of the holding used for the animals carried on it. However, a producer shall be exempt from the application of the stocking density if the number of animals held on his holding and to be taken into account for determining the stocking density is not more than 15 LU.

2. For determining the stocking density on the holding, account shall be taken of:

(a) the male bovine animals, suckler cows and heifers, sheep and/or goats for which premium applications have been submitted, as well as the dairy cows needed to produce the total reference quantity of milk allocated to the producer. The number of animals shall be converted to LU by reference to the conversion table in Annex III,

(b) the forage area, meaning the area of the holding available throughout the calendar year for rearing bovine animals and sheep and/or goats. The forage area shall not include:

buildings, woods, ponds, paths,

areas used for other crops eligible for Community aid or for permanent crops or horticultural crops, except permanent pasture for which area payments are granted pursuant to Article 17 of this Regulation and Article 19 of Regulation (EC) No 1255/1999,

areas qualifying for the support system laid down for the producers of certain arable crops, used for the aid scheme for dried fodder or subject to a national or Community set-aside scheme.

Forage area shall include areas in shared use and areas which are subject to mixed cultivation.'

6. In this connection, recital 13 in the preamble to Regulation No 1254/1999 states:

'... given the trend towards intensification of beef and veal production, premiums for stockfarming should be limited with regard to the forage capacity of each holding in relation to the numbers and species of animals held; whereas, to avoid excessively intensive types of production, the grant of such premiums should be subject to compliance with a maximum stocking density on the holding; whereas, however, the situation of small producers should be taken into consideration'.

7. Under Article 1 of Council Regulation (EEC) No 3508/92 of 27 November 1992 establishing an integrated administration and control system for certain Community aid schemes (OJ 1992 L 355, p. 1), as amended by Council Regulation (EC) No 1593/2000 of 17 July 2000 (OJ 2000 L 182, p. 4), each Member State is to set up an integrated administration and control system applying, in the livestock sector, to the premium and payment arrangements for beef and veal producers established by Chapter 1 of Title 1 of Regulation No 1254/1999.
8. Regulation No 3887/92 contains the provisions for applying that integrated administration and control system. Article 2(1) of that regulation is worded as follows:

'1. For the purposes of this Regulation:

...

(c) each forage area must be available for rearing animals for a minimum period of seven months, starting on a date to be determined by the Member State, which must be between 1 January and 31 March.'

9. Under Article 9(2) of Regulation No 3887/92:

'If the area actually determined is found to be less than that declared in an 'area' aid application, the area actually determined on inspection shall be used for calculation of the aid. ...

...

If the difference is more than 20 % of the determined area no area-linked aid shall be granted.

...'

10. Notwithstanding its repeal by Commission Regulation (EC) No 2419/2001 of 11 December 2001 laying down detailed rules for applying the integrated administration and control system for certain Community aid schemes established by Council Regulation (EEC) No 3508/92 (OJ 2001 L 327, p. 11), Regulation No 3887/92 nevertheless remained applicable to aid applications relating to marketing years or premium periods which finished before 1 January 2002.

