Despite the current challenges of e.g. the war in Ukraine and climate change, the Swiss food sector is relatively resilient. This is the conclusion reached by Agroscope’s report on behalf of the Swiss Federal Office for National Economic Supply.
Switzerland is highly dependent on imported foodstuffs and production inputs (e.g. energy, fertilisers, plant-protection products, and in some cases seed, machinery etc.). To keep track of events and trends in the food sector that could potentially impact supply, Agroscope publishes an annual report on behalf of the Federal Office for Economic Supply FONES. This version is based on analyses of the literature as well as on an internal expert survey conducted in the Nutrition Division of the FONES and illustrates the situation as of mid-2022. If additional supply-related events were to occur in the current, already tense situation (e.g. large-scale harvest losses owing to extreme weather events, prolonged logistics breakdown or significant cyber-attacks on critical infrastructure), the situation would have to be reassessed.
Food supply of many poorer countries at risk
On a global level, food-production trends up to mid-2022 were quite positive. Growing conditions were relatively favourable in many regions of the world. However, the war in Ukraine led to export shortfalls and accelerated price increases for both foodstuffs and agricultural production inputs such as energy sources and fertilisers. This in turn aggravated food-supply problems in many poorer regions of the world, with the Ukrainian-and-Russian-grain-dependent countries in North Africa and the Middle East being particularly hard-hit.
In Europe, although climate trends such as drought adversely affect agricultural production, the risk to the food supply is low owing to the high degree of self-sufficiency. Even so, in light of the increasing risks, the EU has taken various measures to secure supply such as enhanced situation monitoring and the setting up of the European Food Security Crisis Preparedness and Response Mechanism (EFSCM). In addition, measures designed to cushion the impact of rising food prices are being taken in individual member countries.
Swiss food prices are also rising
In Switzerland too, it is safe to assume that rising production costs in agriculture and in the food-processing industry mean that consumers will be affected by persistent price increases for foodstuffs. Because of high Swiss purchasing power and the stable availability of agricultural products on the global market, supply is not conceivably at risk as of mid-2022. Nevertheless, the following uncertainty factors call for close monitoring of how the current situation develops:
- Only a small percentage of the food and production inputs imported into Switzerland come directly from Ukraine or Russia. Even so, further cost and price increases as well as supply shortages in certain segments (e.g. replacement parts for machinery, additives for the processing of raw products) cannot be ruled out.
- The Swiss agriculture and food sector is highly dependent on imported production inputs and on functioning infrastructures (e.g. provision with energy as well as information and communication technologies). In the worst-case scenario, adverse effects in an important area can lead via cascade effects to severe shortage situations in individual sectors.
- Sharply rising prices jeopardise food security, especially for people in the world’s poorest countries. The economic or political upheavals triggered by this can also affect supplies to Switzerland, however.
- Hot, dry summers will likely occur more frequently in Switzerland. As a result, increasingly variable crop yields are to be expected.
- Global food security is decreasing, and could remain at lower levels.
- The challenges along the supply chain of ensuring an adequate food supply for the Swiss population will increase.
- Anticipating and ensuring preparedness for potential severe shortages in Switzerland poses major challenges.
- Despite the challenges, the resilience of the Swiss food sector is relatively high. Cooperation between industry and the State as well as international cooperation remain exceptionally important.