Agriculture and Direct Democracy (Part 4)

Switzerland is seeking its way forward

by Dr rer publ. Werner Wüthrich

With regard to the agricultural policy of Switzerland, four proposals for a constitutional change were on the table until recently: three popular initiatives and one counter-proposal by the parliament: The Swiss Farmers’ Association has already withdrawn its “Food Security” initiative, so that on 24 September only the parliament’s counter-proposal will be voted on. The Farmers’ Union Uniterre and the Green Party have also submitted initiatives – “Für Ernährungssouveränität (Pro Food Sovereignty)” and the “Fair-Food Initiative”. These votes will take place later.
The accumulation of motions by the public is not unusual in Switzerland and shows that farmers are important for the country. Agricultural policy has been in upheaval for about forty years. It is also noticeable that in no other area of politics so many popular initiatives have been submitted and so many referendums have been embraced since the Second World War. The processes of direct democracy, as they have developed in Switzerland, are well reflected by this.
A short résumé of part 3 of this series of articles on direct democracy in the area of agriculture from the 31.1.2017: In 1948, the people had agreed on a new article in the constitution and in 1952 on a new agricultural bill. Governmental interventions and partly also fixed prices (for milk and bread) and import restrictions were part of it. This policy, however, stands in the way of joining the GATT – which was important for an export-oriented Switzerland. However, in 1966 federal Councillor Hans Schaffner succeeded in negotiating a special statute, which has allowed Switzerland to join the GATT and still to pursue an independent and self-determined agricultural policy for almost thirty years. In these years, the focus was on production, environmental issues and animal welfare.

In the 1960s, the import of cheap animal feed resulted in undesirable increases in production. The emergence of specialised, soil-independent operations based on factory farming and using mainly cheap foodstuff from abroad was questionable. The main focus was on pig and poultry farming and large farms with beef cattle. It became possible to keep more livestock on a larger scale than could be fed with one’s own harvest. This disastrous development was a product of euphoric sentiment throughout the country. The economy was booming at a very high level. The environmental protection and animal welfare was neglected because almost every economic project promised a quick profit.
The term “factory farming” soon became a political combat term. And the questionable sides of agriculture have more and more come to the centre of the political debates. Besides the previous “sea of milk” and the “butter mountain” there were now also “meat mountains”. The Federal Council and the Parliament tried to dampen the euphoric sentiment in the country and in the 1960s issued a number of emergency laws aimed at preventing the economy from overheating. This included credit limits and even building bans.
In agriculture, the Federal Council tried to stop the unhealthy development by issuing tariff protection against cheap feedstock from abroad by raising the tariffs massively. However, this enraged the small farmers, who had little land and got by better with the cheap feedstock from abroad.
The subsequent BSE scandal was also linked to the feedstock. The widespread, unnatural feeding of carcass meal to ruminants has been identified as a cause that can lead to Creutzfeldt-Jakob disease and death of humans. This shock greatly disturbed the population and raised agricultural awareness.

How to continue agricultural policy?

As early as in the 1970s, the swiss people became more convinced that agricultural policy had to be refocused. Not only the surpluses, but also animal welfare and the acute issues of environmental and water protection deeply concerned the population. There were three ground-breaking referendums: In 1971, the people agreed to a new environmental protection article in the Federal Constitution with over ninety per cent of the votes. In 1973 and in 1975, two further votes followed on animal welfare and the protection of water and hydropower. Both submittals were clearly accepted. The water quality, for example in Lake Zurich or in the Lake Lugano, had deteriorated to such a degree, that the authorities had to ban bathing.
In many municipalities and regions, citizens’ movements were formed, which were committed to socially and environmentally friendly modes of production. Also left-wing parties such as the Progressive Organisations of Switzerland POCH (which later became the Green Party) took these demands over into their program. The civic parties became green as well. And – hardly surprising – there were years with many popular initiatives, referendums and people votes. It became one of the most intense direct democratic disputes in the history of the confederation. Nevertheless, first things first.

