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The 2005 Green Report


1 The Green Report 2005 The Green Report 2005 Report on the economic and social situation of agriculture and forestry in Lower Austria Office of the Lower Austrian Provincial Government Department of Agriculture Promotion LF3

2 The Green Report 2005 Report on the economic and social situation of agriculture and forestry in Lower Austria Office of the Lower Austrian Provincial Government Department of Agriculture Promotion LF3

3 Foreword In 2005, June 20th was an important day for agriculture, as the agriculture ministers of the 25 member states of the European Union agreed on funding for rural areas. This secured the environmental and mountain farmers program for Austria and thus for Lower Austria. This is also to be seen as a clear commitment to rural areas, the security and development of which is one of the central political challenges. Initially planned cuts for rural development could be prevented after tough negotiations. Of course, this success of the negotiations does not change the fact that agriculture will continue to be affected by structural changes. In addition to the fundamental orientation towards environmentally friendly agriculture, it is all the more important for our farmers to accept the challenges and continue the development towards entrepreneurs and service providers. Innovative and competitive companies guarantee a strong rural area, secure jobs in the regions and thus strengthen the entire rural area. The magic words are quality, refinement and market orientation. Organic farming can also maintain and even expand its market with its wide range of products. In Lower Austria everything was done to ensure high quality products in many areas (milk, meat, wine, etc.) that are more and more requested by customers. Studies have shown that 60 percent of the population prefer local regional products. With the purchase of these products, jobs can be secured in Lower Austria alone. In addition to the production, processing and marketing of food, the energy sector offers opportunities for our farmers. Due to the developments on the international energy markets, the expansion of renewable energy is becoming increasingly important. Many farmers have seized the opportunity and have become energy producers by providing biomass and producing biogas for heat and electricity. The 2005 Green Report

4 Foreword Regarding the Green Report itself, I would like to say that the production value of domestic agriculture in 2005 fell by 6.9 percent compared to the previous year. Losses in crop production contrasted with increases in animal production. The cattle prices have improved very clearly, which on the annual average in 2005 were 9.5 percent higher than a year earlier. The milk price remained almost unchanged at the level of the previous year, and EU compensation payments were also available. A clear plus was recorded for pigs. For forest products, there was an improvement in the total price compared to 2004. The demand for firewood has increased in particular. With the Green Report 2005 the detailed documentation of the development in the Lower Austrian agriculture lies before us. I thank everyone who helped create it. Your Provincial Councilor DI Josef Plank The Green Report 2005

5 Commission members or substitute members of the commission in accordance with 19 Lower Austrian Agriculture Act () Members Substitute members 1. Landesrat Dipl. Ing. Josef Plank Pres. NR Ing. Hermann Schultes 2. Vice-President Theresia Meier Dipl.Ing. Marianne Priplata 3rd Dir. Dipl.Ing. Wolfgang Weichselbraun Dipl.Ing. Martin Schildböck 4th President. Andreas Freistetter Chamber Councilor Karl Schnitzer 5th KAD Mag. Walter Medosch Mag. Heimo 6th Mag. Bernhard Gerhardinger Dr. Ewald Kloser 7. Mag. Alexandra Mille Mag. Thomas Petzel 8. Robert Staudinger Dipl.Ing. Georg Mayer 9th Dipl. Geogr. Thomas Kronister Mag. Adolf Buxbaum 10th District Marianne Lembacher President Dir. Ing.Johann Penz 11th District Rudolf Friewald LAbg. Franz Grandl 12th District Ignaz Hofmacher LAbg. Karl Moser 13th District . Karl Honeder LAbg. Friedrich Hensler Imprint: Media owner: State of Lower Austria Editor and publisher: Office of the Lower Austrian Provincial Government, Department of Agricultural Promotion, Landhausplatz 1, House 12, 3109 St. Pölten Head of the Agricultural Promotion Department: Mag. Martin Wancata Editor: Mag. Eleonora Pretscher , Werner Maurer Internet: Graphic processing: Living Office Kommunikationberatung GmbH Printing: Radinger, Scheibbs The Green Report 2005 can also be downloaded from the INTERNET at the address or. Cover pictures: Niederösterreich-Werbung / BMLFUW The Green Report 2005

6 Service Service The Green Report 2005 can also be downloaded from the Internet at the address or. The Green Report 2005 is also available on CD and will be made available to you free of charge on request. Agricultural Promotion Department, House 12 Landhausplatz St. Pölten Tel .: 02742/9005 DW Fax: 02742/9005 DW Internet: The employees of the Agricultural Promotion Department will be happy to answer any questions you may have. The formulations used in the report apply to both men and women. Our thanks for the cooperation and help go to: the Lower Austrian Chamber of Agriculture, the Social Insurance Institute for Farmers, the Austrian Hail Insurance, the Chamber of Agriculture and the Office of the Lower Austrian State Government: the departments of agricultural education, forestry, veterinary matters, freight routes, hydraulic engineering, energy and radiation protection law and the Lower Austria agricultural district authority. The 2005 Green Report



9 1 The agricultural structure in Lower Austria Lower Austria - Advertising / Reinhard Mandl

10 The agricultural structure in Lower Austria The structural data on Lower Austria's agriculture were obtained up to 1990 through the Austrian-wide agricultural and forestry censuses (full surveys) to be carried out at 10-year intervals. The survey was then converted to EU standards. The new farm structure survey was first carried out in 1993 on a sample basis and has been carried out every 2 to 4 years since then. The results of the last survey dated December 1, 2005 were not yet available at the time of going to press. The data used in the report therefore relate to the year.The minimum criteria for agricultural and forestry operations were defined as follows from 1999: at least 1 ha of agricultural land (previously 1 ha total area) or at least 3 ha of forest (previously 1 ha of forest) or at least 15 ares of special areas (wine, vegetables, fruit, previously 10 ares) or at least 3 cattle or 5 pigs or 10 sheep, goats or 100 poultry in Lower Austria a total of establishments (24.3% of all establishments in Austria) were counted. Since 1999 the number of agricultural and forestry holdings has decreased by 15.2% (Austria: -12.5%). Of the businesses, 51% were full-time and 46% part-time. Only companies (3%) were associations of persons or were in the hands of legal persons. Reasons for the significant decrease in the number of companies in Lower Austria include the closure of small, part-time units, as well as the amalgamation of previously separately managed sub-companies into one main company. While the number of full-time businesses fell by 6.4% compared to 1999, that of part-time businesses fell by or 24%. The structural change in agriculture in Lower Austria slowed down somewhat in the 1980s. Between 1970 and 1980 the number of farms fell by 15.2% and between 1980 and 1990 by 12.3%. After 1990 the development accelerated again. Between 1999 and 2003 alone, the number of farms fell by over or 15.2%. Development of the employment structure in Lower Austria Type of employment Businesses% Businesses% Businesses% Businesses% Main occupation Part-time lawyer. Persons and partnerships Total source: Statistics Austria; Farm census 1970 and 1990, farm structure survey 1999 and 2003 The Green Report

