Structural effects of the new agricultural policy

The central thesis of this paper states that the new agricultural policy (since 1993)has initiated a structural change in Swiss agriculture that appears to be quite different from the past.This is due to the shift in income support from production quantity to factor input.It is characterised by the following structural change paradox:While the decrease in the total number of farms will continue to be retarded,the rate of decrease in the number of full-time farms is expected to accelerate greatly.The increase of the percentage of part-time farms is not surprising because it corresponds to the long-term trend.Paradox, however,is that the remaining farms on average don ‘t increase significantly in size.This can be explained by the following two causes:Firstly,the new agricultural policy increases profitability of low input cultivation at the expense of intensive production.Secondly,it contributes to the continuation of the strong intrasectoral competition for rented land.As a consequence,growth of surviving full-time farms remains restricted or economically not profitable.