Dairy farmers warned to cut costs

Milk is more expensive in Switzerland than in Europe Keystone

Swiss farmers have been warned that they will be unable to compete in the increasingly open dairy market unless they cut costs.

That’s the conclusion of a study by the Federal Institute of the Rural Economy, released on Tuesday. It warned that Swiss dairy producers would need to cut their prices by around 25 to 30 centimes per kilogramme of milk over the next 10 years, if they are to compete with European Union producers.

The study, commissioned by the Federal Agricultural Office, also said that, if Swiss dairies managed to reduce costs, they would have to boost production by 100,000 kilos each year.

The study added that Switzerland would have to work to resolve these issues through diologue with the EU by 2006. Last May, Swiss voters approved a series of bilateral accords with the EU, which will gradually bring down tariff barriers.

Marc Zuber, head of the Agricultural Office, said he thought that only around half of the country’s dairy farmers would be able to satisfy the demands of a more open European dairy industry. Alternatives, he said, would inevitably need to be sought.

swissinfo and agencies