The Constitutional Court found no 129 / 2025 Coll.
Findings of the Constitutional Court sp. zn.
Valid
129
FIND
The Constitutional Court
of 26 March 2025
sp. zn. Pl. ÚS 34 / 24 on the proposal for annulment of Article 9 of Government Decree No. 83 / 2023 Coll., establishing the conditions for granting direct payments to farmers, and point 03.29 of the Common Agricultural Policy Strategy Plan 2023-2027
On behalf of the Republic
On 26 March 2025, the Constitutional Court decided, under point Pl.
as follows:
I. The proposal to abolish Article 9 of Government Decree No. 83 / 2023 Coll., on the conditions for granting direct payments to farmers, is rejected.
II. The proposal to repeal point 03.29 of the Common Agricultural Policy Strategy Plan for the period 2023-2027 is rejected.
Reasons
Subject matter
1. The group of Members, acting on behalf of Ms JUDr. Alena Schiller, Ph.D., made a proposal on 25 November 2024 pursuant to Article 87 (1) (b) of the Constitution of the Czech Republic (hereinafter referred to as the Constitution) to abolish Article 9 of the Government Regulation No. 83 / 2023 Coll., laying down the conditions for granting direct payments to farmers, and point 03.29 of the Common Agricultural Policy Strategy Plan for the period 2023-2027 (hereinafter referred to as the "Strategic Plan"). The proposal was linked by a group of Members to a request for priority hearing within the meaning of Article 39 of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended by Act No. 48 / 2002 Coll.
2. The contested provisions concern the provision of additional redistributive income support for sustainability for farmers. It is one of the series of aid granted under Regulation (EU) No 2021 / 2115 of the European Parliament and of the Council of 2.12.2021 laying down support rules for strategic plans to be drawn up by Member States under the common agricultural policy (CAP strategic plans) and financed by the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD) and repealing Regulations (EU) No 1305 / 2013 and (EU) No 1307 / 2013 ("Regulation 2021 / 2115 '). Additional redistributive support is provided for a maximum area of 150 hectares of agricultural land and 23% of direct payments were allocated to it (about CZK 5 billion).
Arguments of the appellant
3. The substance of the proposal under consideration is the argument that the contested scheme puts at a disadvantage agricultural entrepreneurs or owners of agricultural holdings who collectively engage in cooperative activities or other legal entities, since the 150 ha limit applies to them as a whole. Finally, according to the appellant, there is a breach of the principle of equality and the prohibition of arbitrage pursuant to Article 1 of the Charter of Fundamental Rights and Freedoms (hereinafter referred to as "the Charter '), the right to protection of property pursuant to Article 11 of the Charter and Article 1 of the Additional Protocol to the Convention on the Protection of Human Rights and Fundamental Freedoms (hereinafter referred to as" the Convention'), in conjunction with Article 3 (1) of the Charter and Article 14 of the Convention, and the right to join freely in accordance with Article 20 of the Charter and Article 11 of the Convention and the right to do business under Article 26 (1 of the Charter in conjunction with Article 3 (1) of the Charter.
4. The appellant points out that, pursuant to Article 98 (1) of Regulation 2021 / 2115, additional redistributive support must be granted each year for at least 10% of the financial framework for direct payments, the higher the percentage of direct payments being granted for such aid, the reduction in the amount paid under the basic aid in proportion. In the original version of the strategic plan, the government envisaged an allocation of 10%, but ultimately allocated 23% of direct payments to additional redistributive support.
5. On the association law, the appellant states that the set parameters of additional redistributive support may have a so-called freeze effect on the pooling of farmers who will be forced to do business separately, although otherwise the collective exercise of agricultural activity by both the government and the common agricultural policy of the European Union is supported. Moreover, it is a natural and often necessary step by owners who often do not have the conditions and means to maintain, exploit and further develop their property. Thus, the appellant considers the impact of the contested scheme to be liquidation, which is demonstrated by the example of the Odesh Agricultural Cooperative, which brings together 40 small farmers who, as a result of the cooperative association alone, receive aid per hectare of land by 48% lower. According to the appellant, some farmers will be forced to start their own business.
6. The appellant finds, in particular, a lack of justification for the government's choice of action to infringe the principle of equality and the prohibition of fancy, and it is said that it is only possible to guess what interests it has pursued. The result is a difference in the quality of the exercise of property rights in the form of land management, where the non-associated owner has a significant advantage over the combined owner, although formally exercising the same ownership rights to the same type of property.
