The Nature of Rural Development:

Towards a Sustainable Integrated Rural Policy in Europe

Maria Asamer-Handler & Robert Lukesch Actors, Institutions and Attitudes to Rural Development: World-Wide Fund for Nature and the Statutory Countryside

The Austrian National Report Research Report to the Agencies of Great Britain Regionalberatung GmbH, Austrian Regional Consultants Ltd. ÖAR December 2000 Contents

1. Introduction: Austria's rural and agricultural character ...... 3 2. The institutional framework ...... 6 2.1 Institutions ...... 6 2.2 The most important programmes ...... 8 3. Overview of the most important institutions with regard to rural development in Austria ... 11 4. Analysis of the perceptions and perspectives of important institutions and key actors...... 12 4.1 Key themes and conflicts ...... 13 4.2 The importance of development programmes ...... 16 4.3 Key actors and relationships...... 18 4.4 The influence of the EU programmatic orientations and institutional relationships ...... 20 4.5 Specific themes...... 20 5. Challenges for sustainable rural development...... 24 6. Conclusions ...... 288 6.1 Factors hampering and favouring sustainable rural development ...... 28 6.2 Reflection upon the mutual relationships between agrarian and non-agrarian interest 29 References ...... 322 Annex 1 List of interview partners...... Error! Bookmark not defined.3 Annex II Workshop participants ...... 377

Robert Lukesch ÖAR Regionalberatung GmbH Hirzenriegl 55 A-8350 Fehring Austria

Tel: (+43) 3155 5108 Fax: (+43) 3155 51084 E-mail: [email protected]

Maria Asamer-Handler ÖAR Regionalberatung GmbH Alberstrasse 10 A-8010 Graz Austria

Tel: (+43) 316 3188 4814 Fax: (+43) 316 3188 4888 E-mail: [email protected]

2 1. Introduction: Austria’s rural and agricultural character

Rural areas in Austria

Austria’s rural areas are of outstanding importance, not only because of their extension within the national territory, but also with respect to their function as settlement areas. According to the OECD classification for rural areas, 78% of the Austrian population live in regions which can be classified as “rural”, 41% live in “predominantly rural areas”, another 37% in “significantly rural areas”, and only 22% live in “predominantly urban areas”. If one takes a municipal population density of a maximum of 150 inhabitants per square kilometre as a definition for “rural”, corresponding to the OECD concept, these municipalities would cover 91% of Austria’s territory and represent 43% of the population.

urban

urbanizing

lrural

Intensive tourism

Alps (Alp. Convention)

over 1500 m (

Using the current Austrian definition, which considers all municipalities counting less than 10.000 inhabitants as rural, 56,3% of the population live in rural areas. The LEADER+ - programme excludes municipalities with more than 20.000 inhabitants. Hence 63,5% of the Austrians live in areas eligible for LEADER +.

The demographic evolution is forecasted as relatively stable, except the strong agriculturally dominated peripheral areas in the south and in the east, and some inner alpine areas, which will lose population. Better traffic links and the increase of commuting lead to relatively stable situations in many peripheral areas, as people tend to stay at their residences as long as circumstances allow.

Austria’s geography is largely shaped by the Alps, they cover 60% of Austria’s national territory. The alpine areas are ecologically very sensitive; nevertheless they fulfil all functions of a living and economic space. Nearly one half of the Austrian population lives there. This fact distinguishes the Austrian Alps clearly from other mountain regions in Europe, where the population is very low.

There is a highly developed tourism sector, especially in the Alps. Austria is among those countries with the highest intensity in tourism in the world. With more than 1 million beds, Austria counted 24,9 million arrivals and more than 111 millions overnight stays in 1998. The

3 tourist expenditures (all expenditures foreign or domestic tourists made during a stay) amounted to 29 billions of Euro in 1998, which amounts to 15% of the gross national product.

The labour market

The international trends – the decrease of jobs in agriculture and forestry and the increase in the services sector – also prevail in Austria. Since 1989 the development of the labour market was marked by an extension of employment and a parallel increase of unemployment. Unemployment reached 7,2% in 1998, but has been decreasing again since 1999.

The rate of employment in agriculture and forestry iseen in steady decline since1951, from 32% to 17,4% in 1971, and to 6,7% in 1998. The number of farms decreased from 432.000 in 1951 to 252.000 in 1997. In 1998 the agricultural sector had a share not bigger than 4,5% of employment and 1,4% of the gross domestic product.

The mountain regions form the bulk of Austria’s less favoured areas. These LFA comprise more than 80% of Austria’s cadastral surface, and nearly 70% of the agricultural and forest land. The employment rate in agriculture and forestry of 9,2% is nearly 50% higher here than the Austrian average. There are, however, considerable differences between regions. In the alpine regions grassland (pastures and meadows) and forestry are predominant.

In total, 80% of the Austrian territory (3,4 million ha), are exploited by 252.000 farms. This relatively high number of farms is caused by two peculiarities in the development of the agricultural structure in Austria. One is the general trend towards pluriactivity, expressed by an extraordinary rate of part time farmers (two thirds of all farms). The other one is the high share of very small farms. These farms are not likely to earn more than 6.500 Euro per annum. They exploit only 10% of the land; more than 50% of the actual number of farms belong to this group. However most of the land is used by medium-sised family farms. 44% of Austria’s farms cover between 10 and 100 ha. The farms in this category use two thirds of

4 the agricultural area in Austria. The average farm size lies just above 15 hectares, being the forth smallest in the EU.

In the Austrian average, more than a half of the agricultural gross yield is earned by livestock breeding, another quarter is earned with crops, the last fifth comes from forestry. In the recent past Austrian agriculture developed, besides the production of raw materials, more and more into new specialised branches. By starting to process and market their own products the value added could be raised, so some parts of the income, having got under pressure due to price cuts, could be safeguarded. As we lack direct marketing sale accounts, most information depends on the estimations of experts. They suppose that ¾ of Austrian farm businesses occasionally practice direct marketing, and 10% of them regularly. In 1997 171 direct marketing initiatives were counted, 22% of them border-crossing. In the same year 400 farmers’ markets and 130 farm shops were counted, with the highest density in Styria, with 11.000 inhabitants per farmers market. It is very hard to estimate the turnover created by direct marketing activities.

In Austria, especially in the alpine regions, organic agriculture soared in the 1990s. Since 1991 the number and area covered by organic farms increased by a factor of ten. Today 20.000 farms are organic, which represents close to ten percent or the farms and agricultural land. In the last two years, however, the number of organic farms stayed more or less the same. A similarly high increase is not probable in the near future. Although the introduction of direct payments for organic farming certainly accounts for the sharp increase during the first half of the 1990s, we can undoubtedly state that this relatively high level was largely supported by the efforts taken by domestic supermarket chains, which allowed the breakthrough to “mainstream” consumers by the middle of the 1990s. The creation of own trade marks by these supermarket chains proved to be more successful than earlier attempts to place producer labels in foodstores.

A very important form of pluriactivity is holidays on farms. Nearly 20.000 farming families let 220.000 beds. Due to the structural change in agriculture, and the growing competition in tourism, the whole number of farms offering farm holidays is decreasing, but at the same time their quality has improved. From the 111,1 million overnight stays in Austria, 4,8 million were spent on farms, and 1,5 million in apartments. In those rural areas, where the touristic sector is very dominant (especially in alpine mountainous areas), the interlinkages between the agricultural and touristic sector are very intensive. Agriculture in these regions has – on one hand – only small economic effects, but – on the other hand – it has a more important role in structuring the social and geographical context than in most of the old industrial areas (for example in Upper Styria). In those areas structural change had shown stronger impact on the social and geographical fabric, because changes in employment from agriculture to mining, or heavy industry, were more likely to pull workers away from farming activities. In these mostly mountainous areas the vertical integration of forestry with the wood-processing- industry would probably offer more opportunities to create important intersectoral ties.

5 2. The institutional framework

2.1 Institutions

Austria is a federal state. This means that the competencies of legislation for important fields concerning rural areas, such as spatial planning or nature protection competencies, are at the level of the nine Länder (regions). Nevertheless, the federal level shapes the political framework.

Federal level

Government institutions

Policy-making for rural areas is the task of the Ministry of Agriculture (BMLFUW), which has existed in this form since February 2000. The new government dissolved the former Ministry of Environment, Youth and Family Affairs and added environmental agendas to the Ministry of Agriculture. The BMLFUW is now responsible for the legislation and implementation of policies in the realms of agriculture, forestry, environment and water management, as well for the elaboration of the EU – programmes relevant for rural areas, especially the Rural Development Programme (RDP) and LEADER+. The Ministry of Agriculture is responsible for the control of the EAGGF flows. It is responsible for the payments for development measures in the RDP. For direct payments in the frame of the agri–environmental programme, ÖPUL and the less favoured areas allowances (AZ), the Agrarmarkt Austria (AMA) is responsible. The AMA also accounts for the CAP market regulation payments.

The Federal Chancellery (BKA ) is also concerned with rural areas. It co-ordinates the spatial planning competencies which are under the legislation of the Länder. The BKA is the fund corresponding institution for the ERDF. It was responsible for the national coordination of LEADER II. As LEADER+ corresponds with EAGGF, the competency for LEADER+ has now moved to the BMLFUW. Within the last 20 years the Chancellery has played an important role in testing the Austrian concept of “Endogenous Regional Development”, which has a strong bottom-up component, and is somewhat related to the LEADER approach, and with more recent concepts of “Sustainable Regional Development”. As its essential funding instrument it created a national programme named FER (fund for endogenous local and regional development), by which innovative projects in rural areas were supported. In recent times the FER has co-financed the so-called local development managers (“Regionalmanager”), who identify and initiate projects at the local level and bring together the local and regional actors and funding institutions. Due to the visible success, similar funding programmes were initiated in the eighties at Länder level, whereas the FER is no longer operating.