11 The agricultural structure in Lower Austria When Austria joined the EU, the Integrated Administration and Control System (IACS) was implemented to process the funding measures in Austria. In INVEKOS all area and animal-related aid regulations are included. This means that all farms that take part in funding measures are recorded in IACS with all structural data. The IACCO does not include those companies that either do not meet the funding requirements specified in the individual EU regulations or do not submit multiple applications for other reasons. A comparison of the IACOS data with the results of the agricultural structure survey shows that the number of holdings recorded by the agricultural structure survey is significantly greater than the number of IACS holdings. The reasons for this are: In INVEKOS the operation is defined as a company. It includes all production units (business premises) of a manager. In the agricultural structure survey, on the other hand, all permanent establishments are counted as independent farms. In the case of important funding measures, a minimum area is provided for participation (e.g. ÖPUL: 2ha LN). In the agricultural structure survey, all holdings of 1 ha or more are surveyed. Number of farms according to district chambers of farmers 1999 to 2005 district farms according to INVEKOS farmers chamber agricultural structure Change in% compared to 1999 Amstetten, 93 Baden - Mödling, 67 Bruck / Leitha, 18 Gänserndorf, 87 Gmünd, 78 Hollabrunn, 99 Horn, 88 Korneuburg, 00 Krems , 75 Lilienfeld, 74 Melk, 60 Mistelbach, 03 Neunkirchen, 21 Scheibbs, 01 St.Pölten, 92 Tullnerfeld, 38 Waidhofen / Thaya, 07 Waidhofen / Ybbs, 83 Wiener Neustadt, 16 Zwettl, 55 total, 25 Source: Statistics Austria; AMA, IACOS data, as of October 2005, own evaluations. The number of IACOS companies that submitted multiple applications for area premiums in the previous year was around 16.3% in Lower Austria. This corresponds to a decrease compared to 1999 for companies. This development is regional 12 The Green Report 2005

12 The agricultural structure in Lower Austria varies widely. The largest decreases were recorded in the district chambers of farmers in Mistelbach (-26.0%), Krems (-24.8%), and Gänserndorf (-22.9%). In the district chambers of farmers in Waidhofen / Ybbs (-5.8%) and Lilienfeld (-6.7%), the number of business closings was well below the national average. Development of the farm size structure Size level according to the cultivated area 1) under 5 ha to under 10 ha to under 20 ha to under 50 ha to under 100 ha to under 200 ha ha and more farms in total) From 1999 the detection limit of 1 ha total area was increased to 1 ha of agr. used area or 3 hectares of forest changed Source: Statistics Austria; Farm censuses, agricultural structure survey 1999 and 2003 In the last few years there has been a general decrease in farms in farm sizes up to 50 ha. The strongest declines, at minus 29%, were found in farms with less than 5 hectares of cultivated land. There were only increases in farms in the categories between 50 and 200 ha, with the largest increase with almost 750 farms in the size class between 50 and 100 ha. Furthermore, the criteria of the mountain farm register (BHK) were used as the basis for the evaluations of the farms for the first time in the 2003 Agricultural Structure Survey. Compared to the previous assessment of the difficulty, this offers the advantage of a more comprehensive and up-to-date assessment of the natural and economic difficulties affecting the individual mountain farms. Development of the Lower Austrian mountain farms) Farms% Farms% Farms% BHK group,,, 3 BHK group,,, 9 BHK group,,, 5 BHK group, 1 91 0,, 3 mountain farms,,, 0 without BHK- Group,,, 0 establishments in total) 2003: conversion of the assessment to mountain farm cadastre points Source: Statistics Austria; Agricultural Structure Survey 1995, 1999 and 2003 In 2003, due to the new evaluation according to mountain farm cadastre points (BHK points) in Lower Austria (36%) were designated as mountain farms; In comparison, there were farms in 1999 after the old zoning. However, these two systems are not directly comparable as they are based on different evaluation criteria. The Green Report

13 The agricultural structure in Lower Austria 1.2 People working in agriculture and forestry According to the final result of the 2001 census, Lower Austria has a population of 1, persons. Compared to the 1991 census with 1, the population of Lower Austria has increased by just under or 4.9% above average (Austria: 3.0%). In 2003, a total of people lived in rural households in Lower Austria. The decrease of around people (-20.4%) compared to 1999 is mainly due to the decrease in the number of agricultural and forestry holdings. The number of agricultural and forestry workers in 2003 was, which corresponds to a decrease of persons or 12.5% ​​since 1999. The vast majority, namely individuals or 85%, were family workers. Of these, they worked as business owners. Agricultural and forestry workers compared over time Agricultural and forestry-family-owned workers Non-family workers Economic workers Business-Families Regularly irregular Totally total number of owners Total employed Source: Statistics Austria, Agricultural Business Census 1970, 1980 and 1990, Agricultural Structure Surveys 1999 and 2003 While the Since 1999 the number of family workers has decreased by or more than 18%, the number of non-family workers has increased by around 47%. Lower Austrian pub culture 14 The Green Report 2005

14 The agricultural structure in Lower Austria 1.3 Distribution of the types of crops In 2003 the approximately Lower Austrian holdings (301 holdings were without land) cultivated a total area of ​​1.ha. The largest part of this, namely ha (42.8%), was arable land, followed of areas used for forestry with ha (39%) and permanent grassland with ha (12.5%). Distribution of crop types in hectares Crop types: arable land Multi-mown meadows 1) Single-mown meadows Cultivated pastures and hut willows Alpine pastures and mountain pastures House and kitchen gardens Vineyards Orchards and tree nurseries Agricultural area 1, forestry area Other area Total area 1,,,,) incl : Statistics Austria; Establishment census 1960 and 1990, agricultural structure survey 1999 and 2003 The area (ha) used for forestry shown in the agricultural structure survey differs markedly from that of the Austrian forest inventory (2000/02). It shows an (actual) forest area of ​​around hectares for Lower Austria. The reason for the difference in area is that since the agricultural structure survey in 1999, the increase in the lower limit of the coverage to three hectares has not included the entire forest area. Furthermore, the economic principle is important with regard to the forest, i.e. that the areas are always determined and shown in the municipality of residence of the farmer. Since the cities are very often the headquarters of large forest operations, there are also corresponding shifts in area between the affected municipalities or political districts in individual cases even at the federal state level. 1.4 Livestock farming The cattle and pig herds have been declining since the 1990s. In Lower Austria, the number of pigs increased from 1990 to 2004 (-25%) and the number of cattle increased (-27%) continuously. In 2005, the cattle population in Lower Austria was able to stabilize, contrary to the sustained nationwide downward trend. The pig population increased again by 2.1% after significant decreases in the last few years. A particularly strong decrease was recorded in the previous year on holdings with goat husbandry (-23.9%) and on holdings with sheep husbandry (-11.4%). The Green Report

