Grootes (Agriculture) [2010] EUECJ C-152/09 (11 November 2010)

Judgment This reference for a preliminary ruling concerns the interpretation of Article 40(5) of Council Regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and amending Regulations (EEC) No 2019/93, (EC) No 1452/2001, (EC) No 1453/2001, (EC) No 1454/2001, (EC) No 1868/94, (EC) No 1251/1999, (EC) No 1254/1999, (EC) No 1673/2000, (EEC) No 2358/71 and (EC) No 2529/2001 (OJ 2003 L 270, p. 1, and – corrigendum – OJ 2004 L 94, p. 70), as amended by Council Regulation (EC) No 319/2006 of 20 February 2006 (OJ 2006 L 58, p. 32) (‘Regulation No 1782/2003’). The reference has been made in proceedings between Mr Grootes and the Amt für Landwirtschaft Parchim (Office for Agriculture, Parchim) concerning the status to be granted to a particular plot (‘the area in dispute’), namely the status as arable land or as land under permanent pasture, for the purposes of calculating payment entitlements. Legal context European Union law Regulation No 1782/2003 In the context of reform of the common agricultural policy, the Council of the European Union adopted Regulation No 1782/2003, which establishes common rules for the direct support schemes under the common agricultural policy and for certain support schemes for farmers. Regulation No 1782/2003 establishes, inter alia, an income support scheme for farmers. That scheme is described in the second indent of Article 1 of that regulation as the ‘single payment scheme’. That scheme forms the subject-matter of Title III of that regulation. Under the first subparagraph of Article 34(2) of Regulation No 1782/2003: ‘Farmers shall apply to the single payment scheme by a date, to be fixed by Member States, but not later than 15 May.’ According to Article 37(1) of that regulation: ‘The reference amount shall be the three-year average of the total amounts of payments which a farmer was granted under the support schemes referred to in Annex VI, calculated and adjusted according to Annex VII, in each calendar year of the reference period referred to in Article 38. …’ Pursuant to Article 38 of Regulation No 1782/2003, the reference period comprises the calendar years 2000, 2001 and 2002. Under the heading ‘Hardship cases’, Article 40 of Regulation No 1782/2003 provides: ‘1. By way of derogation from Article 37, a farmer whose production was adversely affected during the reference period by a case of force majeure or exceptional circumstances occurring before or during that reference period shall be entitled to request that the reference amount be calculated on the basis of the calendar year or years in the reference period not affected by the case of force majeure or exceptional circumstances. 2. If the whole reference period was affected by the case of force majeure or exceptional circumstances, the Member State shall calculate the reference amount on the basis of the 1997 to 1999 period or, in case of sugar beet, cane and chicory, on the basis of the closest marketing year prior to the representative period chosen in accordance with point K of Annex VII. In this case, paragraph 1 shall apply mutatis mutandis . 3. A case of force majeure or exceptional circumstances, with relevant evidence to the satisfaction of the competent authority, shall be notified by the farmer concerned in writing to the authority within a deadline to be fixed by each Member State. 4. Force majeure or exceptional circumstances shall be recognised by the competent authority in cases such as, for example: (a) the death of the farmer; (b) long-term professional incapacity of the farmer; (c) a severe natural disaster gravely affecting the holding’s agricultural land; (d) the accidental destruction of livestock buildings on the holding; (e) an epizootic affecting part or all of the farmer’s livestock. 5. Paragraphs 1, 2 and 3 of this Article shall apply, mutatis mutandis , to farmers who, during the reference period, were under agri-environmental commitments in accordance with [Council Regulations] (EEC) No 2078/92 [of 30 June 1992 on agricultural production methods compatible with the requirements of the protection of the environment and the maintenance of the countryside (OJ 1992 L 215, p. 85)] and (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 (OJ 1999 L 160, p. 80)], to hop farmers who, during the same period, were under a grubbing-up commitment in accordance with [Council] Regulation (EC) No 1098/98 [of 25 May 1998 introducing special temporary measures for hops (OJ 1998 L 157, p. 7)] as well as to tobacco farmers who have participated in the quota buy-back programme in accordance with [Council] Regulation (EEC) No 2075/92 [of 30 June 1992 on the common organisation of the market in raw tobacco (OJ 1992 L 215, p. 70)]. In the case where the measures referred to in the first subparagraph covered both the reference period and the period referred to in paragraph 2, Member States shall establish, according to objective criteria and in such a way as to ensure equal treatment between farmers and to avoid market and competition distortions, a reference amount in accordance with the detailed rules to be laid down by the Commission in accordance with the procedure referred to in Article 144(2).’ Section 1 of Chapter 5 of Title III of Regulation No 1782/2003, entitled ‘Regional Implementation’, offers Member States the option of applying at regional level the single payment scheme provided for in Chapters 1 to 4. Under Article 58(1) and (3) of that regulation, a Member State may choose to apply the single payment scheme at regional level by subdividing the national ceiling, not individually between the farmers in that State on the basis of their respective reference amounts, but on the basis of the various regions of which its territory consists. Article 59(1), (3) and (4) of Regulation No 1782/2003 provides: ‘1. In duly justified cases and according to objective criteria, the Member State may divide the total amount of the regional ceiling established under Article 58 or part of it between all the farmers whose holdings are located in the region concerned, including those who do not meet the eligibility criterion referred to in Article 33. … 3. In case of partial division of the total amount of the regional ceiling, farmers shall receive entitlements whose unit value is calculated by dividing the corresponding part of the regional ceiling established under Article 58 by the number of eligible hectares, within the meaning of Article 44(2), established at regional level. In case the farmer is also entitled to receive entitlements calculated on the remaining part of the regional ceiling, the regional unit value of each of his entitlements, except for set-aside entitlements, shall be increased by an amount corresponding to the reference amount divided by the number of his entitlements established in accordance with paragraph 4. … 4. The number of entitlements per farmer shall be equal to the number of hectares he declares in accordance with Article 44(2) for the first year of application of the single payment scheme, except in case of force majeure or exceptional circumstances within the meaning of Article 40(4).’ According to Article 60(3) of Regulation No 1782/2003: ‘Within the limit established according to paragraph 2 for the region concerned, a farmer shall be allowed to make use of the option referred to in paragraph 1: … (b) in case of application, mutatis mutandis , of Articles 40 and 42(4), within the limit of a number of hectares to be established according to objective criteria and in such a way as to ensure equal treatment between farmers and to avoid market and competition distortions.’ Article 61 of that regulation provides: ‘In case of application of Article 59, Member States may also, according to objective criteria, fix, within the regional ceiling or part of it, different per-unit values of entitlements to be allocated to farmers referred to in Article 59(1), for hectares under grassland at the date provided for the area aid applications for 2003 and for any other eligible hectare or alternatively for hectares under permanent pasture at the date provided for the area aid applications for 2003 and for any other eligible hectare.’ Regulation (EC) No 795/2004 Article 16 of Commission Regulation (EC) No 795/2004 of 21 April 2004 laying down detailed rules for the implementation of the single payment scheme provided for in Regulation No 1782/2003 (OJ 2004 L 141, p. 1), as amended by Commission Regulation (EC) No 1974/2004 of 29 October 2004 (OJ 2004 L 345, p. 85) (‘Regulation No 795/2004’), provides: ‘1. In cases referred to in Article 40(5) of Regulation (EC) No 1782/2003, where the agri-environmental commitments referred to in that Article expire after the last date for lodging an application for payment under the single payment scheme in its first year of application, the Member State shall establish, in the first year of application of the single payment scheme, reference amounts for each farmer concerned in accordance with Article 40(1), (2), (3) or (5), second subparagraph, of that Regulation, provided that any double payment under those agri-environmental commitments is excluded. … 2. In the case referred to in the second subparagraph of Article 40(5) of Regulation (EC) No 1782/2003, the farmer shall receive payment entitlements calculated by dividing a reference amount, established by the Member State, in accordance with objective criteria and in such a way as to ensure equal treatment between farmers and to avoid market and competition distortion, by a number of hectares not higher than the number of hectares he declares in the first year of application of the single payment scheme. 