Introduction of milk quotas and the first referendum

In March 1968, the Federal Parliament decided to introduce milk quotas, i.e. to limit the amount of milk (which the Confederation had to take over) with official measures. This was not entirely new. Already in the years 1933 to 1936, the Federal Council had limited the amount of milk in the economic crisis in order to prevent the milk price from sinking. In the 1970s, the Federal Council was looking for the moment for a way to reach this, without explicitly prescribing the quantity of milk production of the individual farmer. In 1971, the Federal Council convened a commission of experts with professors Hans Christoph Binswanger and Hans Popp. Not only did they examine the question of milk quota, but they also examined the idea of direct payments to the farmers in order to secure their income – detached from the state-defined milk price. But the time was not yet ripe for this.
The surpluses in milk continued to increase. This milk was mostly processed into milk powder and sold by the Confederation strongly cheapened abroad. Butter and cheese were also exported at cheapened prices. As a result, the confederation had to bear costs that were summed up in the milk bill and which led to growing deficits (the taxpayer had to pay). In 1977, the Federal Council introduced via an emergency bill a milk quota by calculating the amount of milk that was allowed to be delivered by each farmer according to agreed criteria. A proper legislative decree of the Parliament soon followed.
An intense direct Democratic debate began: the “Union des Producteurs Suisse UPS” (association 1978 of farmers) successfully issued a referendum together with farming committees from the German-speaking part of Switzerland against the milk quota. It came to a vote and the people didn’t agree on the protest from French speaking Switzerland and agreed in 1978 to the decree with 68 per cent. It was the first vote in the agricultural sector after the Agricultural Law was accepted in the year 1951.

Further submittals from the population followed

The first popular initiative for a new agricultural policy didn’t take long. In 1978, the Central Association of Dairy Farmers ZVSM launched 1978, together with animal rights activists, a federal popular initiative with 165,000 signatures “against excessive feedstock imports and animal factories”. The proposed constitutional article largely coincided with the Federal Council’s policy, but went one step further: the initiative demanded that the Federal Council should not only limit the total quantity of imported feedstuff, but similar to the milk quota for each farmer, should limit the amount of purchased feedstuff individually. In other words, the confederation should ration the additionally purchased feedstock of the farms in order to limit the amount of milk and meat produced.
The Federal Council and Parliament accepted the basic idea of the popular initiative and built it into the agricultural bill, but without the “feedstock rationing”. Large amounts of livestock had to be reduced and the number of animals per farm were limited. A permit was required to build or rebuild stables. Further on, 100 million francs were budgeted as aid to shut down entire farms or parts thereof. The following, however, still generous upper limits for livestock were applied to the individual farm: 250 pieces of large fatstock, 1,000 hogs, 1,200 laying hens, etc. The so-revised agricultural bill came into force, and the Central Association of Dairy Farmers withdrew its federal popular initiative “against excessive feed imports and animal factories”. The association had exerted pressure on politics with the national law and at least partially achieved its objective.
The referendum of the Union des Producteurs Suisse and the popular initiative of the Swiss Milk Association were only the prelude to a whole series of referendums, initiatives from the people and counter-proposals by parliament. Again and again, it became clear that a vote did not simply result in a “yes” or “no”, but that public law set a legislative process in motion. For example, a group of people issued a popular initiative with the aim of changing the constitution. The Federal Council and Parliament were opposed to the matter and, with their experts and with their experience, designed a counter-proposal that took up the concern, but in such a way that it fitted better to its policy. Sometimes the initiators are satisfied and withdraw their initiative. In this case, which is favourable to the authorities, only the counterproposal of the Parliament is voted on. However, if the initiators are not satisfied, both proposals are voted on at the same time. There is another possibility: the Federal Council and Parliament are taking the initiative and are trying to implement the initiators’ ideas by putting important points from the initiative into a federal law. The initiators may withdraw the initiative, as the Milk Association had done, and there is no vote. Otherwise there will be a vote.
The agricultural policy in the 1980s gave much to talk about. For the one, the new measures went way too far, for the others they were much too tame. The employees of the Federal Office of Agriculture were not to be envied. The agricultural policy had become complicated. Even the farmers’ associations had difficulties, but they had to reconcile different interests in their ranks. But: At that time, the interplay between the citizen and the state still worked honestly and corresponded with the often not simple realities. Today, signals from Brussels often create discord.

“Gnue Heu dune (Enough is enough!)”

