Federal Department of Economic Affairs DEA Federal Office for Agriculture FOAG Welcome in Switzerland Welcome in Bern

2 Swiss Agriculture mat/zaj Contents: Swiss agricultural policy Information about the FOAG Agriculture in Switzerland Facts / statistics Agricultural policy: aims, instruments Agricultural reform: stages Direct payments Concept, conditions Importance Types Future challenges

3 Swiss Agriculture mat/zaj The Federal Office for Agriculture An office of the Federal Department of Economic Affairs The competence centre for the agricultural sector Implementing the measures together with the cantons Working out new concepts Evaluating the instruments of the agricultural policy Employees: about 235 (full time) 3 research stations with about 855 employees (full time) Budget: 3.6 billion CHF (including research)

4 Swiss Agriculture mat/zaj Research Station: Agroscope AgroscopePosieux-Liebefeld Stud Farm Avenches AgroscopeReckenholz-Tänikon AgroscopeWädenswil-Changins ART: production systems in plant and animal production, agricultural technology ALP: animal production, feedstuffs, foodstuffs of animal origin AWC: plant science, plant pro ducts FSFM: conservation and pro- motion of the Freiberger, the Swiss light cold blood horse

5 Swiss Agriculture mat/zaj Switzerland in Europe (EU 27)

6 Swiss Agriculture mat/zaj 23 or 26 Swiss Cantons

7 Swiss Agriculture mat/zaj Switzerland in the Alpine Space Alps, total surface: 19 million ha Swiss part: 2.5 million ha Alps, total population: 13.2 million inhabitants Swiss part: 1.63 million inhabitants

8 Swiss Agriculture mat/zaj Swiss Mountain Regions 2/3 of the surface 1/4 of the population 20 of 26 cantons 1200 of about 2800 municipalities highest point: 4’634 m (Mt Rosa) lowest point: 196 m (Locarno) Alps Jura Swiss Plateau Regions of Switzerland

9 Swiss Agriculture mat/zaj Zones of agricultural production Lowland (field cropping) Hills Mountain zones I to IV Summering Lakes

10 Swiss Agriculture mat/zaj Utilised agricultural area : 1 million ha Farms: about 62'000 (60% as principal activity) 56% in hills and mountain region Average surface: 17 ha Structural change : annual decrease of 2.5%* Labour force: 3.1% Part of the GDP: 1.1% Main produce: milk, meat Degree of self-sufficiency (cal): 65% (gross) Import / export: EU (principal partner) Federal public spending (2007): 3.6 billion CHF (6,7% of the federal budget; 1990: 7,9%) Swiss agriculture: some facts * = a year

11 Swiss Agriculture mat/zaj Arable farming (excl. maize for silage) 234'000 ha / 23 % Natural pasture and meadows 625'000 ha 59 % Fruit, vegetables 16‘000 ha / 2 % Vineyards 13'000 ha / 1 % Temporary pastures, fodder plants (incl. maize for silage) 162’000 ha / 15 % 1 million hectares Agricultural land use: utilised agricultural area 2005

12 Swiss Agriculture mat/zaj Producer prices in the EU in relation to Switzerland Milk Cattle Veal Porc Poultry Eggs Wheat Barley Grain maize Sugar beet Potatoes Rapeseed Apples Pears Carrots Onions Tomatoes Standard basket

13 Swiss Agriculture mat/zaj Swiss agricultural policy: aims, tasks The Confederation shall ensure that agriculture contributes substantially …: a. to the secure supply of the population; b. to the conservation of national resources and; c. to the upkeep of rural scenery; d. to a decentralized inhabitation of the country. Multifunctional agriculture enshrined in the Federal Constitution applies also to the alpine farming WTO: non-trade concerns OECD: comprehensive analysis

14 Swiss Agriculture mat/zaj Improvement of infrastructure and of general production conditions land use planning, land and land rental laws; structural and land improvements; research, training, extension Production and sales customs protection (WTO), market support, sales promotion labelling (register) Direct payments general direct payments ecological direct payments (direct payments as social policy) Instruments of the agricultural policy

