In a 2017 referendum, the Swiss electorate adopted a new article on food security in the Swiss Constitution. In order to guarantee the supply of food to the population, the Confederation shall create the required conditions for: 1) safeguarding the basis for agricultural production, and agricultural land in particular; 2) food production that is adapted to local conditions and which uses natural resources efficiently; 3) an agriculture and food sector that responds to market requirements; 4) cross-border trade relations that contribute to the sustainable development of the agriculture and food sector; and 5) using food in a way that conserves natural resources. The new article in the Constitution supports the general thrust of current agricultural policy. It sets out how to guarantee proper food supplies to the Swiss population in the long term. In doing so, it takes account of the entire process from farmers to consumers. Food supplies should be guaranteed by exploiting both domestic production and imported foodstuffs.
Most agro-food imports to Switzerland are regulated by Tariff Rate Quotas (TRQ) with relatively low in-quota tariffs and high out-of-quota tariffs. TRQs in particular cover meat, milk products, potatoes, fruits, vegetables, bread cereals and wine. Since 1999, an auctioning system is used to allocate most of the TRQs to traders.
All export subsidies for primary agricultural products were eliminated by 1 January 2010. Export subsidies for some processed agricultural products are allowed within a transitional period until 2020 and compensate for high prices of domestically produced agricultural inputs.
Following the abolition of the milk quotas in May 2009, the inter-branch organisation for milk (l’Interprofession du Lait – IP Lait) developed and implemented for its members standard milk delivery contracts (setting three levels of prices and corresponding volumes for contingents A, B and C). A decision of the Federal Council, made those standard milk delivery contracts compulsory to all milk producers (i.e. also to those outside the IP Lait) from 1 July 2013 to end 2021(with a potential to be further extended). The fact, that these contracts are made compulsory for all producers continuously from 2013 up to 2021 (with a potential to be further extended), means that the abolished production quota system was de facto replaced by a another production control mechanism but on a private base. The effective price paid to milk producers remains on average 51% above the world market prices (producer NPC) in 2016‑18.
The network of Swiss trade agreements consists of the European Free Trade Association (EFTA) Convention, the Free Trade Agreement with the European Union and another 30 agreements concluded with 41 countries. All these agreements were negotiated and signed within EFTA with the exception of agreements with the People’s Republic of China, Japan and the Faroe Islands.
The budgetary spending supporting agriculture consists of three broad financial envelopes. Direct payments: direct payments to farms for meeting societal demand such as food security, environmental services (landscape, biodiversity, sustainable use of resources) and animal welfare. Production and marketing: expenditures are mainly for support dairy producers in the form of direct payments for milk delivered for cheese processing and to milk production without silage feed. Area payments are paid for oilseeds and protein crops and, since 2008, an area payment for sugar beet replaced the system of subsidies to processors and related system of guaranteed prices to sugar beet growers (discontinued in 2008). Export subsidies are still applied to processed dairy and wheat products. Some expenditures under this heading finance also general services to the sector such as marketing and product promotion. Improving the production base and social measures: spending includes direct support to farm investments, but also general services to the sector through infrastructure improvement and social measures.
In March 2017, the Swiss Parliament decided to extend, up to end 2021 and without any substantial changes (see domestic policy development part), the current framework, that had originally been implemented for the period 2014-17 (PA 2014-17). The main change in PA 2014-17, relative to the system of direct payments prior to 2014, was the replacement of general headage payments to ruminants by an area payment to pastures with a requirement for a minimal stocking density. Another important shift in the structure of payments was the suppression of general area payments and reallocation of payments more closely related to specific policy objectives complemented by transition payments to make the reform socially acceptable. Most of the animal welfare and agri-environmental payments from the previous period continue to be applied under the various main categories of the 2014-17 framework still in place. The environmental cross-compliance conditions continue to be applied within the new system of payments. Discussion on the policies to be applied from 2022 (PA 2022+) have already started among the Government and the stakeholders.
The Ordinance on Swissness (HasLV) came into force in 2017. It defines the criteria which have to be fulfilled in order to use the Label “Swiss” and the use of the label of the Swiss cross.
In the framework of the Paris Agreement on Climate Change, a key tool for achieving the statutory climate change targets used by Switzerland is the CO2 levy. It is an incentive tax and has been imposed since 2008 on fossil fuels such as oil or natural gas. This tool is combined with an Emission Trading System (ETS) which enables to reduce emissions where the costs are low. Switzerland wants to link its ETS to the EU scheme so that Swiss companies can participate in the larger and more liquid EU emissions market and benefit from the same competition conditions as EU companies. To this end, an agreement was signed with the European Union on 23 November 2017. Swiss Parliament approved this agreement on 22 March 2019 and accepted the necessary changes to the current CO2 Act. Up to now the Swiss agricultural sector is only partly affected by the current CO2 legislation as the levy is applied on fuels used to heat the glasshouses and heated barns for livestock.
In December 2017, the Swiss Federal Council revised its climate policy for 2021-30 for reducing Swiss emissions in 2030 by 50% compared to the 1990 level. Based on the Swiss climate strategy for agriculture, the proposed target is to reduce emissions in agriculture by one-third by 2050, this effort should contribute to a two-thirds reduction of emissions in the whole agro-food chain (this commitment includes reductions of emissions both at the production and consumption levels). The main activities contributing to this reduction are in the reduction of emissions from livestock production, application and management of fertilisers, soil preparation, reduction of the use of fossil energies and production of renewable energies by the sector. In the whole agro-food chain, the reduction of emissions is related to input industries, processing, but also to final consumption where change of diet and reduction of food waste may be the main drivers. Up to now, the remains unclear which policies will be applied to reach those objectives. In the farming sector, payments are provided supporting the use of technologies which are likely to contribute to the reduction of emissions.
