Cutting export subsidies, cropping domestic production: input-output analysis of the Swiss dairy sector after abolishment of the ‘Chocolate law’ subsidies

Seyhan KÂHYA, Aleš KUHAR


The `Chocolate law’ in Switzerland enables subsidies for dairy and wheat farmers, bound to the condition that their products are exported after processing (Swiss Federation, 2011). Though the Ministerial Conference of the World Trade Organization has decided in December 2015 that this law has to be abolished by 2021 [WTO, 2015]. Cutting subsidies might lead to a demand shock and consequently a cropped domestic production (Miller and Blair, 1985). We analysed in this study the interdependence of the agro-food sectors by a Leontief input-output model and their linkages to other sectors (Chereny and Watanabe, 1958, Leontief 1986) and additionally, the amount, direction and dispersion of the possible demand shock.  Hence, non-meat food processors and dairy processing were determined as key sectors as they have strong linkage effects and are rather concentrated to few sectors. Both sectors rely strongly on the output of the raw milk producers and have few sectors to sell their products. Outside of the cut sectors, these sectors will be challenged the most from this new policy.


agriculture; food production; agro-food sector; dairy production; dairy processing; export subsidies; input-output analysis; legislation; Chocolate law; Switzerland

Full Text:



AGRISTAT / Schweizer Bauernverband. (2015). Milchstatistik der Schweiz 2014. Retrieved from

Aguiar, A., Narayanan, B., & McDougall, R. (2016). An overview of the GTAP 9 data base. Journal of Global Economic Analysis, 1(1), 181–208. doi:10.21642/JGEA.010103AF

Augustinovics, M. (1970). Methods of International and Intertemporal Comparisons of Structures. In A. P. Carter, & A. Brody (Eds.), Contributions to Input-output Analysis (Vol. 1). Amsterdam, North-Holland P. C.

BAKBASEL. (2012). Evaluation und Auswirkungen des Käsefreihandels zwischen der Schweiz und der EU. Retrieved from

Banaszewska, A., Cruijssen, F., van der Vorst, J., Claassen, G., & Kampman, J. (2013). A comprehensive dairy valorization model. Journal of Dairy Science, 96(2), 761–779. doi:10.3168/jds.2012-5641

BFS. (2015a). Bundesamt für Statistik, System der Gesamtrechnungen und Satellitenkonten des Primärsektors, Landwirtschaftliche Gesamtrechnung (LGR). BFS – Bundesamt für Statistik, Schweiz. Retrieved from

BFS. (2015b). Die Bodennutzung in der Schweiz – Auswertungen und Analysen. BFS – Bundesamt für Statistik, Schweiz. Retrieved from

BFS. (2015c). IOT 2011: Erläuterungen und Hinweise zur Nutzung der Schweizerischen Input-Output-Tabelle 2011. BFS – Bundesamt für Statistik, Schweiz. Retrieved from

BFS. (2016a). Landwirtschaft und Ernährung – Taschenstatistik 2016. BFS – Bundesamt für Statistik, Schweiz. Retrieved from

BFS. (2016b). Online database of the statistical office of Switzerland. BFS – Bundesamt für Statistik. Retrieved from

BLW. (2016a). Marktbericht Milch Mai 2016. Retrieved from

BLW. (2016b). Verordnung über die Direktzahlungen an die Landwirtschaft (Direktzahlungsverordnung, DVZ; SR 910.13). Retrieved from

BO Milch. (2016a). BO Milch – Richtpreise. Retrieved from

BO Milch. (2016b). BO Milch – Standardvertrag und Segmentierung. Retrieved from

Chereny, H. B., & Watanabe, T. (1958). International comparison of the structure of production. Econometrica, 26, 487–521. doi:10.2307/1907514

Dietzenbacher, E., & van der Linden, J. (1997). Sectoral and spatial linkages in the EC production structure. Journal of Regional Science, 37, 235–257. doi:10.1111/0022-4146.00053

EFV. (2016). Zeitreihen zum Bundeshaushalt. Retrieved from

EUROSTAT. (2016). Selling prices of crop products (absolute prices) – annual price (from 2000 onwards). Retrieved from

EZV. (2016a). Ausfuhrbeiträge für Erzeugnisse aus Landwirtschaftsprodukten = Export contributions for agricultural products. Retrieved from firmen/04021/04023/04281/index.html?lang=de

EZV. (2016b). Swiss-Impex database. Retrieved from

Fernández Fernández, M. T., & Santos, J. L. (2015). Rasmussen, Chenery and Watanabe, and labour-based multiplier analysis and sensitivity analysis of input coefficients for Spain in 2009. Documentos de trabajo 02/2015. IAES- Instituto Universitario de Análisis Económico y Social, Universidad de Alcalá. Retrieved from

GTAP. (2016). GTAP Data Base webpage. Retrieved from

Hertel, T. W. (1996). Introduction and overview. In T. W. Hertel (Ed.), Global Trade Analysis. Modeling and Applications. Cambridge: Cambridge University Press. doi:10.1017/CBO9781139174688.002

Hirschman, A. (1958). The Strategy of Economic Development. New York: Yale University Press.

