Results with strategical relevance for European comities - Conclusions

1. It was possible to shape the countryside and the farming operations established there, as well as it was to influence the impact this farming had on the quality of the environment. Desired or undesired developments could not be blamed on an anonymous market. They were rather the result of explicit or implicit political actions and omissions, or both, and therefore, policy-makers must accept responsibility for it.
   
   In order to fulfil this task effectively, clear political aims were necessary, differentiated according to the respective situation. These aims needed to be standardised and integrated, and could not be formulated autonomously for specific sectors or functions (environmental policy, agricultural policy, competition policy, regional policy). Such integration and the establishment of the associated priorities were most urgent in the interface between agricultural and environmental policy. A general orientation towards principles such as efficiency, economy, and sustainability without establishing priorities and without discussing the conflicting fields of interest was a futile exercise.
    
2. Agro-political instruments had very differing effects on the various agricultural region types. This means that an efficient policy must combine differently its instruments to correspond to each region type, while following the same aims for all (which would not be very sensible). This could be achieved either by a centrally defined and complicated casuistic approach or by a liberal application of the principle of subsidiarity. It was obvious that only the latter approach could meet the political requirements of the European Union.
   In order to implement this principle without waiving the necessary uniform basic orientation of the European policy, standardised regional classifications needed to be established for the entire area. This was the basis on which local political governments could develop their programs which was comparable to present practices within the framework of the Structural Fund.
   
   The parameters meant to stabilise policy uniformity and market conformity (e.g. the maximal subsidy for services that profit the environment) should not be absolutely expressed in monetary units, but rather oriented to the regionally differing core parameters (e.g. labour investment per hectare necessary for sustainable cultivation).
    
3. In such disadvantaged regions as the Alps, the agricultural sector can only survive in an intense integration with the other economic sectors. At the same time, due to its mere existence and the external effects it causes, the agricultural sector is, in turn, a stabilising factor for the other economic fields, as well as for the entire social structure.
   
   This strong inter-dependence is rarely found in agro-industrial regions with Europe-wide export markets, but is typical for the alpine region. Consequently, all political measures focusing on the development of such rural regions must contain the widest possible interfaces for the realisation of inter-sectorial measures. In general, local governments are also organised in sectors, which by nature puts inter-sectorial projects at a disadvantage. Therefore, the European Union should consider supporting such hybrid-programs with first priority; ideally and financially. In any case, this investigation showed that the external effects desired for agriculture in problematic settings cannot be achieved by agro-political instruments alone.
    
4. The farm strategies of the farm managers react relatively slowly to political incentives. This was especially true of strategy changes with long-term positive environmental impacts. Within time windows of only 5 – 10 years, only weak results were visible. The decisive period was presumably the change of generation at the farm.
   
   If environmental and agricultural policy was to be efficient and sustainable, it needs to be long-term, reliable and stable. These are difficult demands; seeing as dynamic frameworks and altering values necessitate constant corrections. But policy must be realistically oriented to the reaction horizons of the strategical points of reference (i.e. farm manager, environment).
    
5. To be successful, financial incentives must be transparent and must be set above a certain threshold. Findings showed that subsidies above ca. 800 Euro/ha can influence the choice of farm strategy.
   
   It is obvious that a very differentiated subsidisation system (many accumulative, but not integrated types of aid) leads to the fact, that a single subsidy would hardly reach the critical threshold, resulting in a steering factor of about zero, which in effect turns a "subsidy" into a simple "transfer of finances". At best, such support puts an operation into the position of subsidy optimiser with moderate environmental orientation.
   
   This undesirable consequence can be avoided by means of subsidy strategies which exclude each other, but provide a relatively high support on their own. This not only facilitates administrative handling, but also represents a genuine incentive for the farm managers to thoroughly consider the future development of their farm operations.
   
   The high subsidisation intensity in certain single areas was problematic from two points of view, namely the aspect of expenses and the aspect of "market neutrality". Concerning the first argument, it must be made clear that it was not a matter of a general raise in subsidy funding, but rather a concentration of funds within the single farm, which can be carried out cost neutrally.
   
   The current practice of general price limiting was inadequate to ensure market neutrality. Much more, it was the difference between average production costs in the global market compared to the so-called "normal" average costs in an agricultural region that was decisive. Only if these gaps were essentially filled by subsidisation were quantity effects and market distortions to be expected. This means that the leeway for subsidisation in genuinely disadvantaged areas, even from the standpoint of the WTO, was distinctly greater than in a normal situation. This leeway could be used for a more environmentally orientation of agricultural politics.