Swiss farmers generate as much as 80% of their income from the market. In the valleys, this share is even higher—85%, while in hilly and mountainous areas, it amounts to 77% and 61%, respectively. This is why agricultural product prices are crucial for the financial stability of farms.
However, achieving the right market value is becoming increasingly difficult. Production costs in Switzerland are significantly higher than the average prices of agricultural products.
Since 2021, the costs of fertilizers, animal feed, and fuel have risen sharply. Contrary to expectations, buyers have not proportionally increased prices, leaving farmers to bear the burden of inflation.
The year 2022 demonstrated this— even record-high prices for poultry, beef, and milk were not enough to significantly improve farmers’ financial situation.
How to Ensure Sustainable Income?
For agriculture to remain viable, product prices must rise faster than production costs.
The Swiss government does not adjust subsidies to inflation, meaning that farmers must cover all cost increases on their own. Therefore, fair market prices are the only way to ensure the economic and social sustainability of the sector.
Structural Changes in Agriculture
Over the past decades, Swiss agriculture has undergone major transformations. Every year, the number of farms decreases by 1.5%, while the remaining farms are becoming larger and more specialized.
However, this trend has recently slowed down. A new challenge is the age structure— the average age of farmers is increasing.
As many as 55% of farm owners are over 50 years old. This means that in the next 15 years, half of all farms will have to find a successor, as owners can no longer receive direct subsidies after the age of 65.
The Future of Young People in Agriculture
It is encouraging that every year, 1,000 young people in Switzerland train to become farmers. Currently, about 3,800 students are enrolled in agricultural schools.
However, the challenge is how to keep them in rural areas. Better salaries and stable working hours in other sectors often lure them away from agriculture.
That is why, ahead of a major generational shift, it is crucial to create conditions in which young farmers can see a clear economic future in this profession.
Source: Fokus
