Policy Markets Processing

Swiss Lessons to Inform Post-Quota Lobbying

SWITZERLAND - Farming representatives are hoping that lessons learned in Switzerland can ensure milk quota abolition is supported with market stabilising and monitoring measures.

7 August 2014

2 minute read

Europe

Dairy farm closures and milk price collapses have been commonplace following Swiss milk quotas in 2009, says the European Milk Board (EMB).

During this period prices have fallen by 19 per cent across organic milk markets and 15 per cent across standard liquid and processing milk.

Farmer bargaining power has also shrunk over this period, with the EMB stating that processing volumes of the Swiss market’s four biggest companies have increased 38 per cent.

This takes overall market share from 44 to 56 per cent.

These market effects are discussed in a study from the Bern University of Applied Sciences, which links market instability with Switzerland’s post-quota dairy market policy.

The EMB has said ‘clear parallels’ can be drawn with the impending quota change in the European Union.

“Cost-covering prices and stabilising crisis instruments are therefore crucial to securing milk production in the long run,” the EMB said in its August newsletter.

Swiss dairy farmer Anton Bucher has decided to leave dairy farming, after prolonged periods of loss making.

The end of Swiss quotas saw a huge change in Anton Bucher's area. Only one dairy will milk cows next year. Source BIG-M

Prices peaked at one franc per litre before 2009 but Mr Bucher has seen prices halve since then.

His 40 cow business is one of eight other farms in the Stusslingen area to stop milking cows since quotas ended.

“When the quotas ended there were still 9 or 10 of us dairy farmers - now there are three of us, and next year there will be just one,” Mr Bucher told the EMB.

“One is going because his farm no longer meets animal welfare requirements, and I’m getting out because my children don’t want to carry on with milk production.”

Amid a climate of falling milk prices, Mr Bucher explained that the initial euphoria of being able to increase production ‘died down very quickly’.

Describing the Swiss outlook as one depending on value-added products, Mr Bucher said: “Commodity production is replaceable, that can be produced anywhere. There’s no future for Switzerland in that.”