Swiss farm produce is expensive. It is not uncommon to pay over CHF 100 (US$ 105) per kilogram for the best cuts of beef in Swiss supermarkets, a multiple of two to three times the price of many other countries. Similarly high prices exist for many other farm products in Switzerland. Why is this?
Small uneconomic farms
Many farms are so small that they are not economically viable. A Swiss Farmers Union report calculated the average Swiss farm size at 18 hectares in 2012, small by world standards. By comparison the average New Zealand farm in 2012 was 248 hectares. According to another study a quarter of Swiss farmers live below the poverty line.
Swiss farmers struggle despite world’s second highest subsidies
To keep Swiss farmers from poverty the government pays them large subsidies. In 2013, Swiss farmers received the world’s second highest subsidy payments, equal to 49.4% of gross farm receipts. Despite this helping hand from taxpayers many still lead lives of economic hardship.
Import restrictions keep prices high
Import restrictions and duties keep the price of many Swiss goods high by preventing Swiss importers and residents buying anything other than small quantities of foreign produce at lower prices across the border in France, Germany, Austria or Italy. Anyone who has entered Switzerland after an international shopping trip knows how expensive it can be to exceed his or her tax free personal meat allowance, currently one kilogram per person.
High environmental cost
Agriculture’s negative impact on Swiss biodiversity is of concern. According to the Swiss Federal Office for the Environment (FOEN) over one third of all surveyed species are under threat. Excess ammonia, which mainly originates from agriculture, spreads through the air and results in the over-fertilisation of sensitive ecosystems. Switzerland compares poorly to most of the countries in the report’s comparison on biodiversity. Subsidies still exist for environmentally damaging inputs such as farmers’ exemption from mineral oil tax.
The OECD recommends an overhaul
The Organisation for Economic Cooperation and Development (OECD), in a recent report on Switzerland, prioritises farming industry reforms. It describes Swiss farming as lagging behind most of the rest of the world on productivity and recommends removing all import restrictions and making farm subsidies conditional on environmental outcomes – for example removing mineral oil subsidies, introducing taxes on environmentally damaging inputs such as fertilisers and taxing harmful outputs like methane from livestock. It also suggests removing impediments to shifting agricultural land to other uses, in particular changing inheritance laws that favour passing farms between generations.
OECD farm subsidy statistics (in English)
The unseen environmental cost of Swiss farming (Le News – March 15)
New Zealand farm facts (in English)
Swiss customs information (in English)
Swiss Farmers Union report (in French)
Gilian’s comment about Aldi and Lidl declaring origin of product is a good start.
My Swiss brother in law has invested in an Angus cow which cruises the Swiss alps and every now and again he receives meat at a ridiculous price against this investment.
Let those patriots who think it is honourable know when they are purchasing local know by labeling as such. I have no sympathy for these “poor” farmers who drive around in the latest hi-tech tractors paid for by taxpayers. In the Winterthur area many of these” poor” farmers have cashed in on urban sprawl by selling/developing their land at huge profit -do they pay back these subsidies to the state? I doubt it !
A rich country like Switzerland should allow it’s citizens to benefit from cheap imports and not penalise the majority with high import tariffs to benefit a few spoilt farmers
I appreciate that the focus of the article is on the farmer, however I have also noticed that Aldi and Lidl seem to be able to offer locally produced fruit and vegetables ,with a clear provenance, to consumers at a 50% discount compared to Migros and the Co-op.We would all prefer to buy locally sourced food produced in a sustainable way and providing the producer with an acceptable standard of living but I can’t help concluding that there is a degree of complacency in the system here and consequently in Switzerland we do all pay higher prices for goods and services than is absolutely necessary .
Very interesting and informative article. If the Swiss want the best and they want their country to keep looking pristine, then they have to pay more for good food. The question is: Do the people mind?
This is a rather one-sided article. Yes, Swiss farms are subsidised, as are farms in many other countries.
But do we consider local produce a “public good” deserving subsidies, the same way that we think that the government should spend on roads, defense or foreign relations?
(Agriculture spending is 70% of military spending. Switzerland spends 2.5 times more on traffic than on agriculture, and more on its foreign relations than on the farm sector.)
Yes, it’s expensive, but perhaps it’s worth paying for quality food, and a countryside that is cared for by people who live there and know how to maintain it? Isn’t that one feature of Switzerland that attracts tourists, an important source of income for the country and one that ensures that the regions are very much alive for inhabitants and visitors alike?
And in response to Glenn’s assertion, the jeunes libéraux-radicaux and economiesuisse favour reducing farm subsidies, to mention just two of the strong political voices in Switzerland taking that line..
Very good explanation of something I’ve been going on about for years since living in Switzerland – the high subsidies given to Swiss farmers – but the Swiss don’t want it to change – which party has a policy platform to reduce farm subsidies?None that I know. They see farmers as defenders of the countryside – then we should recognise farmers as ‘curators” of a giant outdoor museum…