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Farmers asked to do better with less

Swiss farmers say they are coming under increasing pressure

(Keystone)

Swiss farmers are facing stiff subsidy cuts under reforms unveiled by the government. The move is aimed at increasing competition and productivity.

The Swiss Farmers' Association condemned the proposal, saying that it would put more pressure on an already ailing industry.

Announcing the plans on Wednesday, Economics Minister Joseph Deiss said the government also expected "agriculture to make efforts to restructure itself".

He added that the government's 2011 agriculture-reform programme would increase competitiveness and further open up the sector.

The central aim of the four-year plan is to reduce subsidies, such as those used to underpin butter prices, and to increase direct payments.

Farmers are slated to receive SFr13.458 billion ($10.7 billion) for the period from 2008-2011. This is SFr638 million less than the present four-year budget.

The government says that it is satisfied that the proposal "is bearable on the social level".

WTO demands

Deiss said the plan, which would massively cut export subsidies, was necessary for Switzerland to comply with the demands of the Geneva-based World Trade Organization (WTO).

Last August the country signed an international agreement with the WTO, which foresees the gradual phasing out of protective tariffs and subsidies for agriculture.

The minister said that one of the aims was to reduce price differences, which are on average 20 per cent higher in Switzerland than in the European Union. This should also benefit consumers, he said.

The plans – which have been put out to consultation until mid-December - have provoked mixed reactions.

All four political parties in government welcomed the move, saying the reforms would encourage competitiveness.

But the main farmers' association said it was against the cuts, arguing that they would add to the financial pressure faced by the sector. It said that farmers stood to lose 20 per cent of their revenues under the move.

Changes to the sector have already hit farmers hard. Around 2,000 farms in Switzerland – out of a total of 65,000 – go out of business each year.

swissinfo with agencies

In brief

The agriculture reforms were first put forward in February this year and are under consultation until December 16.

The government's plans are part of restructuring measures for the sector that started in the 1990s.

This latest programme, which aims to increase competition and productivity, is expected to strongly affect farming revenues.

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