In 1980, some farmers founded the Association for the Protection of Small and Medium Farms (VKMB). They launched the federal popular initiative “for authentic farming in agriculture” in 1985. Their slogans were “We want to remain farmers!” and “Gnue Heu dune (Enough is enough!)”. With this battle-cry they went into the offensive against “stand-alone meat mills without farmland and mass-production enterprises”. They were the voice of traditional family-owned farms who produced their own fodder for their livestock and argued that governmental support for agricultural businesses should be restricted to these farms while industrial animal mass production was not worth protecting. Although conciding that policies in favour of small and medium farms was beneficial to a certain degree, the Federal Council called to decline the proposal initiative without counter-proposal. They suggested financial support instead in connection with the imminent admission of Switzerland to the WTO. However, a huge majority voted against this support in parliament, again without counter-proposal.
On 24 June 1989, the issue was to be decided in a peoples’ referendum. Tensions had been rising. Just prior to the voting day the Small Farmers’ Association left the Swiss Farmers’ Union (SBV) for their failure to support them. When it became clear that the courageous action of the small and medium farmers met considerable sympathies in the electorate, the excitement grew. Then the surprising result: 49% had voted yes. This was a huge success fo the small and medium farmers despite their initiative being declined after all, and it sent a strong message to the authorities.

Vine dressing

In the 1980ies, Swiss agriculture produced a little bit too much of almost everything – including wine. Parliament issued an urgent decree which was supposed to solve the problem of vine dressing. However, it had been under dispute from the start: On the federal level the amount of produced wine was to be restricted as soon as the total stock of wine on hand would increase beyond a critical surplus. The wine quality was also meant to be improved by bureaucratic interference and a minimum sugar concentration be defined in three categories (which was disputed extensively). The import of foreign wine was to be restricted to a certain amount and auctions be held from time to time where importers could purchase quotas. The big importers Migros, Denner and Coop went for the referendum and voting took place on 1 April 1990. The electorate declined the notion with 53%.
In 1986, a similar proposal to enhance the sugar beet production by 20% had been declined as well. Federal Government and parliament had failed again with their agricultural initiative. There were more referendums and popular initiatives to come.

The interplay between electorate, parliament and government is working

After the small farmers had stepped out, the Swiss Farmers’ Union tried to regain their leadership and launched a federal popular initiative of their own in 1989, called “For a sustainable and capable agriculture”. Most of all the Union wanted to mobilize their base that way and shape agricultural policies of the future. In a relatively short period of time the farmers collected more than 260,000 signatures.
Parliament accepted the notion of the Union and responded in two ways: On the one hand they came forward with a counter-proposal to the new constitutional article. At the same time they incorporated the main goals of the initiative into the ongoing amendment of the agriculture law. The Swiss Farmers’ Union acknowlegded that they had achieved their aims and withdrew the peoples’ initiative.
However, that didn’t end the direct-democratic discussion about a new agricultural policy because two more peoples’ initiatives were “up and running” at that time:

A committee from the Swiss chapter of the WWF and the Green party launched the popular initiative “Farmers and Consumers – for an agriculture close to nature” in 1990. They, too, proposed a new Article on agriculture for the Federal Constitution.
The “Gnue Heu dune” committee came forward with a second federal popular initiative in 1993 under the name “For affordable food and ecological farms”. The small and medium farmers had composed a new proposal meant to better protect the interests of familiy-owned businesses.

The GMO-Moratorium was decided by the Swiss people in 2005 and since then has been extended several times by Parliament, most recently in March 2017 for the period until the end of 2021 (picture keystone)