15 The agricultural structure in Lower Austria In livestock farming, the trend towards specialization continued. The number of pig farmers has decreased by a third in the last five years, the number of cattle farmers has decreased by 18%. On average, every pig farmer in Lower Austria now keeps almost 75 pigs, which is 45 pigs more than in the year. Livestock farmers and livestock in a time comparison animal species: 04 in% cattle (in 1,000) 622.2 629.4 496.1 459.6 459.6 0 cattle farmers, 1 pigs (in 1,000) 1,277,, 40 970.4 861.5 879.8 2.1 pig farmers, 4 equipods (in 1,000) 9.3 11, equine farmers sheep (in 1,000) 22.7 47 , 9 59.3 58.2 55.4-4.8 sheep farmers, 4 goats (in 1,000) 8.3 6.6 12.2 13.3 12.3-7.5 goat farmers, 9 chickens (in 1,000) 4,988,,, Chicken farmers Source: Statistics Austria - General cattle counts Development of the average herd sizes in Lower Austria Cattle Pigs Sheep Goats Source: Statistics Austria; General livestock censuses.Compared to other European countries, however, the average stock sizes are still small. When it comes to cattle herds, Cyprus leads with an average of 195 animals per farm, followed by Luxembourg with 116 and Great Britain with 96 animals per farm. The smallest herds of cattle in the EU are in Lithuania with an average of 4 animals per farm. Austria is in the lower third with an average of 23 cattle per farm. This trend can also be observed in pig farming. With an average of 52 animals per farm, Austria is well below the EU 25 average of 71 pigs. The highest average pig populations are in Ireland (1,443 pigs) and Denmark (1,167 pigs). 16 The Green Report 2005

16 The agricultural structure in Lower Austria 1.5 Production output in agriculture Lower Austrian agriculture plays a very important role in the production of food. This is mainly due to the natural production conditions and the size of the state. Production output of Lower Austria Agriculture 2005 Austria Lower Austria Share of Lower Austria in% potatoes tt 84% sugar beet 1) tt 75% rye tt 67% wheat tt 63% wine hl hl 61% barley tt 55% field vegetables tt 47% oats tt 45% sheep pc pc. 36% grain maize tt 28% cattle pc pc. 24% pork pc pc. 22% milk tt 20% fruit tt 16% calf pc pc. 12% 1) Estimation Source: Statistics Austria, NÖ LK In 2005, the Lower Austrian farmers and Farmer women food with a content of billion kilojoules (or billion kilocalories). With an average daily per capita consumption of kilojoules (3,061 kilocalories), Lower Austrian agricultural production in 2005 would have been enough to feed 5.6 million people. Lower Austria - Advertising / Thomas Apolt The Green Report

17 The agricultural structure in Lower Austria 1.6 Building equipment and machinery investments Building equipment In terms of structural investments, around EUR 78 million including VAT were made in 2005, which are distributed as a percentage as follows (consulting cases): The construction cost index is around 2.0% compared to 2004 gone up. Agricultural construction investments in Lower Austria% Other 7% Consultation without follow-up costs 13% Residential houses 10% Pig stalls 7% Direct marketing 50% Cattle stalls Source: Lower Austria LK The size of the apartments in the farmhouses is well above the national average of all apartments in Lower Austria, in terms of equipment there are only minor differences. With regard to the furnishing of rural apartments, the following differences emerge compared to all apartments in Lower Austria: Furnishing of rural apartments in Lower Austria Apartments in% overall in% CAT. A with bath, toilet and central heating,, 2 CAT. B with bathroom, toilet and individual stove heating,, 5 CAT. C with toilet and water extraction point in the apartment 200 0,, 7 CAT. D only water extraction point or no water installation in the apartment 200 0,, 6 Source: Statistics Austria, microcensus annual average The Green Report 2005

18 The Agricultural Structure in Lower Austria BMLFUW Machine Investments After an increase in 2004, the number of new tractor registrations fell by 312 to a total of 312 in 2005 (-5.0%). 1.7 Summary According to the agricultural structure survey in 2003, there were farms in Lower Austria. Despite the ongoing structural change, agriculture and forestry in Lower Austria is still small-scale. More than 31% of all farms cultivated less than 10 hectares of cultivated land. Almost farms (36%) show a difficulty zone. There were a total of people in the farm households, of whom people reported part or full employment in agriculture. Lower Austria has a share of around 29% of the agriculturally used area in Austria. Of this, the share of arable land is around 74%, grassland 22% and other cultivated areas (garden land, vineyards, orchards and tree nurseries) 4%. Around cattle were kept in Lower Austria in 2005, including dairy cows. The number of pigs was pieces. The stock of sheep made up pieces. The agricultural structural development is determined by the decrease in the number of agricultural and forestry holdings, by the shift in the type of employment, by a concentration in both areas and animal husbandry and a reduction in the agricultural population and working population. The Green Report

19 2 Economic situation Rita Newman

20 Economic situation 2.1 Economic development in Lower Austria in 2005 According to WIFO, the economy in Austria lost some of its momentum in the first half of 2005. The impetus triggered by exports was not carried over to domestic demand. In the second half of the year, however, the economy recovered. Material goods production and the energy industry made a major contribution to growth. Trade and public services were unable to make any significant contribution to Austrian economic growth. Overall, domestic gross value added increased by 2.2% in 2005. In Lower Austria, economic growth of around 2.0% was slightly below the national average. The strong increases in material goods production and the dynamic development in the energy sector were only able to offset the stagnation in the construction and retail sectors to a limited extent. In Lower Austrian tourism, the good results of the previous year were maintained (+0.1%). The decline in domestic demand was offset by the increase in foreign guests (+ 3.1%). Thanks to the lively demand for labor in the market-oriented services, employment in Lower Austria rose by 1.3%, slightly more than the national average (1.0%). Despite this good employment trend, the number of unemployed increased due to an increase in the labor supply (+1.6%). The unemployment rate in Lower Austria was an annual average of 7.4% of the workforce on a register basis in 2005, 0.3 percentage points higher than in the previous year. The increase in the unemployment rate mainly affected young people (+7.9%) and women (+6.6%). 2.2 Income situation in agriculture and forestry in Lower Austria The income situation in agriculture and forestry can basically be described from two different approaches: The agricultural accounts (EAA) is a satellite account of the national accounts (VGR) and provides the basis for assessment and analysis the development of income in the agricultural sector (macroeconomic analysis). For the microeconomic consideration of the economic situation of the farming families, the bookkeeping results are suitable as primary statistics with precise income and expenditure figures as well as labor that are recorded directly on the farm. Agricultural accounts (EAA) The EAA provides a basis for the assessment and analysis of the agricultural sector In 2000 there were significant changes in the calculation method. The calculations are now EU-compliant and have been revised retrospectively (until 1990) in order to create consistent and internationally comparable time series. The Green Report

21 Economic situation In addition to the production of the agricultural sector and secondary agricultural activities, they now also include certain (non-separable) non-agricultural secondary activities such as farm holidays or direct marketing. Development of agricultural incomes in 2005 According to initial calculations by Statistics Austria, real agricultural income per worker fell by 3.4% in 2005. The provisional figures show a production value in Austrian agriculture of around EUR 5.4 billion for the year under review. This is a decrease of 6.9% compared to the previous year. Losses in crop production contrasted with increases in animal production. However, the development of production volumes and prices in 2005 was overshadowed by the major changes in the support system for agriculture that took place in the course of the implementation of the CAP reform. The overall decline in the value of agricultural output is primarily due to the implementation of the single payment system. Due to the decoupling of most of the area premiums and part of the animal premiums, as well as their transfer to a common single farm payment, these payments are no longer recorded as part of the agricultural production value (but as part of the factor income) in the EAA. In total, the subsidy payments to agriculture included in the EAA decreased by 1.1%. On the cost side, advance payments rose slightly (+ 0.4%), while depreciation rose by 2.3%. The fact that the increase in intermediate consumption was not greater against the background of the considerable increases in energy and fuel prices is due to the introduction of the mineral oil tax refund for agricultural diesel in 2005. Production value and factor income of agriculture in the year) / 2004 in EUR million in EUR million in EUR million in% Vegetable production 2), 3 Animal production 2), 6 Agr. Services & non-separable non-agr. Secondary employment, 6 Production value of agriculture 2), 9 - Intermediate consumption, 4 = Gross value added 2), 9 - Depreciation, 3 = Net value added 2), 7 - Others. Production taxes, 1 + other subsidies, 4 (compensation payments) = factor income from agriculture, 0 1) net 2) at basic prices Source: Statistics Austria, provisional values ​​(as of January 2006) 22 The Green Report 2005

