Why Switzerland supports its struggling sugar industry
Every year, from October to December, more than 1.5 million tonnes of sugar beets grown in Switzerland are harvested to supply the country’s sugar industry, an industry kept alive thanks to massive government subsidies. SWI swissinfo.ch reports from Aarberg, which is home to the country’s largest sugar factory.
This content was published on December 9, 2021 – 09:00
A thick plume of white smoke rises through the early morning fog of the Bernese Seeland as it approaches the town of Aarberg, located in the heart of the region sometimes referred to as Switzerland’s kitchen garden. The scent of caramel and earth swirls through the air as the huge storage vats belonging to the Sucre Suisse (Sucre Suisse) factory appear through the haze.
Passing through the doors of the factory, a flood of trucks, tractors and trains, all loaded to the brim with freshly harvested sugar beets. During the peak production season from October to December, more than 10,000 tonnes of white root vegetables arrive every day from all over the country.
In a process virtually unchanged since the factory opened in 1912, the beets are cleaned, pulped and turned into sugar. A constant noise accompanies shift workers in their occupations 24 hours a day, 7 days a week. Every day during the high season, the factory produces nearly 1,000 tonnes of sugar.
Price in free fall
The Aarberg site is one of two – the other in Frauenfeld, in northeastern Switzerland – owned by Sucre Suisse. Together, they represent the entire sugar production capacity of Switzerland, which peaks at around 270,000 tonnes per year. More than two-thirds of the sugar produced by Sucre Suisse is swallowed up by the country’s food industry, with customers including beverage makers Red Bull and Rivella, multinational food and beverage conglomerate Nestle and chocolate maker Lindt.
“Switzerland has a sugar self-sufficiency rate of almost 65%,” explains Raphael Wild, communications manager at Sucre Suisse. Most of the deficit is imported from the European Union, with 3,300 tonnes of cane sugar imported from Mauritius.
But the local industry is fragile. The negotiated price of Swiss sugar is calculated based on the world market, which is subject to price fluctuations. Bilateral agreements also tie prices to those in the EU, which have fallen sharply since 2017, when Brussels freed up production volumes and removed export restrictions. This has driven prices down in Switzerland, affecting the profit margins of local farmers and causing many to abandon the market.
In less than a decade, the area devoted to the cultivation of sugar beet in Switzerland has increased from 20,000 hectares to 16,500 hectares. Today, cultivation represents just under 2% of the country’s usable agricultural space, and the number of people growing beets has grown from 6,000 five years ago to 4,500 today.
In 2018, in an effort to halt the decline of the industry, the government increased subsidies to beet growers from CHF 300 / ha ($ 325 / ha) to CHF 2,100 / ha. It has also favored organic production and introduced customs protection of at least 70 Swiss francs per tonne of sugar. In September, Parliament extended the measures until 2023.
This year, the industry breathed a small sigh of relief as global conditions improved.
“Prices are on the rise again. This is among the various factors due to a historic drought that hit Brazil this year. Sugar cane crops have suffered tremendously, creating a global shortage, ”said Wild.
The respite should be temporary. Wild says it would be impossible for Swiss sugar to compete with foreign products without state support.
“It is obvious that without these government contributions to beet growers, from which we benefit indirectly, we would be facing significant difficulties,” he says.
Taxpayers foot the bill
The Swiss sugar industry costs taxpayers around 70 million francs a year.
“That’s the equivalent of almost CHF 4,000 in subsidies per hectare, which is more than most other crops,” says Vision Landwirtschaft, a think tank made up of independent agricultural professionals that aims to encourage the sustainable development and to improve the economic position of Swiss agriculture. .
In addition, the think tank says beets are voracious consumers of pesticides, cause soil erosion and create significant soil compaction.
However, Wild says a study commissioned by Sucre Suisse found that Swiss sugar is 30% more sustainable than that produced in the EU.
Farmers demand the return of banned pesticides
Sugar beet crops are often damaged by viral jaundice, a virus transmitted by aphids. In the past, to beat the disease, farmers treated beet seeds before planting them with Gaucho, a neonicotinoid-based insecticide. The gaucho was banned on January 1, 2019 due to its toxicity to bees and aquatic organisms.
To limit viral jaundice, farmers say they must now spray infected beets more often with still-permitted insecticides, accept higher percentages of crop losses or stop growing beets altogether. So far, the Federal Office for Agriculture has rejected requests from farmers to re-authorize the use of Gaucho.
In September, the canton of Friborg tabled a parliamentary initiative calling for the provisional re-authorization of the controversial insecticide. The Freiburg parliamentarians behind the initiative said that a re-authorization of Gaucho would ensure the survival of the Swiss sugar industry.
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Supporters of the industry argue that since sugar is one of the staple foods stored by the government in times of crisis, maintaining sugar production in Switzerland is crucial. Strategic food reserves must be sufficient to cover three months of local consumption.
In a written response to a motion presented by Ursula Schneider Schüttel of the Social Democratic Party, the government justified its support for the industry: “Sugar is considered a commodity, [and] the creation of reserves is mandatory under the country’s economic supply law.
But critics are skeptical. “If we were on our own in a crisis, we wouldn’t be able to eat sugar with a spoon,” Patrick Dümmler of thinktank Avenir Suisse told Swiss public television SRF. He argues that state support for the Swiss sugar industry is also bad from a health point of view. “That is why I think the importance of security of supply for the country is overstated.”
World sugar production and consumption
In 2020, world sugar production was 180 million tonnes, of which around 80% was from cane sugar. Brazil is the world’s largest producer of sugar, ahead of India and China. Germany, the United States and France are the three largest producers of sugar beet sugar. The average global consumption of sugar is around 25 kg per person per year. In Switzerland, each person consumes around 39 kg of sugar per year, compared to only 3 kg in 1850.
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