About to join the WTO

Meanwhile the Federal Council had appointed a second expert panel on the topic of financial subventions, chaired by Professor Hans Popp. They presented their report: Farmers could no longer count on ever-increasing prizes of their products. The prize of milk, fixed by the Federal Government to counter inflation and in connection with parity wages, had gone up from 80 Rappen to 1 Franc 20 between 1980 and 1990 (today 60 to 65 Rappen). Hans Popp predicted falling prizes after admission to the WTO thanks to diminished border protection and further assimilation to the European Union. In order to substitute the shrinking income he suggested direct payments in proportion to the size of the land farmed and the number of livestock cared for the business, or other criteria such as “integrated production” or “bio”, but irrespective of the prize. Agriculture would be “multifunctional” in future, he argued, in other words make contributions to securing the food supply for the population, preserving the natural environment, fostering cultural landscapes and maintaining decentralised settlement of the country. The panel suggested that contributions for the national economy should no longer be rewarded by increasing prizes, but by direct payment instead.
This reorientation of agricultural policies sensitized both farmers and the population strongly. Another issue emerged when the Federal Government refused to make any efforts to prolong the Special Statute Switzerland had negotiated in connection with the General Agreement on Tariffs and Trade (GATT) in 1966, which had allowed Switzerland to pursue her independent agricultural policies for almost 30 years. On 9 January 1992, 30,000 farmers demonstrated in Berne, Luzern and Weinfelden for consideration of agriculture in the so-called GATT Uruguay round, which was regarded as a transition to the WTO.
The Federal Council had asked Professor Heinz Hauser of St. Gallen University to write a report about the consequences of joining the WTO. He concluded that practically all important industry and service branches would benefit. This prompted the trade associations to approach the Swiss Farmers’ Union with the promise to actively secure the protection of Swiss agriculture. (Lipp, Silvan. Standort Schweiz im Umbruch, p.135) The Federal Government, too, vowed to increase direct payments and consider all options to restrict agricultural imports. As a result the Union withdrew the referendum.

Black Day for Federal Council and parliament

Almost simultaneously with the admission of Switzerland to the WTO another two ground-breaking peoples’ referendums were in preparation for 1995. A huge state-political event concerning agriculture set the stage. On the same day of 12 March 1995, three notions had to be voted on: never before had the electorate become so actively involved in legislative and constitutional proceedings of a single economic sector in such a short period of time, with so many federal popular initiatives and referendums. Never had parliament responded to the initiatives with so many counter-proposals. The interplay of electorate, parliament and government was functioning well and Switzerland would pass the challenging test for direct democracy:
This voting Sunday of 12 March 1995 was quite demanding for the citizens. The details were as follows:

Parliament had come forward with a counter-proposal for a new constitutional article which incorporated the many ideas which had been put on the table by now after the federal initiative of the Swiss Farmers’ Union.
Parliament had revised the agriculture law of 1952 several times. This time a solidarity contribution for specific advertisement efforts had been suggested. A certain world-wide promotion of Swiss cheese was very successful in those days. It included the Swiss national skiing team who happened to be internationally quite successful and dedicated their sports outfit to advertise Swiss cheese. Popular skiing aces such as Bernhard Russi, Vreni Schneider, Pirmin Zurbriggen and others agreed to put on Emmental cheese like outfits with its famous holes while racing downhill and winning competitions world-wide, which was broadcast via many television stations. Similar actions were planned. The proposed law suggested that not only members of the trade associations would finance such promotion efforts but also farmers who were non-members (but benefitted at least indirectly as well) would be legally bound to make a solidarity contribution. This was aimed at the small and medium farmers primarily, who had just recently left the Swiss Farmers’ Union. It was them who had called for the referendum which was to be voted on, together with consumers’ organisations.
Finally parliament had composed a milk agreement suggesting that a farmer who would not use his milk quota to the maximal extent should be allowed to sell it or rent it out for some time to another farmer. This was meant to render the milk quota system more flexible. Small farmers went for the referendum against this proposal because mainly big farmers would have benefitted from it. Many people asked why it wasn’t possible in such a case to just reduce the quota and allocate the surplus to a young farmer starting his business.

This voting Sunday of 12 March 1995 became a Black Day for the authorities. The electorate declined all three notions. The unease about the official line of agricultural policies had grown. Many a member of parliament, federal office clerk and accountant in the federal office of agriculture may have sighed how much easier and more comfortable life could be had Switzerland joined the EU and surrendered decisions on her political issues to far-away Brussels. The Federal Council had declared the admission to the EU to be the strategical goal of their policies several years previously and refused to revoke this despite the peoples’ decision against it on 6 December 1992. This fuels unease and mistrust in the population to this very day – especially since such a move would dismantle direct democracy.

The agricultural debate continues – the result is plain to see

12 March 1995 was not yet the end of the dispute. In the Federal Council’s drawer, two other federal popular inititives on agriculture were waiting for the vote, both of which were also aiming at a new constitutional article.

