Milk sector looks for way out of crisis

Will there be fewer milk cows in Switzerland in the future as farms close? Keystone

Swiss milk producers say that milk prices are so low that farmers are no longer able to cover their costs. They have called for more help, including from the government. But not everyone agrees more subsidies are the solution.

Representatives from the sector – including dairy product manufacturers and big retailers – met in Bern on Friday for an “emergency summit”.

They heard that the situation was very serious for many farmers. According to the head of the Swiss Farmers’ Union, Jacques Bourgeois, the price of milk is around the same level as 50 years ago – a record low.

“Many farmers are losing money every working hour of milk production due to the current milk prices,” said Bourgeois.

The number of milk producers dropped by 13% last year – the equivalent of 3,000 farms, he continued, adding that the future would only see the situation worsening.

A report by the Federal Office for Agriculture External linkfrom earlier this year gave several reasons for the pressure on the sector: higher milk production both abroad and at home, accompanied by lower milk prices globally. The strong Swiss franc has also had an impact, it said.

Last year the price of milk had dropped by 10.6% to just under CHF0.6 ($0.6). Organic milk does not seem to be affected by the price drop.

The Farmers’ Union, along with the Swiss Milk Producers’ Association and the Milk Sector Organisation,External link has called for fairer prices from within the milk sector, as well as for immediate measures from the government, including increasing livestock welfare payments and support for a marketing campaign within Switzerland.

Reaction

Dominique Kohl, deputy director of the Federal Office for Agriculture, also at the meeting, has signaled his support for the marketing measures. But he was more cautious about the direct payments. “More money for one measure, means less for another, so perhaps mountain farmers would receive less money,” he told Swiss public television SRFExternal link.

For agricultural economist Felix Schläpfer, subsidies are not the solution for the milk crisis, as they are the reason why there is such a high milk production.

“We should really ask ourselves why is so much milk being produced,” he told SRF’s Tagesschau. “Anything else is ‘sticking plaster’ politics.”

According to a Swiss Farmers’ Union report,External link the production value of the dairy industry was CHF2.1 billion in 2013 – so 20% of the overall agriculture production value. This “makes it thus the most important sector in the Swiss farming and food sector”.

Swiss farmers have long been calling for more to be done about milk prices. Last year farmers joined their European colleagues in Brussels to demand action to stem falling prices in the dairy and meat sectors.