3. Article 40 of Regulation (EC) No 1782/2003 shall apply on the basis of each direct payment referred to in Annex VI [to] that Regulation.’ Chapter 6 of Regulation No 795/2004 includes a Section 1 entitled ‘Regional Implementation’. Article 38(1) to (3) of Regulation No 795/2004, which comes under Section 1, lays down a number of procedures for the implementation of Article 59(1) and (2) of Regulation No 1782/2003. Article 38(4) of Regulation No 795/2004 provides: ‘Article 40 of Regulation (EC) No 1782/2003 and Article 16 of this Regulation shall apply mutatis mutandis .’ National legislation Pursuant to Paragraph 2(1) of the Law implementing the single payment scheme (Betriebsprämiendurchführungsgesetz) (BGBl. 2006 I, p. 1298; ‘the BetrPrämDurchfG’), the single payment is granted at regional level from 1 January 2005 in accordance with the detailed rules laid down in that law and in the regulation implementing the single payment scheme. Paragraph 5(1) of the BetrPrämDurchfG provides that, pursuant to the combined provisions of Article 59(1) and (3) of Regulation No 1782/2003, the reference amount for the single payment consists, for each farmer, of an individual amount for the holding and of an area-based amount. The individual amount for the holding is calculated on the basis of the earlier direct payments set out in Paragraph 5(2)(1) of the BetrPrämDurchfG, to which must be added the dairy premium and additional dairy premium payments. The area-based amount is calculated by dividing the remaining portion of the regional ceiling by the number of hectares eligible for aid. In that regard, Paragraph 5(3) of the BetrPrämDurchfG provides: ‘For the calendar year 2005, the area-based amount shall be calculated as follows: 1. The sum of individual amounts, as defined in Paragraph 2 for each region, shall be deducted from each corresponding regional ceiling defined in Paragraph 4(1). 2. The remainder of the regional ceiling, obtained after deduction in accordance with point 1, shall be subdivided, in accordance with the first subparagraph of Article 59(3) of Regulation (EC) No 1782/2003, between the areas mentioned therein according to the number of hectares, provided that, in each region, the ratio between the admissible area-based amount per hectare, which, on 15 May 2003, was being used as permanent pasture land, and the admissible area-based amount for other areas is respected. …’ Annex 2 to the BetrPrämDurchfG contains a table of per-unit values for hectares under permanent pasture and for all other eligible hectares which, for the Land of Mecklenburg-Vorpommern, lays down a ratio of 0.194 for hectares under permanent pasture and a ratio of 1 for other hectares. At the time of the facts in the main proceedings, Paragraph 13(2) of the Regulation on the implementation of the single payment scheme (Betriebsprämiendurchführungsverordnung) (BGBl. 2006 I, p. 2376) provided, inter alia, as follows: ‘In those cases referred to in the second subparagraph of Article 40(5) of Regulation (EC) No 1782/2003, the individual amount for the holding and the area-based amount shall be calculated, for the purposes of determining the reference amount, on the basis of the calendar year which preceded participation in the agri-environmental measure …’ The dispute in the main proceedings and the questions referred for a preliminary ruling It is apparent from the order for reference that in 1994 the area in dispute, which had previously been a plot of arable land, was converted into pastureland following the conclusion of a contract between the Staatliches Amt für Umwelt und Natur Lübz (Lübz National Office for the Environment and Nature) and the undertaking managing the area in dispute at the time, for the purposes of using it in a manner consistent with nature conservation. In 1999 a further contract was concluded with that Office on the basis of Regulation No 2078/92. Under that contract, the area in dispute was to be used as permanent pasture between January 1999 and December 2003. On 1 October 2002, the civil-law partnership created by Mr Grootes and his father acquired the area in dispute and, under a supplementary agreement dated 3 March 2003, it assumed the rights and obligations under that contract as from 31 December 2002. Mr Grootes subsequently took over management of the holding on his own. The area in dispute, it is claimed, was converted into arable land and accordingly sown in the spring of 2004. By letter of 6 May 2005, Mr Grootes applied for arable land status for the area in dispute for the purposes of calculating his payment entitlements. By decision of 27 February 2006, the competent authority, namely the Amt für Landwirtschaft Parchim (Office for Agriculture, Parchim), granted Mr Grootes payment entitlements only in respect