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In the Swiss agricultural sector, the development towards larger farms and consequently towards more economically favourable cost structures is relatively slow. A dynamic simulation model is used to investigate where an extrapolation of the present development could lead in future and what form alternative development paths could take. The simulations indicate that, compared to a continuation of the current development, more cost-effective structures can be achieved without more frequent, non-age related farm closures. A reduction in the number of start-ups or a development towards a dual agricultural structure can be identified as socially acceptable and politically realisable opportunities for improved competitiveness. In view of future challenges, this potential should be exploited to the full. This demands that agricultural policy demonstrates a firm commitment to more efficient cost structures and thus to larger farms.