Agricultural Policy Monitoring and Evaluation 2024

24. Switzerland

Main findings

Support to agriculture

Since the 1980s, Switzerland has undertaken gradual reforms to liberalise agricultural trade, resulting in moderate reductions in support to agriculture, which plateaued in the early 2010s. Support to producers as a share of gross farm receipts remains at 48% on average in 2021-23, more than three times the OECD average. However, the structure of support has changed, with direct payments replacing a substantial share of market price support (MPS).

MPS remains the main component of support, arising mostly from tariff rate quotas (TRQs) with high out-of-quota tariffs. MPS represented 41% of total producer support in 2021-23, down from 62% in 2000-02. Domestic producer prices were 43% above world prices on average in 2021-23. Large price gaps lead to substantial shares of Single Commodity Transfers (SCT) in commodity gross farm receipts for many products – notably poultry, eggs, and pig meat – while sugar benefits from direct budgetary support.

Switzerland provides significant direct payments to farmers, almost all of which are subject to environmental cross-compliance. The share of these payments in total support to producers increased from 38% in 2000-02 to around 60% in recent years, following the phase down of MPS. Direct support was reformed in 2014 towards more decoupled payments and mostly consists of area-based payments for agricultural land not tied to a specific commodity, payments to maintain farming in less-favoured areas, and payments to farmers who voluntarily apply additional environmental or animal-welfare-related practices.

Switzerland’s expenditures for general services (General Services Support Estimate, GSSE) rose from below 6% in 2000-02 to nearly 9% relative to production value in 2021‑23, which is among the highest proportion for countries covered in this report. Almost half of GSSE expenditure goes to the agricultural knowledge and innovation system.

Total support to agriculture (Total Support Estimate, TSE) fell as a share of Gross Domestic Product (GDP) from 2% in 2000-02 to less than 1% in 2021-23.

Key recent policy changes

Switzerland published its new Climate Strategy for Agriculture and Food 2050 in September 2023. This document confirmed previously announced targets and strategic orientations, including the 40% greenhouse gas (GHG) emissions reduction target for the sector by 2050, compared to 1990 levels, and the reduction by two-thirds of consumer emission footprint over the same time horizon, compared to 2020 levels. The related action plan also introduces mid-term objectives by 2030: reducing domestic agricultural emissions by 20% compared to 1990 levels and reducing the consumer footprint by 25% compared to 2020. In the area of food loss and waste in particular, the objective of a reduction by 50% of food waste by 2030 was also confirmed, with a longer-term reduction by 75% envisaged by 2050.

New agri-environmental payment programmes were introduced in 2023 with the aim to reduce the use of pesticides, promote functional biodiversity, increase soil fertility and lower GHG emissions. These represent a total of CHF 260 million (USD 290 million, i.e. 7% of the budgetary support to producers). This new expenditure has been compensated through reductions in other direct payments in the budgets 2024‑25.

In parallel, agri-environmental measures were adjusted to reduce the level of regulatory pressure on Swiss farmers. The 2030 reduction target for nitrogen losses, originally set at 20%, was revised down to 15%. The 2023 waiver from the obligation of setting aside 3.5% of cropland for the protection of biodiversity, was extended by one year. The share of cropland to be covered by crops for the eligibility to the direct payment on soil cover was reduced from 100% to 80% for annual crops.

After 16 years of negotiation, the EFTA-India Free Trade Agreement was signed in March 2024. This agreement, the first of its kind in Europe with the most populated country of Asia contains provisions on trade in industrial goods and in processed and unprocessed agricultural products, as well as other provisions, including on non-technical barriers to trade and sustainable development. Another new trade agreement was also concluded and signed between EFTA and the Republic of Moldova in June 2023.

Assessment and recommendations

• The Swiss strategic vision for agriculture puts an important emphasis on environmental sustainability, innovation, and reinforcement of know-how as parts of the agricultural policy. This approach is expected to support sustainable productivity growth. Still, unequal diffusion of innovation across territories hinders widespread adoption of new technologies. Despite a federal budget for agricultural research among the highest of the OECD relative to the value of production, total factor productivity growth remains below the OECD average.

• While Switzerland reduced its share of most-distorting producer support over the past decades, border measures and output-based payments remain among the highest in the OECD. Continued efforts to decouple income support from farm output would decrease food prices and reduce pressure on the environment. It would also support further innovation in the sector by encouraging farms’ competitiveness and diversification.

• Payments allocated to improved farming practices have helped to reduce environmental pressures. Shifting more budget towards enhanced production systems is a positive evolution for environmental and climate goals, provided it supports resource efficiency improvements and does not come at the expense of other sustainability objectives. The nitrogen surplus in the country is still twice the OECD average, and several measures aimed at increasing environmental ambition were put on hold or softened in 2023-24, including the reduction targets on nitrogen fertiliser application. A more results-based approach to policy design, combined with stronger regulations are likely needed to address this structural issue.