of permanent pastureland. On 15 March 2006, Mr Grootes lodged an objection to that decision, which was dismissed by a decision of 3 July 2006 relating to both the withdrawal of payment entitlements and the dismissal of the objection. The Amt für Landwirtschaft Parchim took the view that there was no situation of force majeure with regard to the area in dispute, since the use of that land as pastureland pursuant to the State programme was not an agri-environmental measure within the meaning of Article 40(5) of Regulation No 1782/2003 in conjunction with Paragraph 13 of the German regulation implementing the single payment scheme. Mr Grootes brought an action against that decision and sought an order requiring the Amt für Landwirtschaft Parchim to grant him payment entitlements on the basis of arable lands. The referring court notes that, pursuant to the combined provisions of Article 61 of Regulation No 1782/2003 and Paragraph 5(3)(2) of the BetrPrämDurchfG, the question whether payment entitlements for the area are to be determined on the basis of the value of arable land or that of pastureland is determined, in Germany, according to the corresponding usage of the area in dispute on 15 May 2003. On that date the area in dispute was pastureland. In those circumstances, accepting that payment entitlements be based on arable land would not be possible unless there was a case of hardship within the meaning of Article 40 of Regulation No 1782/2003. Taking the view that resolution of the dispute before it turns on the interpretation of the applicable European Union law, the Verwaltungsgericht Schwerin (Schwerin Administrative Court) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling: ‘1. Can hardship under Article 40(5) of Regulation … No 1782/2003 be recognised in relation to an area-based amount even where an agri-environmental measure ongoing on 15 May 2003 constitutes just retention of (permanent) use as pastureland, but it is connected seamlessly in time (or at any rate “promptly”) with a measure under which conversion from arable land to permanent pastureland has taken place? 2. If the first question should be answered in the affirmative: Can hardship under Article 40(5) of Regulation … No 1782/2003 be recognised in relation to an area-based amount only where there has been a change of use of the area from arable land to pastureland on the basis of (and precisely because of) participation in an agri-environmental measure as referred to in the aforementioned provision? 3. Is recognition of hardship under Article 40(5) of Regulation … No 1782/2003 contingent on the farmer making the application being the person who made the change of use, or can a farmer who later “joins in on” the agri-environmental measure also successfully claim hardship under that provision?’ Considerations of the questions referred The first question By its first question, the referring court asks, in essence, whether Article 40(5) of Regulation No 1782/2003 must be interpreted as meaning that where, in the Member State in question, different per-unit values have been fixed for hectares under pasture and for any other hectare eligible for aid under Article 61 of that regulation, a farmer who, on the reference date specified in that article, was under agri-environmental commitments forming part of seamlessly ongoing agri-environmental commitments which had the objective of converting arable lands into permanent pastureland, is entitled to request that the entitlements referred to in the first subparagraph of Article 59(3) of that regulation be calculated on the basis of per-unit values fixed for eligible hectares other than hectares under pasture. As a preliminary point, it should be borne in mind that Article 40 of Regulation No 1782/2003 contains a derogating clause designed to adjust the rule for calculating the reference amount provided for in the context of the so-called ‘historic’ method, and pursuant to which farmers who benefited, during a reference period comprising the calendar years 2000 to 2002, from a payment under at least one of the support schemes referred to in Annex VI to that regulation, are entitled to aid calculated on the basis of a reference amount obtained, for each farmer, on the basis of the annual average, for that period, of the total payments granted under those schemes. In particular, Article 40(5) of Regulation No 1782/2003 allows farmers who were under agri-environmental commitments to avoid being penalised in the context of the single payment scheme by reason of the fact that they were under such commitments during the reference period. In addition, Article 61 of Regulation No 1782/2003 allows Member States to fix different per-unit values for hectares under permanent pasture at the date provided for the area aid applications for 2003 and for any other