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Research projects

Evaluation of agricultural support and agriculture in Vorarlberg in respect of legal provisions

Project number: AW 164/08

Project staff: Ortner, K.M.; Binder, J.; Hambrusch, J.; Janetschek, H.; Pfusterschmid, S.; Quendler, E.; Wagner, K.

Partner: Amt der Vorarlberger Landesregierung; Bundesanstalt für Bergbauernfragen

The period specified: 2008 - 2009

Project description: 

The state parliament of Vorarlberg asked its government, with the participation of stakeholders, experts and the chamber of agriculture, to evaluate the support system and the practice of agriculture, taking account of farm income and EU programmes and regulations, to asses future perspectives and the possibility to apply additional measures in order to meet the goals of the state law on agriculture and forestry. The Federal Institute of Agricultural Economics and the Federal Institute of Disadvantaged and Mountainous Areas performed this task in compliance with the specifi cations of a steering committee. The participation of stakeholders was organized by the state government. A project team with more than thirty experts was appointed and performed a SWOT analysis on the one hand and an analysis of goals and means to meet the goals stated in the law. It also carried out a pretest of a questionnaire which was later presented online on the homepage of the state government and to participants in four regional discussion

conferences which were organized to let the general public voice their concerns.

The evaluation report lists the goals given in the state law, describes the situation and recent developments of agriculture and the overall economy, the demand for agricultural products and public services of the sector, income and its distribution, policy measures by the EU and the state, a comparison of direct payments with those in neighbouring Bavaria and Switzerland, results of the participation processes, and future prospects for agricultural markets. The methodology of evaluation is presented, followed by quantitative and qualitative evaluations of the various measures and the support system overall in respect of the major goals, with the corresponding recommendations.

Agriculture in the state of Vorarlberg is strongly skewed toward the production of milk and beef, due to the fact that the 95.2 % of agricultural and forestry areas in the state are located in disadvantaged (mostly mountainous) regions and only 3 % of agricultural land is arable land. Production costs of agricultural products cannot be covered by world market prices; farm receipts must be supplemented with non-agricultural income, "other subsidies" and transfers;

the latter accounted for 20.2 % of farm receipts on average in 2007. Farm incomes per farm labour unit were rather small on average; they increase with the size of the holding and decrease with the level of disadvantage. The compensatory allowance appears to be insuffi cient to eliminate the disadvantage of farms with higher natural handicaps. In Switzerland subsidies per hectare and per farm are substantially higher than in Vorarlberg while the compensatory allowance per hectare is lower in Bavaria. Gross value added increased at the same rate as the

overall economy since 1995; input of labour into agriculture is decreasing.

The share of state-fi nanced subsidies in Vorarlberg is the highest of all states of Austria due to a state-fi nanced environmental payment on grassland and a relatively low level of single farm payments. The environmental top-up may help to increase the rate of participation in agri-environmental schemes but it mainly contributes to farm income which is also small due to the small-scale structure of farms. Participants in the survey were strongly in favour of supporting agriculture to maintain as many farms as possible, to use land currently in use also in the future, to continue farming in disadvantaged areas, to secure food supplies of domestic origin, to protect domestic production from world prices, to make sure that crop production continues without genetically modifi ed varieties and that agriculture complies with strong environmental and animal welfare standards. They agreed with the current level of support to agriculture.

In order to keep support payments in check and maintain farm incomes it is advisable to exploit market opportunities. There is a strong commitment of consumers to buy regional foods at a higher price, especially if they exhibit corresponding quality traits. There is a strong presence of regional food products in the retail stores but regional labels proliferate and should be consolidated. It is advisable to improve the cooperation and communication between sectors, farmers and consumers. Endogenous development should be emphasised through Leader, village renewal and similar initiatives.

Overall, agriculture in Vorarlberg performs various functions in addition to food production which are held in high esteem by the population and considered worthwhile to maintain through support by both the state and consumers. Given that the goals spelled out in the state law are fi rmly rooted in general perceptions of the public and assuming that the corresponding policy measures continue agriculture in Vorarlberg is well placed to maintain its signifi cance in the future (as it did in the past; see its development of gross and net value added in fi gure 1). The agricultural support system in general was judged to be adequate by participants, and they were defi nitely happy in respect of the various achievements of agriculture in their state.