• The new climate strategy is a positive move towards more clearly endorsed targets for Switzerland’s agriculture, paving the way for enhanced adaptation and mitigation efforts. Research and innovation will play a key role in this area, with investments planned to adapt breeds and practices and better monitor climate and natural resources. Identifying new needs for structural improvement is a useful step, but has to generate concrete investments.

• The food systems perspective taken by the new climate strategy should help Switzerland achieve its sustainability objectives more consistently. The production mix of the agricultural sector needs to be reconsidered in light of its climate and environmental objectives, as livestock production, which accounts for the majority of agricultural output, remains the main driver of GHG emissions and is also the main contributor to the nitrogen and phosphorus surpluses. Self-sufficiency targets should be reconciled with these sustainability objectives, as exports of livestock products require further feed crop imports, which exacerbate soil nutrient imbalances.

Development of support to agriculture

Figure 24.1. Switzerland: Development of support to agriculture

Table 24.1. Switzerland: Estimates of support to agriculture

Million USD

	1986-88	2000-02	2021-23	2021	2022	2023p
Total value of production (at farm gate)	8 025	5 695	9 934	9 691	9 652	10 459
of which: share of MPS commodities (%)	62.80	57.98	62.43	63.91	62.66	60.73
Total value of consumption (at farm gate)	12 693	8 853	16 102	15 696	15 814	16 795
Producer Support Estimate (PSE)	6 842	5 035	6 590	6 768	5 841	7 160
Support based on commodity output	5 938	3 341	3 105	3 265	2 493	3 558
Market price support¹	5 911	3 123	2 690	2 847	2 088	3 137
Positive market price support	5 911	3 123	2 690	2 847	2 088	3 137
Negative market price support	0	0	0	0	0	0
Payments based on output	27	218	415	418	406	421
Payments based on input use	358	126	144	158	141	133
Based on variable input use	289	67	73	73	70	75
with input constraints	0	14	0	0	0	0
Based on fixed capital formation	46	53	72	86	71	58
with input constraints	0	0	29	47	34	5
Based on on-farm services	23	6	0	0	0	0
with input constraints	0	0	0	0	0	0
Payments based on current A/An/R/I, production required	392	564	1 191	1 094	1 054	1 424
Based on Receipts / Income	10	0	0	0	0	0
Based on Area planted / Animal numbers	382	564	1 191	1 094	1 054	1 424
With input constraints	217	540	1 141	1 044	1 007	1 372
Payments based on non-current A/An/R/I, production required	18	51	1 065	1 142	1 089	963
Payments based on non-current A/An/R/I, production not required	0	774	51	68	56	29
With variable payment rates	0	0	0	0	0	0
with commodity exceptions	0	0	0	0	0	0
With fixed payment rates	0	774	51	68	56	29
with commodity exceptions	0	0	0	0	0	0
Payments based on non-commodity criteria	0	58	792	790	764	821
Based on long-term resource retirement	0	0	0	0	0	0
Based on a specific non-commodity output	0	58	792	790	764	821
Based on other non-commodity criteria	0	0	0	0	0	0
Miscellaneous payments	137	120	242	251	244	231
Percentage PSE (%)	76.27	66.14	47.57	49.72	43.57	49.44
Producer NPC (coeff.)	4.34	2.41	1.43	1.48	1.33	1.49
Producer NAC (coeff.)	4.21	2.95	1.91	1.99	1.77	1.98
General Services Support Estimate (GSSE)	431	337	870	867	846	898
Agricultural knowledge and innovation system	110	70	420	421	410	429
Inspection and control	9	24	10	11	10	8
Development and maintenance of infrastructure	80	54	93	92	91	97
Marketing and promotion	29	37	72	71	68	77
Cost of public stockholding	66	32	55	50	54	61
Miscellaneous	137	120	220	222	213	226
Percentage GSSE (% of TSE)	5.43	6.11	11.68	11.35	12.64	11.14
Consumer Support Estimate (CSE)	-8 981	-5 011	-4 374	-4 663	-3 174	-5 284
Transfers to producers from consumers	-6 037	-3 223	-2 701	-2 877	-2 097	-3 128
Other transfers from consumers	-3 786	-1 985	-1 679	-1 797	-1 081	-2 159
Transfers to consumers from taxpayers	700	147	4	5	4	3
Excess feed cost	141	50	2	6	0	0
Percentage CSE (%)	-74.74	-57.56	-27.04	-29.72	-20.08	-31.47
Consumer NPC (coeff.)	4.39	2.43	1.37	1.42	1.25	1.46
Consumer NAC (coeff.)	3.96	2.36	1.37	1.42	1.25	1.46
Total Support Estimate (TSE)	7 973	5 519	7 464	7 640	6 691	8 062
Transfers from consumers	9 822	5 208	4 380	4 674	3 178	5 287
Transfers from taxpayers	1 937	2 296	4 764	4 763	4 594	4 934
Budget revenues	-3 786	-1 985	-1 679	-1 797	-1 081	-2 159
Percentage TSE (% of GDP)	4.17	1.89	0.89	0.94	0.82	0.91
Total Budgetary Support Estimate (TBSE)	2 063	2 396	4 774	4 793	4 604	4 925
Percentage TBSE (% of GDP)	1.08	0.82	0.57	0.59	0.56	0.56
GDP deflator (1986-88 = 100)	100	127	139	136	140	141
Exchange rate (national currency per USD)	1.58	1.64	0.92	0.91	0.95	0.90