eligible hectare in the context of the implementation of the single payment scheme at regional level. In that context, the referring court proceeds on the premiss that Article 40(5) of Regulation No 1782/2003 is applicable also in respect of the reference date specified in Article 61 of that regulation. It is, admittedly, true that the use of a plot as permanent pasture on the reference date specified in Article 61 of Regulation No 1782/2003 may, as appears to be the case in relation to the area here in dispute, be the result of agri-environmental commitments entered into. However, in the absence of an express provision providing for the application of Article 40(5) of Regulation No 1782/2003, as is the case with regard to Articles 59(4) and 60 of that regulation, it is necessary at the outset to determine whether that provision can be applied by analogy in the context of Article 61 of that regulation. Application of a provision by analogy, with regard to an economic operator, is possible where the legal rules applicable, on the one hand, are very similar to those which it is sought to have applied by analogy and, on the other hand, contain an omission which is incompatible with a general principle of Community law and which can be remedied by application by analogy of those other rules (Case 165/84 Krohn [1985] ECR 3997, paragraph 14). In this case, first, the two legal schemes are very similar in so far as the use of areas as permanent pasture on the reference date specified in Article 61 of Regulation No 1782/2003 is based on the same type of agri-environmental commitments as those referred to in Article 40(5) of that regulation. Second, it must be held that, in contrast to Article 40(5) of Regulation No 1782/2003, Article 61 of that regulation does not govern the legal position of farmers who, on the reference date specified in Article 61, were under agri-environmental commitments, with the result that those farmers, by reason of the very fact that they had entered into such commitments, thereby risked being penalised in the context of the single payment scheme which was adopted subsequently. However, the principle of legal certainty, which is a fundamental principle of European Union law, requires that European Union rules binding on individuals must be clear and precise so that they may know without ambiguity what are their rights and obligations and may take steps accordingly (see Case C-170/08 Nijemeisland [2009] ECR I-5127, paragraph 44). It follows that a farmer who has entered into agri-environmental commitments pursuant to Regulations No 2078/92 and No 1257/1999 cannot be penalised in the context of a subsequent European Union support scheme by reason of those very commitments, as that farmer was not in a position to foresee that his decision might have consequences on future direct payments under rules adopted subsequently (see, to that effect, Nijemeisland , paragraph 45). In the present case, it must be remembered that the area in dispute was converted into permanent pastureland in 1994 following agri-environmental commitments which were subsequently taken over by Mr Grootes on 3 March 2003, whereas Regulation No 1782/2003 was adopted on 29 September 2003. In those circumstances, it must be held that Article 40(5) of Regulation No 1782/2003 is applicable mutatis mutandis in the context of Article 61 of that regulation. It is apparent from the order for reference that, under the German rules, the rights to payment are calculated, in the situations referred to in the second subparagraph of Article 40(5) of Regulation No 1782/2003, on the basis of the calendar year which preceded the participation in the agri-environmental measure. In that context, the referring court wishes to know whether agri-environmental commitments undertaken successively in the context of the case in the main proceedings are to be regarded as constituting a whole for the purposes of that provision, read in conjunction with Article 61 of Regulation No 1782/2003. In that regard, it should be noted, first, that it does not appear from the wording of Article 40(5) of Regulation No 1782/2003 that the measures referred to therein must flow from one and the same contractual commitment. Second, in the light of the objective of that provision, which is to avoid a situation in which farmers who assumed certain agri-environmental commitments during the reference period are penalised on that account in the context of the single payment system, little significance attaches to the question whether the use made of an area is the result of a single contract obliging the farmer to adopt agri-environmental measures or whether that commitment is the result of a number of contracts which successively cover that period. By contrast, it is vital in the latter case that the successive contracts