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Economic perspectives of Austria’s alpine pastoral systems in the context of the CAP towards 2020 and after the abolishment oft he milk quota regulation. Agrarpolitischer Arbeitsbehelf Nr. 41 der Bundesanstalt für Agrarwirtschaft

Kirner, L.; Wendtner, S.


Austria`s alpine pastoral systems are characterised by various types of cultivation, differing site specific conditions and regional peculiarities. They are based on an exceptionally long tradition and generate multiple benefits for Austria`s society. In order to guarantee these benefits nationwide, the EU common agricultural policy facilitates financial support for alpine agriculture. During the next couple of years the political framework for European agriculture is likely to change fundamentally. In 2014, the next period of the common agricultural policy will emerge and the EU milk-quota arrangements will expire in the year 2015. Both developments will have essential consequences for Austria`s alpine pastoral systems.

With regard to the historical, environmental, social and cultural background, this study analyses the economic potential of alpine pastoral systems in the context of the changing political framework. Specifically, three questions will be investigated: (i) To which extend can Austria`s alpine pastoral systems contribute to the economic performance of farms within the present CAP programming period? (ii) How will the the upcoming CAP after 2014 influence the return of investment for alpine agriculture? (iii) To what extend will the operational profit of alpine agriculture be influenced, if high altitude grazing of cows will cease as a consequence of the expiration of the milk quota regulation?

In addition, this study creates a scientific basis in order to derive measures for a sustainable management of alpine pastoral systems. The results are based on ten different case studies, and with regard to general insights also, they propose specific advice on the investigated questions. Although the number of investigated case studies might seem small, general tendencies and future trends for Austria`s alpine pastoral systems can be concluded.

An analysis of the current CAP period shows, that monies originating from the rural development funds are presently the major factor for economic survival of alpine pastoral systems. Depending on agricultural holding, those subsidies contribute to between one third and two thirds of the total profit gained by alpine pasture farming. Single farms also gain an additional benefit by the allowance of mountain pastures as a calculation basis for the EU compensation payments for disadvantaged areas. Furthermore the ÖPUL (Austrian Agri-Environmental programme) measure for alpine pasturing and shepherding grants payments for alpine cooperative pastures. Revenue through sales plays a role especially for dairy producing alpine pastoral systems, it contributes to between one fourth to one third of the gross margin.

Negotiations on the Common Agricultural Policy after 2014 are conducted presently. The resulting design of subsidies for agricultural holdings or areas will play a decisive role for the economic future of alpine pastoral systems. A uniform national single area payment scheme and unmodified payments by the rural development funds for example, will lead to an increase of income for agricultural holdings which cultivate alpine pastures. The alternative scenario of a nationwide classification of pillar one premiums or a decrease of rural development funding by 20 % will create a similar economic situation for alpine pastoralism as during the present programming period. In contrast, the income of all agricultural holdings investigated in this study will reduce, if single area payments for extensive pastures are cut significantly and rural development payments are reduced simultaneously. Therefore, it can be concluded, that an economic perspective for traditional alpine pastoral systems can only be given in the long run, if both financial sources will not become restricted. Compared to farms in more favourable regions, agricultural holdings which cultivate alpine pastures have significantly less chances to compensate reduced subsidies through increased productivity.

According to scientific analysis, a tendency from work intensive dairy production on alpine pastures towards more work extensive practices can be made out. This trend gives evidence of the decreasing attractiveness of traditional summering of dairy cows on alpine

pastures in Austria. The question, whether the attractiveness of summering dairy cows will decrease even more after the abandonment of the EU milk quota regulation cannot be generalized, because it needs to take into account the variable preconditions on every single agricultural holding. Nevertheless, it can be concluded, that in future more farms will cease to take their dairy cows to alpine pastures during the summer. On the one hand side, an explanation for this trend can be found in the changing structural framework for dairy farming in Austria: herds become larger and the milk yield per cow increases. On the other side, this study shows that in the medium-or long term, the income of those farms, which quit alpine pastoralism, can increase, if farms lease spare pastures within the reach of their own agricultural holdings. The underlying calculations did not take into account possible existing spare pastures which already belong to the agricultural holdings or the possibility of intensification of dairy production in order to compensate losses from quitting alpine pastoralism. When assuming that no additional pastures are available near the agricultural holding, and farms cannot compensate the missing pastures by additionally buying fodder, continued alpine pastoralism is most likely the most profitable option. Furthermore the calculations of the underlying study show that especially those alpine pastoral systems which employ external labourers will not manage to summer dairy cows anymore after the abandonment of the EU milk quota regulation.

If alpine pastoralism in Austria should continue in future to a similar extend as during the programming period up to 2013, multiple measures will have to be taken. On the one hand, continued funding will be necessary for alpine pastoralism to keep up with an increasing competitive agricultural market. Whether the financial means towards this goal will be taken from the first or second pillar of the CAP won`t make a major difference, but if the traditional cultivation of alpine pastures through various farm animals is to be kept up, it will be of vital importance to align subsidies to the number of summered farm animals. After the termination of the milk quota regulation, especially dairy producing pastoral systems are apt to come under great pressure. Therefore those systems should be regarded specifically within future funding programmes. Apart from the continued guarantee for financial support, additional measures for a cost effective alpine pastoralism should be discussed. It will be a major challenge for example, to increase the profitability especially on Austria`s dairy producing alpine pastoral systems. Another big issue will be to satisfy the big demand for qualified labourers for alpine pastoralism in future. In order to guarantee the cultivation of Austria`s alpine pastures in the long term, economic incentives for Austria`s alpine pastoralism must be provided, but also other supporting actions should be taken into consideration.