WORLD TRADE
ORGANIZATIONG/SCM/N/48/CHE
7 July 1999
(99-2822)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Updating Notification Pursuant to Article XVI:1 of
the GATT 1994 and Article 25 of the SCM Agreement
SWITZERLAND
The following communication, dated 30 June 1999, has been received from the Permanent
Mission of Switzerland.
______________
TABLE OF CONTENTS
Page
PART ONE:  INDUSTRY ...........................................................................................................3
I. ASSISTANCE FOR ECONOMIC ZONES WHICH ARE UNDER ECONOMIC
 RENEWAL  ...........................................................................................................3
II. ASSISTANCE FOR MOUNTAIN AREAS
Surety and contributions to intere st servicing in mountain areas ..........................................4
PART TWO:  AGRICULTURE ......................................................................................................5
I.  MILK AND DAIRY PRODUCTS .....................................................................................5
 I(a) Dairy account of the Confederation.............................................................................5
 I(b) Butter .................................................................................................................... .......6
 I(c) Cheese.................................................................................................................... ......8
 I(d) Preserved milk products.............................................................................................10
 I(e) Dairy-policy m easures taken .....................................................................................11
II.  BREEDING AND DAIRY CATTLE ..............................................................................12
 1. Promotion of sales within the country .......................................................................12
 2. Export su bsidies ........................................................................................................13
III. HORSES .............................................................................................................................15
1. Breeding bonuses.......................................................................................................15
2. Export subs idies.........................................................................................................15G/SCM/N/48/CHE
Page 2
Page
IV. WOOL ............................................................................................................................... ..16
Purchase of domestic wool ..................................................................................................16
V. EGGS ............................................................................................................................... ...17
Price equalization fund for eggs and egg products........................................................17
VI. FEED GRAINS ..................................................................................................................18
Bonuses to promote the growing of feed grains, apart
from maize, and s eed legumes .............................................................................................18
VII. OIL-SEEDS ........................................................................................................................19
Price support .................................................................................................................. ......19
VIII. SUGAR BEET ....................................................................................................................22
Price support .................................................................................................................. ......22
IX. POTATOES ........................................................................................................................23
Encouragement of the use of potatoes .................................................................................23
X. FRUIT ............................................................................................................................... ..26
Valorization of domes tic produc tion ...................................................................................26
XI. WINE, GRAPE JUICE, DESSERT GRAPES ................................................................28
Maintenance of quality by verifi cation of the gr ape harvest ...............................................28
XII. PROCESSED AGRICULTURAL PRODUCTS .............................................................29
Export contributions ........................................................................................................... .29G/SCM/N/48/CHE
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PART ONE:  INDUSTRY
I. ASSISTANCE FOR ECONOMIC ZONES WHICH ARE UNDER ECONOMIC
RENEWAL
1. Title of the programme
Assistance for economic areas which are economically renewed.
2. Period covered
1998.
3. General goal and/or purpose of the subsidy
Support of projects of private enterprises aimed at creating and maintaining jobs in areas
which are under economic renewal.
4. Background and authority
Federal decree of 6 October 1995 (new legislation)
Federal ordinance of 10 June 1996
Federal ordinance of 30 June 1997, modified on 10 July 1998
5. Form of the subsidy
Financial assistance is allocated in the form of:
(i) Tax relief on federal taxes (partial or full)
(ii) Interest subsidies on investment credits(iii) Guarantees for investment credits
6. How the subsidy is granted and to whom
Financial support is granted to manufacturing companies and to services companies with
activities closely linked to the manufacturing process.  The amount of the investment credit taken into
consideration for the grants is at maximum one third of the investment project costs (hard assets and
start up costs).  The project has to be innovative: the product and the manufacturing process have tobe technologically up-to-date and give the company an increased ability to compete through a national
and international market presence.
The interest subsidies have a ceiling of Sw F 5 million for the credit for which interest
contributions may be paid.  The maximum subs idy which may be granted (Confederation plus
Canton) comes to Sw F 625,000.- (assumption of 5 per cent interest rate).
Under the ordinance of 10 June 1996, areas considered to be under economic renewal are
those where:
(a) The average unemployment over the last three years has exceeded the national
average by at least 10 per cent;G/SCM/N/48/CHE
Page 4
(b) The trend in the number of jobs has been markedly less favourable than the national
average;  or
(c) There are clear indications that at least one of the above-mentioned situations will
occur shortly, in particular that the prospects for the most important sectors of the
economy and for the largest firms are unfavourable.
7. Unit amount of the subsidy or, where this is not possible, total amount or budgetized annual
amount of the subsidy
The sum of Sw F 22 million in guarantees has been granted under the new legislation since
the Federal decree of 6 October 1995, came into force. In the same period, the sum of
Sw F 1.8 million in interest subsidies has been granted.
8. Duration of the subsidy and/or any other deadline connected with the subsidy
The assistance programme remains in force for five years, until 30 June 2001.
The maximum duration of financial assistance in each case is 8 years for guarantees, 5 years
for interest contributions, and 10 years for tax relief.
9. Statistical data enabling the effects of the subsidy on trade to be assessed
The effect of the assistance programme on trade is negligible, if not non-existent.
