The Future of Agriculture in Switzerland
The Swiss Farmer - a history of perpetual change and the continuous demand for fair prices
Switzerland’s farming community, counting 50'038 farms in 2019, is versatile. It includes traditional alpine farms, dairy cow and sheep farming, wheat and rapeseed production, orchards for berries and fruit, even beehive meadows - and they, directly or indirectly, carry out an important role in nutritional economy here.
These farms employ a total workforce of 150'133 and manage an agricultural area of approximately 1'043'729 hectares, covering around 25.28 percent of Swiss soil. These figures are indeed surprising. We do not really hear much about Swiss farmers on a day to day level, except maybe when they demonstrate - flooding the Bundesplatz in Bern with Swiss milk or blocking the entrance to parliament with a caravan of tractors.
The Swiss agricultural industry has undergone significant structural changes in recent years, with declining numbers of farms and employees. There have also been significant changes in livestock data and farm management in general. The reasons for these changes are manifold. Although Swiss consumers increasingly buy organic products and goods produced locally, farmers budgets are permanently under attack. This pressure is clearly reflected in the milk price of a mere CHF 0.60 per litre. This is one of the reasons why a young, innovative female farmer from the canton of Vaud has recently established a new cooperative which guarantees its members the price of CHF 1.00 per litre of produced milk.
Swiss farmers are considered to be a role model of hardworking modesty. Of course, many farmers have retained a down-to-earth way of life, but this does not mean there aren’t any wealthy families amongst farmers. Some of them can call themselves millionaires, having accrued wealth through great land tenure. On the other hand, it is a fact, that most farms would not survive without considerable subsidies and direct benefits from the federal government. Direct benefits alone amount to 2.8 billion Swiss francs per year. In addition, there are benefits paid to promote production and sales, for structural improvements as well as subsidies paid out for social measures. So, in its entirety, the federal budget pays out over 3.8 billion francs to farms in Switzerland per year.
So, that famous modesty can be short-lived – particularly when it comes to state subsidies - and the farmers' lobby in parliament is one of the strongest by far. There are a total 28 members of parliament of different political affiliation directly linked to agriculture. Additionally, the network of farm produce sales is a well-oiled machinery. Fenaco (fédération nationale des coopératives agricoles) is a company with approximately 10'000 employees and a turnover (2019) of seven billion Swiss francs a year. The cooperative company, owned largely by farmers, sells to well-known brands such as Landi, Volg, Agrola and Ramseier Suisse.
Switzerland was considered a grain-producing country until the 1880's. Then came the railway and with it, the possibility of importing grain from abroad. In these times of need, local farmers joined forces and began to organise themselves into small associations, which eventually led to Fenaco in 1993. And they were indeed successful in defending the local market. Now it is the free trade agreements that have the Swiss farmers worried, particularly the free trade agreements with the Mercosur states (Brazil, Argentina, Paraguay, Uruguay), which in fact should have been signed at the beginning of this year. Another agreement, supposed to have been relaunched recently, was the one with the USA in 2018. But the last time Switzerland and the USA began negotiations for a free trade agreement, farmers put so much pressure on, it caused the deal to be overturned.
July 02, 2020
PublicationsPKZ - The leading fashion house in Switzerland and its CEO
Manuel Beer is the first female Director of PKZ, a family enterprise which has been in business for the past 138 years. The letters PKZ reflect the name of the Company’s founder: Paul Kehl, Zürich.
August 13, 2020
PublicationsBiospectal - Measuring Blood Pressure via Smartphone
Analytics has undergone great developments in the field of medicine in the last decades. Biospectal, the start-up from Canton of Vaud, is trying to develop and improve a technique unchanged for the past 100 years - blood pressure measurement.
August 11, 2020
PublicationsLetter from the CIO - August 2020
Our Chief Investment Officer gives an overview of market developments and our portfolio activities in the past month.
August 07, 2020