EU Law Blog

Agricultural Revolution: Regulation 1234/2007

A brand new regulation - Council Regulation (EC) n° 1234/2007 of October 22nd 2007 establishing a common organization of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation) - published recently brings about a quiet revolution in the agricultural sector. Not a revolution as dramatic as that brought about by Jethro Tull or Turnip Townshend but an important change in the legislative environment nonetheless.

Regulation 1234/2007 replaces 21 separate regulations establishing common organizations of markets for different agricultural products. It establishes a system common to all the products concerned. Those products include live trees, ornamental flowers, pigmeat, eggs, poultrymeat, raw tobacco, bananas, fruit and vegetables, processed fruit and vegetables, beef and veal, milk, wine, flax and hemp, sheep and goat meat, cereals, rice, dried fodder, olive oil, seeds, hops and sugar.

Up until now, each product had its own regulation setting up a common organization of the market. The consequence was a considerable degree of overlap between them and sometimes different mechanisms were adopted to solve similar or identical problems.

Of course, different rules will exist to take account of the particularities of each product. Nevertheless, the single regulation should simplify the regulatory environment considerably.

Regulation 1234/2007 enters into application on January 1st 2008.

For some useful background information on the Commission's proposal, see here. Some interesting "Questions and Answers" are available here.

Public policy, national proceedings, raising an issue on own motion: Cases C-222/05 to C-225/05

Is a national court, when examining the legality of a national administrative measure, required to raise of its own motion a plea alleging that the national measure has infringed certain provisions of EC legislation ? That is a difficult question to answer. And in Joined Cases C-222/05 to C-225/05 van des Weerd and others the Court of Justice answered no, it was not so required as a matter of EC law.

These cases are in fact a sequel to Case C-28/05 G.J. Dokter, Maatschap Van den Top, W. Boekhout v. Minister van Landbouw, Natuur en Voedselkwaliteit which we wrote about here. What happened was that certain measures taken by the Dutch authorities to control the spread of foot and mouth disease were challenged before the competent Dutch court. The applicants in the main proceedings did not raise the issue of the compatibility of the Dutch measures with EC law, a point that had been raised in another case which gave rise to the ruling of the Court of Justice in Case C-28/05. The Dutch court was uncertain as to whether EC law requires it to take into account arguments based on EC law which had not been raised by the parties.

The Court of Justice held that in the circumstances of the present cases, the national court was not under an obligation to consider arguments of EC not raised by the parties.

The Court of Justice recalled that in the absence of Community rules in the field, it is for the domestic legal system of each Member State to designate the courts and tribunals having jurisdiction and to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derive from Community law, provided, first, that such rules are not less favorable than those governing similar domestic actions (principle of equivalence) and, secondly, that they do not render virtually impossible or excessively difficult the exercise of rights conferred by Community law (principle of effectiveness) (Joined Cases C-430/93 and C-431/93 Van Schijndel and van Veen , paragraph 17, and Case C-129/00 Commission v Italy, paragraph 25).

The Court examined, as regards the principle of equivalence, how and when as a matter of national law the national court court raise issues of its own motion. It found that it was clear from the order for reference that the Dutch court is competent to raise of its own motion issues relating to the infringement of rules of public policy, which are construed in Dutch law as meaning issues concerning the powers of administrative bodies and those of the court itself, and provisions as to admissibility. Those rules lie at the very basis of the national procedures, since they define the conditions in which those procedures may be initiated and the authorities which have the power, within their area of responsibility, to determine the extent of the rights and obligations of individuals. But, interestingly, the Court of Justice held that the provisions of EC law in issue in these proceedings were not equivalent to provisions dealing with matters of public policy.

As regards the principle of effectiveness, the Court recalled that each case which raises the question whether a national procedural provision renders the exercise of rights conferred by the Community legal order on individuals impossible or excessively difficult must be analyzed by reference to the role of that provision in the procedure, its progress and its special features, viewed as a whole, before the various national instances. In that context, it is necessary to take into consideration, where relevant, the principles which lie at the basis of the national legal system, such as the protection of the rights of the defence, the principle of legal certainty and the proper conduct of the proceedings (see, to that effect, Case C-312/93 Peterbroeck, paragraph 14, and Van Schijndel and van Veen, paragraph 19).

The Court recalled also that the principle of effectiveness does not, in circumstances such as those which arise in the main proceedings, impose a duty on national courts to raise a plea based on a EC provision of their own motion, irrespective of the importance of that provision to the EC legal order, where the parties are given a genuine opportunity to raise a plea based on Community law before a national court.

The Court went on to distinguish Case C-126/97 Eco Swiss; Joined Cases C-240/98 to C-244/98 Océano Grupo Editorial and Salvat Editores; Case C-473/00 Cofidis; and Case C‑168/05 Mostaza Claro.

For related posts, see our post on Case C-168/05 Mostaza Claro and our post on Case C-234/04 Kapferer.

Accession of Bulgaria and Romania

The Commission has adopted its final monitoring report on the readiness of Bulgaria and Romania for EU membership by January 1st, 2007.

Basically, the Commission confirms that both Bulgaria and Romania are ready, kind of. For a succinct press release, look here. But a number of safeguard mechanisms are foreseen (politely called "accompanying measures") and those are described here.

The findings of the monitoring report on Bulgaria are summarized here and those for Romania are summarized here.

