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This report examines agricultural policies in Switzerland and makes recommendations concerning the role of regulations, reducing trade barriers and export subsidies, reducing direct payments to farmers and increasing incentives to produce high quality products at competitive prices, implementing regionally differentiated policies, and addressing sustainability of resources and animal welfare.

This chapter draws conclusions concerning the reforms using the principles and operational characteristics established by Ministers for the evaluation of reform efforts across the OECD. It also where appropriate, makes recommendations concerning the continuing search for policy measures that are effective and minimally distorting, while contributing to the achievements of the objectives set by the society to the agricultural sector.

This chapter evaluates strength and weaknesses of the Swiss food industries and their competitiveness on domestic and EU markets. The competitiveness of the industry is assessed by several industry indicators such as global turnover, labour productivity and international trade indicators. Selected EU countries are used as a benchmark to assess the competitiveness of the Swiss agro-food sector as a whole and for selected agro-food branches.

This chapter assesses the impact of Swiss agricultural policy reforms on the economic and environmental performance of agriculture. OECD Policy Evaluation Model (PEM) is used to explore the impacts of policy reforms on production, trade and farm income. This Chapter also attempts to assess the environmental impacts of policy reforms, such as impacts on nutrient balances and surpluses, greenhouse gas emissions and biodiversity, making use of OECD environmental indicators and other data sources. Given the importance of sustainability and landscape objectives of the agricultural policies, the study also explores the use of PEM to assess the environmental impacts of agricultural and agri-environmental policies by incorporating spatial heterogeneity.

This chapter provides an overview of the agricultural situation in Switzerland and the contextual information concerning the environment in which the agriculture sector operates and agricultural policies are implemented. This part focuses in particular on the role of agriculture in the economy, structural characteristics, and economic and environmental performance.

This chapter describes the agricultural policy reforms implemented since the mid-nineties. The chapter outlines the driving principles of the policy reforms including motivations and changes in priorities, and discus the reform process such as sequencing and consensus building. The chapter also analyses the developments in the level and composition of support to agriculture resulting from the agricultural policies implemented within the analysed period. This analysis relies mainly on the PSE/CSE/GSSE and related indicators.

Agriculture plays a relatively minor and declining role in the Swiss economy, its share in gross domestic product is below 1% and the share in employment is around 4%. But the sector is perceived as an important element in maintaining food security, and as a provider of positive externalities such as environmental benefits and maintenance of cultural landscapes, which are highly valued by Swiss society. Much, but not all, of Swiss farming occurs in difficult natural circumstances.

The country’s four main agricultural policy objectives, set in the federal constitution are: food security (make an essential contribution towards ensuring food supplies for the population); sustainability of agricultural production (production measures which maintain fertile soils and clean drinking water are to be used); taking care of the landscape is seen as an essential task of agriculture; and finally agriculture is to help maintain rural areas. To meet these objectives Switzerland has adopted an elaborate system of agricultural policy measures, combining border measures and direct payments to farmers that add up to a relatively high level of support to its farming sector. Since the mid-1990s Switzerland has been implementing gradual reforms to its farming policies by reducing market interventions and increasing the role of direct payments.