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

11. On 9 May 2001, in order to receive Community aid in the beef and veal sector, Schouten applied to the Minister for the registration as forage area for 2001 of parcels of land representing a total area of 70.29 ha of pasture.
12. Some of those parcels are water meadows. A water meadow is a piece of ground, mostly pasture, situated beyond the dyke, that is to say, between the dyke which protects the hinterland against flooding and the riverbed. Water meadows are partly under water for shorter or longer periods.
13. On 10 and 11 May 2001, a satellite image and an aerial photograph of the region were taken. They showed that the parcels owned by Schouten were partly under water.
14. On 1 August 2001, Schouten submitted a claim for a premium for holding 26 male bovine animals on the parcels referred to in paragraph 11 of this judgment, under Article 4(1) of Regulation No 1254/1999.
15. By letter of 17 December 2001, the Minister informed Schouten that the area of some parcels, determined by teledetection, was less than the forage area stated in the application. As the difference amounted to more than 20%, the forage area registered in respect of Schouten was to be treated as zero under Article 9(2) of Regulation No 3887/92.
16. By decision of 27 May 2002, Schouten's application for a premium for holding 26 male bovine animals was rejected by the Minister, on the ground that the forage area was registered at zero and therefore the stocking density referred to in Article 12 of Regulation No 1254/1999 was not complied with.
17. By letter of 3 July 2002, Schouten lodged an objection against that decision. In support of its objection it submitted, in a letter of 22 July 2002, that it had measured the parcels lying on water meadows on 2 July 2002 and that they occupied an area which approximately matched the area stated in the application.
18. By decision of 8 August 2003, the Minister rejected that objection on the ground that the areas declared by Schouten as forage area were not available for a continuous period of seven months, namely from 31 March to 31 October 2001, for the rearing of bovine animals, sheep or goats. It found that Schouten had to run the risk that a flood might occur when the teledetection was being carried out and that, consequently, the area determined would be less than that which it had declared.
19. By letter of 17 September 2003, Schouten brought an action before the College van Beroep voor het bedrijfsleven (Administrative Court for Trade and Industry) against that rejection by the Minister. In the main proceedings, Schouten claims that the circumstances were extraordinary at the time of the teledetection and that that is not a risk it should have to bear. It also asserts that the water had already disappeared three days after 11 May 2001 and that the bovine animals were grazing there again after 10 days.
20. The Minister submits, for his part, that Article 12(2)(b) of Regulation No 1254/1999, read in conjunction with Article 2(1)(c) of Regulation No 3887/92, must be interpreted as meaning that it must be possible to use the parcels declared as forage area to feed the animals for a continuous period of at least seven months and, in any event, from 31 March to 31 October. He contends that if, during that period, it is established by teledetection that a parcel is wholly or partly under water, the area under water is no longer available as forage area.
21. The College van Beroep voor het bedrijfsleven considers that it is not entirely clear whether it is correct to take a restrictive interpretation of the words 'be available for rearing bovine animals, sheep or goats' and that there is still room for doubt on that matter.
22. In those circumstances, the College van Beroep voor het bedrijfsleven decided to stay proceedings and to refer to the Court for a preliminary ruling the following questions:

'(1) Must Article 12(2)(b) of Regulation (EC) No 1254/1999 and Article 2(1)(c) of Regulation (EEC) No 3887/92 be interpreted as meaning that a parcel of land declared as a forage area may not be regarded as �available� if at any time in the relevant period that parcel of land has been under water?

(2) If the answer to Question 1 is in the affirmative, are the provisions referred to above binding with specific regard to the consequences flowing from such reply?

(3) If the answer to Question 1 is in the negative, what are the applicable criteria for determining whether a parcel of land declared as a forage area which was temporarily under water can be regarded as �available� within the meaning of Article 12(2)(b) of Regulation (EC) No 1254/1999 and Article 2(1)(c) of Regulation (EEC) No 3887/92?'