The Chancellery also hosts the ÖROK (Austrian Spatial Coordination Conference), a body made up of representatives of the federal and Länder levels and the so-called social partners (interest groups, see below) for co-ordinating spatial planning activities at the national level. The ÖROK serves as secretariat for the monitoring committees in a number of EU structural funds programmes.

Of course, other ministries also have a certain influence on rural areas, be it in the realms of education or traffic. Worth mentioning is the Ministry of Economy and Labour, which is responsible for the ESF flows and for the federal co-ordination of the Territorial Employment Pacts, which are created in coherence with the regional development strategies and supported by regional development partnerships. Also the Ministry of Finance has a decisive influence, as it has to provide the means for national co-financing. It may also therefore have an important influence on the contents of policies of programmes in rural areas.

6 Social partners

In Austria the big “Interessensvertretungen” (interest groups) collaborate in the framework of the so-called “social partnership”, an institution aiming at ensuring the economic equilibrium of interests and at preserving social peace. The social partnership is made up of three chambers, the chamber of agriculture and forestry (LWK), the chamber of commerce (WK) and the chamber of labour (AK) and two voluntary organisations, the industrial association and the trade union (ÖGB). Most of the laws will be examined by at least four of these partners (LWK, AK,WK, ÖGB) before they are discussed in the parliament. In recent years the influence of the social partners decreased to the same extent as the two big founding parties of Austria’s Second Republic. The conservative, christian- democrat ÖVP and the social-democrat SPÖ lost political support. According to most political commentators this tendency became manifest after the formation of the new government coalition between ÖVP and the right wing FPÖ in February 2000. The loss of power of the social partnership as a system does not imply that the influence of single representatives of interests decreased to the same extent.

The interest group with the highest influence on the Ministry of Agriculture policy is the Conference of Presidents of the Chambers of Agriculture (PRÄKO). The chambers of agriculture are also organised on the Länder level, and the PRÄKO acts as an umbrella organisation. The politically most influential group within the chambers (and hence the PRÄKO), is the “Bauernbund” (farmers union), an integral part of the ÖVP. Of course, the chambers of agriculture represent the farmers’ interests, and their most important aims are the maintenance of the quality of life and the incomes of farmers. The PRÄKO and the agricultural departments of the Länder were all intensively involved in the elaboration of the RDP, and also of the LEADER+ national programme. The PRÄKO regards itself as a speaker for and co-ordinator of the regional chambers’ interests in the agricultural sector.

The Chamber of commerce, as the representative of interests of craft and industry, is mainly involved in policy making for rural areas by its participation in the ÖROK. It was also involved in the elaboration of the parts of the RDP which concern the craft sector.

NGOs, research institutes and others

NGOs concerned with rural development are the WWF (World Wide Fund for Nature), the NFI (Friends of Nature International) and the Alpinist Association (AV). All of them are mainly interested in nature protection and environmental issues. The farmers‘ associations are to a high degree organised alongside political strands. The most influential among them is the „Bauernbund“, a constituent body of the ÖVP.

The ÖBV, the Austrian association of mountain farmers, speaks up for the concerns of small and mountain farmers. The aforementioned NGOs act on the federal level, whereas others, such as the „Distelverein“ („thistle association“) aim to reconcile environmental, agricultural and hunters‘ interests on a regional scale.

Concerning research, in addition to the universities, research institutes belonging to the BMLFUW, such as the “Federal Institute for Mountain Farming” (BABF) and the “Federal Institute for Agricultural Economy” (AWI) and private research institutes like the ÖVAF (Austrian Association for Agricultural Research) work in the field of rural development.

The level of the “ Länder”

At the level of the nine Länder, the departments corresponding to the EU structural funds such as economy, agriculture and spatial planning are, similarly to the most important federal ministries, to an increasing degree also the departments for nature protection.

7 In the framework of the EU – Structural Funds 1 Objective 1 programme (in Burgenland) and 7 Objective 2 programmes in all the other Länder (except Vienna) were elaborated. The leading departments were in most cases the departments of economy. The departments of agriculture did not contribute very much to the programming documents, but they intensively helped to elaborate the Austrian Rural Development Programme (RDP) of the Ministry of Agriculture. The Objective 1 programme of Burgenland comprises the same agricultural measures as the RDP. The departments of spatial planning are usually responsible for implementing the INTERREG programmes. Three of them are also responsible for LEADER+, and in five other Länder the departments of agriculture are responsible for LEADER+.

The local (= microregional) level

At the microregional level the local development agencies (LDAs), which currently number 25, are important. In most regions there is one LDA responsible for the ERDF, and one for the EAGGF. The local development manager brings together the local actors and opens them access to the funding institutions. The regional Labour Market Services (AMS) are responsible for the implementation of ESF programmes.

Below the level of the “Länder” there are the “political districts”, but they just host administrative bodies of the Land and the federal level. The next, and smallest, legislative level is formed by the municipalities, whose mayors may have some influence in project development and implementation. So far they dominated nearly all 31 LEADER II action groups. However, their number in the new LAGs will decline due to the LEADER+ regulations.

The regional social partners also play a certain role. For instance, in the framework of regional spatial planning committees at the district levels of some Länder, or in regional development partnerships.

2.2 The most important programmes

The Rural Development Programme (RDP)

The Austrian RDP was submitted on September 1st 1999 (earlier than by the other Member States) and approved by the European Commission with the signature of the agricultural commissioner on July 14th 2000. The RDP mainly sums up and further develops existing programme strands, such as ÖPUL 1995/1998 or the now abolished Objective 5b. At the core of the new RDP are the agri–environmental measures (ÖPUL) and the allowances for less favoured areas (AZ). For the other measures of the programme the means are relatively limited. The Austrian RDP represents 9,7 % of the whole EU budget allocated to the “second column”, which is a disproportionately high amount. For the RDP this is around 7,3 Billion Euro, which is twice as high as the CAP market regulation amount. This ratio stands at 2 : 1 in Austria, but the EU average is 1: 6.

ÖPUL has by far the biggest share with 59% of the budget. ÖPUL is the Austrian agri- environmental programme , corresponding to the EU Regulation 2078/92, which is now integrated into the new RDP. ÖPUL has a total coverage approach, which means as many farms as possible should be covered with the programme. There are allowances for the following measures: § measures for agricultural extensification, like the abstention from, or reduction of, pesticides and fertilisers, or for organic farming; § preservation of cultural landscapes and traditional land use methods, such as mowing steep slopes; § measures to protect water and soil; 8 § measures concerning projects, for example in the field of nature protection.

ÖPUL is considered as a compensation for environmental services, it is area-related with a certain degression according to the farm size, but with no upper limit. Farmers wanting to make use of ÖPUL oblige themselves to do so for five years. The programme therefore has a structure-preserving character. The following environmental effects are expected with ÖPUL: § Reduction of nutrient leakage; § Preservation of typical landscape features; § Nature protection (endangered species and habitats/biodiversity) ; § Water protection; § Keeping landscapes open.

A further priority of the RDP is the allowance for less favoured areas (AZ). 26% of the programme costs are reserved for the AZ. The AZ should compensate for difficulties and restrictions (Natura 2000) in land use and the lack of competitiveness in mountainous, less favoured, and small structured areas. The programme introduces a basic payment, regardless of the farm size, thus favouring smaller farms. The measure is seen as important for the preservation of agriculture and forestry in the mountain regions, and also serves as a compensation for services such as disaster control, and preservation of cultural landscapes in sensitive areas, an essential base for tourism.

In addition to these compensation measures there are also subsidies which aim to improve the production of Austrian agriculture and forestry. These measures comprise: § Funding of investments on farms and allowances for young farmers (5,9% of the RDP); § Vocational training (0,8%); § Support for processing and marketing (1,53%); § Measures under Art. 33 (4,4%; they do not differ very much from the former Objective 5b programmes; although they now extend to all rural areas); § Forestry measures (2,35%).

LEADER+

A working group within the responsibility of the BMLFUW, and with the inclusion of the other relevant ministries, the PRÄKO and the agricultural and/or spatial planning departments of the Länder, elaborated a national LEADER+ programme under the control of a steering committee. The programme is now in Brussels for approval. The responsibility for its implementation will be under the agricultural or spatial planning departments of the Länder. The existing LEADER II action groups, and other areas wanting to found such groups, are currently working at their territorial strategies.

Objective 1 – programme Burgenland

The easternmost Land has been an Objective1 area in the last period and will remain one in the new period. An agricultural programme corresponding to the RDP is included in the Single Programme Planning Document. The investment measures including Art.33 will be funded by EAGGF – guidance, and the other measures by EAGGF – guarantee. The programme has already been approved by the European Commission.

Objective 2 - programmes of the Länder

Objective 2 programmes are elaborated in all Länder except Vienna and Burgenland. According to the new map of eligible areas, they are considerably reduced compared to the former Objective 2 and Objective 5b areas. The new Objective 2 programmes aim at the

9 economic strengthening of old industrial areas and rural peripheral areas. To give an example, the following are the measures of the Styrian Objective 2 programme:

- Support for the industrial and services sector (for example through inward investments, founding of innovative enterprises, support for environmental measures). - Strengthening territorial competitiveness and preparing businesses for the information society (founding/extension of innovation centres, research and innovation, networking, consultancy and transfer of know how). - Support of integrated regional development with focus on tourism and culture (for example tourist infrastructure, support of cultural projects and initiatives, support of regional development concepts). - Technical assistance. - Support for human resources (for example qualification of persons threatened by exclusion, innovative qualification measures in businesses).

