Community legislation authorises the Member States to introduce a special system of aid to encourage farming and to raise farm incomes in certain less-favoured areas. Thus, with a financial contribution by the Community, the Member States may grant an annual allowance intended to compensate for the permanent natural handicaps of the area concerned. The Member States are entitled to lay down the conditions for granting the allowance. The objective pursued is the continuation of farming and the maintenance of a minimum population level.
The Finnish legislation provides that a compensatory allowance may be paid to a farmer who lives on or within 12 kilometres of the farm. Municipal authorities may derogate from that requirement on certain conditions.
The Court of Justice has upheld the validity of such legislation in the light of Community law.
In the two cases in issue, the administrative authorities had refused to grant the compensatory allowance to two persons who owned farms on the ground that they did not live on them. Ms Jokela, who owns a farm in the municipality of Laihia (Finland), which is classed as a less-favoured area, lives in Bonn (Germany) with her husband, an official in the Finnish Ministry of Foreign Affairs. Ms Pitkäranta, who was born in 1989, inherited a farm situated in the municipality of Nummi-Pusula (Finland), which is also classed as a less-favoured area, where she has never lived. They challenged those refusals before the Etelä-Pohjanmaan Maaseutuelinkeinopiiri (District Rural Businesses Committee for Southern Pohjanmaa) and the Uudenmaan Maaseutuelinkeinopiiri (District Rural Businesses Committee for Uusimaa) respectively.
Their claims were dismissed. Both applicants then appealed to the Maaseutuelinkeinojen Valituslautakunta (Rural Businesses Appeals Board), which decided to ask the Court for an interpretation of the Community legislation concerning compensatory allowances, in particular with regard to the conditions for granting them.
The Court has held that the objective of the Community rules is essentially to support the continuation of farming in less-favoured areas. The Community legislation does not require a farmer to have his home on the farm in order to be awarded a compensatory allowance, but leaves the Member States free to lay down additional or limiting conditions for the grant of the compensatory allowance in so far as they are attached to the objectives pursued by the system of aid.
The Court considers that a condition requiring a farmer to have his home on the farm forms part of the objective of helping to maintain a minimum population level in areas threatened by rural exodus. According to the Court, the features of Finland's geographical situation and the fact that it is so sparsely populated justify the general requirement under the Finnish legislation that a farmer must live on or very close to his farm if he is to receive the allowance.
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