22 Economic situation The aforementioned developments in the individual items in the EAA resulted in a 3% decrease in agricultural factor income. Since the agricultural labor input also continued to decline in 2005 (-1.3%), the decline in income per worker is somewhat lower (-1.7%). In real terms, this corresponds to a decrease of 3.4%. The value of crop production fell sharply In crop production, on the one hand, a lower production volume was recorded than in 2004; at the same time, producer prices were also below the previous year's level (-2.3%). Added to this was the decoupling of most area payments, which significantly increased the decline in production value. In total, the value of plant production decreased by 17.3% to around EUR 2.2 billion. Cattle production: increases in price and volume In contrast, animal production achieved increases in value despite the decoupling of part of the animal premiums (+1.6% ). Cattle production increased by 2.7% compared to the previous year, while prices rose sharply (+13.3%). The decoupling of part of the cattle premiums, however, severely weakened the increase in production value to only 0.6%. Price-related increases were achieved in pig farming (+3.1%), the production volume here remained practically unchanged (+0.2%). In milk production, the production volume (-0.1%) and producer prices (-0.2%) stagnated. However, as a result of the increase in the milk premium, the production value of milk increased by 2.7%. In total, the provisional calculations for the agricultural sector for 2005 result in a production value of around EUR 5.4 billion. Animal production made up almost half of this with 49% (compared to 45% in 2004). The share of plant production declined to 41% (2004: 46%). Around 7% of production value was attributable to inseparable non-agricultural secondary activities such as farm holidays and direct marketing, and the remaining 3% to agricultural services. NÖ LK The Green Report

23 Economic situation Comparison of output value between Lower Austria and Austria (in EUR million) 1) Lower Austria Austria:: 04 in% in% Vegetable production 1,128.6 844.0-25,,, 2-16.7 of which cereals 335.4 171.4 -51.6 724.5 396.4 -45.3 Oilseeds 42.7 26.4-38.2 88.1 66.3-24.4 Protein crops 16.1 5.8-64.0 27.9 9 , 9-64.2 Sugar beet 99.6 93.8-5.8 132.3 125.7-5.0 Forage crops 106.3 120.5 13.4 490.5 542.0 10.5 Vegetables 45.9 33.5-27.0 163.3 144.6-11.5 Plants and flowers 55.1 54.9-0.4 199.3 192.2-3.6 Potatoes 46.6 41.1-11, 8 56.2 48.7-13.3 Fruit 74.1 64.4-13.1 298.6 284.0-4.9 Wine 286.1 231.3-19.2 474.6 402.9- 15.6 Animal production 643.2 642.4-0,,, 9 1.7 of which cattle 187.0 182.5-2.4 742.2 746.3 0.6 Pigs 179.0 189.4 5, 8 658.8 679.2 3.1 Sheep and goats 4.9 3.9-20.4 28.6 23.3-18.5 Poultry 39.1 34.4-12.0 124.9 124.3 -0.5 Milk 174.1 175.9 1.0 858.7 876.8 2.1 Eggs 48.0 46.4 -3.3 138.4 140.3 1.4 Agricultural production Goods 1,771,, 5-16,,, 0-7.8 Note: The sharp decline in agricultural output is primarily due to the implementation of the single payment system. Due to the decoupling of most of the area payments and part of the animal payments and their transfer to a common single payment, these payments are no longer recorded as part of the agricultural production value within the framework of the EAA. 1) at basic prices as at: April 2006 Source: Statistics Austria Bookkeeping results of agricultural holdings The bookkeeping results provide a comprehensive insight into the economic conditions of agricultural and forestry holdings. In order to ensure that the economic situation of the individual groups of companies is presented as meaningfully as possible, a network of voluntary bookkeeping companies is maintained throughout Germany. LBG Wirtschaftstreuhand- und Beratungsgesellschaft m.b.h. is responsible for these voluntary bookkeeping companies and the statistical processing of their data. transferred, EDP-based processing takes place in the agricultural and forestry data center. The selection framework includes farms with a standard contribution margin between EUR 6,000 and EUR, whereby forest holdings with over 200 hectares of forest area are excluded due to the small number of businesses and the heterogeneity. Overall, for the year 2005, the accounting data of companies that voluntarily keep records within the framework of the Federal Green Report were evaluated nationwide. The accounting results of 810 companies were used for Lower Austria. 24 The Green Report 2005

24 Economic situation Number of accounting establishments evaluated Production area Year 2004 Year: 2004 in% Pre-Alpine region, 2 Alpenostrand, 2 Waldviertel, 6 Alpenvorland, 7 Nö. Flat and hill country, 6 Lower Austria businesses in total, 3 Source: LBG Wirtschaftstreuhand, calculations by the Federal Agency for Agricultural Economics The evaluations by the LBG Wirtschaftstreuhand- undberatungsgesellschaft show that the voluntary bookkeeping businesses in Lower Austria cultivate an average of 22.3 hectares of arable land and therefore clearly are above the federal average of 13.0 ha. An average of 5.9 hectares of permanent grassland and 7.5 hectares of forest land are cultivated per farm, which corresponds to around 8.5 hectares of grassland or 4.5 hectares of forest land less than the federal average. The average number of cattle is 15.5, and the number of pigs is 33.5, slightly above the national average. Comparison of operating data for Lower Austria with the national average for 2005 Lower Austria Austria, 5 31,, 3 13.0 5.9 14.5 7.5 11.9 15.5 18.7 0 Arable land Permanent grassland Forests Cattle Pigs Source: LBG Wirtschaftstreuhand, calculations by the Federal Agricultural Agency Income The income of an agricultural and forestry business consists of: the income from the use of the land the income from animal husbandry the income from forestry the money transfer from the public sector related to the management (without investment subsidies) the income from agriculture. Secondary business or secondary activity (e.g. guest accommodation) of the sales tax received minus the internal income (e.g. feed produced and consumed in-house) The Green Report