If you are really keen you can find the full version of the monitoring report here. And you call that "ready" ?

What seems like a new sort of measure is the adoption of a special regulation - Commission Regulation (EC) No 1423/2006 setting up a mechanism for what are euphemistically termed "appropriate measures" in the field of agricultural spending in respect of Bulgaria and Romania. That regulation will allow the Commission to suspend 25% of certain agricultural expenditure if a number of conditions are fulfilled.

Reform of the common agricultural policy and annulment: Case C-310/04

The Court's judgment in Case C-310/04 Spain v. Council is pretty much a textbook case on annulment actions and on how the Court approaches judicial review. So it is worth reading. But it also shows how difficult is a true and thorough reform of common agricultural policy from the inside. In that case, the Court annulled the parts of Regulation 1782/2003 as amended by Regulation 864/2004 on support for cotton because it breached the principle of proportionality.

The story goes like this. And this is a much simplified version. When Greece joined the EC back in 1980, a support scheme for cotton was introduced by Protocol 4 on cotton annexed to the Greek Act of Accession. Then the scheme was extended to Spain and Portugal when those countries joined in 1986. Basically, the support scheme took the form of an aid to cotton production.

Then, the Council adopted Regulation 1782/2003 as part of the reform of the common agricultural policy to "decouple" aid to farmers from actual production. The idea was to provide income support for farmers without inciting them to produce stuff no-one wanted at prices no-one could afford. The Council brought the cotton support scheme into line with that new general philosophy with Regulation 864/2004. But a complete alignment would have disrupted the cotton sector considerably so the Council split the support into two parts: 35% would be paid as support for production per eligible hectare and the remaining 65% would be paid over as income support irrespective of cotton production. The problem lay in how "eligible hectares" of production were defined and calculated. The Council defined "eligible hectares" rather restrictively as areas sown with cotton and maintained at least until the boll opening under normal growing conditions.

Spain brought an action to annul the new support scheme. It contended that the condition that the crop should be maintained until the boll opening was manifestly inappropriate for ensuring economic conditions which can ensure that cotton growing can continue and prevent the crop from being driven out by others.

The Court agreed with Spain. It held that the condition that the crop be maintained until the boll opening was disproportionate. The Court held that he Community legislature has, in agricultural matters, a wide discretion, corresponding to the political responsibilities given to it by Articles 34 EC to 37 EC. Thus judicial review must be limited to verifying that the measure in question is not vitiated by any manifest error or misuse of powers and that the authority concerned has not manifestly exceeded the limits of its discretion (Case C‑189/01 Jippes and Others, paragraph 80). As to review of proportionality, the principle of proportionality requires that acts adopted by Community institutions do not exceed the limits of what is appropriate and necessary in order to attain the legitimate objectives pursued by the legislation in question; where there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued (Case C‑189/01 Jippes and Others paragraph 81). As regards judicial review of the implementation of that principle, bearing in mind the wide discretion enjoyed by the Community legislature where the common agricultural policy is concerned, the lawfulness of a measure adopted in that sphere can be affected only if the measure is manifestly inappropriate in terms of the objective which the competent institution is seeking to pursue. In this particular case, the Court held that one of the goals of the scheme was to ensure the maintenance of cotton production and prevent cotton being driven out by other crops. It found after careful review that the level of production aid (the 35% part) was insufficient to meet the objective assigned and that the institutions had not taken into account all the relevant factors in calculating the quantum of aid.

However, the Court suspended the effects of the annulment under Article 231 EC until such time as a new measure is adopted.

But the Court rejected other pleas adduced by Spain. It rejected the plea that the measure contained insufficient reasoning contrary to Article 253 EC. The Court found that in the case of a measure of general application, as here, the statement of reasons may be limited to indicating, first, the general situation which led to its adoption and, second, the general objectives which it is intended to achieve (see, inter alia, Case C‑342/03 Spain v Council, paragraph 55). If the contested measure clearly discloses the essential objective pursued by the institution, it would be excessive to require a specific statement of reasons for the various technical choices made (see, inter alia, Case C‑284/94 Spain v Council paragraph 30).

The Court also rejected a plea of misuse of powers. It held that an act is vitiated by misuse of powers only if it appears, on the basis of objective, relevant and consistent evidence, to have been taken with the exclusive or main purpose of achieving an end other than that stated or evading a procedure specifically prescribed by the Treaty for dealing with the circumstances of the case (see, inter alia, Case C‑342/03 Spain v Council, paragraph 64). But Spain had produced no such evidence.

One final curiosity is worth mentioning. The case was assigned to a chamber comprising 5 judges (the second chamber). After the Council saw the Advocate General's opinion of March 16th, 2006, recommending annulment of the measure, it must have panicked and wrote to the Court to request that the case be transferred to the Grand Chamber under Article 16 of the Statute of the Court. The Court held that it was too late for such a transfer: unjustified delay would be caused and would be contrary to the requirement of the proper administration of justice.

New sugar market

The new Council Regulation on the common organisation of the markets in the sugar sector - Council Regulation n° 318/2006 - has been published.

It enters into force on March 3rd, 2006.

It aims to cure some of the major ills of the old sugar market which was highly protectionist and kept prices in the EC artificially high. Apart from that just go and read it for yourselves.... Who said EC law was easy ?