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Agri-environmental indicators before and after the CAP reform

In the last column of Table 13.1, the percentage change of variables of interest between the periods 2002/03 and 2008/09 is presented. The major differences between the scenarios of the model simulation and the observed reality are

  • • output and input prices increased considerably, whereas no change was assumed in the model analysis;
  • • the requirement to set aside arable land was abolished, whereas land use was constrained in the model analysis; and
  • • a significant conversion of agricultural land into forest land took place, whereas this was ruled out in the model analysis.

The comparison between the situation in 2002/03 and 2008/09 shows that many indicators show less environmental impact. These findings corroborate the general findings of the model analysis, even if the scenario assumptions deviated from what happened in reality.

Despite the intuition that higher output prices would induce more intensive farming practices, the opposite came true. One reason is that not only output prices surged but also input prices. The second reason seems to be that the abolition of the production incentive of coupled payments effectively made Austrian agriculture more extensive. Organic production has become even more profitable, mainly due to the willingness of consumers to pay premium prices for organic food on a larger scale than expected in the model scenarios. Soaring costs for fertilizers and commercial feed may have contributed to this adjustment.

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