25 Economic situation In the weighted federal average of the book-keeping test companies, the income was EUR, - 2.5% above the previous year's value. The increase was mainly due to higher revenues in pig and cattle farming. The positive development in the forest sector also contributed to the increase in earnings. Yield per farm (in euros) Farm groups: 2004 in% farm types Farms with more than 50% forest, 99 farms with% forest, 20 forage farms, 50 mixed agricultural farms, 86 market fruit farms, 17 permanent crop farms, 31 processing farms, 60 mountain farms and disadvantaged areas mountain farms, 04 Non-mining operations, 62 production areas foothills of the Alps, 04 Alpenostrand, 87 Waldviertel, 99 Alpine foothills, 17 northeastern flat and hill country, 10 Lower Austria, 72 Austria, 50 Source: LBG Wirtschaftstreuhand, calculations by the Federal Agency for Agricultural Economics The average yield in 2005 in Lower Austria was EUR, - per company. If one looks at the yield according to the type of farm, it can be seen that it has developed very differently in individual cases. While the yield at the fodder and processing companies rose by 5.5% and3.6%, the permanent crops had to cope with a decline of 18.3% to EUR, - after a good result in the previous year. The highest average yields per hectare of reduced agricultural area (RLF) were achieved in the foothills of the Alps with EUR 3,377 and in the eastern edge of the Alps with EUR 3,080. In the northeast. In flat and hilly areas, the yield per hectare of RLF was the lowest at EUR 2,215. Expenses Company expenses are the value of labor and material goods expended to achieve the company's income. It is made up of: the expenses for the material operating expenses the costs for non-family workers the value-based deduction for wear and tear (depreciation) the interest on borrowed capital the lease and rental expenses the expenses for agricultural Secondary business or secondary business of the sales tax paid less internal expenses (internal expenses equals internal income) 26 The Green Report 2005

26 Economic situation Yield per hectare of reduced agricultural area (in EUR) according to production areas 4,000 amounts in EUR / ha RLF Waldviertel Flat and hill country Alpine foothills Federal means Pre-Alpine area Alpenostrand Lower Austria Source: LBG Wirtschaftstreuhand, own calculations The average expenditure in 2005 in Lower Austria was EUR, - per company. The corresponding Austrian average was EUR per company and increased by 2.5% compared to the previous year. In 2005 there were different developments in terms of expenditure for the individual types of business. For example, the costs of forestry and fodder farms increased by 6.1% and 1.6%, respectively, compared to 2004. On the other hand, it was possible to reduce the expenditure on permanent crop farms by 3.3% to EUR per farm. Expenditure per farm (in EUR): 2004 in% farm types farms with more than 50% forest portion, 08 farms with% forest portion, 68 fodder farms, 59 mixed agricultural farms, 70 market fruit farms, 18 permanent crop farms, 33 processing farms, 46 mountain farms and disadvantaged areas mountain farms, 73 non-mining farms , 81 production areas foothills of the Alps, 80 eastern edge of the Alps, 75 Waldviertel, 78 foothills of the Alps, 12 northeastern flat and hill country, 17 Lower Austria, 26 Austria, 54 Source: LBG Wirtschaftstreuhand, calculations by the Federal Agency for Agricultural Economics The Green Report

27 Economic situation Expenditure per hectare of reduced agricultural area (in EUR) according to production areas 3000 amounts in EUR / ha RLF Waldviertel flat and hill country Alpine foothills Federal means Pre-Alpine area Alpenostrand Lower Austria Source: LBG Wirtschaftstreuhand, own calculations The average effort per hectare RLF was in Lower Austria in 2005 at EUR 1,851. In terms of production areas, the cost in the eastern edge of the Alps was the highest at EUR 2,398.00. The lowest effort per hectare of RLF was for the north-east. Flat and hill country shown at EUR 1,319. Income from agriculture and forestry The income from agriculture and forestry results from the difference between income and expenditure. They represent the remuneration for the work done in agriculture and forestry by the unpaid workforce, for entrepreneurial activity and for the use of equity. The income from agriculture and forestry still has to cover the contributions to statutory social security and income tax . Income from agriculture and forestry averaged EUR, - for the book-keeping test farms, which was 2.4% more than in the year In Lower Austria, income from agriculture and forestry averaged EUR, - slightly above the federal mean. Broken down according to the type of farm as well as the production areas in Lower Austria, the income from agriculture and forestry developed very differently compared to the previous year. By far the best in 2005 were the processing companies with EUR, - and the market fruit companies with EUR, - per farm. The fodder farms achieved the highest increase in income compared to the previous year with around 17%. The permanent crop farms achieved the lowest income with EUR, - per farm. 28 The 2005 Green Report

28 Economic situation Earnings, expenses and income from agriculture and forestry 2005 (in EUR) depending on the type of business Income Expenditure Income from agriculture and forestry Lower Austria Forestry Fodder growing Market crops Refining permanent crops Federal funds Source: LBG Wirtschaftstreuhand, calculations by the Federal Agricultural Institute In der Figure shows the development of agricultural and forestry income per worker in the individual types of farm from 1997 to 2005. The highest average incomes per nak were achieved by the market fruit farms with EUR, -, with the processing companies in second place with EUR, -. The fodder farms were able to increase their income by an average of 12.2% to EUR per nak. In 2005, permanent cultivation companies came in last with EUR, -. Development of income from agriculture and forestry per family worker or unpaid worker unit (nak) according to type of farm (in EUR) Forage production Forest permanent culture Market crop processing Due to a new distribution plan and new key figures, a direct comparison of the data before 2002 with the data from 2003 onwards is not possible permissible. Source: LBG Wirtschaftstreuhand, calculations by the Federal Agency for Agricultural Economics. Depending on the Lower Austrian production areas, the results showed the highest increases in income in the Waldviertel and in the foothills of the Alps. The north-east lay closer to home. Flat and hill country with an income of EUR, - at the top, in the foothills of the Alps the income was a little above and in the Waldviertel a little below the federal mean of EUR, -. In the eastern edge of the Alps, the income per nak was EUR 8,447.00, almost 50% below the national average. The Green Report

29 Economic situation Earned income and total income In addition to income from agriculture and forestry, the farming family also has access to non-farm income, any pensions, family allowances and other social transfer payments to cover their financial needs. In addition to income from agriculture and forestry, earned income includes salaries and wages from employment as well as income from self-employed work and business operations. Pensions and labor pensions are not included. It is therefore the income that the farming family has at their disposal due to their activity, be it within or outside of agriculture and forestry. The average earned income per labor unit (AK-U) in Lower Austria in 2005 was EUR, - and thus slightly above the federal average of EUR. Broken down by production area, the operations in 2005 were located in the north-east. Flat and hill country with EUR, - per labor unit ahead, followed by the farms in the foothills of the Alps. The establishments in the eastern edge of the Alps recorded the lowest income in 2005 with an average of EUR per worker unit. The total income corresponds to the sum of income from agriculture and forestry and non-agricultural earnings (salaries, wages or income from self-employment) as well as pensions, family allowances and other social transfers. The total income in the federal average was EUR, - per company in 2005 and was thus 3.7% above the previous year's figure as a result of the increase in income from self-employed work. Total income per farm (in EUR): 2004 in% farm types Farms with more than 50% forest, 80 farms with% forest, 40 forage farms, 53 mixed farms, 67 market fruit farms, 77 permanent crop farms, 26 processing farms, 27 mountain farms and disadvantaged areas mountain farms, 57 non-mining farms , 51 production areas foothills of the Alps, 36 eastern edge of the Alps, 57 Waldviertel, 96 Alpine foothills, 82 north-eastern flat and hill country, 74 Lower Austria, 44 Austria, 65 Source: LBG Wirtschaftstreuhand, calculations by the Federal Agency for Agricultural Economics 30 The Green Report 2005

