Judgment of the Court (First Chamber) of 2 July 2015

Legal context

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

13 Ms Wree is a vet and runs a sheep farm. She breeds sheep and rears lambs for slaughter, among other things.

14 Her flocks graze on a number of restored areas situated in the districts of North Frisia (Germany) and Schleswig-Flensburg (Germany).

15 That grazing land includes the restored areas laid over the cover layers of the Ahrenshöft landfill site in the district of North Frisia and the Schleswig-Haferteich landfill site in the district of Schleswig-Flensburg. Both of those above-ground landfills have come to the end of their waste-deposit phase. The Ahrenshöft landfill site is currently still in the closure phase and is due to be released into after-care shortly, whilst the Schleswig-Haferteich landfill site is already in after-care.

16 Between Ms Wree and each of the landfill operators concerned, there are contractual agreements entitling her to graze her sheep (free of charge) on the green areas on those sites.

17 The contractual agreement entered into by Ms Wree and the operator of the Ahrenshöft landfill site is known as an ‘Agricultural lease relating to individual areas’. Under the first and second sentences of Paragraph 7 of that agreement, ‘[t]he purpose of this lease is to prevent bush encroachment of the area. The lessee is required to prevent damage to the grassland in consultation and cooperation with the lessor’.

18 Paragraph 19(1) of that agreement provides as follows:

‘The lessor or a person appointed by him shall have the right to enter and inspect the leased areas at any time.’

19 Since 2007, contractual agreements have also been concluded between Ms Wree and the operator of the Schleswig-Haferteich landfill site.

20 On 11 May 2010, Ms Wree requested the aid to be granted as a single payment for the 2010 harvest year and, to that end, declared a total area of eligible land at 25 5098 ha, which also included the green areas on the Ahrenshöft and Schleswig-Haferteich landfill sites.

21 By a decision of 14 December 2010, the Landesamt refused the application on the ground that the areas concerned, totalling 19 7855 ha, did not exist in the land register and that the total eligible area declared by Ms Wree in fact amounted to 5 7243 ha. Consequently, in accordance inter alia with the third paragraph of Article 58 of Regulation (EC) No 1122/2009, the Landesamt decided that no aid was to be granted under the single payment scheme.

22 Ms Wree brought an administrative action against the decision of the Landesamt. She stated that she uses the land at the landfill sites as grazing land for sheep and that she levels and cuts parts of it. She also argued in support of her action that the entire surface area of the landfill sites could be used without restriction for sheep grazing.

23 By decision of 31 March 2011, the Landesamt dismissed that action as unfounded. The Landesamt based its decision on the fact that the areas for which Ms Wree had claimed payment were not productive agricultural areas within the meaning of Regulation No 73/2009, but closed landfill sites as provided for in the Ordinance on landfill sites and long-term waste storage facilities (Deponieverordnung).

24 On 15 April 2011, Ms Wree brought an action against that decision before the Schleswig-Holsteinisches Verwaltungsgericht (Administrative Court, Schleswig-Holstein), arguing, inter alia, that the primary use of the areas forming the subject-matter of the proceedings was not principally as a closed landfill site, since that is a state rather than a use. The Landesamt, by contrast, argued that the areas at issue are used mainly for landfills in after-care and that, for the sake of the stability of the landfill site, the land could be subjected to a controlled process of pasturing for sheep grazing. According to the Landesamt, it was essentially in order to prevent damaging biological processes affecting the stability of the landfill that the operators had made the areas in question available to Ms Wree free of charge.

25 By judgment of 19 January 2012, the Schleswig-Holsteinisches Verwaltungsgericht upheld Ms Wree’s action. It held that she was entitled to the single payment for the year 2010 and that those areas were to be taken into account for the purpose of calculating the aid applied for by her.

26 The Landesamt was granted leave to appeal against that judgment by order of 3 September 2012 of the Schleswig-Holsteinisches Oberverwaltungsgericht (Higher Administrative Court, Schleswig-Holstein).

27 Before the referring court, the Landesamt argues, inter alia, that the areas of the Ahrenshöft and Schleswig-Haferteich landfill sites cannot be regarded as agricultural areas within the meaning of Article 2(h) of Regulation No 73/2009.

28 Since it considers that the outcome of the main proceedings turns on the interpretation of EU law, the Schleswig-Holsteinisches Oberverwaltungsgericht decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling:

‘Is there also an agricultural area within the meaning of Article 34(2)(a) of Regulation No 73/2009 of 19 January 2009 if that area, although also used for agricultural activities (grazing for sheep-farming purposes), forms the cover layer of a landfill site in after-care?’

The question referred for a preliminary ruling

29 By its question, the referring court asks, in essence, whether Article 34(2)(a) of Regulation No 73/2009 must be interpreted as meaning that an area, although also used for grazing for sheep-farming purposes, forms the cover layer of a landfill site in after-care and constitutes an agricultural area within the meaning of that provision.