7. If there is a breach of the right to the protection of property, the appellant submits that the State, through the long-term application of the common agricultural policy, creates legitimate expectations for beneficiaries of agricultural subsidies that public aid will be granted in a proportionate manner. Moreover, the Government's measure is, according to the appellant, non-discriminatory because the Government has not explained the legitimate objective pursued by the restriction of rights, and the measure does not meet the criterion of necessity as the financial support for small farmers could also be implemented by other means.
8. Finally, the contested acts, according to the appellant, interfere with the very core of the right to do business, since a strong increase in the funds earmarked for additional redistributive support will have a fatal impact on certain farmers. Interventions in the right to do business must therefore be subjected to a proportionality test in which it does not pass the step of necessity and proportionality. The public aid rules also provide for market imbalances and distortions of competition rules, where small farms receive increased aid and thus have preferential access to the resources for their activities, thereby "pushing 'farmers in cooperatives.
9. According to the appellant, it is necessary to conduct oral proceedings in order to carry out the evidence and clarify the whole case.
Proceedings before the Constitutional Court
10. On the same day as the appellant's motion, the Constitutional Court also received a motion from a group of senators to repeal the same acts. The Constitutional Court, by order of sp. zn. Pl. ÚS 35 / 24 of 8.1.2025 (ref.: decision of the Constitutional Court, is available at https: / / nalus.ujud.cz), pursuant to § 35 (2) and § 43 (2) (b), in conjunction with § 43 (1) (e) of the Constitutional Court Act, as amended, has refused to take part in the hearing of the earlier application as a party to the proceedings. The position of the intervener in these cases leads to the fact that the Constitutional Court deals fully with the application of the intervener (order of the Constitutional Court sp. zn. Pl. ÚS 24 / 15 of 3.11.2015), but it does not appear in fact in the present case, as the appellant's proposal and the intervener's proposal are identical in the petition and the reasoning. The Constitutional Court will therefore deal with the intervener's proposal by settling the appellant's proposal.
11. The Constitutional Court, pursuant to Paragraph 69 (1) of the Law on the Constitutional Court, called on the Government to comment on the application. According to Article 69 (3) of the Constitutional Court Act, as amended, he then sent the proposal to the Ombudsman, stating that he could intervene. The Constitutional Court also addressed the Agrarian Chamber of the Czech Republic and the Association of Private Agriculture of the Czech Republic with a request for their opinion.
12. The Government proposed to reject the proposal through the Ministry of Agriculture. Moreover, the proposal to repeal point 03.29 of the strategic plan is inadmissible, according to the Government, since the strategic plan does not meet the legal criteria and was also approved by a Commission decision which the Constitutional Court is not called upon to examine.
13. As the Government states, the two documents contested were issued on the basis of direct requirements of Union law, which aims to create fairer and more effective support for agriculture across Member States of the European Union. Therefore, one of the important objectives is to strengthen equality between agricultural holdings and ensure sustainable rural development. The proposal under examination is impugned by the very existence of an additional redistributive payment, which, contrary to what is stated in the proposal, is precisely the settlement of the actual inequality and which the Czech Republic, as a Member State of the European Union, had an obligation to introduce. Therefore, the assessment of the contested regulation must also take account of European Union legislation and the contested government regulation cannot be assessed without respect for Regulation 2021 / 2115. In this light, the Government's regulation will succeed in the constitutional test, as it was prepared to implement Regulation 2021 / 2115 and the Commission's approved strategic plan. Moreover, additional redistributive support is fully paid from the European Development and Guarantee Fund.
14. In relation to the association law, the Government states that the determination of who may receive the redistributive payment was directly implemented by Regulation 2021 / 2115, according to which only the active farmer can receive it, and the conditions under which redistributive payment can be drawn by operators operating in the association are also laid down. The establishment of a producer organisation shall in no way prevent its members from making each redistributive payment separately, provided that the conditions are met separately. According to the appellant, the association of agricultural entrepreneurs in collective legal entities is often necessary, but their proposal is precisely against the instrument to help eliminate these negative effects.
15. The redistributive payment, according to the Government, does not infringe the principle of equality and prohibition of arbitrarily, as its basic characteristics are directly derived from Regulation 2021 / 2115. The aim of strengthening the sustainability of small enterprises has been accentuated by the Commission since the start of the project negotiations in 2018, since around 80% of agricultural subsidies were previously drawn from 20% of the largest applicants in the European Union.
