Consumers are willing to pay high prices for food, but farmers are still "struggling"

Bad news for Swiss farmers is good news for consumers, who are paying some of the highest food prices in Europe.

Swiss consumers accept higher prices, especially when domestic inflation is much lower than in the euro zone. (Source: Bloomberg)

Switzerland's tariff system, designed to protect domestic agriculture , prevents imports of products that could be produced domestically. However, when harvests fail or demand surges, leading to shortages of meat, fruit and vegetables, the government reduces tariffs to allow cheaper goods to be imported from abroad.

Prices rise as Switzerland enters its domestic summer harvest, according to UBS economist Maxime Botteron. This is in stark contrast to other eurozone countries, where prices fall as domestic supply increases. As a result, crops like cherry tomatoes often become cheaper in the off-season.

The Swiss government maintains this paradox under pressure from groups advocating for farmers and food independence. Swiss consumers are also willing to accept higher prices, especially when domestic inflation is much lower than in the Eurozone.

Swiss products are known for their high quality and strict environmental and social standards, and a large part of the population is willing to pay a premium for this, said Stefan Legge, head of tax and trade policy at the University of St. Gallen.

The government can reduce import tariffs in exceptional circumstances. Last week, Switzerland reduced tariffs on egg imports because domestic production has not kept up with demand, despite a 35% increase over the past decade. The government has increased the low-tariff import quota by 43%, to nearly 25,000 tonnes, to ensure supplies before Christmas.

Still, Swiss farmers are struggling. Last year, the government spent about 2.7 billion francs ($3.1 billion) in direct subsidies on agriculture.

Swiss Economy Minister Guy Parmelin recently visited a farm in Wileroltigen and heard complaints from farmers about complicated administrative processes and strict pesticide regulations. He acknowledged that food prices were an issue, but insisted that Swiss food must meet higher standards and stressed the importance of food security.

With high wages, many Swiss consumers may not realize that they are paying 50% more for food than their neighbors. For those who do, it is easy to cross the border to shop in France, Germany, Italy or Austria.

Source: https://baoquocte.vn/nghich-ly-tai-thuy-sy-nguoi-tieu-dung-san-sang-tra-gia-cao-mua-thuc-pham-nong-dan-van-lao-dao-283062.html