The cheese processing aid in Switzerland: ex-post and ex-ante evaluations

The cheese processing aid is used in Switzerland since 1999 to support cheese production and raw milk producer. This paper presents ex-post and ex-ante evaluations of reductions of this processing aid. The ex-post analysis, using vector autoregressive models and monthly milk prices, estimates the effects of reductions of the aid on milk prices for Emmentaler, Gruyère and industrial cheese production. Declines in the aid were found to have significant negative but heterogeneous effects on milk prices and that these reductions are transmitted only imperfectly. The ex-ante analysis evaluates the effects of a complete removal of the aid using a partial equilibrium model. Despite the contraction of cheese production, this was found to have a positive net global welfare impact due to the reallocation of raw milk to other milk channels.

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 Record created 2017-04-01, last modified 2018-01-23

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