Investing in Swiss Agriculture
The Swiss agriculture industry is one of the largest and most economically important industries in the country and serves a number of purposes. One of these purposes is to ensure that vacant countryside is well-maintained and looked after, as well as assuring that decentralised fields and other open spaces are not left to the elements.
Swiss policies on agriculture
As the Swiss Agriculture Industry is highly valuable and provides the Swiss economy with a stable backbone, the government has developed an exceptionally strict string of regulations and legal requirements for business within that industry to follow.
A good note to take for investors and businessmen and women is that agricultural businesses receive a myriad of subsidies and tariffs, so this means that there is potential to generate even higher profits on every dollar spent investing in the agriculture industry than other industries. Currently, over 70% of all agriculture businesses in Switzerland benefit from expansive Swiss government subsidies.
Additionally, all subsidies offered by the Swiss government are closely monitored and regulated for correct adherence. The subsidies are also able to be obtained by companies who import select products into Switzerland.
A way that the Swiss government has attempted to push for in-Switzerland production of agri-goods is by adding on multiple taxes to goods which are imported which can also be made in Switzerland. This means that if a company imports a product which is made in Switzerland, this product may then be subject to price bumps because of these taxes – therefore pushing businesses to buy Swiss goods.
Another note to make is that the Swiss Federal Council exercises its’ right to set fixed prices upon popular goods like milk, wheat and other common products to keep companies competitive.
Policy developments for Swiss agriculture
The main driver of Switzerland’s powerful agriculture industry is mainly a consequence of the markets agri-focused orientation, although the government’s intervention and financial assistance is also a great contributor to the development of the industry.
As of this writing, there is no longer a set price for milk in Switzerland, and on top of this, the required supply quota of milk has been removed and in turn, the industry has increased innovation and productivity. Also, the existing agri-export subsidies have been removed and therefore new subsidies have been implemented in other areas so that economic stability is maintained and productivity and goods productions remain steady.
Organic products market in Switzerland
In the late 90’s Swiss agricultural companies began a shift in their industries to focus more heavily on the development and investment of organic and non-GM foods. This led a number of businesses to entirely move their profits directly from savings into investment in new organic-focused businesses. In turn, this resulted in the Swiss government looking for ways to remunerate these businesses and from this, the EMS subsidy was unveiled.
The EMS subsidy is primarily a subsidy which is allocated to farmers, and other businesses who operate in agriculture if they secure an official environmental management system (EMS) certificate.
In order to be granted an EMS certificate the following conditions apply:
- All fertilisers are to be used sparingly and under strict control
- At least 7% of all land should be reserved for counteracting goods production
- All crops must alternate
- Flora, fauna and soil are all required to be safeguarded
- The use of pesticides must be limited
The above information has all resulted in Switzerland’s agriculture industry being organic-centred as well as being extremely efficient and a popular investment opportunity for foreign investors.
If with the above information, you have more questions about opening an agriculture business or investing in one in Switzerland, you should feel free to contact one of our business consultants for more in-depth information.