Note: p: provisional. NPC: Nominal Protection Coefficient. NAC: Nominal Assistance Coefficient. A/An/R/I: Area planted/Animal numbers/Receipts/Income. 1. Market Price Support (MPS) is net of producer levies and excess feed cost. MPS commodities for Switzerland are: wheat, maize, barley, rapeseed, sugar, milk, beef and veal, sheep meat, pig meat, poultry and eggs.

Source: OECD (2024), “Producer and Consumer Support Estimates”, OECD Agricultural policy monitoring (database), https://data-explorer.oecd.org/.

Policy landscape

Main policy instruments

Policy objectives

Swiss agricultural policy falls under the framework of the Agriculture Act (AgricA) from 1998, which establishes the principles and instruments for the regulation of the sector. The AgricA aims to ensure that agriculture is sustainable and innovative. It focuses on 1) food security for the population; 2) conservation of natural resources; 3) preserving cultivated landscape; 4) decentralised occupation of the territory; and 5) improving animal welfare.

The key elements of the AgricA have been enshrined in the Swiss Federal Constitution (Art. 104). In 2017 a referendum led to the adoption of a new article on food security (Art. 104a), emphasising the need to guarantee the supply of food to the population through:

• safeguarding the basis of agricultural production, especially land

• adapting food production to local conditions and using natural resources efficiently

• ensuring that the agriculture and food sector meet the market’s needs

• building trade relationships that contribute to the sustainable development of the agriculture and food sector

• using food in a way that conserves natural resources.

The Constitution and the AgricA require securing sufficient long-term food supplies for the population, based on both domestic production and imports, and considering the entire value chain. This is achieved through specific measures developed within four-year budget and programme cycles.

Budgetary support

The current support programmes are defined by the agricultural budget for the period 2022-25 (AP 2022‑25). The budget allocation for agriculture has been rather stable in nominal terms over the past decade, at about CHF 3.4 billion (USD 3.8 billion) per year. The AP 2022-25 budget is 0.6% larger than the previous AP 2018-21 one, which itself was 1.7% below the AP 2014-17 budget.

Budgetary support to agriculture consists of three main elements, including direct payments, production and marketing expenditures, and support to improve the production base.

Direct payments to farmers target provision of basic food products, environmental services (landscape, biodiversity, sustainable use of resources) and animal welfare. These payments are subject to environmental conditions, with specific “ecological services requirements”.

Production and marketing expenditures mainly support dairy producers via three types of payments: (1) for milk processing into cheese; (2) for milk production without silage feed; and since 2019 (3) for milk and dairy product sales from the farm. In addition, area payments apply to oilseeds, protein crops, cereals (introduced in 2019) and sugar beet. Some expenditures under this heading are for general services to the sector, including marketing and product promotion.

Policies to improve the production base include direct support for on-farm investments as well as general support for infrastructure improvement, social aid to farmers, and advisory services, which were all initiated as part of the AP 2014-17 policy framework.

Following the abolition of milk quotas in 2009, the inter-branch organisation for milk, l’Interprofession du Lait (IP Lait), implemented standard milk delivery contracts for its members. These set different prices and volumes for milk delivery (contingents A, B and C). These contracts became compulsory for all milk producers in 2013, including those outside IP Lait. In effect, this replaced the previous production quota system with another production control mechanism implemented on a private basis. This scheme was extended in 2021 by the Federal Council (Switzerland’s federal government) and is still in place today.

Trade policy instruments

Agro-food imports to Switzerland are largely regulated by tariff rate quotas (TRQs) with relatively low in-quota tariffs and relatively high out-of-quota tariffs. These TRQs cover meat, milk, eggs and egg products, potatoes, fruits, vegetables, bread cereals and wine. Since 1999, an auction system allocates some of the TRQs or parts thereof to traders. A notable exception to the quota system is feed grains, which are subject to single tariffs. These are regularly adjusted depending on market conditions to stabilise feed prices for the livestock sector.

Preferential tariff rates apply unilaterally to imports from developing countries under the general system of preferences. The Swiss Government grants zero tariffs to all products from Least Developed Countries (LDCs), so agricultural imports from LDCs (according to the official UN definition) are duty- and quota-free since September 2009.

Export subsidies for primary agricultural products were eliminated by 1 January 2010. The remaining export subsidies for live horses and some processed products were abolished at the end of 2015 and 2018, respectively, following the Nairobi agreement in 2015. To compensate the impacts of that reform, additional payments to producers for commercial milk (AgricA Art. 40) and grain (AgricA Art. 55) were introduced.