30 Economic situation In terms of total income in Lower Austria in 2005, the processing companies were ahead with EUR, - per farm, followed by the market fruit farms and forage farms. Farms with a percentage of forest and permanent crop farms recorded the lowest amounts for total income. The share of income from agriculture and forestry in total income fell by one percentage point to 53% compared to the previous year, 30% came from employed and self-employed work, and almost 17% from pension payments, family allowances and other social transfers. The change in equity results from the difference between total income and consumption (social security contributions and private consumption). Its importance is expressed in the economic further development of the company, in particular for the financing of operationally necessary investments. Without a minimum of equity growth, a future-oriented or secure company portfolio can hardly be expected. In the case of the average agricultural and forestry company in Lower Austria, the equity capital formation in 2005 was EUR 3,922 or around 11% of total income. On a national average, the increase in equity capital per company rose somewhat more sharply by EUR 4,863 or 13% of total income. Within the type of operation, the equity formation of the processing operations was highest with around 25% and within the production areas the Waldviertel with 20% and the foothills of the Alps with 16.5%. Further important company and income data 2005 according to Lower Austria production areas Results per company Voralpen- Alpenost- Wald- and Alpenvor- Lower Austria Flat and Lower Federal (in EUR) area edge Mühlviertel country Hügelland Austria medium Income from LW and FW out of business. Income Earned income Social transfers 1) Total income Consumption Changes in equity earned income per AK-U) Child benefit, family and school allowance, pensions and unemployment benefit Source: LBG Wirtschaftstreuhand, calculations by the Federal Agricultural Agency 2.3 Price indices The cost development for operating resources and capital goods continues to show for agriculture crucial problem. Due to the strong integration with the non-agricultural sectors of the economy, increases in prices in these sectors usually have an income-reducing effect on agriculture. Price indices, since neither production nor expenditure quantities are recorded, alone do not provide conclusive evidence of income development, but the current situation in agriculture can be read from these values. The Green Report

31 Economic situation Income comparison Lower Austria with national average per farm and unpaid labor unit (nak) 2005 Lower Austria Austria (amounts in EUR per hectare RLF) Income from agriculture and forestry. Operation of which public funds of the yield Income from agriculture and forestry per nak earned income per AK-U earned income per entrepreneurial household Total income per entrepreneurial household Source: LBG Wirtschaftstreuhand, calculations by the Federal Agricultural Agency While total expenditure has increased from 100 (= base) to 122 since 1986 .5 increased continuously in 2005, the products without public funds fell to 79.7. When comparing the agricultural income index from 2005 to 2004, there was a significant increase of 4.7%. The main reason for this was the significantly higher public money in 2005, when the 2004 cattle premiums paid out in spring were supplemented in December by the single farm payment for 2005, which also includes decoupled animal premiums. In addition, in 2005, for the first time, compensation was granted under the Agricultural Diesel Ordinance. Since the average expenditure index in 2005 rose by 2.3% compared to 2004, the price gap (1995 basis) improved from minus 19.1% to minus 16.3%. The price gap is calculated as the price index difference between total expenditure and operating income, expressed as a percentage of operating income. Operating income In the annual average of 2005, the index for vegetable products is in total 5.4% lower than in the year. The decisive factor here were the sometimes significant decreases in the index in agriculture, which in total led to a minus of 7.6%. Within arable farming there were lower price indices for grain (-3.2%), oilseeds (-1.2%), potatoes (-26.0%) and sugar beets (-12.0%) compared to the annual averages. . Vegetable growing saw a slight decrease in the index of 2.8%, while fruit growing saw a drop of 7.4%. There was also a negative trend of 1.0% in viticulture. In the animal sector, a comparison of the annual averages from 2005 to 2004 showed a positive overall balance. The overall index rose by 4.5%. The cattle prices have improved very clearly. On average in 2005, these were 9.5% higher than in the year slaughter cattle improved by 10.7% and breeding cattle by 9.4%. The milk price remained almost at 0.2% in 2005, 32 The Green Report 2005

32 Economic situation Development of the agricultural indices (in%), 1986 = 100 total expenditure for products without public. Funds products with public. Funds source: LBG parity table unchanged at the level of the previous year. There was a clear plus of 7.7% for pigs, triggered by significantly better piglet prices (+ 18.8%). Only poultry and eggs saw a total price decrease of 3.4%. In the case of forest products, the overall price level improved by 2.0% compared with 2004. Firewood in particular showed a good development, which can also be explained by the increasing demand for firewood as a cost-effective alternative to fossil fuels that have become very unpredictable in terms of price. Price index for agriculture and forestry. Products and public funds (1995 = 100): 2004 Grain 75.6 73.2-3.2 Vegetable growing 105.0 102.1-2.8 Fruit growing 125.1 115.9-7.4 Viticulture 118.0 116, 8-1.0 Sugar beet 101.9 89.7-12.0 Potatoes 68.4 50.6-26.0 Cattle 91.1 99.8 +9.5 Pigs 90.0 96.9 +7.7 Milk 1) 104.1 104.3 +0.2 poultry / eggs 119.2 115.1-3.4 wood 91.4 93.2 +2.0 public funds 88.9 101.8 +14.5 products and public funds 94.9 99.4 +4.7 in% 1) 4.1% fat; 3.3% protein Source: LBG parity mirror The Green Report

33 Economic situation Operating expenses On the expenditure side, the total expenditure index rose by a total of 2.3% compared to the previous year. The general rise in oil prices with the associated consequences that e.g. Steel also became more expensive, causing machine prices to rise significantly by 4.0%. Energy expenditure even increased by a total of 8.3%. Purchases of animals were also significantly more expensive (+ 12.9%), with the increased piglet prices having an impact here as a cost factor. On the other hand, due to the general decline in the price of field products, feed became significantly cheaper, by a total of 12.6%. 2.4 Parity comparison An essential basis of European agricultural policy is the income comparison between agriculture and the other economic sectors (parity comparison). The parity comparison usually serves as an important reference point in price and income policy. The main problem with all income comparisons is the choice of reference values. In the present report, the gross monthly earnings of those employed in industry in the non-agricultural sector are used, whereby social income is not taken into account. It should be noted here that with the accession to the EU, industrial workers' wages will no longer be charged in their previous form. The data of the new EU-compliant short-term statistics in the manufacturing sector include not only industrial operations but also commercial operations. For agriculture, the agricultural income was topped up by the additional part-time income and public subsidies. Price index of total expenditure (1995 = 100): 2004 in% commercial fertilizer 107.3 112.0 +4.4 purchased animals 96.8 109.3 +12.9 seeds 104.0 105.4 +1.3 external wage costs 120.6 123 .0 +2.0 Equipment maintenance 134.1 135.5 +1.0 Building maintenance 121.2 124.2 +2.5 Administrative costs 115.9 114.8-0.9 Property insurance 121.0 122.4 +1.2 Construction costs 113.3 115.7 +2.1 Animal feed 108.2 94.6-12.6 Machinery / equipment 116.7 121.4 +4.0 Animal husbandry 114.0 114.3 +0.3 Energy expenditure 118.6 128.4 +8.3 Plant protection products 86.6 86.5-0.1 Total expenditure 113.0 115.6 +2.3 Source: LBG-Paritätsspiegel 34 The Green Report 2005

