The government has decided to do away with export subsidies and reduce financial payments for agricultural production as part of its reform package for the sector.
The money saved will go towards direct payments. The measures are due to come into force next year.
However, subsidies for cheese production will remain to keep Swiss producers competitive in a liberalised European Union market, according to the economics ministry.
The main farmers association welcomed the decision but added that farmers in mountain regions would be the main beneficiaries of the reform.
It warned that the situation for arable farmers remained unsatisfactory.
Organic producers as well as environmental groups said the policy would give an unfair advantage to big farms.
The government last November approved a first series of reforms, including higher family allowances for farmers.
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