Switzerland gives aid to dairy industry

22nd October 2009, Comments 0 comments

Switzerland on Wednesday granted CHF 28 million to the dairy industry after a pricing agreement.

Geneva -- Switzerland on Wednesday granted CHF 28 million in state support to its dairy industry after farmers and distributors agreed to end a dispute over prices similar to that in the EU.

"We hope that through the agreement, we'll be able to calm things down and send the right signals" to the market, said Dominique Kohli, a senior official at the federal agriculture office.

The deal between some 27,000 Swiss farmers, the four major processors and two biggest distributors establishes annual contracts and voluntary price fixing every four months.

The support package includes CHF 18 million for dairy companies in Switzerland to encourage them to use locally-produced milk products, the Economy Ministry said in a statement.

Another CHF 4.5 million is aimed at reducing a 3,500 tonne mound of unused butter.

Switzerland cancelled its system of milk production quotas in May.

The European Union, Switzerland's biggest trading partner, on Monday announced a EUR 280 million (CHF 423 million) aid package for its dairy industry in 2010 as hundreds of milk producers renewed protests on the streets in Luxembourg.

The wave of protests in EU nations and in Switzerland followed a collapse in dairy prices, partly due to low demand caused by the financial and economic crisis.

In November 2008, EU agriculture ministers agreed to reduce milk production quotas by one percent per year before cancelling them altogether in 2014-2015 while European farmers called for financial aid or limits on supplies.

AFP / Expatica

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