Switzerland’s network of trade agreements consists of the European Free Trade Association (EFTA) Convention,1 the Free Trade Agreement with the European Union and 33 agreements in place with 43 countries, and two more recently concluded awaiting ratification. All these agreements were signed within EFTA, with the exception of agreements with the People’s Republic of China, Japan, the United Kingdom, and the Faroe Islands.

Climate change policies in agriculture

Switzerland set the goal in 2019 to reach climate neutrality by 2050 and defined specific commitments for emissions reductions in the agricultural sector. Since the Climate Strategy for Agriculture and Food 2050 was adopted in 2023 (see further below), an objective of agricultural emissions reduction of 40% by 2050 (compared to 1990 levels) has been confirmed.

The Climate Strategy for Agriculture and Food 2050 defines the action areas for specific mitigation objectives. These are in the livestock sector (breed, herd management, animal feed, animal building), the crop sector (crop and variety type, management practices), fertiliser management (application rate, storage and spreading), and energy consumption (building, machinery and renewable energy). Beside mitigation objectives for national production, an overall emissions reduction target by 2050 of two-thirds had also been set in 2011 for at consumer level, compared to 1990 levels. An intermediate target was introduced in 2021 with the 2030 Sustainable Development Strategy, which called for reducing the GHG emissions footprint of each food consumer (including imported food) by 25% by 2030, based on 2020 levels.

Several measures currently support climate mitigation in agriculture:

• A carbon tax on fossil fuels used to heat greenhouses and barns for livestock, as set out by the 2011 version of the CO2 Act. Transportation fuels are not subject to the carbon tax. Since 2022, the level of this tax has been at CHF 120 (USD 133) per tonne CO₂. Producers can opt out of the tax payment by submitting a long-term decarbonisation plan for their installations.

• A requirement for fossil fuel producers and importers to offset part of transport-related CO2 emissions through national emissions reductions projects. Domestic agricultural projects can contribute to these with investments in anaerobic digesters or fertilisation improvements.

• New measures were adopted in 2022-23, such as the new water quality plan setting a nitrogen fertiliser reduction target of 15% by 2030 and strengthened contributions to sustainable production systems through soil fertility improvement measures, higher use of organic fertilisers and longer productive lifetime for cows to reduce emissions per unit of output (see further below).

Adaptation to climate change is more specifically governed by the latest national Action Plan 2020‑25, released in 2020, that specifies measures for all sectors of the economy. This plan contains 75 adaptation measures, including 46 already initiated over a first programming period (2014-19).2 It clarifies what actions to undertake at federal, cantonal and communal levels, and lays out international collaboration channels to support climate adaptation. Some measures target agriculture specifically, while others have indirect implications in related domains (e.g. water management, biodiversity, human health, animal welfare).

Adaptation measures for agriculture, as defined in the successive adaptation plans, are organised around three axes: (1) adapting products, production systems, and production practices; (2) improving knowledge of adaptation possibilities; and (3) mitigating weather-related risks for production and prices. Work started with the following action tracks: optimised use of plants and suitable animal breeds, including pest management; enhanced use of land and water resources; data development for operations adapted to production sites; extension of monitoring and early-warning systems; and analysis of opportunities to support private risk-management. Initiatives are also in place to foster R&D, knowledge dissemination and innovation for climate action. These fund information platforms, association initiatives for climate protection in agriculture, or development of sustainability schemes.

Sustainable Development Goals

In 2021, the Federal Council adopted a 2030 Sustainable Development Strategy (SDS) and a related action plan, which was further updated in January 2024 to schedule measures for the period 2024‑27. The SDS identifies three priority themes with specific objectives for 2030: sustainable consumption and production; climate, energy and biodiversity; and social equity. For the transformation towards sustainable food systems, four targets were defined as part of the SDS Sustainable Consumption and Production theme:

• A 25% reduction of food GHG emissions footprint for Swiss consumers by 2030 compared to 2020 (described earlier).

• A share of one-third of the total population with healthy and sustainable dietary patterns by 2030, in line with the food pyramid (national dietary recommendations).3

• A reduction of 50% in food waste per capita by 2030 compared to 2017, and a substantial reduction in food losses along the supply chain.

• An increase by one-third by 2030 in the share of farms exceeding mandatory ecological services requirements in a verifiable manner, compared to 2020.

The SDS is also complemented by a National Pathway for Food Systems Transformation, developed in 2021 in co-ordination with stakeholders, that specifies more detailed measurable goals towards 2030, as well as concrete actionable measures.

Innovation for sustainable productivity growth

The Constitution and the AgricA provisions both emphasise the need to satisfy basic food supply while using natural resources efficiently and conserving them. For this purpose, the Federal Council lists the reinforcement of innovation and know-how throughout the food supply chain as part of the four action lines of its long-term strategy for agriculture, in its 2022 orientation report for the future of the sector. The SDS also identifies training, research and innovation as part of the four drivers supporting sustainable development for the Swiss economy as a whole, and research and innovation is given a key role in the National Pathways for Food Systems Transformation.