16. The argument that the State has motivated agricultural entrepreneurs to create a financial model dependent on public support revenues, thereby creating legitimate expectations for them, is considered absurd by the Government. Moreover, the State did not support such an economic model, and it was reasonable to expect that the setting-up of individual aid would bring about significant changes.
17. The Government refuses that, as a result of the contested acts, two agricultural entrepreneurs would have different conditions on the sole basis that one of them is a member of the cooperative. A member of a cooperative or other corporation is not an agricultural entrepreneur or an active farmer and is therefore not eligible for subsidies. Redistributive aid does not create an unjustified difference between the quality of the exercise of ownership between the associated and non-associated owners, as the non-associated landowner is significantly disadvantaged on the market. According to the Government, it is not possible to compare only the amount of subsidies provided, as the analyses in setting the conditions for direct payments confirmed that the conditions on the Czech market are significantly in favour of large farms, enterprises up to 150 hectares, e.g. reaching significantly lower modified net added value and wage levels. It is on the basis of these analyses that the government has chosen 150 ha as the maximum number of hectares for which redistributive aid is granted and 23% as part of the payments to that aid.
18. Furthermore, the Government states that additional redistributive aid cannot be considered in isolation. This is one of several parts of public support provided under the common agricultural policy and the conditions for its payment reflect the specific situation in the Czech Republic, as resulted from the analyses carried out.
19. The Ombudsman did not use his authority to intervene.
20. The Association of Private Agriculture of the Czech Republic, which is an interest association of legal entities, expressed the view that the proposal is irrelevant to absurd and is based on interpretation showing signs of manipulation of the facts applicable to the agricultural sector. The proposal is based on erroneous data and is an expression of a misunderstanding of the rules of the common agricultural policy and a disregard for long-term legislation defining agricultural entrepreneurs. According to the Association, the proposal should therefore not be granted.
21. As the Association explains, the agricultural cooperative in form, as is practically implemented in the Czech Republic, does not in principle exist in the European Union except Slovakia. This is a relic of socialist agriculture and its subsequent transformation, which, in addition to those members of agricultural cooperatives who are involved in the activity of employees or leaders, is a member of the cooperative of a person who does not work there and has no other relationship with the cooperative; Most of them even have nothing to do with the agricultural sector. In particular, they do not have a separate business legal personality. It is therefore not an association of small farmers, but the owners of specifically unspecified holdings, an association of shareholders in the assets of the cooperative. It is typical that the shareholders who have "inserted" land into the agricultural cooperative do not manage it in any way and merely smuggle "their" cooperative "into it and receive the smoldering fees from it, like other smugglers in the position of non-members of the cooperative.
22. According to the Association, members of cooperatives do not have the will to do business independently or to start their own businesses as the vast majority of family businesses have done, but want to use their property in the described model of the agricultural cooperative. However, these voluntary decisions necessarily entail additional consequences, for example, that a member of a cooperative or similar member of a trading company is not an object or entity of the common agricultural policy entitled to receive agricultural subsidies. This basic postulate is unconditionally accepted in the European Union and fully implemented in the Czech Republic (not only in agriculture), as it covers a whole scheme consisting of about 200 other agricultural subsidies. All relevant provisions, including Union rules, define the agricultural holdings and, consequently, applicants for direct payments, irrespective of their number of shareholders, shareholders or shareholders. Direct payments to farmers are intended to promote the viability of agricultural holdings, not to provide financial income for individual landowners or other shareholders in cooperatives.
23. The Association stresses that additional redistributive support is a compulsory instrument throughout the European Union. The allocation of 23% is based on the compromise reached after the discussion of the strategic plan involving all agricultural NGOs and is within the limits of Union law. Moreover, the size of the envelope for additional redistributive aid, expressed as a percentage of the envelope for direct payments, is not comparable between countries because some countries have chosen to pay redistributive aid for the first hectares for all enterprises, others have chosen a payment scheme for the first hectares of enterprises only up to a certain size. If the Czech Republic paid redistributive support for the first 150 hectares only for enterprises with a size of up to 150 ha, the envelope would only need 16%. Therefore, the aid is also paid to the said Agricultural Cooperative Odesh, which operates more than 150 ha and would not even be eligible for redistributive aid in many other countries. The selected limit of 150 ha corresponds to the average size of the agricultural holding in the Czech Republic, supported by all non-governmental agricultural organisations and is multiple times higher than in other countries, taking into account their much lower average size of farms.