10 3. Overview of the most important institutions with regard to rural development in Austria

Federal level

Ministry of and other Ministry of Ministry of Chancellery Economy and ministries Finance Agriculture Labour

Business Pres. conference- and other social of agric.chambers Chamber partners

Envir. Research Agric. - NGOs Inst. NGOs

Länder level

Land government

Space planning- Agric. Economic and other departments departm. departm. departm. Social partners

Local level

Local developm.managements EFRE Social Mayors partners Local initiatives Local developm.managements EAGGF 4. Analysis of the perceptions and perspectives of important institutions and key actors

The following text is a synthesis and interpretation of personal or telephone interviews carried out by the project team Asamer-Handler/Lukesch with the persons listed in section 8.1 between the 1st and 27th of July 2000.

We tried to refrain from bringing in our subjective opinions as far as possible, but our influence may express itself by the selection of the interview partners. The selection was made jointly with Mrs. Simone Lughofer (WWF Austria), and was also discussed with Mr. Heinrich Wohlmeyer (ÖVAF) and Mr. Manfred Pils (NFI). We used a 3-dimensional matrix with the following parameters:

Ø Distribution according to political levels (national/regional = Länder/local) Ø Distribution according to function and position of actors Ø Geographical distribution.

We could also have influenced the statements of the interview partners by our way of interpreting them. Differences of personal perception and priorities may unwillingly take effect in reporting. In order to avoid this effect, we thoroughly discussed the draft report with Mrs. Simone Lughofer and Mrs. Simone Matouch from WWF Austria on 27th of July in Vienna.

It should be noted that we did take position in section 6.2. concerning a crucial issue, namely the mutual relationships between key actors in rural development with regard to their proximity to or distance from the agricultural interest groups.

We invited our interview partners (abbreviated by IP in the following text) , together with other influential actors to a workshop of synthesis and reflection on the 24th of October 2000. The workshop was held in a room of the Federal Parliament in Vienna with the presence of a representative of the IEEP (Mr. Jan-Erik Petersen). Representatives of the WWF (Mrs. Simone Lughofer), the ÖAR (Mr. Robet Lukesch) and the NFI (Mr. Manfred Pils) presented the main findings of the draft study, which was vividly discussed during the half days‘ meeting. Some participants expressed an interest in continueing the dialogue forum and meeting again in spring 2001, after the new programmes had started.

Contributions by participants in this forum, and further comments coming from their side by e-mail during the following „digestion“ phase, were finally integrated into the study in December 2000.

The statements of IP and other contributors are sufficiently anonymised, and at times we categorised them according to certain functions and positions in order to facilitate understanding. Quotations are put in quotation marks and italics.

In the presentation we follow the template provided by the IEEP for the national studies. Section 4.1. reflects some of the key themes and conflicts, which repetedly emerged in most of the interviews. In section 4.2. we concentrate on relevant development programmes, especially the Rural Development Programme, and how they are perceived by the IPs. In Section 4.3. we focus on the „power mapping“ of key actors and their relationships. Section 4.4. highlights the specific influence of the EU, in terms of programmes and instiutional arrangements. Section 4.5. features a number of important themes of political significance with reference to sustainable development, such as sectorial integration, empowerment, gender equity, ecological and cultural diversity. In Section 5 we put an even stronger focus on sustainable development , reflecting the IP’s views on that issue.

In Section 6 we summarise some of the „core messages“ of the IP and other contributors (6.1.), under 6.2. the authors of the study (R. Lukesch, M. Asamer-Handler) reflect their own experiences with regard to the mutual relationships between what we call „agrarian“ and „non-agrarian“ interests.

Section 7 contains the list of documents utilised for the study, and Section 8 the list of IPs and participants in the synthesis workshop on the 24 th October in Vienna.

4.1 Key themes and conflicts

The basic question: can „the“ rural area be defined? v Many IP deny the existence of one rural space. There is a broad consensus upon the existence of many „rural areas“, where different sectors (agriculture, tourism, industry) may dominate and which may show different levels of prosperity.

In a number of interviews rural areas were conceptualised as being opposed to urbanised areas, which expresses itself in their definition:

„The driving force for rural development is the exchange between urban and rural areas, economically, culturally, socially and also with respect to democracy.“

„There are no more rural areas as such, there are central and peripheral areas, and the peripheral ones are determined by the central areas.“ v Other IPs state that „urbanization“ (in the sense of „globalization of lifestyles“) has become such an ubiquitous phenomenon that it shapes urban and rural areas in an equal manner. It even starts to put the diversity of regional identities at risk of vanishing. v Some IP emphasise the eminent role of natural resources and the heritage of cultural landscapes in rural reas. One of the major resources, the personal relationships and organisational intensity among rural people is largely „much more complex than in the cities“.

The aim: preserving a functional living space

Rural development, according to an IP, is dealing with - Building on locally existing resources - Linking together sectoral economic activities - Perceiving new opportunities - Making thematic strengths emerge - Developing projects out of these strong points - Awakening dormant potentials. v Attaining a social equilibrium and creating new job opportunities plays an increasing role in striving for preserving rural areas as an excellent living space („by combining the highest possible value added with the highest possible employment effects“) v Rural development in Austria stands in a tradition of balancing social disparities deriving from geographically determined productivity differentials (e.g. in mountain farming). Due to the supposition that agriculture and rural areas determine each other, the master strategy of the Rural Development Programme (RDP) consists of full coverage of rural areas by an ecologically and socially sound, family-based agriculture. The aim is to avoid „ecologisation“ of one part of agriculture, and and over-intensification and environmentally devastating „industrialization“ of the other part.

13 v Some important features distinguish rural from urban areas, such as the relevance of regional self-sufficiency and proximity of services, and the value of natural resources and farming landscapes. v A big threat is the out-migration of young, skilled people, therefore most IP express the necessity of education policies, in close connection with the productive sector, and appropriate for the local context and needs.

An economic path: new value added by closing regional cycles v A number of IP stresses the importance that economic sustainability of rural areas (in the sense of permanent functionality and suitability for settling) is based on:

- The priority of using local resources, especially biogene renewable materials; - The aim for regional availability in those realms, „where it makes sense“ (proximity and supply of everyday goods and services, and energy); - A dense and innovative production structure of handicraft-based SME and farms; - An economic compensation for environmental and social services by farmers; - Strengthening regional purchasing power and keeping alive short-distance distribution structures for local consumers; - A sufficient density of local handicraft and marketing structures by making use of modern information and communication technologies; - Efforts in education for raising a sense of quality and for influencing consumption styles; - A targeted accompanying support for building up local value added chains in those sectors, which combine local products with a modern understanding of quality, over a sufficiently long period („niche management“). v The fragmented situation of a multitude of small enterprises and suppliers are a hindrance to a coherent regional concept. A holistic approach is required. Regardless of which sector is going down the drain, the other ones will follow soon. That somewhat implies inter-connectivity, which in turn has to be strengthened and utilised for encouraging the rural area to thrive. v Regardless of the dwindling importance of agriculture in quantitative terms, „it will and must remain the key sector for rural development“, because – according to an IP – of its „space-covering character“ and its „strong influence on settlement patterns“. Almost 1 million inhabitants live on farms. Regional development must be a concerted effort, „the Ministry of Agriculture’s role is to secure the key sector agriculture.“

A political path: decentralisation of competencies and responsibilities v Rural areas, territorial equilibrium and political decentralisation are highly regarded issues in the political debate in Austria. v In reality – says an IP – „central areas are the winners“, „solidarity is in decline“. Dealing with „rural areas“ in an isolated manner is not useful. The determining factor for rural development is always the „dialogue between urban and rural areas“. v One of the most important levers is the mobilisation of people for participative processes. To do this, sufficient resources for responsivity are required, furthermore openness and transparency of the decision processes, especially in preparing, deciding and implementing spatial development programmes.

14 A neglected issue: financial capital in rural areas v An IP states that the system of weighted tax redistribution disadvantages rural areas, because it provides a higher rate per capita for densely populated, hence urban and metropolitan areas. The less an area is populated, and the smaller the villages in terms of people, the less the amount of public money per capita flowing back from the federal treasury to municipal budgets. The political discussion has now gained intensity, as some representatives of the actual federal government seem to favour an even redistribution of tax money, regardless of the size of the municipality. v Also the current practice of privatisations (e.g. in the energy and transportation sector) and the global trade agreements (WTO) are undermining the capacity for accumulating capital in disadvantaged rural areas. v There is virtually no risk capital available for the creation of new innovative enterprises in rural areas. According to EU Regulation 1257/99 there would have been a possibility to create local venture capital funds. But this opportunity has not been realised in the actual RDP. v Risky key projects do not only need support for getting off the ground, and subsidies for personal and material costs in the first three years. They do in many cases need a longer-lasting support for consolidation and for overcoming setbacks. v It is important to stress that a clear vision comes first in territorial development. If strategic orientations are missing, funding opportunities may for example „trap“ farmers in engaging in low threshold activities which would never become viable in the long run. Too many micro-labels would be created instead of building up solid trade marks with substantial „critical mass“.

