Keywords
Summary

Keywords

Agriculture – Common agricultural policy – Integrated administration and control system for certain aid schemes – Single payment scheme

(Council Regulation No 1782/2003, Arts 1, second indent, (2)(a) and (c), 33(1)(a), 36(1), 43(1), and 46; Commission Regulation No 795/2004)

Summary

There is no provision in either Regulation No 1782/2003, establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers, or Regulation No 795/2004, laying down detailed rules for the implementation of the single payment scheme provided for in Regulation No 1782/2003, which provides that the lessee is required, on the expiry of the lease, to deliver to the lessor not only the leased land but also the payment entitlements accumulated thereon or relating thereto.

On the contrary, it is apparent from both the objectives and the scheme of Regulation No 1782/2003 that, in the absence of a clause to the contrary, payment entitlements remain with the lessee on the expiry of the lease.

First, in accordance with the second indent of Article 1 of Regulation No 1782/2003, the single payment scheme constitutes an income support for farmers, the objective of which is to ensure a fair standard of living for the agricultural community. In accordance with Article 43(1) of that regulation, the payment entitlements granted to a farmer under the single payment scheme depend on the number of hectares which he held during the reference period and the payments which he was granted under the support schemes laid down in the annex to the regulation. In that context, Article 36(1) of Regulation No 1782/2003 states that aid under the single payment scheme is to be paid in respect of payment entitlements accompanied by an equal number of eligible hectares. By contrast, it is not apparent from Article 36(1) that the payment entitlements are linked to specific parcels, in particular to those which the farmer held during the reference period.

Article 46 of Regulation No 1782/2003 which provides for the possibility to transfer payment entitlements in accordance with the objective referred to in recital 30 in the preamble to that regulation states, in particular, in paragraph 2 thereof that, in the case of a lease or similar types of transactions, payment entitlements may be transferred only if the payment entitlements transferred are accompanied by the transfer of an equivalent number of eligible hectares. That provision seeks to avoid speculative transfers leading to the accumulation of payment entitlements without a corresponding agricultural basis, in accordance with the objective laid down in recital 30. Moreover, under Article 33(1)(a) of Regulation No 1782/2003 in conjunction with Article 2(a) and (c) thereof, the single payment scheme is aimed at farmers, namely persons who exercise an ‘agricultural activity’, consisting of the production, rearing or growing of agricultural products or maintaining the land in good agricultural and environmental condition. However, a lessor of land is not necessarily a farmer within the meaning of Article 2(a) of that regulation. Accordingly, if the Community legislature had wanted payment entitlements to revert back to the lessor in all circumstances on the expiry of the lease, it would have enacted a provision to that effect.

Consequently, Community law does not require a lessee, on the expiry of the lease, to deliver to the lessor not only the leased land, but also the payment entitlements accumulated thereon or relating thereto, or to pay him compensation.

(see paras 25-28, 30, 32, 34-38, 43, operative part)