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Flood Risk - Prevention and Impact on Agricultural Lands, in: Proceedings of the Annual Conference of the Agrictural Economics Society, 30.3.-1.4. 2009, Irish Management Institute, Dublin

Wagner, K.; Neuwirth, J.; Janetschek, H.


Recent extreme weather events have resulted in an ongoing discussion on the issues of land use and compensation payments within Austrian agriculture. The basic results developed within the sub-project "Agriculture and Flooding" will flow into the overall project "Flood Risk II," while furthermore contributing to an understanding of the multifunctionality of agricultural lands and to the setting of priorities on a regional scale. An objective appraisal of the economic implications associated with adapting land use should also facilitate decision making regarding packaged flood-prevention and damage-minimization measures. However, the results at hand can only serve as one step toward regional flood protection projects, whose development will require the cooperation of all interest groups.

Implementation of the recommended measures could be carried out via different instruments and at various levels, to be decided through the political process. Among the official, state-regulated instruments available are legislation, taxes, levies and subsidies, while private instruments would include agreements (e.g., usage contracts, land purchases and leases), funds and endowments, and tradable rights. Within the scope of private-sector administration, public authorities could, for example, enter into usage agreements with land owners (e.g., contractual flood protection), purchase flood-plain land or establish dedicated compensation funds for flood events.

Governing authorities could, for example, assimilate "flood-compatible land cultivation" as an additional cross-compliance provision. To do so, however, would first require nation-wide analyses of the current state of cultivation practices in water catchment and flood plain areas, as well as deriving generally accepted criteria for flood-compatible land cultivation. An alternative course of action would be to introduce new subsidy programs or expand existing ones - such as ÖPUL (the Austrian agro-environmental program) - that includes regionally and locally targeted packages of measures earmarked for flood protection. Nevertheless, as per the urgency of measures, it remains necessary to consider that participation in the aforementioned types of programs is on a voluntary basis and thus their true effect will also depend on uncontrollable circumstances (e.g., national and international price developments for agricultural products, energy prices, etc.).