24. Furthermore, the Association pointed out that additional redistributive support is only one of the important instruments of the strategic plan and cannot itself solve the other problems and risks that are plagued by Czech agriculture, such as the trend in the concentration of agricultural holdings up to tens of thousands of hectares and their acquisition by large investment groups. This trend is also stimulated by the payment of subsidies without any limit and the contested instruments can improve this situation. Many countries have already applied the grating of direct payments in the long term.
25. According to the Association, the deteriorated economic situation of some enterprises is also based on a number of long-term problems, including the inappropriate setting up of a subsidy policy that created a syndrome of "income expectations" in beneficiaries, which contributed to the preservation of an unsatisfactory structure of agricultural production. The argument through the Odesh Agricultural Cooperative is merely a response to inevitable changes in the rules of the existing "addictive" subsidy economy.
26. The Association points to statistical data suggesting a worse economic position of small farms compared to larger and dual structure of Czech agriculture, which is characterised by the existence of tens of thousands of smaller enterprises, against which several hundred large and a few dozen extremely large enterprises with different property links within holding holdings, etc. As a result, it is difficult to introduce any deeper measures, as they always create dissatisfaction for some of these groups. Fixing the rate of redistribution of additional payments to 23% was a logical measure to reduce this duality. Moreover, the State could have taken far more stringent measures. The interpretation of the resulting values on the economic situation, on the volume of the subsidy aid and on the impact of the adjustment of the additional redistribution payment is, in any case, a very challenging and professional issue, which is influenced by a number of other factors and other settings of the common agricultural policy.
27. The Association considers that post-socialist enterprises are unable to generate new farmers and successors as the most important negative factor affecting the future of some farms. In the vast majority of cases, this horn is naturally provided by a model of classic family farms that "breed" and prepare their followers on all sides. This aspect has been abandoned by previous agricultural policy and has not provided any effective tools to address this problem, which also affects the Odesh Agricultural Cooperative. According to the Association, one of the motivations of the Odesh Agricultural Cooperative is to enforce the principle of redistributive aid, which will make this enterprise and other agricultural cooperatives with a similar structure more attractive in their typically-considered sales to ordinary-sized agroholers.
28. As regards the principles of equality and proportionality, the Association states that the additional redistribution payment is granted to all agricultural entrepreneurs, albeit in order to help, in particular, the smaller ones, in order to contribute to reducing the disparities in income achieved. Strictly speaking, any subsidy aid distorts the equality of entities, but subsidies do not have a demanding character and many conditions are needed to obtain it. Where a member of an agricultural cooperative is deemed to receive an additional redistribution payment, he may become an agricultural entrepreneur and fulfil all conditions and obligations. However, this trend was not confirmed in practice.
29. The system of allocation of direct payments under the Association does not give rise to legitimate expectations of beneficiaries nor can financial planning be based on it. This could only be claimed in the case of a specific right to a subsidy already actually established. The opposite interpretation would call into question the entire common agricultural policy mechanism, which is based on permanent developments and varies according to the economic situation and public interest at regular seven-year intervals. A few years before strategic documents are created, there is an informal social and political debate in the sector in which farmers contribute to shaping the objectives of the common agricultural policy.
30. The Agrarian Chamber of the Czech Republic did not send an opinion on the proposal.
31. The Constitutional Court has sent the observations received by the Government and the Association of Private Agriculture of the Czech Republic to the appellant on a possible reply.
32. In reply to the Government's observations, the appellant stressed that it did not consider the existence of additional redistributive support, but rather its solution in the form of a limit of 150 ha of agricultural land and the allocation of 23% of the total amount of funds for which the Government was not forced by Union law. Similarly, the Government's decision was not to allow the use of additional redistributive aid to persons associated with a legal entity.
33. The conditions of additional redistributive aid, according to the appellant, are explained by the government's efforts to offset the revenues of smaller and larger enterprises, but the government is based on misleading analyses. Even before adopting the contested scheme, smaller farmers were not discriminated against more and the difference in subsidy revenue was the result of their decision not to engage in some subsidised segments. Prior to the introduction of additional redistributive aid, enterprises with less than 37 hectares of agricultural land received higher operating aid and had a higher income from agricultural activity, higher assets, lower indebtedness and higher capital than enterprises with more than 595 hectares. According to the appellant, other indicators also argue that smaller farms would be lagging behind or disadvantaged.
