A court in Innsbruck issued its ruling on Thursday in a civil lawsuit brought by the woman's husband and son, public broadcaster ORF reported. The farmer is to appeal, it added.
The incident took place on July 28, 2014, when the 45-year-old German holidaymaker was hiking with her dog in the Pinnistal valley of the Austrian Alps in Tyrol.
The cows suddenly surrounded her and trampled her. Despite attempts to resuscitate the woman, she died of her injuries at the scene.
READ ALSO: Cows kill German dog-walker in Tyrol
Her husband and son had accused the farmer of negligence, while the farmer insisted that he had put up warning signs on the pasture.
The court ruled that the signs were not enough and that the grazing land should have been fenced off. The ruling angered Tyrol's farmers who see it as a threat to their livelihood in the mountainous region which is a popular tourist attraction.
The Tyrolean Chamber of Agriculture slammed the decision as being “out of touch with reality”.
“The ruling is generating a great deal of anxiety and uncertainty among farmers, who are faced with the question of whether they should allow their cows to graze, or whether they should close off the pastures completely,” said the chamber's president Josef Hechenberger.
Regional politicians were also critical.
“However tragic the case may be, the court's decision is not comprehensible,” complained Tyrol's regional governor Guenther Platter.
The farmers' association and the local chamber of commerce similarly warned of “fatal consequences” for the sector.