30 Under that provision, any agricultural area of the holding that is used for an agricultural activity or, where the area is used as well for non-agricultural activities, predominantly used for agricultural activities, is eligible for aid.

31 The concept of ‘agricultural area’ is defined in Article 2(h) of Regulation No 73/2009 as ‘the total area taken up by arable land, permanent pasture and permanent crops’.

32 In the dispute in the main proceedings, it is common ground that the areas at issue are used for pasture.

33 However, in order to qualify as ‘permanent pasture’ and therefore ‘agricultural area’ within the meaning of Article 2(h) of Regulation No 73/2009, such areas must meet the definition in Article 2(c) of Regulation No 1120/2009, under which an area used for ‘permanent pasture’ means ‘land used to grow grasses or other herbaceous forage naturally (self-seeded) or through cultivation (sown) and that has not been included in the crop rotation of the holding for five years or longer, excluding areas set aside’. The provision adds ‘to this end, “grasses or other herbaceous forage” means all herbaceous plants traditionally found in natural pastures or normally included in mixtures of seeds for pastures or meadows in the Member State (whether or not used for grazing animals)’.

34 Regarding, first of all, the question whether areas forming the cover layer of a landfill site in after-care can be categorised as ‘land’ within the meaning of that provision, it should be noted that Ms Wree argued in her written observations that the landfills at issue in the main proceedings are covered by a number of layers, including an upper layer comprising elements naturally present in soil, namely sand and clay.

35 In that regard and subject to verifications to be made by the referring court, if the very function of the restored cover layers of those two landfill sites was to approximate as much as possible a natural surface covered with grasses or other herbaceous forage, it should be held to be ‘land’ within the meaning of Regulation No 73/2009.

36 Next, the categorisation of the areas at issue as ‘permanent pasture’ within the meaning of Article 2(c) of Regulation No 1120/2009 depends on the actual use of the land in question, so that an area must be classified as ‘agricultural’ where it is used as ‘permanent pasture’ within the meaning of that provision (see, by analogy, judgment in Landkreis Bad Dürkheim, C‑61/09, EU:C:2010:606 , paragraph 37).

37 It follows that the provision in the lease agreement providing that Ms Wree’s activities on the areas in question are also aimed at preventing or limiting bush encroachment of the area in order to avoid destruction of the cover layers of the landfill sites, is irrelevant in that regard.

38 Similarly, the fact, relied on by the Landesamt, that those areas are subject to the waste management scheme does not preclude them from being categorised as ‘permanent pasture’ within the meaning of that provision.

39 It follows from the considerations set out above that an area which forms the cover layer of a landfill site in after-care constitutes an agricultural area within the meaning of Article 34(2)(a) of Regulation No 73/2009 when it is actually used for permanent pasture, which it is for the referring court to verify.

40 In order to provide the referring court with a useful answer, it should be stated additionally that, in order to be eligible for aid under Article 34(2)(a) of Regulation No 73/2009, the agricultural areas at issue in the main proceedings must be used for an agricultural activity or, where the areas are used as well for non-agricultural activities, predominantly used for agricultural activities.

41 In that regard the first paragraph of Article 9 of Regulation No 1120/2009 states that if the agricultural activity can be exercised without being significantly hampered by the intensity, nature, duration and timing of the non-agricultural activity that area is to be considered as being used predominantly for agricultural activities.

42 In the present case it is common ground that Ms Wree’s flocks graze on areas which form the restored cover layers of two landfill sites. That activity consists in the breeding and keeping of animals for farming purposes and therefore constitutes an ‘agricultural activity’ within the meaning of Article 2(c) of Regulation No 73/2009.

43 It is also for the referring court to ascertain whether and how non-agricultural activities have also been pursued on the areas at issue, it being clear that the mere contractual or legal possibility that non-agricultural activities may be pursued on the areas concerned is not by itself sufficient for a finding that those areas were actually used for non-agricultural activities. It follows that, in the present case, the fact that the lease agreement allows the lessor or a person appointed by him to have the right to enter and inspect the leased areas at any time in no way pre-determines their actual use.

44 Lastly, it must be borne in mind that, in order to be eligible for aid within the meaning of Article 34(2)(a) of Regulation No 73/2009, the agricultural areas at issue must be allocated to the relevant farmer’s holding. The Court has held in that regard that this is the case where the farmer enjoys a degree of autonomy with regard to that area sufficient for the carrying-out of his agricultural activity (see, by analogy, judgment in Landkreis Bad Dürkheim, C‑61/09, EU:C:2010:606 , paragraphs 58 and 62).

45 In the light of all the foregoing considerations, the answer to the question referred is that Article 34(2)(a) of Regulation No 73/2009 must be interpreted as meaning that an area which forms the cover layer of a landfill site in after-care constitutes an agricultural area within the meaning of that provision when it is actually used for permanent pasture.

Costs

46 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.