Rural areas: two categories of people v Although there is only one rural space, rural people are divided into two categories, according as they are classified as farmers or not. Superficially they are not easy to distinguish within territories, where most people own a little piece of land to grow some crops for themselves and for their families. In fact, this makes a big difference if the products enter the local market, and it is difficult to decide whether they should be considered as products of a farmers‘ side occupation or of a small enterprise. v Those who run an enterprise , claim that farmers who actually did the same (for example marketing local products, running a bed and breakfast accommodation), would enjoy an unjust competitive advantage due to tax relief. v Farmers claim that they are severely disadvantaged by the rules governing trade licences and a host of other regulations concerning construction, space planning, animal husbandry. v In times when „multifunctionality“ of agriculture becomes a globally acknowledged attribute, farmers‘ issues can not be seriously discussed without taking into account individual or cooperative processing and commercialization activities. v There is a growing awareness that small businesses and small farmers should be encouraged to create interlinkages in production and trade , because they could be regarded as „natural allies“. Small farmers would be „entrepreneurs“ in the original sense of the word. Some contributors think that the categorisation, which is historically and politically determined, would increasingly lose relevance. On one hand trade licence regulations would be more and more liberalised, whereas tax relief would become more equal between farmers and small rural enterprises.

15 4.2 The importance of development programmes

The Rural Development Programme (RDP) v The RDP has been elaborated within the Ministry of Agriculture (BMLFUW) with strong involvement of agricultural stakeholders on national and Länder levels. Other departments and stakeholders have been involved and informed to a lesser extent. The relatively poor information level of „regional developers“ about the agricultural system may be also be due to the fact that this matter has historically evolved into very high complexity. There is no monitoring committee for the implementation of the RDP, because the EC did not oblige Member States to install such a committee. v Two environmental NGOs, WWF Austria and ÖGNU („Austrian Society for Nature and Environmental Protection“) have a seat in the monitoring committee for the agri- environmental programme (ÖPUL). The committee is headed by the BMLFUW and also attended by the agricultural and nature protection departments of the Länder governments. Currently there is a discussion over whether this committee could be transformed into an environmental monitoring committee for the whole RDP. v According to IPs who were involved in the elaboration of the RDP, it is a peculiar programme , because it covers nearly 10% of the overall EU budget allocated to „rural development“. The relation between CAP market regulation and rural development measures in Austria is at a rate of 1 : 2, the same rate is at 6 :1 in the EU average. The introduction of basic rates in compensation payments (AZ), the increase of the budgets of both AZ and ÖPUL are, according to many IPs, massive interventions for securing a full- coverage, environmentally sound, small-structured and family-based agriculture. v According to other IPs the RDP is just prolonging existing programme lines and is missing innovative elements. Direct payments from ÖPUL and AZ alone cannot trigger development. They also miss the emphasis on organic agriculture compared to other extensification measures, e.g. by introducing base payments. The description of the „good farming practice“ as the baseline for assessing the value added by the environmental ÖPUL measures is considered insufficient, and the formulation of many ÖPUL targets too vague. ÖPUL measures have a structure–conserving effect and can in the best case be linked to development concepts in a supportive manner. Furthermore, the fixation of the bulk of the budget in ÖPUL and AZ exposes the „variable“ parts of the RDP, which are the relevant ones for development in the proper sense (investments, education, Article 33-measures), to budget cuts which are expected with regard to the ambitious zero-deficit target by 2002 formulated by the federal government. Some IPs think that the 2,9 billion Euro agreement in the government coalition contract as national counterpart for EU – payments in the agricultural sector would finally be cut down. v On the other hand, agricultural representatives among the IPs said that even CAP measures contain elements that have territorial effects, such as dairy quota for mountain farming and the minimum rate of land per livestock unit. v One IP considered the twinning of agricultural and environmental policies as the „possibly most massive innovation of Regulation 1257/99“. Alongside the ÖPUL, the AZ and Article 33 measures provide subsidies for either managing Natura 2000 areas or being compensated for restrictions due to protection measures (according to Art. 16 of Regulation 1257/99). Thus ÖPUL can be used as a tool for contractual environmental preservation, whereas AZ serves as an instrument to support regulative measures with legal character. The complete coverage by ÖPUL which builds on the „good practice“ as the minimum standard, ensures an overall preservation and development of cultural landscapes, and prevents further environmental pressures on important factors such as soil and ground water. Some agrarian IP pointed out that when one thinks about 16 financing nature and environmental protection measures one should not immediately think about tapping agricultural money. Some of the responsibility should be taken by other economic sectors. v Some IPs regret that organic agriculture has not received more strategic importance. The considerable level which it has reached in Austria could be quickly equalised by other countries. The BMLFUW is in fact planning to launch a new promotion initiative, but they are also anxious about vexing those parts of the farming community for whom environmental limitations are already going to far. v The objectives of the RDP remain relatively vague, a regional focus would be not recognisable, whereas clear aims, corresponding actions and measurable evaluation criteria would be prerequisites for a reasonable ex-ante and ex-post evaluation. That opinion specifically applies to the ÖPUL programme, which consumes 8 billions ATS and for which no means are reserved for accompanying monitoring, or assessment sites for cross-comparison. v There should be a minimum budget for accompanying research; scientific support should be more systematically built in. This accompanying monitoring/evaluation process should involve farmers in order to close learning loops at the actors‘ level. v Nearly all IPs point out that the trans-sectoral measures under Article 33 are quite insufficient („the RDP is a pure agricultural programme“). Networking and inter-linkages have been not sufficiently taken into account, according to some IPs. Art. 33 should be the interface to LEADER+. A funding programme should have the necessary elasticity to be customised and adapted to specific micro-regions, in order to meet the needs of local actors. v The tangible lack of trans-sectorality seems, according to some IPs, to reveal a rather restrictive attitude of EC officials. The rules under the EAGFL – guarantee are „very stern, in contrast to the structural funds“. Any subsidies from the EAGFL guarantee budget have to comply with Annex 1 of the Common Treaty which contains a tax list of what can be considered as „agricultural“. Anything which does not correspond to the listed items in Annex 1 is remitted to the de minimis rule. Sub-sectors like renewable energy production, tourism based on rural SME are not included in that category, as an IP stated. But there would be ways to find alternative solutions: Biomass based local energy production systems could for example be supported from the budget foreseen for „environmental subsidies“. All in all, the reportedly restrictive attitude of the EC is considered as being in conflict with most of its political statements. v Generally spoken, the text of a funding programme mirrors the structure of the institutions which creates it. If coordination mechanisms are insufficient within the institution, if bureaucratic processes hinder a continuous flow of information, their outputs, funding programmes, show equally insufficient cross-links, are difficult to understand and cannot be easily implemented.

Community initiatives v LEADER II has yielded an overwhelmingly positive response. It is considered as the programme with the biggest knock-on effect, especially by catalysing new strategic cooperation and partnership structures. v Some IPs ascribe a similarly positive effect on actors‘ interlinkage to INTERREG II.

17 v Some IPs point out that LEADER + will serve, because of its applicability in all rural areas, as an important complement, neutralising the unilateral agricultural orientation of Article 33. v Concerning the future implementation structures for LEADER + and INTERREG III, it is strange that a „one stop shop“ system only functions in one of the Länder (i.e. Steiermark). In all the other Länder all departments concerned by a single project have to approve it one by one.

4.3 Key actors and relationships v The interests of the agricultural sector are represented in the Federal Presidents‘ Conference of regional (Länder-) chambers of agriculture. They are one of the four pillars of the Austrian Social Partnership. Their way to defend agricultural interests was described by several IP as most effective („the agricultural machinery is the best organised lobby“), especially taking into account the small quantitative importance of the farming sector. v At federal level the Minister of Agriculture and Forestry, who is in the actual legislation period (since February 2000) also responsible for Environment and Water Management, is member of the coalition coordination committee, and therefore a powerful member of government. According to many IPs he is successfully defending agricultural interests in close coordination with the chambers‘ conference of presidents. v Within the Federal Government, the political framework is mainly set by the BMLFUW, but also by the Ministry for Economy and Labour (BMWA) and the spatial coordination and regional policy section of the Federal Chancellery (BKA). Some IPs think that the integration of environmental competence into the BMLFUW might be a chance for an improved dialogue between the respective administrative bodies, but according to other opinions there is a danger that the environmental department would be simply outnumbered in terms of personnel resources, and therefore lose importance. v The Financial Ministry (BMF) plays a special role by virtue of its budget competence (for the federal co-financing part). It is not only influential at the national level, but also as a part of the EU Council of Finance Ministers. v Among the Social Partners there is, apart from the Agricultural Chambers, only the Business Chambers with considerable influence on the development of rural areas, and even less important the Chamber of Labour, and the unions. One IP pointed out that big organisations belonging to the social partners have privileged access to education budgets in vocational training and adult education, in a way that they are „swallowing“ large sums with standard measures with very little connection to the experience and practice of the trainees. v The Länder governments play an important role, especially their departments for agriculture and environment. In some of the Länder there have been fairly profiled regional programmes since the 1980s, for instance the Carinthian ORE: „Local and regional development programme“ or the Styrian STEFREI: Styrian Fund for Local Endogenous Initiatives“. They often serve as co-financing funds implemented by the spatial coordination departments of the Länder governments. v Mayors have an important role to play, according to many IPs. For example they have shown strong presence in the formulation and implementation of projects in 5b areas. Of course their horizon is defined by municipal boundaries. Intermunicipal cooperation only