On the questions referred

Questions 1 and 3

23. By Questions 1 and 3, which must be examined together, the referring court is essentially asking whether and, if so, under what conditions, a parcel of land declared as a forage area, which has been temporarily under water during the relevant period, may be regarded as 'available' within the meaning of Article 12(2)(b) of Regulation No 1254/1999 and Article 2(1)(c) Regulation No 3887/92.
24. As a preliminary point, it should be observed that those regulations do not specify how an 'available' forage area is to be construed.
25. it iIt is settled case-law that, in interpreting a provision of Community law, it is necessary to consider not only its wording, but also the context in which it occurs and the objectives pursued by the rules of which it is part (see, inter alia, Case C-294/01 Granarolo [2003] ECR I-13429, paragraph 34, and Case C-306/05 SGAE [2006] ECR I-0000, paragraph 34).
26. Article Article 12(2)(b) of Regulation No 1254/1999 contains a list of the areas which are excluded from the forage area, meaning the area of the holding available throughout the calendar year for rearing bovine animals and sheep and/or goats. That list expressly includes areas which do not contribute to the forage resources of the holding, such as buildings, woods, ponds, paths and areas used for other crops eligible for Community aid, except permanent pasture for which area payments are granted.
27. It follows that an area can be regarded as an 'available' forage area within the meaning of that provision where it is intended to be used exclusively for the feedings of animals.
28. That interpretation is borne out by the objectives pursued by Regulation No 1254/1999. In fact, as recital 13 in the preamble thereto shows, one of the aims of that regulation is to halt the trend towards intensification of beef and veal production, whereby producers carry ever-increasing numbers of bovine animals on their holdings without increasing the area of the latter so that it is insufficient to feed the animals.
29. To achieve that objective, Article 4 of Regulation No 1254/1999 makes the grant of a special premium subject to complying with a stocking density, laid down in Article 12 of that regulation, which expresses the relationship between the number of animals carried on the holding and the forage area of the holding used to feed them, thereby ensuring that that area is sufficient to meet the feeding requirements of those animals. Therefore, a producer who wishes to obtain the special premium cannot use the area concerned for any purpose other than to feed those animals.
30. It follows that, contrary to the contention of the Netherlands Government, the fact that an area was temporarily under water during the relevant period does not, in principle, preclude it from being used exclusively to feed the animals held on it and, consequently, regarded as an 'available' forage area within the meaning of Article 12(2)(b) of Regulation No 1254/1999. Moreover, it should be pointed out that the list in that provision does not feature zones which are, or risk being, temporarily under water, such as water meadows, whereas conversely it does include areas permanently covered by water, such as ponds.
31. In addition, Article 2(1)(c) of Regulation No 3887/92 specifies that 'each forage area must be available for rearing animals for a minimum period of seven months, starting on a date to be determined by the Member State, which must be between 1 January and 31 March'.
32. It is clear from that provision, read in conjunction with Article 12 of Regulation No 1254/1999, which establishes a stocking density with the objective, as noted in paragraph 29 of this judgment, of granting a premium only for animals held on holdings of an area large enough to feed them, that a forage area can be regarded as 'available' if it has actually been possible to use it to feed the animals held on the holding concerned for a minimum period of seven months during the calendar year, from the date fixed by the national legislation, which must be between 1 January and 31 March.
33. Specifying such a minimum period of seven months does not, contrary to the contention of the Netherlands Government, mean that the forage area must be occupied on a continuous basis by the animals to be considered 'available'.
34. As the Advocate General noted in point 51 of his Opinion, where the condition for a minimum period of seven months during the calendar year has been met, a temporary failure to use the area concerned, for reasons such as brief flooding, does not call in question the fact that it is intended to be used exclusively to feed the animals carried on it. Likewise, as Schouten correctly observes, the fact that the areas were partly under water for several days over the reference period does not necessarily call in question their intended use as a forage area.
35. Furthermore, it should be pointed out that there is no indication at all in the wording of the provisions at issue in the main proceedings that the forage area must be occupied continuously by the animals during the relevant period. It is precisely the risk of unpredictable weather conditions, such as flooding, frost or snow, making the land temporarily inaccessible, which may have led the Community legislature not to require a continuous period of occupation.
36. In the present case, it is common ground that the areas at issue were under water for several days. That temporary flooding, leading to the failure to use those areas, does not in principle prevent the minimum period required under Article 2(1)(c) of Regulation No 3887/92 from being complied with.
37. In this connection, it is for the referring court to ascertain whether, notwithstanding that brief failure to occupy the areas at issue in the main proceedings, it was in fact possible to use those areas to feed the animals for a minimum period of seven months during the calendar year, from the date fixed by the national legislation, which must be between 1 January and 31 March.
38. In the In the light of all the foregoing considerations, the answer to Questions 1 and 3 must be that Article 12(2)(b) of Regulation No 1254/1999 and Article 2(1)(c) of Regulation No 3887/92 must be interpreted as meaning that a parcel of land declared as a forage area may be regarded as 'available' where, first, it is intended to be used exclusively for the feeding of the animals held on it throughout the calendar year and, secondly, it was in fact possible to use it to feed them for a minimum period of seven months during that year, from the date fixed by the national legislation, which must be between 1 January and 31 March, even though that parcel of land was not occupied continuously by those animals, in particular because it was temporarily under water.

Question 2

39. In view of the answer given to Questions 1 and 3, it is unnecessary to answer Question 2.

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 (Second Chamber) hereby rules:

Articles Article 12(2)(b) of Council Regulation (EC) No 1254/1999 of 17 May 1999 on the common organisation of the market in beef and veal and Article 2(1)(c) of Commission Regulation (EEC) No 3887/92 of 23 December 1992 laying down detailed rules for applying the integrated administration and control system for certain Community aid schemes must be interpreted as meaning that a parcel of land declared as a forage area may be regarded as 'available' where, first, it is intended to be used exclusively for the feeding of the animals held on it throughout the calendar year and, secondly, it was in fact possible to use it to feed them for a minimum period of seven months during that year, from the date fixed by the national legislation, which must be between 1 January and 31 March, even though that parcel of land was not occupied continuously by those animals, in particular because it was temporarily under water.

[Signatures]

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* Language of the case: Dutch.