Since 1993, the Swiss federal agricultural policy has been providing financial support for organic farming via area payments. Like other voluntary agri-environmental measures (AEM), these payments are intended as incentives for farmers to comply with defined production standards. Such payments lead to better environmental performance, as compliance with organic production standards averts negative and provides positive external effects compared to conventional or integrated farming (CRER, 2002). For instance, organic farming is largely not dependent on external inputs.