18 functions without major problems where there is absolutely no chance for stand-alone municipalities (e.g. for getting subsidies out of programmes such as LEADER). v Local development associations play an increasing role. They mostly consist of municipalities, often with participation of social partners, less often with the participation of economic or non-profit initiatives. These associations gain importance where they operate an efficient local development management. The BKA, as part of its spatial coordination competence, and the Länder governments, supported around 25 local initiatives in all the Länder except Vienna, for implementing EFRE programmes after EU accession in 1995. In 7 Länder these local initiatives (in Austria they are called „Regionalmanagement“) were embedded in local development association structures, in 1 (Burgenland) they were acting as a Land government agency. The quality of coordination with the financial streams of EAGGF and ESF was different according to the Land. In some areas though, the local development associations have very little margin to take action. One IP said, in those cases young and unexperienced people are „worn out“ as regional managers facing various pressures and influences from both the Länder and municipal levels. v In relatively small Länder (with respect to surface and population) local managers communicate directly with members of Land governments, which takes a very positive effect on accelerating bureaucratic processes. In bigger Länder these contacts exist more with the members of the regional or federal parliaments, whose aim is to use „their region“ as an important reference base for their political work and sometimes act on behalf of their regions across party boundaries. v In the background political parties still play an eminent role. Those local managers who do not have the necessary experience to understand the importance of certain local actors, will not be able „to integrate them where they should be integrated“. This can lead to a serious blockade of processes, and project failures, because the critical mass of supporters cannot be found. Trustworthiness is a priority asset in the local development game. v Some IP ascribe „local actors“ eminent influence – if they are able to „link up with each other“. Creating local networks is more difficult when the analogous actors‘ coordination on the higher levels (regional and federal level) is missing. This problem has been observed especially between agricultural and non-agricultural officials and actors. v At the local levels there are sometimes, apart from the mayors, very influential individuals. For instance, tourism entrepreneurs, especially in alpine areas: the „tyranny of the indebted“. Of course, successful initiatives whose activities serve as local image boosters are gaining power as well. v Organic producers associations gain influence, but, as some IPs pointed out, could be still more influential if they were not spending energy on internal competition. v (Inter)national NGOs dealing with nature and environmental protection are influential, be it as project implementors, by their participation in working committees (such as the ÖPUL monitoring committee), or at times as evaluators. Agricultural representatives tend to take international environmental NGOs, such as the WWF or Birdlife, very seriously. Although of different opinions at times, they find it reasonable to integrate them in an institutional way. From the point of view of these NGOs, whose budgets are mainly based on members fees or sponsorship, their resources are so limited that they are beginning to think of claiming cost compensation for their collaboration in working committees, because they deliver expertise in these structures.

19 v Local NGOs are important actors at the local level, and often determine modalities and orientations of innovation in rural development. Although their integration into municipal structures is considered as necessary, one IP argues that they lose creativity and impetus to the same measure as they get closer to municipal structures.

4.4 The influence of the EU programmatic orientations and institutional relationships v The accession to the EU on 1st January 1995 has brought a shift to multi-annual development programmes, and an increase of opportunities in regional policies, but, according to an IP, also more „pressure“ (with respect to negotiation skills and the articulation of the local level). v EU-programming routines have positively contributed to a higher quality of development planning, and more comprehension among actors of what development planning can be. That means, sharply formulated, the trend goes towards more strategic approaches and away from serving political clients with the watering can. v To a certain extent the planning of Objective 5 b and INTERREG II programmes, but especially LEADER II, had a leverage effect on dynamising rural areas and the creation of actors‘ networks. One of LEADER’s major contributions has been the provision of the means for brainstorming, and introduction of a concept phase of innovative projects. That made „niche policies“ pre-existing in Austria since the 1980s shift into the mainstream of regional policies. v The EU accession equally brought a new political and juridical actor into the game, which can, according to the NGOs. reinforce decidedly their stand, against for instance Land governments with respect to implementing Natura 2000. The EC explicitly wishes to integrate NGOs into relevant monitoring committees covering tasks such as programming, monitoring and further developing of Structural Funds programmes. In the Objective 1 area Burgenland this integration (of the WWF) has already taken place. v The installation of local development management agencies (LDAs), whose tasks range from technical assistance for project development and funding to the sensibilisation and motivation of local actors and networking, is seen by many IPs as a successful innovation in the course of the structural funds implementation. This has been especially emphasised in those cases, where the agencies were capable to integrate and bundle different funding streams (EAGGF, ERDF, ESF) and customise them according to the local needs.

4.5 Specific themes

Holistic approach and sectoral integration v IPs agreed that also sectoral stakeholders have understood the importance of an integrated, trans-sectoral approach. The translation of this concept into action depends on forming, and keeping alive, intensive communication links between the different stakeholders. v In practice successful trans-sectoral harmonisation and networking can result in local quality labels, which mostly emerge from cooperation between agriculture and tourism, but may soon integrate the craft sector. The purpose of these strategies is to confer the „face“ of a territory upon products containing a high level of local value added and, hence, bestow on them a unique selling proposition.

20 v Another successful strategy is the joint action upon regional themes, which facilitates a recognition of the value added by cooperation, and also creates strong links to the historical and cultural identity of an area.

Empowerment and participation in rural development v Nearly all IPs point out that local development has to be carried out „from bottom up“. There is much knowledge embedded in local communities which should be utilised. Of course in many cases the problem solving capacity of the local level remains insufficient, for instance for transport, energy and spatial planning. Models for real citizens participation on higher than municipal levels are still missing. Integrating people sometimes means losing effectiveness in decision making, because they first of all keep „defending their own little territory“. In any case, the most important prerequisites for participation are transparency and free flow of information in one direction („top down“) and eagerness to learn and the ambition for qualified contributions in the other direction („bottom up“). v IPs complained many times about the lack of transparency during the elaboration of programmes. This was expressed with regard to the federal level (especially the RDP) as well as to the Länder level (especially Objective 2 plans). Farmers (both women and men) should be urgently integrated into the elaboration of programmes and funding schemes. Information must be delivered during the early stages of a decision making process (such as designing a development programme), when it really serves to foster feedback and mutual learning. v Some IPs even observed a degeneration of decision processes towards more informal and hidden practices, disguised in the public sphere with modern elements such as a „round table“, „fora“ and „platforms“. In this increasingly complex world it can be an important task of the NGOs to sometimes „audibly bang the fist on the table, when it is required.“

Investments in human capital: Research and education v Research has a crucial role to play in rural development, although the demand from the „users and beneficiaries“ themselves (politicians, administrations, local actors) is not very audible as yet. Scientific assistance should play a much more important role in monitoring and evaluation, in the sense of supporting and improving local action. A contributor to the workshop stressed the shining example of a research institute (Kornberg-Institut) which was created by a Styrian LEADER action group (Feldbach) with the help of the Technical University of Graz. It explicitly serves the demand arising from territorial development. v Education and training are eligible activities in the new RDP – a big step forward according to many IPs. v Consultancy and project monitoring for ensuring long-term implementation and consolidation still remains a weak point, because according to some contributors, a huge part of the human resources in advisory work for farmers are absorbed by administrative processes related to direct payments. They should be made more available for supporting projects. v Local development management agencies (LDAs) have visibly improved the situation. Uncertainty prevails considering the fact that the RDP does not fund technical assistance. LEADER budgets will be quite small because of the extension of eligible areas and the subsequent increase in the number and the size of LAGs.

21 Gender equity and social balance v The EC prescribed gender equity as a horizontal theme of priority in all Structural Funds programmes. The Federal and Länder levels integrated gender equity delegates into the programming processes. v The gender issue has practically played no role in the elaboration of the RDP and therefore is not reflected in the programme. v Some IPs argued that ex-ante evaluations alone are not sufficient for ensuring gender equity. v At the regional and local levels, interests and special needs of women are taken into account in various manners. In projects funded by the ESF (e.g. the territorial employment pacts) there is also a formal integration of gender equity delegates into the operating partnership. v „Classical“ women promotion projects have, according to some IPs sometimes left negative effects with respect to further isolation of target groups. Most statements are today aiming at an appropriate structuring of framework conditions for gender equity (e.g. working time, working rhythm, nurseries). Although men are clearly in the majority of local management and networking positions, there is in some regions a considerably growing share of women as project coordinators. v The equilibrium between social groups and the integration of marginal people by combining training activities with enterprise creation is increasing in importance as it becomes possible to link up the ESF implementing Labour Market Services (AMS) with the local development agencies. The territorial employment pacts, which build upon local development partnerships, turn out to be an appropriate institutional instruments for this. For example, in one of the areas a farmers‘ direct marketing project, involving big hotels and restaurants, was supported by an agricultural employment association.

Cultural and ecological diversity v Culture of preservation, culture of change

- In earlier times the world view and opinions of Austrian rural people were overwhelmingly shaped by big rural, farmer-based organisations, and were hence rather homogenous. They are still quite dominant today, but life careers and interests have diversified: „Farmers become entrepreneurs, workers become shareholders“. The growing orientation towards economic competition also implies that people tend to speak less openly about their personal perspectives and projects, that means about their future, than formerly.

- Introducing change needs a special examination of the traditional relationships and alliances. Many times a proposal is dismissed, because it came „from the wrong side“. Political consensus upon existing programmes is more important than inventing new programmes.

- All too often a pre-modern and static mental model of rural culture and tradition prevails. This does not reach young people. To be successful, a creative and innovative connection between traditional forms of expression and new style elements leading to the emergence of typical, area-based products has to be induced.

