MODEL-CALCULATIONS FOR FARMING DECISIONS UNDER NEW ECONOMIC-CONDITIONS

Membership of the EU has changed the economic conditions under which A ustria's farmers must operate. EU market rules and lower prices now ap ply to many agricultural products, and the Austrian Environmental Prog ramme for Agriculture (OPUL) has also been redesigned. Accordingly, fa rmers in Austria are faced by a number of new decisions. This paper ad dresses the following questions through the use of model calculations: 1 What influence does the participation in OPUL have on farm holdings ? 2. Based on economic considerations, should a farmer choose the gene ral or simplified scheme for EU compensatory payments for cereals, pro tein crops and oilseeds? 3. What influence do the national (degressive ) compensatory payments from 1995 to 1998 have on the optimal use of a rable land of farm holdings? Linear programming techniques are applied within the calculations. The sum of individual crop gross margins acr oss a holding is maximised for each of a range of initial conditions. These conditions vary according to participation/non-participation in OPUL, the available arable hectarage and its suitability for different crops, crop yields, and inclusion/non-inclusion of national compensat ory payments in 1996. The results show that participation in OPUL does have financial advantages for a holding. The specifications included within OPUL also influence the optimal use of arable land on the holdi ng. The greatest influence is recognized on those holdings featuring o nly those crops which qualify for compensatory payments. As the use of crops not qualifying for such payments rises, the implications of par ticipation in OPUL become less important. No clear conclusions can be drawn regarding the choice between the general and simplified compensa tory payment schemes. This is closely dependent on the particular crop choices and associated yields on any individual holding. The optimal use of arable land is influenced by,national compensatory payments, wh ich are to be paid between 1995 and 1998 on cereals, protein crops and oilseeds, just to a small extent.