15 Swiss Agriculture mat/zaj till 1992: till 1992: agriculture under State control: prices and sales guarantee 1992: 1992: beginning of the reform : : first stage development of the direct payments 1996: 1996: new article of the Federal Constitution : : second stage (AP 2002) less public intervention 2004: 2004: third stage (AP 2007) milk quotas: till end 2009 improving the structures 2007: 2007: fourth stage (AP 2011) remaining market support  direct payments Agricultural Reform: Stages

16 Swiss Agriculture mat/zaj Development of the agricultural policy till now Stage 1  Product-independent direct payments  Price reductions  Incentives for particular ecological services  Adaptation of customs protection (WTO) Decoupling: „more ecology“ Stage 3  Abolition of the milk quotas  Auctioning of the meat import quotas  Structural improve- ments and social flanking measures Market: „more competitiveness“ AP 2007 Stage 2  Abolition of prices and sales guarantees  Abolition of semi public market organisations  Direct payments: proof of ecological performance Deregulation: „more market“ AP th Agricultural Report: SUSTAINABILITY and COMPETITIVENESS

17 Swiss Agriculture mat/zaj Stage 4  Secure public goods with direct payments  Still improve competitiveness  Facilitate structural change  Reduce the customs protection (WTO? Free trade agreement CH-EU) Market: „challenges and promotes“ AP 2011 Stage 6  ? Stage 5  ? Development of the agricultural policy: future?  Competitiveness  Relation to EU  Border shopping  Strategy: competitiveness increase through/despite:  less border protection  less domestic subsidies  no export subsidies

18 Swiss Agriculture mat/zaj / Million CHF Struct. improvements, research… Production and salesDirect payments Development of the direct payments since 1990/92

19 Swiss Agriculture mat/zaj 72 % of the FOAG budget: principal instrument of the agricultural policy remuneration for the public interest services (multifunction) compensation of the difficult conditions in the mountains decoupling of the prices and incomes policies integration of the ecological concerns, incentives conditions concerning structure and ecology WTO-compatible (Green-Box  subsidies must not distort trade, or at most cause minimal distortion) Direct payments: general remarks

20 Swiss Agriculture mat/zaj a. balanced use of fertilisers b. ecological compensation surfaces (min. 7%) c. regular crop rotation d. soil protection e.targeted use of plant protection products f.animals protection Proof of ecological performance (PEP) Other conditions a. minimal labour force (0.25 standard manpower units) b.age limit c.professional qualification e.income and holdings limits Direct payments: legal conditions

21 Swiss Agriculture mat/zaj Types of direct payments (2006) General direct payments for surfaces per hectare herbivores per animal / LU* declivity (hills and mountains) per hectare livestock farmers (hills and mountains) per LU* ecological direct payments for organic agriculture per hectare extensive plant production per hectare ecological compensation surfaces per hectare / tree animal friendly stablesper animal / LU* regular outdoor exercise for livestockper animal / LU* summering per animal ecological quality: connection of surfaces per hectare water protection measuresper hectare 2’ ’007 * livestock units; **sanctions - 25** million CHF

22 Swiss Agriculture mat/zaj TotalLowland HillsMountains Sample of farms (number) Average farm surface (ha) General DP (CHF) Ecological DP (CHF) Total DP (CHF) Turnover (CHF) DP in turnover (in %) Direct payments: importance in regions (2006) 3’2711’ ’48632’31637’26849‘995 7’9998’8838’1176’405 46’48441’19945’38656’ ’795272’530209’031168’ Agroscope ART

23 Swiss Agriculture mat/zaj Spatial policies Mountain region Agriculture* Land planning * Financial equalisation Transports Environment, NHG 1 Tourism, Craft industry Cantonal economic promotion Regional policy* Forestry* * 1 Nature and Cultural Heritage Protection Act

24 Swiss Agriculture mat/zaj Future challenges for the agriculture Irrespective of the issue of the WTO negotiations: the pressure remains! Improving competitiveness Multifunction remains the principle in force (constitutional task) Free trade with the EU: working out of the flanking measures Debate on budget: reductions Better coordination and cooperation with other policy sectors

25 Swiss Agriculture mat/zaj Producer prices in the EU in relation to Switzerland Milk Young bulls PigsChickens Wheat 1 st class Barley Grain maize Potatoes Carrots Index (CH = 100) Ø (Sept.)

26 Swiss Agriculture mat/zaj Thank you and enjoy your meal Your Swiss Agricultural Product