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Swiss gear up for hard times with bulked up food reserves

Economic Indicators Jun 30, 2022 09:02AM ET
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2/2 © Reuters. A general view shows the Stadtmuehle Schenk AG mill, which also stores emergency grain reserves as a contractor to the Swiss Federal Agency for National Economic Supply (Reserve Suisse) in Ostermundigen, Switzerland June 29, 2022. REUTERS/Arnd Wiegmann 2/2

By John Revill

ZURICH (Reuters) - Switzerland wants to expand its emergency food reserves to make sure the neutral country is not hit by shortages of coffee, grain and sugar caused by over-extended supply chains, climate change and conflicts like Ukraine.

A growing population and changes in food production have made the government consider raising stockpiles to six months worth of consumption, from three to four months at present.

That would mean steep increases in, for example, the 160,000 tonnes of grain stored in silos dotted around the country, increasing official reserves to levels last seen in the 1980s.

It would also build more silos to hold more animal feed, wheat and rice under state contracts with nearly 100 food manufacturers.

"We decided in the last two years we needed to increase our reserves in Switzerland," said Peter Lehmann, chief of compulsory stocks at the Federal Office for National Economic Supply.

"We started the project before the Ukraine war, but that has underlined how important it is to have a reserve. The world is more fragile," he told Reuters in Bern.

The emergency stores programme, which dates back to the period between World Wars One and Two, had reduced stock levels in the 1990s when Cold War ended.

CLIMATE CHANGE

Switzerland, which imports around 40% of its food, also has emergency stocks of fuel, although there are no plans at present to increase fuel reserves which stand a 4.5 months for petrol and diesel.

Climate change could also make it more difficult to obtain the correct food products in future, Lehmann said.

    "If the supply chain collapsed, or there was harvest failure because of bad weather or drought, that could have political consequences," Lehmann said.

    "It doesn't take much for a bottleneck to happen. Even without Ukraine, the logistic chains have become longer and more vulnerable."

If the government decides, with deliberations and votes scheduled for next year, new silos will be built over the next decade.

The stores, which belong to companies, are not just about maintaining self-sufficiency in times of dire need, but to ensure food production during "ordinary" shortages.

There are no plans to release food stocks to lower inflation, which in May hit its highest level in 14 years.

"From time to time we get pressure to release stocks, but as long as things can be produced, we don't release," Lehmann said. "Price is irrelevant."

Swiss gear up for hard times with bulked up food reserves
 

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