Productivity growth is expected to play an important role to support sustainability in agriculture according to the long-term strategic vision from the 2022 orientation report. More efficient use of inputs can contribute to achieve climate and other environmental objectives, and could help addressing some of the challenges faced by the country, such as the high nutrient imbalances. However, the country potential is hindered by disparities in performance across territories, and innovation in rural areas tends to focus more on incremental innovation in processes and less on product innovation in science and technology fields (OECD, 2022[1]).

Meanwhile, total factor productivity growth in Swiss agriculture remains relatively low, at 0.4% on average between 2012 and 2021, compared to 1.1% for the OECD average (see Key economic and agricultural statistics below). In the meanwhile, the federal budget dedicated to agricultural research more than doubled from CHF 73 million (USD 81 million) in 2000‑02 to CHF 190 million (USD 212 million) in 2021‑23, and it increased seven-fold, from CHF 23 million (USD 26 million) to CHF 160 million (USD 178 million) for knowledge transfer over the same period, mostly through support to university and specialised schools. A new regulation aiming at reinforcing collaboration between higher education institutions, research organisations and the private sector is currently in public consultation and should enter into force in 2025 to strengthen skills and innovation in the agriculture and food sector.

In 2023, the Swiss Office for Agriculture also identified, at the request of the Swiss Parliament (National Council), the key future investments needed for the sector to remain both competitive and sustainable in its “Strategy on Structural Improvement 2030+” report. Beside usual investments into agricultural buildings and infrastructure, the analysis identified the need to ramp up federal investments in irrigation and soil quality, as well as climate, environmental and animal welfare, from CHF 2 million (USD 2.2 million) today to CHF 44 million (USD 48million) by 2040. Additional investments would also be needed in the form of public credits.

Innovation in production technologies

Digitalisation in agriculture has been identified as a key driver for future productivity gains, as highlighted by the 2018 Charter on Agriculture and Food Chain Digitalisation and the Digital Switzerland Strategy and its action plan. The adoption of digital technologies by farmers has been mixed and still has strong potential for further development (Groher, Heitkämper and Umstätter, 2020[2]). To better monitor the use of fertilisers and pesticides, the Swiss Office for Agriculture launched in 2023 its data platform digiFlux, on which all farmers will be required to report their chemical products use as from 2026. Digital transformations also relate to the improvement of market efficiency. In December 2023, Switzerland deployed a new public platform to provide further transparency on trends in agricultural and food market volumes and prices.

To foster the use of new seeds and breeds, Switzerland launched its second call for projects on crop breed selection in December 2023, implementing its Crop Selection Strategy 2050. An emphasis is given on crop breeds resistant to pests and resilient to climate change. Since January 2023, new financial support (CHF 30 000, or USD 33 400, per ha) is also provided to viticulturists to use new breeds resisting better to diseases, with a view to reduce the use of pesticides. In October 2023, the Federal Council also laid out the guidelines for the preparation of new legislation to be submitted for consultation in 2024 on the use of crop seeds created through new breeding techniques.

Environmental protection and sustainability

New water-quality measures in place since 2023 include a ban on high‑risk pesticides, more-restrictive spraying rules, and adjustments in direct payments to disincentivise pesticide use. These measures support the goal of reducing pesticide-related risks by 50% by 2027. The Swiss Office for Agriculture also published in 2023 several guidance documents for farmers and project promotors to better preserve water quality and improve the efficient use of fertilisers.

Targeted projects oriented towards improvement of environmental practices have been identified as key tools to support sustainable productivity growth, notably under the Swiss Programme on Sustainable Use of Resources. This programme, in place since 2014, had funded a total of 52 projects by the end of 2022. The support allocated to this programme in 2022 was CHF 28.6 million (USD 31.8 million), mostly oriented towards better soil and water protection, reduction of chemical use, and reduction of GHG and other air pollutant emissions. For instance, the two most recently launched projects, Lait KlimaStaR and RISC, are both oriented towards more climate-friendly practices for participating farms, through a better management of grass-based dairy cattle, and more sustainable cropping soil management practices, respectively. In 2023, 18 projects under this programme were still active, representing a total investment of CHF 136 million (USD 151 million) over their lifetime.

Domestic policy developments in 2023-24

Environmental measures

Several new forms of direct support to farmers entered into force in 2023 in the context of the contribution to production systems, aiming to help by reducing the use of pesticide, promoting functional biodiversity, increasing soil fertility and reducing greenhouse gas emissions. The good uptake of these programmes, supporting direct forms of more sustainable production practices, generated an additional support of CHF 260 million (USD 290 million), representing 7% of the total budgetary support to producers. To keep a balanced budget in 2024-25, the Federal Council decided to reallocate CHF 100 million (USD 111 million) previously devoted to support food security, biodiversity and animal welfare.

