Sunday, September 23, 2012

What went wrong with the Swiss agricultural policy?

Last week has been a hot week in the Swiss parliament. The agricultural policy revision was on the agenda.
There is no doubt, the agricultural sector Europe wide has been liberalized despite of the still very high level of subsidies (in Switzerland more then 60% of the farmer's income comes through subsidies) Milk quotas have been abolished, barriers to trade are continuously decreased. What is the effect of this market liberalization? Farmers faced low prices and therefore started to produce more pushing prices even lower. Today Switzerland produces more milk and sugar beets then ever.
On the top of this, Swiss agricultural policies are still based the idea of industrialization of agriculture (a policy that emerged after World War II to insure food security) and gives incentives to farmers to produce even more.
Today's debate is about making agricultural policies that do not support industrialization anymore and that focus on much more sustainable production. The total amount paid to the agricultural sector should remain at the same level, but the distribution of the money will become different. The subsidy per animal for example should be abolished.

In principle a low input agriculture would allow to produce high quality food for the Swiss and European market. This type of agriculture would be much more sustainable. 

ECO vom 17.09.2012
The farmer in this movie explains how he organized his low input system. He makes use of nature and his animals to reduce mechanization. His cows are grazing on the meadow. Compared to an intensive system, he does not need to carry the grass to the farm nor to bring the manure back saving on fuel for the tractor and reducing the CO2 emission. Thanks to grazing land management, he has the right amount and quality of grass when needed, and his cows produce about 30 liters of milk per day which within the average without using soya (that is one of the major reason for deforestation) or other fodder than produced on his farm.
He also has a small amount of pigs he feeds with input produced on his farm at zero cost. The stable is organized in such a way that animal warmth stays within and no electricity for heating is possible. Again saving money and improve sustainability.
When the new policy comes, he will be a winner, with his low input system, he will get more subsidies for his environmentally friendly production.

All in whole, the new policy setting incentives for more a more sustainable agriculture. It sets the incentive for a more traditional (opposed to industrialized production) which corresponds to what society wants. Less production will also restore normal prices allowing all farmers to benefit.

So why all these discussions for something that looks so optimal and urgent? Many "model farmers" who were praised years ago as innovative because they invested into a modern and industrialized agriculture are going to loose. They have invested in more machine, bigger stables and are today trapped. They need to pay back the credits that enabled them to mechanize and industrialize their production. It is understandable that those farmers that have followed the policies and strategy of the government now stand up and refuse to loose. Therefore, the change towards low input agriculture should be slow, allowing to farmers to adjust.

This movie is an interesting interview with the the president of the Swiss farmer organization, debating if the new policy will increase or decrease the farmers' income. For sure is only that the new subsidy scheme will change the distribution, and there will be losers and winners. 

Next week the debate will continue in the parliament. It's going to be a hot week in Bern !

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