Huff, K., McDougall, R., & Walmsley, T. (2000). Contributing input-output tables to the GTAP data base (GTAP Technical Paper 1, Release 4.2). West Lafayette, IN 47907-1145 USA: Center for Global Trade Analysis, Purdue University.

Humavindu, M. N., & Stage, J. (2013). Key sectors of the Namibian economy. Journal of Economic Structures, 2(1), 1–15. doi:10.1186/2193-2409-2-1

ife. (2016). Rohstoffwert Milch (4,0 % fett). Retrieved from

Isard, W. (1951). International and regional input-output analysis: a model of a space-economy. The review of economics and statistics, 33(4), 318–328. doi:10.2307/1926459

Kearl, J. R., Pope, C. L., Whiting, G. C., & Wimmer, L. T. (1979). A confusion of economists? American Economic Review, 69(2), 28–37. (Papers and Proceedings).

Leontief, W. (Ed.). (1986). Input-Output Economics (2nd ed.). 200 Madison Avenue, New York 10016: Oxford University Press, Inc.

Mankiw, N. G. (2014). Principles of Economics (7th ed.). South-Nashville, TN, USA: Western College Pub.

Mattas, K., Louizou, S., Tzouvelekas, V., & Meropi, T. (2006). A common input-output model. In A. Bonfiglio, R. Esposti, & F. Sotte (Eds.), Rural balkans and EU integration: An input-output approach. Milano, Italy: FrancoAngeli s.r.l.

Miller, R. E., & Blair, P. D. (1985). Input-Output Analysis: Foundations and Extensions. Englewood Cliffs, New Jersey 07632: Prentice-Hall, Inc.

van Nieuwkoop, R., & Nathani, C. (2012). Switzerland (Chapter 7.O). In B. G. Narayanan, A. Aguiar, & R. McDougall (Eds.), Global Trade, Assistance, and Production: The GTAP 8 Data Base. West Lafayette, IN 47907-1145 USA: Center for Global Trade Analysis, Purdue University.

OECD. (2015). OECD Review of Agricultural Policies: Switzerland 2015. OECD Publishing. Retrieved from

ten Raa, T. (2010). Input-Output Economics: Theory and Applications. World Scientific Publishing Co. Pte. Ltd.

Rasmussen, N. (1956). Studies in Intersectoral Relations. Amsterdam, Holland: North Holland Publishing Company.

Ricardo, D. (1817). On the Principles of Political Economy and Taxation. London: John Murray.

Rueda-Cantuche, J., Neuwahl, F., & Delgado, L. (2009). The adjustment capacity of the European economy examined with an input–output based key sector analysis: towards a review of the European single market. Cuaderno, 01/09. Sociedad Hispanoamericana de Análisis Input–Output, Oviedo, Spain.

Schuschny, A. R. (2005). Tópicos sobre el modelo de insumo-producto: teoria y aplicaciones, REDIMA II: Reunión de trabajo sobre Modelización, Matrices de Insumo-Producto y Armonización Fiscal, 29 and 30. August 2005, Santiago de Chile, Chile.

Smith, A. (1776). An Inquiry into the Nature and Causes of the Wealth of Nations. London: W. Strahan and T. Cadell. doi:10.1093/oseo/instance.00043218

Swiss Federation. (1998). Federal law: 910.1 federal act of 29. April 1998 on agriculture (agriculture act, agrica). Retrieved from

Swiss Federation. (2011). Bundesrecht = federal law: 632.111.72: Bundesgesetz über die Ein- und Ausfuhr von Erzeugnissen aus Landwirtschaftsprodukten. Retrieved from

swiss granum. (2016a). Richtpreise Brotgetreide / prix indicatifs des cereales panifiables (chf/dt). Retrieved from

swiss granum. (2016b). Richtpreise Futtergetreide und Eiweisspflanzen / prix indicatifs des cereales fourrageres et des proteagineux (chf/dt). Retrieved from

Temurshoev, U. (2004). Key sectors in the Kyrgyzstan economy (Discussion Paper No. 2004 – 135). Praha: Charles University, CERGE-EI.

Varian, H. (2010). Intermediate microeconomics: A modern approach. W. W. Norton & Company, Inc., 500 Fifth Avenue, New York, N.Y. 10110, 8th edition.

World Bank. (2016). World databank: World development indicators. Retrieved from

WTO. (2015). World Trade Organization – tenth WTO ministerial conference, Nairobi, 2015. Retrieved from

WTO. (2016a). World Trade Organization – international trade and market access data. Retrieved from

WTO. (2016b). World Trade Organization – what we stand for. Retrieved from



  • There are currently no refbacks.

Copyright (c) 2016 Seyhan KÂHYA, Aleš KUHAR

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.


Acta agriculturae Slovenica is an Open Access journal published under the terms of the Creative Commons CC BY License.


eISSN 1854-1941