22 v Environment as a limit, environment as an opportunity

- Agriculture without a strong environmental accountability has become, according to all IPs, unthinkable in modern times. There is a whole range of subsidies aimed at supporting agricultural activities in and around nature protection areas (ÖPUL, AZ, Art.33).

- Agricultural representatives argue that society has to ask itself the question, how much it values the preservation of rural areas and natural resources, instead of merely ascribing environmental responsibility unilaterally to farmers.

- The ÖPUL 2000 measures do not only represent a substantial extension in terms of eligibility, but also in financial terms. On the other hand their complexity has grown considerably; the number of possible combinations between single measures has increased, according to an IP, from 3.000 to 10.000 in the new period. The complexity absorbs a lot of human resources in the agricultural advisory services. Furthermore, some of these measures will have „no real environmental impact,. such as the crop rotation subsidies“.

- Although it is common sense that territorial competitiveness largely depends on the environmental quality of an area, environmental restrictions are felt in many cases as limiting factors by economic actors (e.g. in tourism, agriculture). This makes it reasonable, and even necessary in and around protected areas, to chose strategies which are capable of fusing ecologically sound production methods and local origin into attractive products and services.

- The assessment of environmental effects of development measures is seen principally as a reasonable practice, if it is done efficiently and related to concrete projects. In one of the rural areas a local development agency collaborates with a scientific institute in order to create a standardised assessment method for the environmental effects of different project alternatives. This is based on the „ecological footprints“ and „energy accounts“, and is used in their internal project selection. Although principally welcome, the current practice of strategic environmental assessments (SEA) is worth considering critically, because the Structural Funds programmes are mostly defined as framework programmes, and just allow vague conclusions on the actual directions the funded projects will take. SEA could thus easily get a fig-leaf function.

23 5. Challenges for sustainable rural development

„The challenge is to allow future generations to live in rural areas“ v The mainstream of EU subsidies still serve to strengthen market performance of single farm enterprises under conditions of a globalised economy. This orientation on farm productivity gets more and more into conflict with the aim of promoting rural development. v As one farmers‘ representative claimed, Austrian farmers still suffer from competitive disadvantages with respect not only to the relative small size of farms, but also due to stricter construction regulations, limited road access for agricultural machinery, more expensive controlling mechanisms and higher prices for materials such as veterinary medicaments. v One IP pointed out that rural development needs „by its nature“ more time for changes. Rural actors do not easily adopt high expectations, but on the other hand they are more likely to overcome crises. v The IPs use to say that rural dwellers put high value in their rural lifestyle. The challenge is to maintain and to strengthen economic power, and to offer an infrastructure which matches urban conditions, and which requires a sufficient number of inhabitants to remain affordable. The competition with agglomeration areas involves the risk of destroying exactly those landscape features by excessive sub-urbanisation which are actually sought in rural areas. v It is hard to assess the influence of global trends and conditions. Certainly rural areas are strongly affected by climate change, but they remain aloof from the centres of decision. The still low price of fossil fuels is one of those mighty factors which act against a sustainable rural development, by steadily increasing individual transport flows, which is called the „problem number 1 of alpine regions“, or by competitive pressure coming from global players in the agro-business. Therefore some IPs consider an ecological tax reform as important („away from charging labour towards charging non-renewable resources and hazardous substances“). v There is a need to „bestow a political profile“ to rural areas. A possibility to articulate their interests lies in concerted political efforts across regions and parties which have to result in internationally signed and respected contracts, such as the Protocols under the Alpine Convention.

„An appropriate settlement structure and land management is unseparably linked to the further existence of small farming, family based structures.“ v Nowadays one can observe a „massive farm decline“ especially in peripheral areas. No one knows where and how it might end. Many IPs think that product revenues alone will not suffice for sustaining farms through the next generation. A possibility lies in the decoupling of product revenues and compensations for services for the whole society (environment, settlement). On the other hand, a survival on transfer payments alone does not meet farmers‘ traditional self-esteem. By this the decline of farming would not come to a halt. It would be essential to address the mental readiness of young farmers to take over their parents‘ farms and to dedicate themselves to farming or farm-based activities with a long term perspective, on the basis of the belief that farming indeed has a future in a diversified rural economy. v The multifunctionality of agriculture, which includes environmental and societal functions, will have to be translated into commercial opportunities. The question is 24 therefore: how can the needs and expectations from society to agriculture be transformed into profit instead of mere pressure? How can agriculture reframe obvious disadvantages into factual advantages? For example the production function of agriculture can be extended in the following directions, provided there is a clear ecological orientation: - In the food sector on the basis of cooperations with rural craft SMEs; - On the basis of a eco- and cultural tourism; - On the basis of selected renewable biogenic resources. v Representatives of organic agriculture ask for a strong and clear support for their segment. This position is not shared by other agrarians, because it would leave too many farmers outside. In contrast to this they want as many farmers as possible to produce in an environmentally friendly way throughout the whole area. Organic farmers argue that Austria’s name should remain connected with organic products in the international context. That would require a sufficient production base and coherent support strategies. In case the position would not be held, for instance if genetic engineering was allowed in agriculture, organic products coming from Austria inevitably would have the same scale disadvantages as „conventional“ products, because other countries are rapidly catching up. v There is no way to renounce direct payments, but they have to correspond to clear outcomes in order to remain justifiable. Herein the agri-environmental programme ÖPUL has to get rid of a self-imposed burden. Originally wrested from the EC, at least partially, to compensate income losses in the course of the EU accession, it can be justified in the long run only if it fully becomes what it always should have been according to its title: a budget line for compensating environmental services which have to represent visibly more than the „good farming practice“ requirements. Agrarians mention that the prevailing standards for „good farming practice“ in Austria still excel those of other EU countries1. One contributor to the workshop asked if cross-compliance should not become a basic requirement for any direct payments in all EU countries. v Cultural landscape preservation is orienting itself in the features of the past, but economic flows have drastically changed in the meantime. It would be meaningless to preserve theatre scenes just as past landscapes. Agrarians point out that farmers will only remain motivated to do the job if they can earn a sufficient part of their living from their core activities, which is the production of agricultural goods and food. There is a consensus about the fact that keeping alive the diversity of landscapes even in peripheral areas depends on them being permanently inhabited and managed. v Agricultural representatives rather have the opinion that the CAP will continue and be funded even after 2006, whereas other IPs tended to answer that this system of funding will be phased out due to the EU enlargement and to restrictions imposed by the WTO.

„Regions must strive for satisfying the most of their basic needs to the highest possible extent on the basis of their endogenous resources.“ v The globalisation („urbanisation“) of lifestyles puts rural areas under growing pressure concerning the requirements for basic and furthermore leisure, sporting and cultural infrastructures. With the use of modern technologies and logistics the basic local services (food, transport, social services) shall be secured in innovative ways. Based on their specific strengths, the regions will develop visions for the future which allow them to structure the existing resources and turn them into assets.

1 „Good farming practice“ is defined in section 9.2. of the RDP by rules and limitations for fertiliser applications 25 v The „natural allies“ in this challenge are the generally small farms, tourism and handicraft-oriented craft SMEs, each of them providing a sufficient level of meaningful and qualified jobs and keeping the value added within the area. Processing activities, marketing and commercialisation of farm-based products contribute to strengthening interlinkages with the craft sector and should therefore be specifically supported. v Some IPs identify „sustainability“ with „closing regional cycles“. Following the trend towards devolution of political tasks and making use of new technologies, rural areas can take advantage of a „decentralisation, wherever it makes sense“. This can be for example for basic services, energy production and distribution or decision making. This process has to be negotiated though, it is not at all „automatic“.

„Sustainability is a pretty slogan. The question is who pays.“ v According to an IP, sustainability means „to enrich our present capacity to grow the fruits with which we will live happy lives in the future“. From an ecological perspective this requires not only the preservation, but also the improvement of the present environmental situation. The integration of Natura 2000 areas and the extension of the ÖPUL reaching consensus amongst nearly all IP, but some think that the instrument ÖPUL is still not effective enough. There is no monitoring of the environmental impact of the RDP, and its installation would be necessary. v The shift of CAP funds to rural development funds (modulation) should be possible according to some IP, but agrarians mostly dismiss this proposal and argue that also CAP measures contribute to support environmental aims such as dairy quota and the minimum surface-livestock rate. There is unanimity about the fact that environmental protection in the future will be much more based on contractual agreements and cross compliance than nowadays. v In the long run, said a contributor to the workshop, public financial transfers would only be justified for three kinds of purposes, all of them related to market failures or insufficiencies: - Environmental payments (ÖPUL) - Social payments (AZ, basic rate for disadvantaged areas) - Innovation (promoting horizontal and vertical integration, cooperation and networking, market access etc.) v Local development associations will play an increasing role in setting the frame for initiating and financing development projects, in order to get them off the ground in the long run. This means - Strengthening the self-financing capacity of the private sector - Sufficient funding for planning, preparative and coordinating activities and start-ups - Highest possible extent of diversification of funding sources by appropriate „financial engineering“, because regional policy mechanisms and financial transfers will always be necessary for balancing the ongoing liberalisation process and opening to global markets. v The management agencies operating in the name of local development associations (e.g. LEADER action groups) will have an increasingly important role in the quality management of development strategies, of local partnerships and global networking in order to build up territorial competitiveness.