should stipulate each of the agri-environmental commitments under Regulations No 2078/92 or No 1257/1999 and that they should form part of a seamless temporal continuum. The same applies in the case where the reference date specified in Article 61 of Regulation No 1782/2003 has to be adjusted in the context of applying Article 40(5) of that regulation by analogy. Accordingly, the answer to the first question is that Article 40(5) of Regulation No 1782/2003 must be interpreted as meaning that where, in the Member State in question, different per-unit values were fixed for hectares under pasture and for any other hectare eligible for aid under Article 61 of that regulation, a farmer who, on the reference date specified in that article, was under agri-environmental commitments pursuant to Regulation No 2078/92, forming part of seamlessly ongoing agri-environmental commitments which had the objective of converting arable lands into permanent pastureland, is entitled to request that the entitlements referred to in the first subparagraph of Article 59(3) of Regulation No 1782/2003 be calculated on the basis of the per-unit values fixed for eligible hectares other than hectares under pasture. The second question By its second question, the referring court asks, in essence, whether Article 40(5) of Regulation No 1782/2003, read in conjunction with Article 61 of that regulation, must be interpreted as meaning that only where there is a causal link between the change of use of an area from arable land to permanent pastureland and participation in an agri-environmental measure, within the meaning of that provision, may the fact that that area was used as permanent pastureland, on the reference date specified in Article 61 of that regulation, be disregarded for the purposes of calculating payment entitlements. In order to reply to that question, it must be observed that it is, admittedly, true that it does not follow from the wording of Article 40(5) of Regulation No 1782/2003 that the benefit of the derogation laid down in that provision is subject to the condition that the agricultural areas in question must have been converted into permanent pastureland by reason of the agri-environmental commitments undertaken. None the less, it must be borne in mind that, in the context of the case in the main proceedings, Article 40(5) of Regulation No 1782/2003 is applicable by analogy to a situation governed by Article 61 of that regulation. As is clear from paragraph 42 above, such application is based on the fact that the change of use of the plot in question occurred precisely because of the commitments assumed by the farmer pursuant to Regulations No 2078/92 and No 1257/1999. It follows that, if the plot in question had been used as pastureland before the farmer undertook the commitment to implement agri-environmental measures and independently of that commitment, that plot would also be regarded as having been used as pastureland for the purposes of Article 61 of Regulation No 1782/2003. Therefore, the answer to the second question is that Article 40(5) of Regulation No 1782/2003, read in conjunction with Article 61 of that regulation, must be interpreted as meaning that only where there is a causal link between the change of use of an area from arable land to permanent pastureland and participation in an agri-environmental measure may the fact that that area was being used as permanent pastureland, on the reference date specified in Article 61 of that regulation, be disregarded for the purposes of calculating payment entitlements. The third question By its third question, the referring court asks, in essence, whether Article 40(5) of Regulation No 1782/2003, read in conjunction with Article 61 of that regulation, must be interpreted as meaning that its application is contingent on the farmer who makes the single payment application also being the person who introduced the change of use of the relevant area. As a preliminary point, it should be borne in mind that, as is apparent from the wording of Article 40(5) of Regulation No 1782/2005, read in conjunction with Article 40(1), a farmer who, during the reference period, was under agri-environmental commitments is entitled to request that the reference amount be calculated on the basis of the calendar year or years in the reference period which were not affected by those commitments. When Article 40(5) of Regulation No 1782/2003 is applied by analogy to a situation governed by Article 61 of that regulation, it nevertheless serves to adjust, not the reference period referred to in Article 38 of that regulation, but the reference date specified in Article 61 of that regulation, for the purpose of calculating the reference amount. In that regard, it must be borne in mind that Article 61 of Regulation No 1782/2003 allows Member