The federal initiative “Peasants and Consumers – for a near-natural agriculture” of the WWF Switzerland and the Green Party (which had already been submitted in 1990) – and
The 2nd federal popular initiative of the Association of Small and Medium Farmers VKMB “For Low-Cost Food and Organic Farms” (submitted 1994).

For the time being, the councils prepared a counter-proposal to the popular initiative of the WWF and the Greens. In so doing, they departed from their own counter-proposal, which had been rejected by the people on 12 March 1995, and improved it convincingly to the point that the WWF and the Greens withdrew their federal popular initiative and the Parliament‘s counter-proposal came to the vote. This time around, the result surprised favourably. On 9 June 1996, with almost 78 per cent, the people very clearly voted with Yes. The relief in the Federation was great. The series of no-votes in the agricultural sector had come to an end. The voting text of 9 June 1996 is Article 104 in the Federal Constitution and has not been changed until today. (see box on page 16)

Article 104 in the Federal Constitution – a success from a democratic perspective as well

This well-founded constitutional article is the result of a perennial interaction of people and parliament. Farmers, active citizens, several initiative groups, numerous associations, several parties, various NGOs, the National Council and the Council of the States with their commissions and finally the sovereign have in several votes contributed and helped to complete this work, a solid foundation for the agricultural policy and proposals for improvement that are now on the table.
Whoever, from the point of view of the state, has a look at the result of this perennial dispute, is impressed and comes to the conclusion that the direct or halfway direct democracy passed the test. The result is that there is a lot more legitimised and anchored within the population than a mere parliamentary decision.

“Epilogue”

Two years later, the VKMB popular Initiative “For Low-priced Foods and Ecological Farms” was also put to the vote. It was linked to the initiative which the same committee had almost won in 1989 with 49 per cent of the votes. The small and medium farmers discussed the problems of the newly introduced direct payments. This time around too the initiators demanded that only real farms, especially family farms, should enjoy full agricultural protection. In addition, the direct payments would have to be limited up above: “Farmers produce in a near-natural and animal friendly manner. If they meet this requirement, they are entitled to receive direct payments if they are required to achieve a reasonable income. These, however, may not exceed a maximum of CHF 50,000 per plant.” For large companies, this would have been too little. The starting position for this referendum was, however, worse than in 1989. Hence, with a large majority the people had recently adopted the present Article 104 in the Federal Constitution. The question raised or rather the problem of direct payments was untimely. Experience had to be gained first. Therefore, on 27. 9. 1998, the initiative of small farmers was clearly rejected with 77 per cent no-votes. Since then, no other agricultural referendum has taken place in the agricultural sector, with the pleasing exception of five years later.

GMO-free agriculture

In 2003, a committee of farmers, environmentalists and consumer protectors launched a popular initiative “For food from GMO-free agriculture”. It wanted to have a reflection period in the discussion about GM products requiring Swiss agriculture to remain GMO-free for a period of five years after the adoption of the article. The research field was excluded from the ban. The Federal Council rejected the popular initiative. In Parliament it was controversial. There was a vote of equality in the National Council so that, with her vote the President of the Council decided for rejection. The people saw this differently and with 55 per cent agreed to it on 27. 11. 2005. In the meantime the moratorium has been extended several times by Parliament.

Paradigm change in the line of the WTO?

The 1995 WTO Agreement on Agriculture and Agricultural Agreements with the EU in 1999 have led to a real paradigm shift in agricultural policy and to an increasing restriction of direct democratic rights. The main points are:

Quantitative import restrictions (quotas) are no longer allowed and must be converted into customs duties. The import can only be controlled via customs duties. For example, a certain quantity of a product is imported at a relatively low rate. If this quantity is exceeded, however, the duty will massively go up.
New was the system of direct payments. It compensates for the loss of income. While earlier around two thirds of the federal expenditures were spent on support for prices, it still is around 20 per cent today. In return, spending on direct payments rose to more than 75 per cent today. It is oriented according to very different criteria, the area and the number of animals fed with grass or hay. There are special contributions for miners working in difficult terrain, as well as for near-natural, environmentally-friendly or particularly animal-friendly production methods. Depending on the structure of direct payments, the development of agriculture can still be steered today. Like this the criterion of biodiversity is paramount. The fields should be planted and cultivated as naturally as possible. This means that the cultivable area is reduced and imports are more cost-effective. Therefore, the self-sufficiency rate of about 55 per cent at present is falling constantly. – Shall agriculture be further liberalised?