26 „We need a new concept of modernity in the rural world.“ v According to some IPs slogans like „the preservation of rural cultural heritage“ or „tradition and folklore“ are not attractive enough to motivate young people for a creative and future oriented interpretation of rural life. An innovative understanding of rural culture and lifestyles has to link up to existing values, but must also carry a modern self-understanding and be attractive to farming as well to non-farming communities. This self-assertion would emphasise local characteristics and conceptualise itself as being complementary and not contradictory to urban lifestyles. v According to a contributor, there is a growing gap between small and medium family farms and highly intensified agricultural producers operating on a world market scale. The somewhat backward oriented „bucolic“ image of the rural world which is communicated in advertisements uses the sympathetic features of family farms to mask less romantic industrial farming practices. v Being connected socially and technically (by means of transport) to central areas remains an equally important factor for a future oriented rural area as their inhabitants‘ consciousness of their autonomy and capacity of self-regeneration.

27 6. Conclusions

In the last session of the synthesis workshop on the 24th October we summarised some of the strongest points emerging from the debate in the following way: v There is an overall consensus in Austria about the value and the importance of rural territories and local products. v There is a need to concretise more thoroughly integrated, inter-sectoral development strategies in rural areas. v All participants see the importance of linking „good farming practice“ to environmental quality standards. v Direct payments are an important instrument of agricultural and rural policies, but they will not guarantee the maintenance of farming activities in all rural areas beyond the present generation. New coalitions between the farming sector, small crafts and industries, and tourism, are necessary to make rural territories competitive. v To build these coalitions, a reconsideration of the formal separation between the „farming“ and the „non-farming“ population is required through revising tax and trade licence regulations. v Education, training and knowledge management are essential for the future of rural areas and have to be put in the centre of all development activities. v Environmental payments should meet the requirements of socially and regionally equitable distribution. v The WTO issue seems to stay aloof from everyday debates, but the participants agree that questions referring to global trade can only be reasonably dealt with on the EU level. It is therefore important to seek consensus on the essential criteria for sustainable rural development between all EU Member States.

6.1 Factors hampering and favouring sustainable rural development

The following statements are approximate quotations frequently heard from interview partners.

Hampering factors: a. External factors: v The impact of climate change will be severe, especially upon (alpine) settlement areas, agriculture, forestry and tourism, but it will be difficult to assess. v The ongoing liberalisation, especially the globalisation of trade based upon cheap fossil energy, aggravates natural productivity differentials. b. Internal factors: v The ongoing decline of family farms in sensitive marginal areas ends up in a deprivation of these areas in terms of landscape diversity, and subsequently leads to the abandonment of settlements. v The ongoing loss of the active population leads to an increase of the dependency rate and the ageing of peripheral areas.

28 v The low level of trust in the own capacity to take action on one hand, and the ignorance of the existing economic, cultural and natural values on the own territory on the other hand, keeps rural people from taking their future into their own hands. v In order to fulfil the ideal type of the „master on his own piece of land“ many people sometimes take heavy burdens on them before they might finally make the giant step towards acknowledging the value of cooperation in the economic realm. v In spite of strong efforts to integrate environmental concerns into production practices, they are still considered as just limiting factors by many rural actors. v The very limited availability of financial resources for coordination activities (such as for farming women who without pay organise direct marketing operations „in the background“) and for difficulties in starting phases („infantile diseases“) very often puts important and good projects under a stifling threat of failure. v The persistence of political – administrative routines still preserves an attitude which abhors changes following the pattern “everything which is not explicitly allowed, is forbidden.“ v The frequently very opaque informal coordination mechanisms hamper a transparent management of decision making processes, obstruct collective learning, and therefore impede the evolution of a democratic culture of participation of NGOs and of the local population. v The lack of capacity to articulate themselves beyond sectoral interests leads to a fragmentation of the rural areas‘ efforts to negotiate their position in the power balance between regions.

Favourable factors: v The importance of development of rural areas is based on a broad political consensus. v There is still a remarkable density of organisations and human relations in rural areas, which allows the implementation even of ambitious development programmes. v The willingness and ability to think and act trans-sectorally is getting tangibly stronger. v The philosophy behind the agricultural development strategy is to maintain the small structured farming system in an environmentally friendly way, covering all cultivated land, and to ensure the protection of important assets such as soil fertility and water quality, even in intensive agricultural areas. v Local development management agencies structure programmes and financial flows in sufficiently extended and coherent areas, and act on behalf of broadly accepted local development strategies, with respect to the available resources and thematic priorities. v The efforts for (re)construction, preservation and multiplication of traditional local and modern technological knowledge, in close connection with the productive sectors, are gaining importance. v There is a growing comprehension of the fact that „working out“ a common position after a local negotiation process yields better results than old-style intervention policies through traditional party channels.

6.2 Reflection upon the mutual relationships between agrarian and non-agrarian interests2

After 24 interviews and the synthesis workshop, we discovered that one can distinguish between two different forms of perception of the term „rural“. These modes of perception are ideal types and therefore always exist in various „mixtures“. a. Firstly there is the „genuinely agrarian standpoint“ which is based on the assumption of the identity of interests between the farming community and the rural area as a whole.

2 This appendix reflects the opinion of the research team. 29 According to this perception, the multifunctionality of rural areas roots in the historic multifunctionality of farming, and can only be sustained in the future to the extent to which it will be possible to allow farmers to continue. Spatial development is seen in close connection with the temporal continuity of farmers‘ modes of thinking, producing and their cultural tradition. Those who represent this perception mostly feel themselves as being part of that tradition and mission, spanning many generations. b. Secondly there is the position of the „local developer“, whose interest is focused more on the actual diversity and multitude of different stakeholders in rural areas. From this point of view, farmers are one category among other actors, and in many cases not even the most influential one in the local fabric of interest coalitions and conflicts. The „local developer“ tries to be „neutral“ for finding appropriate solutions and strategies for the „local system“. Neutrality does not mean disengagement or lack of empathy in this case, it can be better described as „equidistance“.

As we said above, both perceptual positions can be outlined as ideal types. Their differences are really felt by many interview partners. However we observed that these differences have very little effect on the essence of their statements. In the end, they are quite similar in terms of content, although different in the weighting they put on various aspects. In any case, they are complementary.

We think that the mutual demarcation is mainly driven by two factors: v The socialisation and feelings of adherence (an important parameter is the degree of proximity to the agricultural interest groups). v The linguistic code: Agrarians use more the words „Land“ (= land, but also rural), „bäuerlich“ (= farming...), „Tradition“ (= tradition), the local developers use more the words „Region“ (= local in the sense of microregional), „lokal“ (= local in the sense of municipal/communal), „Kulturerbe“ (= cultural heritage) etc.

We interpret the interviews in a way that the two positions are converging towards each other and even fusing in the recent period, mainly catalysed by two other factors: v Since EU accession a new player came into the game, in relation to which both positions were confronted, especially during the pre-accession negotiations. After accession new structures and terminologies came into use, to which the pre-existing structures had to adapt themselves. A certain homogenisation of positions was especially fostered by the Objective 5b structures of implementation, and in a more subtle, but possibly still more durable manner, by LEADER II. v Furthermore, the global theme of sustainability catalyses the homogenisation of both positions. We try an explication of how this works: - The „agrarian“ position focuses, apart from the spatial dimension, on the temporal dimension (of the continuity of farming) and keeps the social dimension constant, concerning the farming community. - The „local developers“ position focuses, apart from the spatial dimension, on the social dimension (the diversity of actors) and keeps the temporal dimension constant, because the approach is more or less ahistoric: it rarely takes into account facts and events more than 20 years ago. - The sustainability perspective complements the „agrarian position“ by the social dimension, by requiring the integration of all „stakeholders“ into an open negotiation process („Local Agenda 21“), which should result in a durable win-win situation for the whole system. The concept of system is implicitly transferred from ecological systems to regional systems. In contrast to this, the sustainability approach enriches the „local developers“ position by bringing in the temporal dimension. Sustainability requires the embedding of development strategies into a time frame spanning more

30 generations, at first sight in the „forward“ direction (future), but as a consequence in the „backward“ direction (past), too.

Although the restrictive interpretation of Article 33 by EC officials seems to have further limited the already meagre possibilities of area-based, trans-sectoral funding in the RDP, more than expected due to the Structural Funds‘ logic3, we think that the process of dynamic fusion and mutual enrichment between the sketched positions is irreversible in Austria.

Of course, there is still too little mutual information, transparency, and overlaps exist which should be avoided for setting free new energy and creativity in rural development. It is interesting to observe that IPs standing near the agricultural sector usually show a better knowledge about Structural Funds programmes (EAGGF-guidance, ERDF, ESF) than vice- versa. The other IP seem to know about the RDP, which was virtually unknown to some of them, although the proposal has been available since 1/9/1999.

We say this because the interview showed us that the explicitly trans-sectoral community initiative, LEADER II, has led in many areas, locally and also within the Länder administration, to a dynamisation of actors. We think that this dynamisation will continue under LEADER +, because the character of the programme will prevail even after its integration into the EAGGF-guidance. Its trans-sectoral character expresses itself in the fact that it will be implemented under the competence of the spatial coordination departments in the governments of Styria, Carinthia and Tyrol, and under the competency of the agricultural departments in Vorarlberg, Salzburg, Upper and Lower Austria and Burgenland.

We interpret many statements in the interviews as showing that the „rural“ has a very high value in Austria, but its capacity to articulate itself is weak. We ask ourselves how it would be, if rural areas would get a clear political profile, as it is the case for example in Sweden and, to a lesser extent, in Hungary and Estonia, where there are „Rural Parliaments“ acting together across geographical and political party boundaries. The shaping of a political profile in this sense will, in our opinion, be the outcome of the further co-evolution of both positions in new and surprising ways.

