Economic situation of Swiss agriculture

The Institute of Agricultural- and Food Economics at ETH Zurich analyzes the economic state of Swiss Farms on a periodical basis. The study consists of a performance analysis, and the investigation of stress of competition under a hypothetical adjustment of prices to EU levels. The performance decreased slightly between 2000 and 2004, which was mainly due to declining prices for agricultural products. Especially the increased engagement in activities closely related to agriculture such as tourism, contract labor, direct marketing as well as leasing of buildings and machines prevented further declines in performance. Hypothetical stress in competition increased slightly, since the difference between Swiss and EU prices for farm products widened. Especially crop farms would come under pressure, as their market prices benefit to a larger degree from boarder protection. For lower performing diary farms in hilly and mountainous regions, the pressure is limited because of higher levels of federal direct payments. The study reveals big differences in the economic situation of particular farms even though production conditions are almost identical. Better performing farms have a higher productivity (for instance through the substitution of manual labor through assets in diary farming), and – especially in crop farming- leverage a higher utilization of production equipment.