34. The net added value, according to the appellant, cannot be based on the fact that larger undertakings have costs which are not taken into account in its calculation, in addition they produce a larger product per hectare. In other words, they achieve higher revenues because they make greater efforts to produce food. The same support for all farmers, no matter how efficient and industrious they are, demotifies entrepreneurs in an effort to make their own living and goes against the basic principles of the market economy.
35. In order to implement the additional redistributive aid in that form, there were no economic reasons and its effects will most likely be felt by medium-sized enterprises, which are neither small enough to benefit from the full benefit of the preferential payment, nor sufficiently extensive to compensate for the loss of aid over 150 ha overall. It is precisely the concern about the impact on medium-sized farms that has played an important horn in why the vast majority of European Union Member States have chosen a lower redistribution rate.
36. The Constitutional Court, having regard to the observations received, decided, in accordance with Article 44 of the Law on the Constitutional Court, as amended, without oral action, as it did not expect further clarification of the case.
Presumption of a substantive assessment of the proposal
37. The application was submitted by a group of 52 Members, which, pursuant to Article 64 (2) (b) of the Constitutional Court Act, is the entitled appellant to submit an application for annulment of another legislation; the legislative will to support the proposal has been certified by the attached signature. However, this does not affect the signature of Mr David Pražák (who would therefore be the 53rd Member) on this list on line 6 to meet the requirement of a minimum number of Members entitled to make a proposal (25).
38. In the part which is challenged by Paragraph 9 of the Decree of the Government, the proposal contains the legally required formalities, is not inadmissible under Section 66 of the Law on the Constitutional Court, as amended, no grounds for termination of the procedure under Section 67 of the Law on the Constitutional Court, as amended by Act No. 48 / 2002 Coll., and the Constitutional Court is competent to hear the application; Therefore, the procedural conditions of the procedure are met.
39. Otherwise, it is in the part in which the appellant seeks the annulment of point 03.29 of the Common Agricultural Policy Strategy Plan 2023-2027. Contrary to what the appellant contends, the strategic plan cannot be regarded as another law within the meaning of Article 87 (1) (b) of the Constitution and the jurisdiction of the Constitutional Court to discuss the application for its annulment cannot be inferred from other provisions defining the powers of the Constitutional Court.
40. In order to be an act of another law within the meaning of Article 87 (1) (b) of the Constitution, it must be an act of a national nature, which means, in particular, that it is accepted and approved by (exclusively) the Czech public authorities on the basis of their Constitution for a given or foreseen competence. For example, the Constitutional Court does not have the power to repeal European Union regulations or directives (or international treaties). The contested strategic plan shall be drawn up on the basis of European Regulation 2021 / 2115. In accordance with Article 118 (1) thereof, States shall submit their strategic plan to the Commission for approval and, in accordance with Article 118 (7) thereof, the strategic plan shall take legal effects only after it has been approved by the Commission. It is therefore not a national law, but an act of a Union nature resulting from cooperation between the Czech Republic and the Union institutions. Thus, the Constitutional Court does not have the power to abolish this act, but this does not in itself mean that it could not deal with the constitutionality of (national) acts that follow or relate to the strategic plan, whether it be "implementing 'legislation or, for example, acts of individual application of the law.
Text of the contested provision of the Government Regulation
41. Paragraph 9 of the Government Regulation on the conditions for granting direct payments to farmers reads as follows:
Conditions for granting additional redistributive income support for sustainability
(1) The Fund shall provide the applicant with additional redistributive income support for sustainability on agricultural land, on which the applicant fulfilled the conditions for providing basic income support for sustainability in the year of application, pursuant to Article 7.
(2) In the event of a reduction or failure to provide basic income support for sustainability, additional redistributive income support for sustainability shall be reduced or not provided in the same way.
(3) Additional redistributive income support for sustainability may be granted at an area of up to 150 hectares of agricultural land for which basic income support for sustainability may be granted. ';
Review of the procedure for adopting the contested provision of a government regulation
42. The Government is entitled, directly under Article 78 of the Constitution, to issue regulations for the implementation of the Act and within its limits. This means that there is no need for explicit authorisation in the relevant Act [the Constitutional Court finding sp. zn. Pl. ÚS 43 / 97 of 29.4.1998 (N 48 / 10 CollNU 319; 119 / 1998 Coll.), the Government's Decree on the teaching obligation of teachers and the degree of obligation of the educational work of other teaching staff in education]. The Decree of the Government, which is part of the contested provision, was issued for the implementation of the rural development programme and the strategic plan pursuant to Article 2c (5) of Act No. 252 / 1997 Coll., on Agriculture, as amended, was approved by Government Resolution No. 196 of 22.3.2023 and published in the Final Act No. 31.3.2023 in the amount of 46 / 2023; the affected part has become effective on 1 April 2023 and has not yet been amended. The provisional procedural conditions and the competence to adopt the contested provision have been fulfilled.
