Austria’s land market is characterised by significant land concentration in the hands of large-scale landowners, lack of transparency and regional differences in price, policy and regulations. Loss of farmland is quite rapid, mostly due to urban sprawl and infrastructure construction.
Losing an average of 22ha of farmland daily (i.e. 5% of farmland area per year), Austria is witnessing one of the fastest decreases in agricultural area in Europe. In particular, urban sprawl is strongly connected with the successive loss of the country’s most fertile soils. Population growth, urban sprawl and ground sealing along with it, are especially relevant in a few ‘hot spots’: the cities of Vienna, Linz and Graz as well as the Inn valley in Tyrol.
Opacity of land ownership is a crucial issue in Austria. It is however well known that the state forest agency, Österreichische Bundesforste, is the largest landowner of the country at 850.000ha (roughly 10% of the national area), followed by the city of Vienna at 58.000ha. Furthermore, large amounts of land belong to former noble families and monasteries (1).
Austria ranks second in the EU with 82% of forest being in private hands, compared to an EU average of 52%. Some of the largest owners of these forest lands are members of the representative body for large landowners ‘Land- und Forstbetriebe Österreich’. The members of this organisation own 1.6 million ha of land in total, 60.000ha of this being agricultural area. Agriculturally active members own 420 ha on average, compared to a nationwide average of around 19ha.
Like in other European countries, the push to ‘grow or perish’ as promoted by agro-industrial interest groups and lobbies, is another contributor to land concentration: the numbers of small and medium sized farms are rapidly decreasing, while the average farm size is increasing. Between 1951 and 2007, the average farm size has doubled.
Austrian investors play a significant role in land grabbing in other countries, for example in Hungary and Romania.
The question of agricultural land prices in Austria is characterised by lack of transparency. There is no national or regional survey data on agricultural land prices, making it impossible to reasonably quantify current price levels, price evolution over time, and regional differences.
Land renting price averages vary between 300€/ha in Eastern Austria and up to 460€/ha in Southern Austria, with the national average at €348/ha (numbers from 2016, EUROSTAT).
Despite the lack of hard data, it is evident that especially since the financial crisis 2008, land prices have been driven up by private investors looking for solid securities and often willing to pay significantly more than average local prices. In theory, overpriced sales can be appealed in favour of local farmers; in reality, however, local and especially beginning farmers are often disadvantaged and the agricultural chamber has even taken up advising non-farmers on purchasing land.
Source: EUROSTAT (2018): Agricultural land renting prices for one year by region. Available at: http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=apri_lrnt&lang=en
Main obstacles for new entrants into farming in Austria are:
– Obtaining relevant information, especially
o on adequate prices
o on useful but less common types of contracts, eg in farm succession outside family lines
Regional advisory bodies in agriculture are often not experienced in the specific fields that new entrants want to engage in, and information geared towards the specific needs and questions of entrants is scarce.
– Finding available land for farming
– Acquiring funds for land as well as buildings
An important contract option for the transfer of land and farms to the next generation is that of life annuity contracts. The life annuity is a contract between the old farmers and the farm successor. The property remains with the owner as long as they live and is afterwards passed over to the new farmers. The details of a life annuity contract can be negotiated by the two parties, and offer quite some creative leeway.
(1) Reisenberger, Brigitte (2014): Landkonzentration und Land Grabbing in Osteuropa: Die Rolle österreichischer Unternehmen. Wien: FIAN Österreich für Hands off the Land.
Full references are provided in the Resources section.