Farming in mountainous areas: A fragile balance

Mountain farming is one of the sectors that is looking to diversify itself and survive in a milk quota-less world. [Ilaria/Flickr]

This article is part of our special report Can the (new) CAP deliver on sustainability?.

SPECIAL REPORT / There is one type of agriculture that is more demanding and laboursome than others, but essential from a social point of view, and that is mountain farming. EURACTIV Italy reports.

The EU has ranked them among the most “disadvantaged areas” for agriculture. However, in mountainous regions, “disadvantaged” is not synonymous with marginal. On the contrary, in these areas, agriculture is central.

“Mountains are kept alive only through agriculture, it’s integral to country life,” said Hubert Ungerer, who is responsible for an EU-financed project called LaugenRind, set up in response to the milk crisis.

The scheme has allowed farmers from the Italian province of Bolzano to create a brand under which to sell fresh meat and gourmet produce.

“Here, the vitality of the agricultural sector support other economic sectors, tourism primarily, but also on craftsmanship and handicraft,” Ungerer added.

Mountain farmers operate in a particularly demanding environment. The weather and soil conditions shorten the growing season, labour costs are higher and the topography makes the use of conventional machinery more difficult, meaning further expenditure for specialised tools is often necessary.

Farms there tend to be small-scale, remote from logistic centres and at high risk of abandonment. In that sense they may be seen as “disadvantaged”.

Mountain farming represents 18% of all agricultural enterprises in Europe, while utilising 15% of agricultural land and 15% of the agricultural workforce.

Due to geographical constraints, productivity is on average 28% lower in mountainous areas than in other disadvantaged areas and 40% lower than farming on the plains. At altitude, arable crops such as cereals, and permanent crops such as fruit and olive trees, give way to permanent grassland and animal grazing: 60% of the land is used for pastoral farming.

Disadvantaged areas under the CAP and its subsequent reform

For decades, the EU has recognised the social and environmental worth of mountain agriculture and the Common Agricultural Policy (CAP) provides compensation for such enterprises through rural development programmes. Mountainous regions were included among the three types of disadvantaged areas, covering around 91 million hectares and accounting for roughly 57% of total agricultural land use in the EU.

The three definitions are as follows: mountain zones, identified by parameters such as altitude, gradient and geographical position; areas characterised by specific disadvantages such as coastal or island location; and so-called intermediate areas, classified by using hundreds of national criteria.

In 2003, the European Court of Auditors denounced the arbitrary nature of the intermediate areas, ruling that it could discriminate between farmers from different EU states. For example, Spanish farmers could be paid around €16 per hectare, while their Maltese counterparts were entitled to over €200.

In 2005, accepting the Court’s findings, the European Commission instigated a revision of these parameters in order to establish fair, across-the-board criteria.

“The CAP reform introduced eight biophysical objective criteria, such as gradient and soil quality, in order to define areas with natural constraints, allowing the member states the flexibility to impose other criteria on up to 10% of their agricultural land,” the Commission explained.

The reform also allows various countries to use up to 5% of their national direct aid budget to assist farmers in areas with natural constraints, instead of doing it for rural development. Denmark is the only country which has opted for this.

Although not technically a part of the actual reform, another important element is the so-called “Quality package” (Regulation (EU) 1151/2012), which has introduced the possibility of using specialised labelling to enhance the value of products, for example, “product of island farming” and “mountain product”.

Quality and organisation

“For consumers, mountains convey this image of pureness, traditional values, which is a strong identity that has great market potential,” according to Euromontana, the European association of mountain areas.

The organisation ran a project that was intended to assess the perceptions of consumers and retailers towards mountain products. The EuroMARC project lasted three years and ended in January 2010.

The study showed that 86% of consumers interviewed were in favour of a distinct labelling system for mountain products.

Hubert Ungerer commented, “The European agricultural policy is doing a lot, but it must insist upon more product diversification, more incentives for niche activities and the creation of new products and service, like agritourism.”

Focusing on diversification and quality, as well as organisation, is exactly what the LaugenRind cooperative has done.

The project dates back to 2003, when, thanks to the LEADER+ project, eight farmers developed a milk-production quality scheme involving the rearing of Tyrolese Grey cattle. Further down the line, the cooperative decided to extend the scheme to include meat production as well.

Today, the cooperative is made up of 30 farmers, with 100 heads of cattle, producing under the LaugenRind brand. The farmers have increased their sales and achieved prices that are 30% higher than when they started the initiative. Furthermore, they are contributing to the protection of traditional breeds, under strict animal welfare standards. In 2007, the cooperative joined the Slow Food movement.

Milk quotas

These farmers are to some extent front runners. But the end of milk quotas could put this fragile balance at risk. The fear is that some farmers might decide to abandon mountainous areas, where production costs are higher, in favour of more cost-effective production.

In certain countries this could spell the end of entire industries. “Milk produced via mountain farming represents 10% of milk produced in the EU, but in Austria, Slovenia and Finland it accounts for two thirds of production and three quarters of producers, and the numbers are similar in a dozen other countries,” according to a 2013 report on the subject, authored by Herbert Dorfmann, an Italian MEP. The report also suggests that the end of milk quotas will not have immediate effects, but that those will become clearer in the medium to long term.

“That is why we in the European Parliament have requested the Commission to prepare a report on this specific issue by 2017. The quotas were a safety net for mountain producers, because they limited concentration of production only in the most competitive areas. Without the quotas we must remain attentive and think of possible solutions,” added Dorfmann.

Ungerer believes that, “if the hypothesis of a negative impact of the end of milk quotas comes true, then most of the mountain farmers would be in a critical situation. That is why we need to encourage them to explore different paths and not just focus on increasing product quantity.”

The Common Agricultural Policy (CAP) is the European Union's system of direct payments for farmers and subsidies, which costs each EU citizen around 30 euro cents a day, according to the European Commission.

The CAP has a budget of €53 billion a year, making it the European Union’s most expensive programme. The CAP accounts for 37.8% of the EU's 2014 to 2020 budget, compared to nearly 71% in 1984.

The majority (over 70%) of CAP spending goes to direct payments for farmers, while some 20% of the CAP budget is spent on rural development measures. The rest is handed out as export subsidies to food companies.

The Commission's reformed CAP places a greater emphasis on environmental measures, with up to 30% of the funding granted to farmers who diversify production, rotate their land or maintain permanent pastures.

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