States to fix different per-unit values for hectares under permanent pasture and for any other eligible hectare at a specific date. Thus, the decisive criterion in the context of Article 61 of Regulation No 1782/2003 is the use to which the plots in question were being put on the reference date specified in that article. By contrast, the issue of whether the farmer who applied for payment entitlements is himself the person who owned the areas on the reference date specified in that article is irrelevant in that regard. In the context of the application of Article 40(5) of Regulation No 1782/2003 by analogy to a situation governed by Article 61 of that regulation, no additional condition may be imposed. It follows that the identity of the farmer who is the owner of the areas on the reference date amended pursuant to Article 40(5) of Regulation No 1782/2003 is irrelevant in the context of the application of that provision by analogy to a situation governed by Article 61 of that regulation. The identity of the farmer who was responsible for the change of use of those areas is likewise irrelevant. It must, furthermore, be borne in mind that, according to settled case-law, the principle of equal treatment or 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 (see, inter alia, Case C-343/09 Afton Chemical [2010] ECR I-0000, paragraph 74). In the present case, the farmer who originally assumed agri-environmental commitments and the farmer who merely took over those commitments in the context of a transfer of agricultural areas are in a comparable situation under Article 61 of Regulation No 1782/2003 when applying to participate in the single payment scheme. In those circumstances, it would be manifestly contrary to the principle of equal treatment if they were to be treated differently and if only the farmer who originally assumed the agri-environmental commitments were to be entitled to seek application of Article 40(5) of Regulation No 1782/2003, read in conjunction with Article 61 of that regulation. In the light of all of the foregoing, the answer to the third question is that Article 40(5) of Regulation No 1782/2003, read in conjunction with Article 61 of that regulation, must be interpreted as meaning that its application is not contingent on the farmer who makes the single payment application also being the person who introduced the change of use of the area in question. Costs 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 (First Chamber) hereby rules: 1. Article 40(5) of Council Regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and amending Regulations (EEC) No 2019/93, (EC) No 1452/2001, (EC) No 1453/2001, (EC) No 1454/2001, (EC) No 1868/94, (EC) No 1251/1999, (EC) No 1254/1999, (EC) No 1673/2000, (EEC) No 2358/71 and (EC) No 2529/2001, as amended by Council Regulation (EC) No 319/2006 of 20 February 2006, must be interpreted as meaning that where, in the Member State in question, different per-unit values were fixed for hectares under pasture and for any other hectare eligible for aid under Article 61 of that regulation, a farmer who, on the reference date specified in that article, was under agri-environmental commitments pursuant to Council Regulation (EEC) No 2078/92 of 30 June 1992 on agricultural production methods compatible with the requirements of the protection of the environment and the maintenance of the countryside, forming part of seamlessly ongoing agri-environmental commitments which had the objective of converting arable lands into permanent pastureland, is entitled to request that the entitlements referred to in the first subparagraph of Article 59(3) of Regulation No 1782/2003, as amended by Regulation No 319/2006, be calculated on the basis of the per-unit values fixed for eligible hectares other than hectares under pasture. 2. Article 40(5) of Regulation No 1782/2003, as amended by Regulation No 319/2006, read in conjunction with Article 61 of that regulation, as amended, must be interpreted as meaning that only where there is a causal link between the change of use of an area from arable land to permanent pastureland and participation in an agri-environmental measure may the fact that that area was being used as permanent pastureland, on the reference date specified in Article 61 of that regulation, as amended, be disregarded for the purposes of calculating payment entitlements. 3. Article 40(5) of Regulation No 1782/2003, as amended by Regulation No 319/2006, read in conjunction with Article 61 of that regulation, as amended, must be interpreted as meaning that its application is not contingent on the farmer who makes the single payment application also being the person who introduced the change of use of the area in question. [Signatures] * Language of the case: German. 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