34 Economic situation Social income was also not taken into account. Thus, the pure income resulting from economic activity is used as a basis for comparison. The following table shows the income development from 2000 to 2004. The income gap between agriculture and industrial employees in the reporting year cannot yet be estimated, as the figures for industrial employees for 2005 will not be available until the end of September 2006 at the earliest. In 2004 the average monthly earned income per farm worker was EUR 1,507, - that is around 50.27% of the average gross monthly earnings of an industrial worker.Development of earned income in agriculture and forestry Income comparison in EUR per month as% of monthly earnings of the industrial employees, animal species agriculture and forestry. Businesses 1) Federal funds, mining companies Federal funds, industrial workers 2) Federal funds, workers 3) Federal funds, workers Lower Austrian funds 1) Earned income (including public subsidies) per total family worker 2) Gross earnings of the employed workers by industry, ÖNACE-EU system 3) All workers and employees without apprentices and civil servants (arithmetic mean) Source: Statistics Austria, LBG Wirtschaftstreuhand 2.5 Summary In Lower Austria, economic growth was 2% thanks to a good second half of the year. The driving forces were material goods production and the energy sector. In the tourism industry, the good results of the previous year were maintained. The unemployment rate nonetheless rose by 0.3 percentage points to 7.4%. According to preliminary calculations by Statistics Austria, agricultural incomes have declined by 3.4% per worker in real terms compared to the previous year. In crop production, both the production volume and producer prices were below the previous year's level. The growth in animal production of 1.6% was primarily due to higher revenues in cattle husbandry and pig production. Within the agricultural price indices, the price index for agricultural and forestry products improved by 4.7% compared to the previous year. The main reason for this was the significantly higher public funding. The price index of total spending increased by 2.3% over the same period. As a result, the price gap (based on 1995) improved from minus 19.1% in the previous year to minus 16.3% in 2005. The average monthly income of a farm worker in 2004 was EUR 1,507.00 (2003: EUR 1,418.00), which is around 50.27% of the average gross wage of an industrial worker (EUR 2,998.00). The Green Report

35 3 Agricultural Production and Markets Lower Austria LK

36 Agricultural production and markets 3.1 Vegetable production General The 2005 crop year was characterized by relatively high amounts of precipitation and moderate temperatures in spring and summer. The yield formation in the large arable crops was therefore almost optimal. In many parts of Lower Austria, however, intensive rainfall in the already ripe wheat crops severely impaired the quality of the harvest (fall number), so that some of these could only be marketed at a discount. The earnings results for grain in 2005 were at a high level, even if the results of 2004 could not be fully matched. In the case of maize, an absolute peak yield was achieved as a result of the adequate water supply. However, the grain moisture was relatively high on average, which caused a corresponding burden on the contribution margins with the high energy costs. The price development for oilseed rape was still dampened in the 2005 harvest by an oversupply from the previous year's harvest. In the medium term, however, the high energy prices and the addition of vegetable oil to diesel should ensure that producer prices stabilize. Producer prices for vegetable products in EUR / 1000 kg without VAT. Product annual average 2005: in% milling wheat (common wheat) 113.41 85.19 79.40-6.8 Quality wheat (mixed wheat) 119.41 96.04 91.93-4 , 3 durum wheat (durum wheat) 137.20 109.08 102.76-5.8 milled rye 95.72 74.56 71.29-4.4 malting barley 148.04 93.58 90.57-3.2 feed barley 103. 63 78.56 81.05 +3.2 forage oats 100.40 76.52 68.70-10.2 Grain maize 137.64 88.17 87.32-1.0 Potatoes fixed boil. Variety (Ditta) 155.52 99.03 70.17-29.1 Mainly solid and flour. 142.44 97.31 68.25-29.9 Starch potatoes 45.78 41.72 38.39-8.0 Sugar beet 1) 44.75 45.58 40.13-12.0 Hay, sweet, pressed 107, 56 104.69 96.97-7.4 Straw 41.42 56.23 55.49-1.3 Grain prices: January to June final prices 1) Average yield of the harvest: weighted mean of A, B and C beets Source: LBG, Landwirtschaftlicher Paritätsspiegel Grain and Maize Cultivation areas and yields In Lower Austria, grain was cultivated on an area of ​​ha in 2005 (2004: ha); this means a decrease of 2.3% compared to strong area reductions mainly for durum wheat, triticale and rye. This shift very clearly reflects the premium and market situation. The decoupling of the durum wheat premium made durum cultivation for The Green Report

37 Agricultural production and markets make the farmer less attractive. The poor price situation for triticale and rye made these crops less worthwhile. In terms of area, however, only spring barley was able to increase. The yields in the 2005 crop year could not reach the high level of the previous year. The abundant rainfall in July was problematic for the quality. Since many grain stocks in eastern Austria were already ready for threshing, the continuous rain led to outgrowth and a reduction in the number of falls. Such lots were difficult to market despite the high protein values. Grain cultivation areas and harvest quantities in Lower Austria Grain type Yield of Lower Austria Cultivation area Lower Austria Change in dt / ha in ha of area in% Winter wheat 60.2 50,, 0 Durum wheat 50.7 42,, 8 Rye 45.9 36,, 7 Winter barley 59.1 50 ,, 3 spring barley 51.2 40,, 4 oats 46.3 42,, 7 triticale 47.3 47,, 3 grain maize 87.1 98,, 6 bread grain, 2 feed grain, 3 total grain, 3 source: Statistics Austria Maisbau In the year under review, grain maize was grown on a total of ha (2004: ha) in Lower Austria; this means an area reduction of -7.6%. The loss of area very clearly reflects the poor price situation for grain maize. In the case of maize, there were significant increases in yield due to the favorable distribution of precipitation. The grain maize yields were increased from 87.1 dt / ha to 98.8 dt / ha. Despite the area reduction, this led to a record harvest of t in Lower Austria. The below-average cool August turned out to be a disadvantage. The associated development deficit was only partially offset by the golden October. So very often threshing had to be done when the grain moisture was still high. The resulting drying costs reduced the profitability of this culture. Seed approval In 2005, seeds were produced in Lower Austria on a total area of ​​approx. This means a slight decrease in area compared to the previous year. The largest decrease in area is made up of winter cereals. The sharp decline in rapeseed increases is striking. So far, it was mainly in early threshing areas for export for cultivation in the harvest year. After the good harvests in 2004 and 2005, there is so much seed in stock that only new varieties are propagated. The maize reproduction area has increased again by almost 10% per hectare. 38 The Green Report 2005

38 Agricultural production and markets Propagation areas of the individual groups of crops Species group Area in ha Grain Maize Large-seeded legumes Beta beets 210 Cruciferous 40 Special crops 185 Small-seeded legumes 135 Grasses 60 Source: Lower Austria LK Vegetable alternatives Winter rape The acreage for winter rape (consumer and industrial rape) remained at a low level in Lower Austria Level at ha constant. The area share of the total Austrian cultivation area (ha) was 50%. After the record harvest of 2004 (33.9 dt / ha) in Lower Austria, the average yield fell to 27.6 dt / ha. Oil sunflowers After a significant expansion of the area in 2004, the area under cultivation of oil sunflowers in Lower Austria remained stable at ha (2004: ha). Due to an Austria-wide increase in sunflower cultivation to ha (2004: ha), the proportion fell to 79%. On average, a good 27.2 dt / ha was harvested in Lower Austria for the 2005 harvest (2004: 27.4 dt / ha). Soybean The area under cultivation of soybeans increased to ha in 2005 (2004: ha). The proportion of the growing area (ha) in Austria as a whole remained low at 8%. In Lower Austria the average yield was 24.1 dt / ha (2004: 21.5 dt / ha). Grain peas and field beans The cultivation of grain peas in Lower Austria decreased from ha (2004) to ha in 2005 and accounted for 63% of the Austrian acreage (ha). The cultivation area of ​​broad beans remained at the previous year's level at 449 hectares in 2005. The average yields in Lower Austria fell in 2005 to a modest 25.5 dt / ha (grain peas) and 26.2 dt / ha (field beans). Flax and hemp The acreage for flax and hemp was further reduced in 2005. Despite a whole series of possible uses in the technical and structural area, profitable marketing still fails due to the lack of competitiveness compared to synthetic fibers. The use of grain is still the most economically interesting form of utilization for farmers (both conventional and organic). However, a contract with a straw processor is mandatory in order to receive payments from the single farm payment with the cultivation. For this reason, the difficulties faced by fiber processors also affect producers who primarily intend to use them in the grain sector. The Green Report