Review of the contested provision of the Government Regulation
43. The motion is not justified.
44. The Constitutional Court states that the supplementary redistributive support to be dealt with is only one of the instruments of the common agricultural policy, which contains a number of other payments and other mechanisms affecting and regulating the agricultural market. Thus, an isolated assessment of the effects and effects of this aid as one of the many instruments used is not even possible. Indeed, some of the reservations raised by the appellant against the current form of additional redistributive support (e.g. that it is disrupting the market environment) are closer to criticism of the subsidy economy as such, criticism of the political nature. The Constitutional Court has previously held that "free market free of all regulation 'does not consider [the finding of sp. zn. Setting up the economic system is a matter of political representation, not a Constitutional Court.
45. In its reply, the appellant pointed out that they did not oppose the existence of an additional redistributive payment itself, but rather its specific setting. This, however, puts the Constitutional Court in the role of a body that should decide in detail on the individual parameters of the subsidy policy. It is not for the Constitutional Court to determine, namely how much percentage of the total amount of direct payments will be reserved for additional redistributive support or specifically for how many hectares of agricultural land this payment is to be made. This is also a matter of political representation.
46. In the light of the above, the following can be added to the alleged contradictions of the contested legislation with the constitutional order.
The right to join freely
47. The Charter in Article 20 (1) guarantees freedom of association, in accordance with which everyone has the right to associate with others in associations, companies and other associations. According to the appellant, the contested legislation infringes this right as a result of the so-called chilling effect. Farmers are supposed to be forced to do business separately by setting up additional redistributive support (as opposed to membership of the agricultural cooperative) because they will not be able to reach them as members of the cooperative.
48. According to the Constitutional Court, the contested regulation does not, however, interfere in the law of association under Article 20 (1) of the Charter (or Article 27 (1) of the Charter), let alone infringe it.
49. In order to do so, it should be noted that Article 9 of the contested Regulation does not in any way regulate, prohibit or restrict the association of prima facie associations, nor does it apply at all. The possibility of establishing or entering a cooperative remains unaffected. The membership of the cooperative itself is neither a disqualifying factor in terms of who is entitled to receive additional redistributive aid. This support shall be granted to anyone who is an active farmer and fulfils the conditions laid down. If natural or legal persons in a single cooperative and fulfil the conditions jointly, then such a cooperative - as a legal entity (legal entity) - belongs to the same support as anyone else. The freedom of association does not imply that, in such a case, any member of the agricultural land on which the cooperative operates should be regarded as individually fulfilling the conditions for payment of the aid. The respect for freedom of association here is that members can fulfil the subsidy conditions together, not that the joint fulfilment of the terms by the association (cooperative) must lead to the creation of an individual entitlement of the member.
50. Thus, the decision to establish or join (agricultural) cooperatives remains a free choice for everyone, which does not mean that this choice is or is to be free of external influences. The decision whether to do business alone, join a cooperative or use other forms of cooperation or association may, of course, also depend on what is most economically advantageous for individuals, which can also be influenced by the setting of the subsidy system. However, the subsidy aid to smaller farmers in this regard does not affect the freedom of association any more than the appellant's support for the collective performance of agriculture affects the freedom not to (as a negative component of the right guaranteed by Article 20 of the Charter).
The prohibition of libel and the principle of equality
51. Article 1 The Charter is free and equal in dignity and in law. Article 3 (1) The Charter is guaranteed to all without distinction sex, race, colour, language, faith and religion, political or other thinking, national or social origin, membership of a national or ethnic minority, property, family or other status. The introductory article of the Charter provides for the constitutional protection of equality in all rights (non-accession equality), or the general prohibition of arbitrarily, and Article 3 (1) of the Charter provides for the equality of action.
