Investment opportunities in Swiss agriculture

Technology, subsidies, and excessive protection of local products have been the means of progress for Swiss agriculture. Currently, farmers in this country are the most supported farmers in the world, according to a report by the Organization for Economic Cooperation and Development. Besides, the Swiss have also found a niche, besides the world-famous cheeses: they have developed organic farming, being pioneers in this field.

This sector plays an important role in the Swiss state so that its existence is guaranteed even by the Federal Constitution. Agriculture has not only the role of producing food but also fulfills the function of ensuring and maintaining the population of mountain areas. The total agricultural area amounts to 1.1 million hectares. The agricultural sector provides more than 50% of local plant products and almost entirely animal products. The livestock sector is the main supplier of basic products for domestic consumption and export.

In Switzerland, grain crops such as wheat and barley, root vegetables, sugar beet, and potatoes, as well as fruits, like apples and grapes (approximately 124 million liters of wine are produced annually in Switzerland), predominate in Switzerland. Dairy products, such as milk and world-famous Swiss cheeses, make up a significant part of agriculture incomes. Milk production and livestock income provide more than two-thirds of the total agriculture value. Milk, butter, cheese, and chocolate are the top products that keep this sector in Switzerland.

Subsidies, part of Swiss policies on agriculture

The progress of agriculture in Switzerland was ensured by subsidizing farmers. According to a report made by the Organization for Economic Cooperation and Development, 56% of Swiss agricultural income comes from state subsidies.

In order to protect the entrepreneurs who want to invest in Swiss agriculture, but also to ensure domestic needs, the federal government has developed a system of protection in this area, restricting import products, particularly dairy products and cereals.

The high tariffs for everything imported and tariff quotas, limiting the number of goods that can be imported from a country apply to most products that were manufactured internally, thus being advantageous.

Manufacturers, especially those in the alpine areas, have been and are constantly supported by the authorities. Supporting the milk price is just one of the protectionist measures that make the product price remain significantly higher than in EU markets.

Swiss protectionism on agricultural products

Since 1993, Switzerland has reformed the agricultural sector due to the need to reduce the budget costs, as well as pressure from consumers and trade partners. Trade liberalization agreements have forced Switzerland to eliminate harsh import conditions, reduce export subsidies, revise agricultural tariffs, and reduce support for domestic producers. Consequently, the trend was to synchronize with EU regulations in the field.

The process of reforming agricultural policy began with a downturn in dairy prices. Reform culminated in 1998 when Parliament approved a new package of agricultural policy measures. According to the package, prices continued to be reduced, and direct payments to agricultural holdings were conditioned by the use of production methods, encouraged by organic farming.

Organic farming in Switzerland

In Switzerland, the main certifiers of organic products are bio.ispecta (founded in 1998) and BioTest Agro. Today, Bio.inspecta inspects and certifies more than 80% of Swiss farms, processors, and traders.

Swiss legislation requires respecting minimum environmental standards to grant agricultural subsidies: crop rotation with at least four crops; measures to combat soil erosion; the nutritional balance of plants; biodiversity. In addition, Swiss farmers can choose from the various special programs, the land protection program with live hedges or the animal welfare program.

Several factors have led to the growth of organic farms: consumer concerns about less healthy food; the government's agro-environmental policy, which supports organic farms with annual subsidies; the availability of organic food in two of Switzerland's largest supermarkets; the collaboration between Bio Suisse and FiBL, which provides research data and practical advice to farmers.

All Swiss cantons offer an introductory course for farmers to convert to organic farming and state advisory services provide technical advice to organic farmers in each canton. The consultancy services focus on technically assured support during the conversion period and on technical assistance in granting subsidies.

If you want to invest in this sector in Switzerland or to know the things you should do if you want to incorporate in Switzerland, our consultants provide you with all the information you need.

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