Structural change in support of future-orientated mountain agriculture

Structural change has become a central theme in debates on agriculture and, at the same time, is likewise getting more and more attention at the regional policy level. Regardless of the particular position supported, discussions focus mainly on the extent of structural change that is necessary, from a long-term point of view, to ensure that agricultural policy objectives are achieved and that farms remain profitable enterprises. This issue becomes even more relevant in view of the anticipated decline in commodity prices coupled with constant production costs and direct payments that are held at the present level, or even reduced. This article uses an agricultural sector model to investigate the structural development of the agricultural sector in the Swiss Alpine region. The main result reveals that any decline in commodity prices without an associated reduction in structural costs must inevitably lead to an increase in the degree of structural change required to maintain agricultural revenue at current levels. Hence, to ensure economic competitiveness, the number of farms and, more particularly, the agricultural labour force, must be reduced even further. Consequently, agriculture’s contribution to decentralised settlement will, and indeed must, shrink even more in future.