National Council and Council of the States say No!

From 2001 onwards negotiations began within the WTO on a further liberalisation in the range of agriculture (Doha Round). After ten years, these negotiations have practically failed. Thereby, however, the Federal Council was able to put pressure on the agricultural policy over many years. Time and again, it has stated that the Doha negotiations were about to come to a conclusion and the agricultural policy was urgently be reformed in the line of the WTO.
In November 2008, the Federal Council started negotiations with Brussels with the aim of entering into a free trade agreement in the agricultural and food sector. Flanking measures are to accompany the transition and socially soften hardships. This questionable policy, based on uncertain and rationally improbable negotiations of the Doha Round, triggered unrest among farmers and the general public, in particular because the WTO regime was to be effective in the future and people could no longer rule their lives themselves. First measures in the line of the WTO and the EU were initiated. In 2009, the milk quotation was completely abolished and the customs protection of the borders was further reduced. Some of the state-supported prices were wholly or partially released and the direct payments were somewhat stronger geared towards landscape management.
The National Council and the Council of the States responded to the failure of the Doha round. The “abandonment of the exercise” was ordered in 2011 and the Federal Council was instructed to “immediately stop” the ongoing negotiations with the EU on a free trade agreement in the agricultural and food sector.

A new paradigm shift – within the meaning of the World Agricultural Report WAR?

Parallel to the Doha Round, the World Bank and the UNO initiated a development already in 2003, attended by 500 scientists from all continents and disciplines. It is about nothing less than securing nourishment in the 21st century. “How can hunger and poverty be reduced?” was the initial question. How can the natural resources be spared so that they are sufficient for a growing population? How can we establish food supply just, ecologically and sustainably? This broad-based project was concluded in the “World Agricultural Report” (title: “Agriculture at a Crossroads”), published by Uno in 2008. It emphasized the need to protect and promote small-scale agriculture. The focus should be on the fact that farmers who live in very different circumstances all over the world will be able to make a living.

Three popular initiatives continue the idea of the WAR

In Switzerland, these ideas – how could it be otherwise – have been incorporated into new popular initiatives, which are now under discussion, and on which a first popular vote will take place on 24 September. The Swiss Farmers’ Association has withdrawn its “food security” initiative, so that it only can be voted on the Parliament’s counter-proposal. The initiatives of Uniterre “For Food Sovereignty” and the Fair Food Initiative of the Greens will follow later. This wants also imported food to meet higher environmental and social standards in future. Uniterre wants to make – besides others – sure that the farmers get their income again increasingly on the prices. Central to all popular initiatives is – as already many times – the protection and maintenance of domestic agriculture.

Retro- and prospect

Those who are following the debate on Swiss agricultural policy over the past hundred years attract attention on the following:

Before the First World War, the atmosphere in politics and business was quite similar to that of today. You could import anything and everything at any time, was said then. Grain cultivation could largely be relinquished, since this could be operated much more cost-effectively in other countries anyway. No one thought that this situation could change radically. – There was an evil awakening in the world war. This could also happen today. It suffices a major crisis or a natural catastrophe that other countries need their own food themselves.
International agreements and treaties on tariffs and free trade are important for resource-poor and export-oriented Switzerland – then as now. In 1966, fifty years ago, Federal Councillor Hans Schaffner and his employees negotiated at the GATT a special statute for Swiss agriculture. This has enabled Switzerland to pursue an independent policy for almost 30 years. Only in this way was it possible for the people to bring itself again and again into the political debate via the rights of the people, and to determine the policy essentially itself. Today, the Federal Council is taking a different position and intends to further internationalize its policy also in the field of agriculture.

Discussions on agricultural policy in the context of international agreements can be reduced at their core – then as now – to a single point: There are especially in agriculture many and varied differences between the many countries in the world, which have to consider. Food is a special good, for which rules are different than in the “normal” trade of goods.
Today, Swiss agriculture is supported by federal funds of around CHF 4 billion. This amount has not fallen significantly in recent years. This and the many direct democratic debates over the past decades show that peasants in their own country are important to the population and that their work is appreciated. A large majority of the population is still prepared to pay a higher price.    •

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