Swiss agriculture benefits from world prices

How now brown cow?

The increase in prices for farm products around the globe has made Swiss agriculture more competitive, the Federal Agriculture Office announced on Thursday.

Presenting its 2007 report on agriculture in Bern, it said that this situation was likely to continue, confirming the appropriateness of Swiss farm policy.

The Agriculture Office said that the difference in prices for primary products between Switzerland and the world market had reduced markedly, noting that prices for cereals, milk and butter had soared abroad, with the price for corn having doubled.

The vice-director, Jacques Chavaz, noted that as a result of customs protection, prices for these products in Switzerland had hardly changed.

The prices are closing in particular on those of the European Union, Switzerland’s largest trading partner.

In 2006, for example, Swiss cereal production prices were two to three times higher than in the EU. This had come down to a factor of between one and one and a half, the report said.

The difference in milk prices has also come down. Over the past few years, the price of Swiss milk was 30 centimes a litre higher than in the EU but it should be between ten and 15 centimes by the end of the year.

Higher revenues

This rapprochement of prices is not without its consequences for farmers whose revenues have increased by 2.2 per cent to SFr2.6 billion.

According to the director of the Agriculture Office, Manfred Bötsch, the development gives credibility to Switzerland’s agricultural policy.

He argued that farmers should now seize opportunities to export their products. However, he warned them not to make bad investments.

Bötsch also warned that the increase in world prices was of a temporary nature. “But we too don’t know when they will fall back,” he commented.

Increasing demand

The Agriculture Office still believes that there will be higher producer prices in the mid to long term. It said demand was expected to increase, partly as a result of the global population rise and the growing popularity for meat and milk products.

Bösch added that structural change in the agriculture was still an issue, noting that the number of farms in Switzerland was still on the decrease, although at a slower rate.

The number of farms dropped by 2.7 per cent between 1999 and 2000, and by 1.9 per cent between 2000 and 2006.

The report also noted that farmers work hard, including at weekends, and had only a few holidays.

Almost three quarters of them work more than 50 hours a week, it noted.

The Swiss Farmers’ Association has welcomed current developments in the agriculture sector. Earlier this week, its president, Hansjörg Walter, said that Swiss food prices were not too high.

“The difference compared with countries close to us has come down massively or does not exist any more. We should also not forget that we have a higher purchasing power in Switzerland,” he commented.

swissinfo with agencies

Swiss agriculture – very protected

Swiss agriculture is one of the most protected in the world. According to the Organisation for Economic Cooperation and Development, the total value of protection and support measures in 2005 reached almost 68% of the total value of Swiss agricultural production. Only Norway and Iceland support their farmers more.

The measures have two aims: to allow farmers to continue producing, and support what they do out of public interest, with the environment also in mind.

Agriculture in Switzerland is among the European average when it comes to the number of the number of people it employs (5.4% of the active population) and its added value (1.2% of GDP).

Animal production accounts for nearly three quarters of Swiss agricultural production. Swiss farmers produce about three fifths of the food consumed in the country.

In the current liberalisation negotiations at the World Trade Organization, Switzerland presides over a group of ten countries that are net importers of agricultural products and have a defensive approach to agriculture.