3 As we already wrote in section 4.2, some IPs stated that the negotiations with EC officials regarding sector- transgressing funding turned out to be surprisingly complicated. According to those IP, these restrictions specificly affected investments into rural tourism and renewable energy supply. 31 References

Bundesministerium für Land- und Forstwirtschaft, Umwelt und Wasser (1997): "Lebensmittelreport" (National Food Report).

Bundesministerium für Land- und Forstwirtschaft, Umwelt und Wasser (1999): "Grüner Bericht" (Agricultural Report) 1998.

Bundesministerium für Land- und Forstwirtschaft, Umwelt und Wasser (2000): "Programm für die Entwicklung des ländlichen Raums" (approved version).

Bundesministerium für Land- und Forstwirtschaft, Umwelt und Wasser (2000): "Nationales Programm für LEADER+" (Proposal submitted to the EC).

Bundesanstalt für Agrarwirtschaft (2000): "Rural Areas. Discussion Paper for the elaboration of the Austrian Spatial Development Concept 2001".

Burgenländische Landesregierung (2000): "Ziel 1-Programm Burgenland" (Approved version).

Falch Reinhard (2000): "Rural Areas. Discussion Paper for the elaboration of the Austrian Spatial Development Concept 2001".

Statistik Austria: Tourism statistics of several years until 1999.

Steiermärkische Landesregierung (2000): "Ziel 2-Programm Steiermark" (Proposal submitted to the EC).

32 Annex I: List of interview partners

The letters after the name indicate how the interview was made (P = personal, T = telephone).

Josef Amerstorfer (T) ÖIG (Manager of an organic producers association) Hanriederstraße 8 4132 LEMBACH Tel. 07286 75170 [email protected]

DI Elisabeth Baumhöfer (P) Österreichische Bergbauernvereinigung (Manager of a national NGO of mountain farmers) Herklotzg. 7/21, A - 1150 Wien Tel: +43 1 89 29 400, Fax: +43 1 89 32 927 [email protected]

DI Manfred Bruckmoser (P) Bundeskanzleramt IV/4 (Dep. for spatial coordination; official responsible for LEADER +) Hohenstaufengasse 3 1014 WIEN Tel. 01 53115 2913 [email protected]

Dr. Thomas Dax (P) Federal Institute for Mountain Farming (Scientist) Möllwaldplatz 5, A – 1040 Wien Tel: +43 1 504 88 69 0, Fax: +43 1 504 88 69 39 email: [email protected], homepage: http://www.babf.bmlf.gv.at

Ing. Horst Fidlschuster (P) EU – Regionalmanager Oststeiermark (local development management East Styria) Radersdorf 62 8263 GROSSWILFERSDORF Tel. 03385 8400 [email protected]. Homepage: www.regionalmanagement.at

DI Johann Gruber (P) Responsible for the department of agricultural subsidies Land government of Upper Austria Promenade 31 4020 LINZ Tel. 0732 77200 [email protected]

Dr. Gottfried Hamböck (P) Österreichische Bundesforste AG (Manager of Board Affairs of the National Forest Enterprise) Marxergasse 2 1030 WIEN Tel. 01 7114514 [email protected]

33 Helmut Haslinger (T) Manager of the LAG ARGE Nationalparkregion Hohe Tauern and EAGGF – 5b – local development manager in the local agricultural chamber of Zell am See/Salzburg) Saalfeldnerstraße 7 5700 ZELL am SEE Tel. 06542 7239376 [email protected]

Peter Hasslacher (T) Austrian Alpinist Association (national NGO), responsible for space planning Wilhelm Greil Straße 15 6010 INNSBRUCK Tel. 0512 5954727 [email protected]

Dr. Hans Jaklitsch (P) Styrian Chamber of Commerce (responsible for economic policy and rural development) Körblergasse 111 – 113 8010 GRAZ Tel. 0316-6010 [email protected]

Dr. Herbert Kasser (T) Financial Ministry, budget section, responsible for agriculture Himmelpfortgasse 4 – 8 1010 WIEN Tel. 01514330 [email protected]

Dir. Dr. Kurt Kirchberger (T) Director of the National Park Neusiedler See-Seewinkel in Burgenland Apetloner Hof 7143 APETLON Tel. 02175 3365 [email protected]

Mag. Barbara Klemenz (P) 5b – EFRE – local development manager and manager of the LAG Norische Region in Carinthia Marktplatz 1/16 9371 BRÜCKL Tel. 04214 51050 [email protected]

Ing. Ignaz Knöbl (P) BMLFUW, head of department II/B9 (responsible for the coordination of the RDP and LEADER+) Stubenring 1/4.Stock 1010 WIEN Tel. 01 71100 6788 [email protected]

34 DI Rupert Lindner (T) Speaker of the Presidents‘ Conference of the Regional (Länder -) Agricultural Chambers Löwelstraße 13 1010 WIEN Tel. 01 534410 [email protected]

Mag. Simone Lughofer (P) WWF Austria, head of department of agriculture and rural development Ottakringer Straße 114 – 116 1160 WIEN Tel. 01 488170 [email protected]

DI Dietlinde Mlaker (P) Head of spatial coordination department in the Styrian Land government Stempfergasse 7 8010 GRAZ Tel. 0316 877 2512 [email protected]

Mag. Wilhelm Molterer (P) Federal Minister for Agriculture, Forestry, Environment and Water Stubenring 1/1.Stock 1010 WIEN Tel. 01 71100 6911 Fax 01 5870366 [email protected]

Manfred Pils (T) Manager of the transnational NGO Friends of Nature International Diefenbachgasse 36 1150 WIEN Tel. 01 8923877 [email protected]

DI Wolfgang Pirklhuber (P) Member of Parliament, Green Party, Speaker for Agricultural and Rural Development Parlament, Dr. Karl Renner Ring 3 1010 WIEN Tel: +43 1 40110 6672, Fax +43 1 40110 6882, Mobil: +43 664 111 91 23 [email protected]

DI Sigbert Riccabona (T) Enviromental Ombudsman in the Land of Tyrol (Tasks: nature protection, environmental assessments) Brixnerstraße 2 6010 INNSBRUCK Tel. 0512 567170 [email protected]

35 Franz Rüf (T) Manager of the LAG Natur und Leben Bregenzerwald, 5b – local development manager of the local development association Bregenzerwald and owner of an NTIC firm called Telesis Ltd. Hof 4 6861 ALBERSCHWENDE Tel. 05579 7171 [email protected]

Prof. DI Dr. Heinrich Wohlmeyer (P) Manager of the Austrian Association for Agricultural Research (ÖVAF) Kl. Sperlgasse 1/37 A - 1020 Wien 1020 WIEN Tel: 01 214 59 030 [email protected]

LR Georg Wurmitzer (T) Member of Land Government, Carinthia, responsible for Spatial Development, Municipalities and Nature Protection Wulfengasse 13 9020 KLAGENFURT Tel. 0463 5360 [email protected]

36 Annex II: Workshop participants (24/10/00)

Interview partners among workshop participants are marked by „I“.

Elisabeth BAUMHÖFER (I) ÖBV ( Austrian Association of Mountain Farmers) [email protected]

Bernhard DRUMEL WWF Austria [email protected]

Rudolf FEHRER BMLFUW – Abt. II B5 (Ministry of Agriculture, Forestry, Environment and Water) [email protected]

Horst FIDLSCHUSTER (I) EU-Regionalmanagement Oststeiermark(Local development management agency East Styria) [email protected]

Franz GÖLTL BMLFUW – Abt. II B5 (Ministry of Agriculture, Forestry, Environment and Water [email protected]

Johann GRUBER (I) Land Gvt. Of Upper Austria – Agricultural Department [email protected]

Hans JAKLITSCH (I) Business Chamber Steiermark (Styria) [email protected]

Andrea KISS Inst. for Ecology and Nature Conservation/University of Vienna [email protected]

Barbara KLEMENZ (I) Regionalmanagement Norische Region/Kärnten (Local Development Management agency Noric Region/Carinthia) [email protected]

Barbara KÖNIG BMLFUW (Ministry for Agriculture, Forestry, Environment and Water) [email protected]

Kurt KREITNER Land Gvt. Of Lower Austria – Agricultural Department [email protected]

Alois LEIDWEIN Österreichischer Bauernbund (Farmers Union) [email protected]

37 Rupert LINDNER (I) Speaker of the Presidents‘ Conference of the Regional (Länder -) Agricultural Chambers [email protected]

Simone LUGHOFER (I) WWF Austria [email protected]

Robert LUKESCH ÖAR Regionalberatung GmbH [email protected]

Jan-Erik PETERSEN IEEP London [email protected]

Manfred PILS (I) NFI [email protected]

Simone MATOUCH WWF Austria [email protected]

Alexandra POHL ARGE Bio-Landbau (Organic Agriculture Forum) [email protected]

Dietlind PROSKE Land Gvt. of Styria – Nature Conservation Department [email protected]

Barbara REITER BMF (Ministry of Financial Affairs) [email protected]

Klaus WAGNER Bundesanstalt für Agrarwirtschaft (Federal Institute for Agro-Economics) [email protected]

Petra WINKLER ÖIR (Austrian Institute for Spatial Plannung) [email protected]

Johannes WOLF Distelverein (Thistle association) [email protected]

38