52. The appellant contends that both of these articles are infringed, but in view of the abstract control of the standards, this distinction is not of decisive importance [finding of the Constitutional Court sp. v. Pl. ÚS 16 / 24 of 20.11.2024 (6 / 2025 Coll.), Salary discrimination of starting judges on maternity and parental leave, paragraph 72]. In so doing, the Constitutional Court shall also deal with the objection of infringement of another Charter of Guaranteed Rights, which was to result in infringement of Article 3 (1) of the Charter. It is therefore not necessary to distinguish in this context or in detail in the argument between individuals (i.e. persons covered by Article 1 of the Charter) and legal persons.
53. In particular, the appellant argues that the current establishment of an additional redistribution policy is particularly detrimental to agricultural entrepreneurs who are associated in a single legal person. According to the appellant, there was an unjustified difference between the unrelated owner and the combined owner.
54. From the nature of the case and in accordance with the settled case-law of the Constitutional Court, only in the category of equality can be considered in relation between entities in a comparable position [see, for example, the finding of sp. zn. The key is whether the two situations with which the law treats them differently are relatively similar. This is not the case here.
55. The purpose of the additional redistributive payment is generally to promote entrepreneurship in agriculture with a focus on smaller entrepreneurs. Additional redistributive support (but also other direct payments) may be requested under Section 2 of the Government's contested regulation by a natural or legal person who is an active farmer under Section 4. According to Section 4, an active farmer is, inter alia, a natural or legal person who, in addition to fulfilling the additional conditions, is an agricultural entrepreneur. According to Section 2e (1) of the Act on Agriculture, as amended, the agricultural entrepreneur is a natural or legal person who (inter alia) intends to pursue agricultural production as a continuous and independent activity on his own behalf, under his own responsibility, in order to achieve profit.
56. Although the specific form of involvement of a member of a cooperative in its activities may differ on a case-by-case basis, a member of the cooperative not only does it not operate agricultural production in its own name and under its own responsibility, but the agricultural activity itself is not a prerequisite for membership, which may actually be close to participating in other commercial corporations. The agricultural entrepreneur is the cooperative as a whole, not every individual member. Therefore, for the purpose of granting a subsidy to promote business in agriculture, an agricultural entrepreneur cannot be compared to a "mere 'member of an agricultural cooperative.
57. For the sake of completeness, it can be added that there is no unequal treatment between "small 'and" large' agricultural entrepreneurs, where the management of 150 ha of land can be designated as a frontier criterion for these purposes. This comparison can be viewed by two views. First, it can be argued that there is no difference in treatment, since the aid for the first 150 hectares of cultivated land belongs to each agricultural operator regardless of size. From this point of view, different treatment cannot be seen only in that agricultural entrepreneurs with land above 150 ha do not receive a higher subsidy compared to "smaller" agricultural entrepreneurs. It would also be theoretically possible to argue that the difference in treatment is that, while some entrepreneurs (up to 150 ha) receive aid for each hectare managed, "larger" entrepreneurs will receive aid for only part of their land. If, however, the Constitutional Court does not take into account the cases at stake which cannot in principle be avoided in similar situations (cf. Moreover, a number of support instruments and regulations across the rule of law are based on the position of smaller business entities, as the nature of the matter in the agricultural market for the weaker ones.
58. Indeed, in this (and only in this) way, these instruments are similar to social support, in which context the Constitutional Court has already expressed in the past that "inequality in social relations, if it is to affect fundamental human rights, must achieve an intensity which, at least in some ways, calls into question the very essence of equality. If the determination of the different terms and conditions of social benefits, depending on the justified needs of certain groups of persons, were to be regarded on a flat-rate basis as a breach of fundamental rights and equality in rights, that would in fact mean that, for social benefits, there would be no condition for entitlement or the amount of social benefits, consisting, for example, of the age, time or individual assessment of the social and economic situation, nor could it be established" [finding sp. zl. ÚS 40 / 97 of 2.9.1998 (N 96 / 12 SbNU 27; 223 / 1998 Coll.), Differentiation of child allowances].
To legitimate expectations
59. In accordance with Article 11 (1) The Charter has every right to own the property, i.e. the right to hold, use, enjoy and dispose of the property. Under the protection of this article is also the so-called legitimate expectation or property claim, which can reasonably be expected to be met [in the context of the subsidy policy, see for example the finding of the Constitutional Court sp. zn. Pl. ÚS 12 / 14 of 16.6.2015 (N 109 / 77 CollNU 577; 177 / 2015 Coll.), On the inconstitutionality of the lockout of judicial review for suspension of payment of part of the subsidy, paragraph 46]. The property claim is protected, which has already been individualised by a legal act or is identifiable directly on the basis of the legislation [the Constitutional Court found sp. zn. Pl. ÚS 50 / 04 of 8.3.2006 (N 50 / 40 of SbNU 443; 154 / 2006 Coll.), Sugar quota III. "Potud, if," alias Czech Solange].
