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The share ofagriculture in Austria in theAustrian economy declined steadily afterWorld War II; however,agriculture continues to represent an important element of the economy because of its social and political significance.^[1] The Chamber of Agriculture remains on an equal level with the chambers of commerce and labor, although its members produce only a fraction of theGDP that industrial and commercial workers produce.^[1]

InAustria, as in most other eastern countries, the government has played an important role in agriculture since the end of World War II.^[1] The government has concentrated on mitigating social, regional, economic, and even environmental consequences of the sector's decline, as well as delaying the decline itself.^[1]

Agricultural policy has been carried out with different objectives and with different laws and policies depending on the times.^[1] at the early post-war years, the most important objectives were survival andself-sufficiency.^[1] As a poor country, Austria needed to be able to feed itself if its population was to survive.^[1]

By the 1950s, however, the policy was changing to a more global perspective, while keeping intact the traditionalfarm economy.^[1] The government wanted to protectdomestic production, stabilize agricultural markets, protect farmers' incomes, and improve the sector's ability to compete in Austria and abroad.^[1] Increasingly, the government began to believe in the importance of maintaining rural society as an objective in its own right, for social reasons, and to protect the environment and encouragetourism.^[1] Because of these aims, agricultural policy, more than any othereconomic policy, reflects a mixture of economic and noneconomic objectives and concerns.^[1] The principal aim, however, is to preserve the existing number offarms as much as possible.^[1]

Within the structure of thesocial partnership, various organizations work to maintain farm incomes and thus farm existence, among them theGrain Board, theDairy Board, and theLivestock and Meat Commission.^[1] These organizations set basic support prices, taking into account domestic costs and localsupply and demand, with only weak linkages to worldmarket prices.^[1]

The boards and commission use a variety of measures to achieve their broad purposes.^[1] Among these measures areimport restrictions, such asborder controls and entry controls—some of which may be bilaterally negotiated—and variable import duties.^[1] If import restrictions are not sufficient to maintain prices because of excess production, thesurplus is exported at subsidized prices (with thesubsidies usually coming from federal or provincial authorities).^[1] Authorities also applyproduction controls, such as sales quotas or limits, on the size and density oflivestock holdings.^[1] Quotas exist for many different products, with the quotas usually fixed on the basis of past production.^[1] Price and quality controls and limits also exist, especially with respect to different prices for different grades ofwheat ormilk.^[1] The government can also pay direct income supplements, but these payments are generally restricted to certainmountain farming zones and other equally disadvantaged areas.^[1] Subsidies are mainly paid by thefederal government but may in some instances be paid by provincial governments.^[1]

Because of the complex system of price supports andmarket access limitations, the exact share of subsidy costs to the government and to consumers is virtually impossible to calculate.^[1] Experts estimate that the total cost to the federal and other governments for agricultural andforestry support during the late 1980s was approximately S16 billion a year, a level that would have been roughly at the same level as that of many otherOrganisation for Economic Co-operation and Development (OECD) governments but slightly higher than theEC average.^[1]

The economic research instituteÖsterreichisches Institut für Wirtschaftsforschung (WIFO) estimated after a major 1989 study that about 71 percent of the cost ofagricultural support was borne by consumers in the form of higher prices, with the taxpayers carrying the remaining 29 percent through such different programs as direct and indirect federal and provincial subsidies or various kinds ofmarket regulation.^[1]

Despite the government's efforts to sustain agriculture, not one province had as much as 10 percent of the population involved in agriculture and forestry by 1991.^[1] At the beginning of the 1970s, all but two provinces (Vienna andVorarlberg) had more than 10 percent of their populations involved in farming.^[1] This contrasted markedly to the situation in 1934, when all but those same two provinces had more than 30 percent of their populations working in agriculture.^[1] Over this period of two generations, the decline in the Austrian farm population was as fast as any in the Western world.^[1]

As of the early 1990s, of Austria's total area of almost 84,000 square kilometers, about 67,000 square kilometers was used for farming and forestry.^[1] Roughly half of that area wasforest, and the remainder wasarable land andpasture.^[1]

Agriculture and forestry accounted for about 280,000 enterprises in 1986, with the average holding being about twenty-three hectares.^[1] There were about 4,500 corporate farms.^[1] Beyond those farms, however, only a third of all farmers were full-time farmers or farming companies.^[1] Over half the farming enterprises were smaller than ten hectares; nearly 40 percent were smaller than five hectares.^[1] Just as the number of farmers has long been in decline, so also has been the number of farms.^[1]

Family labor predominates, especially in mountainous areas and on smaller farms.^[1] Only a third of all farm and forestry enterprises were classified as full-time occupations in 1986.^[1] A full half of these enterprises are spare-time, that is, less than half of household labor is devoted to farming or forestry.^[1] The remainder are part-time.^[1] Farms up to ten hectares are more often tended by part-time and spare-time farmers rather than by full-time farmers.^[1] For most farm owners and workers, nonfarm income is as important, if not more important, than farm income.^[1]

Despite the decline in the number of farmers and agriculture's share of GDP since 1960, agricultural output has risen.^[1] As of the early 1990s, Austria was self-sufficient in allcereals andmilk products as well as inred meat. This gain was achieved because of the considerable gains in agriculturallabor productivity.^[1]

The value of agricultural and forestry output is heavily concentrated infield crops,meat, anddairy products, with most of it coming fromanimal husbandry.^[1] Because large parts of Austria are mountainous, only the lowland areas of eastern Austria and some smaller flat portions of western and northern Austria are suitable for crop production and more intensive forms of animal husbandry.^[1] The remainder of the land is used for forestry and less intensive animal husbandry, most of which takes advantage of mountainpasturage.^[1]

• Agriculture in Austria

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