Keywords: Common Agricultural Policy, cross-compliance, good agricultural and environmental condition, devolution, discrimination
Over recent years subsidiarity has become entrenched as a guiding principle which underpins both the formulation and implementation of European Union law. Not least it is enshrined in the Treaty framework; and whereas, when first introduced under the Maastricht Treaty, it acknowledged only action at the level of the Member State and the European Union (EU), Article 5 of the Treaty on European Union now acknowledges action also at the regional and local level. Moreover, the principle finds clear expression in wider strategic thinking on how to regulate. For example, in European Governance — a White Paper, it was stated that '[a]t EU level, the Commission should ensure that regional and local knowledge and conditions are taken into account when developing policy proposals', and that 'there should be more flexibility in the means for implementing legislation and programmes with a strong territorial impact, provided the level playing field at the heart of the internal market can be maintained'.1
Similarly, with regard to the Common Agricultural Policy (CAP), the need for such an approach has frequently been articulated, with particular reference to its 'Second Pillar' (rural development) where the need to secure regional differentiation would seem more acute. Not least in the current Rural Development Regulation emphasis is laid upon the requirement that measures should be adopted 'in accordance with the principle of subsidiarity';2 and central to the legislative procedure are the national strategy plans and rural development programmes drawn up at the level of the Member State. Similar considerations would also seem to be forming an ever greater part of the 'First Pillar' of the CAP (market management and direct payments), and it was in this context that there arose the dispute of Horvath v Secretary of State for Environment, Food and Rural Affairs?
The European Court of Justice (ECJ) was asked to consider, most notably, the vexed question of whether differing 'First Pillar' provisions imposed by differing administrations could amount to discrimination. Poignancy was added to the proceedings by reason of the fact that such differences arose between, on the one hand, measures enacted specifically for England and, on the other hand, measures enacted by the devolved administrations of Northern Ireland, Scotland and Wales.4 The potential for the dispute to impact adversely upon that constitutional settlement may be indicated by the fact that the United Kingdom Government took the unusual step of appealing against the reference to the ECJ (in the event, unsuccessfully).
When CAP support for farmers was radically reformed under the Mid-Term Review, the majority of direct payments were placed subject to a variety of 'cross-compliance' obligations.6 In other words, their receipt was dependent upon meeting specified conditions and, in extreme cases, failure to do so could result in total exclusion from one or more aid schemes for one or more calendar years.7 The imposition of conditions on the receipt of direct payments was not a new instrument of EU policy: for example, the Agenda 2000 reforms had already introduced environ mental protection requirements in the case of most 'First Pillar' support schemes.8 Yet the regime implemented by the Mid-Term Review was different in scale, reflecting a clear desire upon the part of the European Commission to promote sustainable agriculture and to render the CAP more compatible with the expectations of society at large.