In 2023, several adjustments to agri-environmental measures were made to reduce the level of regulatory pressure on Swiss farmers. This follows previous decisions in 2022 to put new environmental regulations on hold until 2024 due to the difficult market conditions, notably as a consequence of Russia’s war of aggression against Ukraine. Among new adjustments announced in 2023:

• The target of 20% of reduction in nitrogen losses by 2030, set in 2022 in the context of the new water quality legislation, was revised down to 15%. The objective of reduction remains set at 20% for phosphorus losses, however.

• The 2023 waiver from the obligation of setting aside 3.5% of cropland for the protection of biodiversity was extended by one year and is set to end in 2025.

• The threshold on the share of soil to be covered for the eligibility to the direct payment on cropland soil cover was reduced from 100% to 80% for annual crops.

Adjustments of existing support schemes

In April 2023, the Federal Council revised the ordinance on livestock rearing. In particular, the support to the conservation of traditional breeds of cows was increased by CHF 3.9 million (USD 4.3 million).

In November 2023, additional measures were adopted by the Federal Council for 2024, through its annual set of ordinances under the AgricA. These include:

• A complementary payment for farms practicing pasture summering to protect cattle from predators.

• The inclusion of farmland partly equipped with photovoltaic panels among agricultural land eligible for direct payments.

Food systems resilience

In June 2023, Switzerland ended its policy of strategic reserves release of fertilisers, activated in 2021 amid supply difficulties on international markets. The country however opened discussion in November 2021 for the adaptation of its strategic reserve policy and further follow-up public consultations are scheduled in 2024 on this issue in relation to food security.

In February 2024, several food market regulations were revised to strengthen the labelling of products as to their origin (bakery products), to reduce the use of wrapping material and to facilitate the donation of food left-overs from retailers and restaurant to charities with a view to reducing food waste.

Policies to mitigate emissions from agriculture

In September 2023, the new Climate Strategy for Agriculture and Food 2050 was released by the Federal Office of Agriculture, jointly with the Federal Office for the Environment, and the Federal Office for Food Safety and Veterinary Affairs. This document, which replaces the previous Climate Strategy for Agriculture from 2011, confirms previous targets and strategic orientations from the future orientation of the agricultural policy published in 2022. This includes the 40% emissions reduction target for the sector by 2050, compared to 1990 levels, and the reduction by two-thirds of consumer emission footprint by the same year, compared to 2020 levels. These targets have to be achieved while maintaining a self-sufficiency of at least 50% for the country.

The action plan accompanying the strategy introduces mid-term objectives by 2030: reducing domestic agricultural emissions by 20% compared to 1990 and reducing consumer footprint by 25% compared to 2020. The plan includes 42 measures, 25 of which have already started, and covering both the production and the consumption sides. These fit within eight areas of action: sustainable consumption, waste reduction, sustainable trade, optimal production mix, better nutrient management, water resource protection, soil quality conservation, and more efficient energy use. In the area of food waste reduction, in particular, the SDS objective of reduction by 50% of food waste is confirmed, with a longer-term reduction by 75% envisaged by 2050.

Trade policy developments in 2023-24

After 16 years of negotiation, the EFTA-India Free Trade Agreement was signed in March 2024. With this agreement, EFTA countries are the first in Europe concluding a trade partnership with the South Asian country. The agreement contains provisions on trade in industrial goods and in processed and unprocessed agricultural products. Other provisions relate to technical barriers to trade, sanitary and phytosanitary measures, rules of origin, trade facilitation, trade in services, investment promotion, protection of intellectual property, competition, public procurement (development clause), dispute settlement and trade and sustainable development.

The EFTA-Moldova Free Trade Agreement was signed in June 2023 to foster economic exchanges and co‑operation between the four countries of the free trade zone and Moldova. Key areas of focus for the agreement are trade in industrial products, as well as agro-food products (including sea products), technical barriers to trade, sanitary and phytosanitary measures, rules of origin, trade facilitation, trade in services, investments, intellectual property rights, competition, public procurement, conflict arbitration and sustainable trade.

In January 2024, the EFTA states concluded negotiations on the modernisation proposal of the trade agreement with Chile, in place since 2004. The new agreement, to be signed in June 2024, includes an extended access to goods, strengthened clauses related to sustainable trade, financial services, small and medium enterprises, and digital trade. It also plans for a better recognition of geographic indications. In March 2023, Switzerland published a list of 157 recognised geographic indications for Chilean products.

In October 2023, Switzerland used temporary adjustments to its tariff rate quotas to address conjunctural market shortages. The in-quota volume for eggs was increased by 5 500 tonnes or 31% until the end of 2023. The butter in-quota volume was raised by 500 tonnes (for an annual consumption of around 40 000 tonnes).

Policy context

Key economic and agricultural statistics

Switzerland is a small economy with high GDP per capita, that had experienced low and periodically negative inflation until the 2022 global inflation surge with unemployment rates below 5% over the past two decades. GDP growth has been stable at around 2% prior to the COVID-19 pandemic, and following a high-growth recovery period in 2021, it resumed in 2023 with growth rates below pre-crisis levels.

