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Competitiveness of cattle farming in Austria after the abolishment of the market organisation payments in 2013

Kirner, L.


The Common Agricultural Policy (CAP) of the EU will be reformed as of the year 2014. On November 18th 2010, the European Commission published proposals regarding the CAP until 2020, which included fundamental suggestions about the reorganisation of the CAP. These proposals formed the basis for calculations of the present study. The economic consequences of possible future direct payment schemes are analysed for individual cattle farms. Eight different direct payment schemes and seven typical farms with different types of production were specified. The farm model calculations report sharp drops in income mainly for specialised bull fattening farms. Reasons for this are extremely high single farm payments at the present time and disproportionate effects of the greening of the first pillar. Suckler cow farms are affected by smaller reductions in income, particularly those involved in extensive farming and with a high proportion of grassland. The impacts for suckler cow farms mainly depend on coupled suckler cow premiums. Exclusive premiums for ruminants in combination with area payments would increase the income of cattle farms only slightly in comparison to sole area payments. Additionally, the required budget for this premium would be too high for a coupled payment. On the contrary, a premium for slaughter cattle and compliance with quality standards may significantly reduce negative effects for cattle fattening farms. As a result of marginal funds, this premium could be in principle offered as a coupled payment. On the whole, the present study offers preliminary but pioneering insights of possible impacts of the CAP until 2020 for cattle farms in Austria. An interpretation of the results should consider the missing knowledge of future negotiations so far.

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