Paddock Talk: NZers, Swiss worlds apart in dairy production

When I arrived in New Zealand to do some research about farming, I had to wonder.

Everything looks upside down compared with Switzerland, where I'm from. The average dairy farm is about 10 times bigger here.

New Zealand has nothing like government subsidies, while Swiss farmers earn a good part of their livelihood directly from state support.

My fellow countrymen must comply with a broad set of environmental regulations to prevent water and soil degradation and encourage biodiversity.

At the same time, New Zealand decries the decreasing water quality of the rivers, and apparently does not know how to solve the problem.

All while New Zealand's dairy farmers are doing pretty well economically.

At an initial glance, the contrast is striking. You guys have the big and successful Fonterra, which is growing and growing, producing something like 7% of your GDP, while the producers are generally getting a fair price for their milk.

Beside a few disagreements with the smaller companies, the dairy industry looks strong and unified.

Back home, the situation is not looking so good. Since the state suppressed the milk quotas (which regulated quantities produced), the dairy industry is fragmented and divided.

Whereas Fonterra speaks about conquering new markets in Asia, the Swiss industry is entangled in overproduction.

In the meantime, Swiss farmers are struggling to maintain an income that is already lower than the national average, despite the money they receive from the state.

Anyway, it's a common saying that our Swiss farmers do (or should?) not farm for money - they value the lifestyle and enjoy working with nature.

Even the Swiss Ministry of Agriculture said so (and considered the problem solved).

Perhaps my surprise at the differences was premature. First, the two histories are largely different.

Swiss farming is based on a peasant past, composed of numerous small family farms contained in a small, densely populated country.

This peasant heritage has been partially protected through the 20th century modernisation, more for political than economic reasons: farmland has been protected from speculation; farm succession has been encouraged; farming incomes have been supported, first by price control, then by environmental schemes.

Some would say this had a negative impact on the competitiveness of the sector, impeding its restructuring.

By contrast, New Zealand agriculture was built by settlers, with huge spaces available. With the development of transportation, it became a major motor of the national economy.

Limited government interference since the 1980s has probably helped economic efficiency on the farms, and accelerated restructuring.