The relative importance of agriculture in the Swiss economy is low, accounting for just 0.6% of GDP and around 2.3% of employment. The farm structure is dominated by relatively small family farms. Hills and mountain farming areas (including alpine summer pastures) are used for extensive milk and meat production, while more intensive pork and poultry production is located in valleys. Agricultural land covers 36% of the country area and is composed mostly of grassland, with arable land representing only 26% of agricultural land. Crop production has shifted away from traditional arable crops (grains, oilseeds) towards an increasing production of fruits and vegetables over time.

Table 24.2. Switzerland: Contextual indicators

	Switzerland		International comparison
	2000*	2022*	2000*	2022*
Economic context			Share in total of all countries
GDP (billion USD in PPPs)	264	743	0.7%	0.5%
Population (million)	7	9	0.2%	0.2%
Land area (thousand km2)	40	40	0.00%	0.00%
Agricultural area (AA) (thousand ha)	1 566	1 499	0.1%	0.1%
			All countries1
Population density (inhabitants/km2)	180	219	52	64
GDP per capita (USD in PPPs)	36 352	84 593	9 363	25 965
Trade as % of GDP	29.2	46.2	12.3	16.6
Agriculture in the economy			All countries1
Agriculture in GDP (%)	1.1	0.6	2.9	3.8
Agriculture share in employment (%)	4.6	2.3	-	-
Agro-food exports (% of total exports)	2.4	2.7	6.4	8.0
Agro-food imports (% of total imports)	5.2	4.4	5.8	6.9
Characteristics of the agricultural sector			All countries1
Crop in total agricultural production (%)	50	43	-	-
Livestock in total agricultural production (%)	50	57	-	-
Share of arable land in AA (%)	26	26	32	34

Note: *or closest available year.

1. Average of all countries covered in this report.

Sources: OECD statistical databases; International Labour Organization (ILO); UN Comtrade; World Bank, WDI; FAO database and national data.

Switzerland has consistently been a net agro-food importer, with USD 15.6 billion of total imports of agro-food products in 2022, compared to USD 10.8 billion for its agro-food exports. Swiss agro-food exports consist mostly of processed products for final consumption (86% of total agro-food exports). This category also represents almost half of the agro-food imports (Figure 24.5).

Total factor productivity (TFP) growth in agriculture has been 0.4% between 2012 and 2021. However, both the use of intermediary inputs (-0.1%) and primary factors (‑0.6%) decreased. As a result, overall output has declined over that period.

Swiss agriculture is largely rain-fed. Swiss farmers irrigate only 3.3% of their agricultural land and the share of agriculture in the country’s water abstraction (8%) is less than one-sixth of the OECD average. In addition, the water stress indicator is well below the OECD average. Agriculture’s share of energy use went down as well and is less than a third of the OECD average. On the other hand, while nutrient surpluses have declined moderately, the surplus of nitrogen (59 kg/ha for N) is still twice the OECD average, which negatively impacts water quality and GHG emissions. Swiss agriculture emissions amounted to 5.9 MtCO₂eq in 2021 (13.1% of national emissions), not counting emissions from energy consumption in agriculture, forestry and fisheries (0.6 MtCO₂, i.e. 1.4%). This places the country above the OECD average. While the LULUCF sector in Switzerland is a net sink, thanks to forest management (‑2.3 MtCO₂ per year since 1990), cropland and grassland also emit together an average 0.7 MtCO₂ (1.5% of the national emissions) due to changes in soil carbon.

Table 24.3. Switzerland: Productivity and environmental indicators

	Switzerland		International comparison
	1991-2000	2012-2021	1991-2000	2012-2021
			World
TFP annual growth rate (%)	0.0%	0.4%	1.7%	1.1%
			OECD average
Environmental indicators	2000*	2022*	2000*	2022*
Nitrogen balance, kg/ha	63.0	59.4	32.1	28.2
Phosphorus balance, kg/ha	2.8	3.5	3.3	2.3
Agriculture share of total energy use (%)	0.6	0.6	1.7	2.0
Agriculture share of GHG emissions (%)	11.4	13.1	8.7	10.1
Share of irrigated land in AA (%)	2.8	3.3	-	-
Share of agriculture in water abstractions (%)	..	8.0	47.0	49.5
Water stress indicator	4.9	3.8	8.7	..

Note: * or closest available year.

Sources: USDA Economic Research Service, Agricultural Productivity database; OECD statistical databases; FAO database and national data.

Historical trends in agricultural policies

Until the early 1990s, Swiss agriculture was largely isolated from world markets, due to high trade barriers and strong domestic market regulations. Substantial reforms of agricultural policy were implemented in the mid-1990s and early 2000s. These were prompted by commitments made under the GATT and later the WTO. There have been no systematic policy reforms since 2013, and current schemes are expected to extend until at least 2025.

The reforms implemented between 1993 and 2003 had three main elements:

1. Reduced barriers to imports and greater transparency in border measures, gradual removal of price guarantees and other market regulations, maintenance of production quotas for milk, and introduction (in 1998) of new market regulations for sugar.