60. According to the appellant, the State's long-term subsidy policy created legitimate expectations for beneficiaries of subsidies that they would be stable in accepting public aid. However, the expectation of maintaining the subsidy aid is not a legitimate expectation within the meaning of the Constitutional Court's case-law; rather, it is a precondition for future political developments or the focus of economic policy, which does not belong to the protection of Article 11 of the Charter. Although it can be accepted that the subsidy economy creates a certain "subsidy dependence," the subsidised entities cannot legitimately expect state support to never end and never change. On the contrary, it is notoriety that the level and focus of subsidies are gradually changing not only depending on the change in political representation, or the implementation of policies that political forces compete for in national and European elections, but also as a result of changes brought by economic cycles or other factors, both local and global. Nor can it be ruled out that the State will once completely withdraw from the subsidy schemes. Indeed, the interpretation that farmers, regardless of the legislation, have a legitimate expectation of a permanent subsidy income would be contrary to the government's principle of time.
The right to undertake and pursue other economic activities
61. Article 26 (1) The Charter has every right to undertake and operate other economic activities. This right may be invoked under Article 41 of the Charter only within the limits of the laws implementing it.
62. The appellant considers that small farmers will, thanks to increased market support, be pushed over by cooperatives (e.g. when buying more land), with an increase in the funds allocated to additional redistributive aid having fatal consequences for certain undertakings. According to the appellant, the contested regulation therefore interferes with the very core of the right to conduct business freely. However, according to the Constitutional Court, it does not interfere at all with that law, in principle for the same reasons as have already been described.
63. If the members of the cooperative join together for the purpose of doing business in the cooperative as a separate legal person, it is not an intervention in their right to do business if the State actually treats them as one person and one entrepreneur - with all the advantages and disadvantages of it - it approaches them. This is only a logical consequence of the choice of its members, who have been brought together precisely for the purpose of common representation, sometimes because it seemed economically advantageous. If this turns out not to be the case, they can do business separately and separately to meet the subsidy conditions.
64. The fact that larger entrepreneurs do not receive higher additional redistribution aid than small entrepreneurs cannot be regarded as an intervention in the law. The right to do business not only does it not give rise to any direct payment from the State at all, it does not give rise to an increase in the size of the beneficiaries. Moreover, it cannot be overlooked that the appellant considers, on the one hand, that the contested scheme will make it impossible for larger than small farmers to do business, but also predicts that small farmers will benefit from the claimed benefits for the acquisition of additional land (and thus for their own expansion, which the appellant considers to be liquidation).
65. The Constitutional Court admits that State aid to certain entrepreneurs may affect the business of their competitors. Indeed, the impact of the market environment is, in a sense, the essence of the subsidy. However, as has already been said, agriculture is a highly subsidised sector and additional redistributive support is just one of a number of state and European Union support measures. It is in this light that it does not appear meaningful to choose this one aid and to examine whether it does not interfere with the right to engage in distortions of an already significantly distorted market environment. If a larger undertaking really ceases to be competitive after receiving one partial aid of the same amount as its smaller competitor has received, this can be indicative of either individual failure or a structural, sector-wide problem. None of this can be resolved by the Constitutional Court in the standard control procedure.
Conclusion
66. The Constitutional Court, for the reasons set out above, rejected the application for annulment of Article 9 of Government Decree No. 83 / 2023 Coll., on the conditions for granting direct payments to farmers, pursuant to Paragraph 70 (2) of the Law on the Constitutional Court, while the application for annulment of point 03.29 of the Common Agricultural Policy Strategy Plan for the period 2023-2027 under Section 43 (1) (d) of the Law on the Constitutional Court, as amended by Law No 77 / 1998 Coll., rejected. He did not have to deal with the need or possibility of Euroconformal interpretation of the constitutional order (cf. The quoted finding of the Constitutional Court sp. v. Pl. ÚS 50 / 04).
President of the Constitutional Court:
JUDr.
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Regulation Information
| Citation | The Constitutional Court found no 129 / 2025 Coll., sp. zn. |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 06.05.2025 |
|---|---|
| Effective from | - |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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