39 Agricultural production and markets Other alternative crops The area of ​​other alternative crops recorded slight increases. These crops include: poppy seeds, oil pumpkin, buckwheat, medicinal and aromatic plants, millet, caraway, milk thistle, safflower, lupine, Sudan grass, amaranth, quinoa, oil flax and St. John's wort. Potato market situation The 2005 potato season began with a rapid decline in anticipation of a large potato harvest the producer prices. The simultaneous supply of stock items from the previous year's harvest, imported stock items from France and new potatoes from Egypt had a disadvantageous effect. The 2005 harvest brought record yields for the main varieties. In autumn, therefore, the price could not really develop in the interests of the producers. As a result of the high demand from Eastern and Southern Europe, more potatoes were exported than ever before, so that towards Christmas the first signs of a recovery in producer prices became noticeable, which intensified after the turn of the year and enabled at least cost-covering and profitable revenues for the storekeepers. From the perspective of the potato farmers, on average over the years, the enlargement of the EU in 2005 must clearly be seen more as an opportunity than a threat to domestic production. The high yield level of the 2005 potato harvest is also reflected in the delivery results of the potato starch factory in Gmünd. With t potatoes and an average starch content of 18.3%, more potato starch was produced in Gmünd than ever before. However, this means that the Austrian quota has been exceeded by around 11%. The contract volume must therefore be reduced by 5% in the next year. The amount that exceeds 105% must be exported to third countries without export refunds. The harvest of food industry potatoes for processing into French fries and ready-made potato products also produced good results. The contract quantities were also handed over in this area due to the high yields. The development of potato prices producer prices in EUR / 100 kg without VAT. New potatoes vorw. fixed Varieties festk. Types of lifting week 27.50 27.00 2nd lifting week 21.50 18.50 3rd lifting week 16.50 12.60 4th lifting week 13.20 8.40 Ø August, 30 5.40 5.30 6.40 Ø September , 50 5.80 5.50 6.40 Ø October, 60 6.00 4.60 6.00 Ø November, 60 6.00 4.80 6.00 Ø December, 30 6.90 5.50 6.50 Source: Lower Austria LK 40 The Green Report 2005

40 Agricultural production and markets Industrial potato production is almost entirely carried out at contractually fixed prices and quantities, so that changes in the international market situation do not affect the producers directly and thus calculable conditions exist. Lower Austria has around 80% of Austria's potato area. The total area in Lower Austria was restricted by 100 hectares in 2005. Table potatoes were reduced by 350 hectares and industrial potatoes were expanded by over 200 hectares. Distribution of the potato cultivation area in Lower Austria: 04 in% seedlings, 0% new potatoes, 0% table potatoes, 0% food industry potatoes, 5% starch potatoes, 8% total of Lower Austria Source: Lower Austria LK Seed potato production In 2005, seed potatoes were produced on an area of ​​ha. 96% of these were recognized (258 hectares of basic seedlings, 981 hectares of class Z, 52 hectares withdrawn). The good area yield and high recognition rate means that the supply of potato planting material will exceed demand for some varieties. Seed potato approval 2005 in Lower Austria 21% preliminary stages 76% class Z 3% denied Source: Lower Austria LK The Green Report

41 Agricultural production and markets Vegetable and horticultural cultivation The areas under vegetable growing in Lower Austria are stable. The year was marked by a late start to the season. Moderate temperatures and humid weather character slowed the vegetation. A mild late summer and long autumn favored the ripening of stored vegetables, which were harvested in good quality. The yields were generally in the middle of the field. The main seasons in ornamental plant cultivation were reasonably satisfactory. The autumn sales were very good due to the favorable weather and the Christmas business was also favorable. However, the steadily rising energy costs are causing more and more problems for companies. Due to the discontinuation of the investment subsidies, some companies were also unable to make the planned switch to alternative fuels. Without sufficient funding, however, many companies cannot switch to the very expensive wood chip or pellet heating systems. At the tree nurseries, spring sales started very late due to the weather, but the sales season was very long. Summer sales are increasingly developing into the second busiest season. The autumn season was also very good due to the weather, whereby the sale of bulk goods via non-branch retailers is becoming a problem for the companies. Field vegetable growing The strained market situation for onions from the previous year continued in 2005. Until April stock items could only be sold at extremely subdued prices (1 to 2 cents / kg). Around tonnes of onions were disposed of towards the end of the season. With the start of the new harvest in mid-June, the price situation improved. Due to the lower onion harvests across Europe, prices remained stable for the rest of the season. Development of onion producer prices Onion producer prices in EUR / 100 kg, sorted in boxes, excluding VAT July 17.00 16.10 25.30 August 12.90 6.50 12.50 September 16.05 5.90 12.70 October 17.85 4.50 10.80 November 18.90 3.60 10.00 December 20.50 2.50 9.80 Source: NÖ LK Due to heavy spoilage in January and February, carrots became a scarce commodity and prices rose. The newly harvested goods could also be sold at satisfactory prices. In Austria, onions and carrots in particular have a very high proportion of organic production. Organic produce continues to gain in importance and is largely exported. 42 The 2005 Green Report

42 Agricultural production and markets Development of carrot producer prices Carrot producer prices in EUR / 100 kg washed, sorted, loose, without VAT July 14.70 13.00 14.00 August 11.40 9.40 11.60 September 11.50 8.70 10, 40 October 14.00 8.00 7.00 November 15.50 5.80 6.30 December 16.50 5.20 7.40 Source: Lower Austria LK Asparagus production is still under price pressure. Despite low yields due to cool weather, no price advantages could develop for the producers. Increasing competition arises from providers from countries with lower wages. The sales channels for asparagus have changed massively in recent years. Currently around 75% of the goods produced in Lower Austria are delivered to the food retail trade. The rest of the quantities are shared between catering and direct sales. The cultivation for the deep-freeze processor Austria Frost showed an upward trend in the reporting year. On October 25, the company filed for bankruptcy with EUR 26 million in liabilities (delivery obligations). Farmers were affected to the extent of EUR 2.6 million. Due to the massive efforts of the farmers, the Lower Austrian regional government and the Lower Austrian LK, it was possible to find an acquirer in the Frenzel company who gave a guarantee of the location and an expansion of frozen production in the peas, beans and spinach area for the next few years represents. The production of pickling cucumbers in Lower Austria is at a very high technical level. Due to the high wage level for seasonal workers and the poor availability of seasonal workers, cultivation in Lower Austria is declining. BMLFUW The Green Report