2. New direct payments less coupled to production, and voluntary ecological direct payments linked to ecological services (1993-1998).

3. Cross-compliance requirements connecting almost all direct payments to proof of ecological performance as of 1999.

Between 2004 and 2013, policy reforms were comparatively modest and focussed on deregulation of agricultural markets. Export subsidies were phased out, and milk quotas were abandoned in 2009 even though the market remained strongly regulated.

In 2013, a new Agricultural Policy framework for 2014-17 (AP 2014-17) reformed the system of payments (OECD, 2015[3]). This framework was extended since then and is still in place today. The direct payment scheme was modified under this reform to improve its efficiency and effectiveness and create links to specific agricultural practices (OECD, 2017[4]).

Strengthening of the environmental modalities (regulations on pesticide and nutrient surpluses, cross-compliance requirements and budgetary support to sustainable practices) has been considered in the context of the latest reform discussions for the Swiss Agricultural Policy beyond 2022 (AP22+). Although the reform process was suspended, the future orientation of the agricultural policy, published by the government in 2022, set new milestones for policy reform, and some first environmental measures started to be implemented.

Table 24.4. Switzerland: Agricultural policy trends

Period	Framework	Changes in agricultural policies
Prior to 1993	Closed market	High border protection; regulated prices and interventions in domestic agricultural markets Payments based on output and input use; commodity-specific area and headage payments
1993-1998	Reforms to open up markets New system of direct payments	Reduced import barriers; enhanced transparency Reduction of export subsidies for some agricultural and processed products Reduction of domestic market regulations except for milk (production quotas); introduction of sugar production quotas and guaranteed prices Creation of General Direct Payments, including: - Complementary Direct Payments based on area (arable and grassland) and other supplementary payments - Payments for integrated production - Payments for farming in difficult conditions Introduction of Ecological Direct Payments as voluntary schemes based on environmental services provided by farmers (biodiversity, landscape, animal welfare, etc.), and incentives for more sustainable use of resources and pollution reduction
1999-2004	Continuation of reforms to open up markets Changes in the system of direct payments	Further gradual reduction of import barriers Reform of the General Direct Payments; Complementary Direct Payments replaced by a general Area Payment not requiring production of particular crops; introduction of a general payment for ruminants Abolition of payments for integrated production Introduction of environmental cross-compliance; all direct payments conditional to a proof of ecological requirements
2005-2013	Abolition of export subsidies Removal of production quotas (dairy, sugar)	Further gradual reduction of import barriers Abolition of export subsidies for primary agricultural products (2010) Abolition of dairy quotas and related guarantee prices for milk (2009) Abolition of sugar market regulations and introduction of area payments for sugar-beet to compensate for related price reductions (2009)
2014-present	Reform of the general direct payments	Reform of the system of General Direct Payments (2014) Abolition of general area payments Reallocation of payments related to specific agricultural practices Introduction of transition payments to make the reform socially acceptable Replacement of general headage payments to ruminants with area payments to pastures with a minimum stocking density Continuation of environmental cross-compliance conditions within the new system of payments Abolition of remaining export subsidies for some processed products (1 January 2019) New payments to producers of commercial milk and grains to compensate for price reductions due to the abolition of export subsidies for processed products (2019)

Support to farmers declined from close to 80% of gross farm receipts in the late 1980s but remained high at 48% on average during 2021‑23. Potentially most production- and trade-distorting support (mainly market price support) also declined from around more than 90% to some 48% of producer support between 1986-88 and 2021-23, while other payments grew.

References

[2] Groher, T., K. Heitkämper and C. Umstätter (2020), “Nutzung digitaler Technologien in der Schweizer Landwirtschaft”, Agrarforschung Schweiz, Vol. 11, pp. 59-67, https://doi.org/10.34776/afs11-59.

[1] OECD (2022), “The agricultural innovation system in Switzerland”, in Enhancing Innovation in Rural Regions of Switzerland, OECD Publishing, Paris, https://doi.org/10.1787/fda0a725-en.

[4] OECD (2017), “Reforming agricultural subsidies to support biodiversity in Switzerland: Country Study”, OECD Environment Policy Papers, No. 8, OECD Publishing, Paris, https://doi.org/10.1787/53c0e549-en.

[3] OECD (2015), OECD Review of Agricultural Policies: Switzerland 2015, OECD Review of Agricultural Policies, OECD Publishing, Paris, https://doi.org/10.1787/9789264168039-en.

Notes

← 1.  EFTA currently comprises four countries: Iceland, Liechtenstein, Norway and Switzerland.

← 2.  In 2020, the Swiss Government found that 14 of the 63 measures in the first adaptation plan were fully completed, 28 were in advanced implementation, 19 were in the initial phase of implementation, and 2 were on hold.

← 3.  This target is an intermediate milestone for a long-term ambition of the whole population adopting a healthy and sustainable diet by 2050.