II. ASSISTANCE FOR MOUNTAIN AREAS
1. Title of the programme
Surety and contributions to interest servicing in mountain areas.
2. Period covered
1998.
3. General goal and/or purpose of the subsidy
The programme is aimed at providing long and medium term capital loans to small- and
medium-sized establishments situated in mountain areas.
4. Background and authority
This financial assistance is based on the Federal Law encouraging credit guarantees and on
loan service contributions in mountain areas (RS 901.2) of 25 June 1976.  These areas are defined in
the Federal Law on investment assistance in  mountain areas (RS 901.1) of 21 March 1997.
5. Form of the subsidy
The Confederation encourages the grant of sureties by giving subsidies to the Swiss
Guarantee Cooperative for the Arts and Crafts and by making interest servicing contributions.  Thesubsidy does not relate to a specific product or sector.G/SCM/N/48/CHE
Page 5
6. How the subsidy is granted and to whom
The programme applies to sureties and intere st servicing contributions for small- and
medium-sized enterprises which are profitable or likely to develop, whether existing or to be created,
whose activity conforms to an established devel opment programme within the meaning of the Federal
Law on investment assistance in mountain areas (RS 901.1) of 21 March 1997.  Payments are madeonly to establishments which are not already supp orted by the Confederation in some other way.
7. Unit amount of the subsidy or, where this is not possible, total amount or budgetized annual
amount of the subsidy
In 1998, the Confederation's total share of the losses on guaranteed loans was
Sw F 1.3 million, with federal commitments as a whole amounting, at year end, to Sw F 55.6 million.
The contributions to interest servicing paid out in 1998 totalled Sw F 0.3 million.
8. Duration of the subsidy and/or any other deadline connected with the subsidy
The assistance programme for mountain areas remains in force indefinitely.
9. Statistical data enabling the effects of the subsidy on trade to be assessed
The effect of the subsidy on trade is insignificant, if not non-existent.
PART TWO:  AGRICULTURE
I. MILK AND DAIRY PRODUCTS
I(a) Dairy account of the Confederation
The dairy economy represents the most important branch of Swiss agriculture and is
responsible for a little more than one third of the gross value of agricultural production.  An extract
below from the Confederation's dairy account gives a general picture of the financial measures takenin this sector.  The details of these measures (with the exception of point 3, which does not constitute
a specific subsidy under Article 2 of the ASMC) will be studied in the following chapters dealing with
the various groups of dairy products.
(Millions of Sw F)
Accounting period 1998
Expenditure
1. Disposal of butter 308.6
2. Disposal of cheese 331.7
3. Contribution to cow keepers  whose milk is not marketed   89.7
4. Special price reduction for soft and semi-hard cheese   39.7
5. Other measures (including valorization of preserved milk products)   31.4
6. Supplements on milk converted into cheese   64.0G/SCM/N/48/CHE
Page 6
I(b) Butter
1. Title of the subsidy programme
Item 1 of the dairy account above:  disposal of butter
2. Period covered
1998.
3. General goal and/or purpose of the subsidy
The Swiss butter market is governed by the Swiss Central Office for Butter Supplies
(BUTYRA), a public cooperative society which hol ds the monopoly of butter imports.  Subsidies,
which may be granted concurrently, promote the disposal of butter on the domestic market only.
- BUTYRA pays a subsidy to the butter centres to enable them to sell table butter
without loss at prices fixed by the Federal Council;
- the Confederation allocates to BUTYRA the sums necessary to enable it to sell fresh
or resolidified cooking butter at a reduced price;  the amount of the price reduction,
and consequently of the loss entailed, varies according to the destination and quality
of the product;
- BUTYRA shares in the cost of advert ising to promote butter consumption;
- in order to encourage the use of fresh skimmed milk for animal feed, BUTYRA pays
a subsidy to users of this product.
In order to limit as far as possible the losses incurred in the valorization of milk, an order or
priority is laid down.  The largest possible proportion of domestic production is used to meet the
demand for fresh milk and fresh dairy products, which can be sold without loss.  For the rest,
manufacture of cheese and preserved milk products takes priority over butter, which involves theheaviest losses in the utilization of milk.
4. Background and authority
- Agriculture Act of 3 October 1951;- Order of the Federal Assembly of 29 September 1953 concerning milk, dairy
products and edible fats;
- Federal Act of 21 December 1960 concerning goods at protected prices;- Dairy Economy Order of 16 December 1988.
5. Form of the subsidy
Subsidies consist of Government financial contributions and of price-support measures.
BUTYRA delivers imported butter at prices ma tching the wholesale price of domestic butter,
purchases at a price corresponding to the milk base price domestic butter for which there is no ready
market and arranges for its disposal with the help of the contributions from the Confederation.  The
different forms of butter-disposal subsidies are:G/SCM/N/48/CHE
Page 7
 (Millions of Sw F)
Accounting period 1998
1. Reduction in the price of table butter (choice, full-cream and whey-based butter) 159.2
2. Reduction in the price of cooking butter and resolidified butter, and storage,
transport and interest costs73.7
3. Advertising costs 8.0
4. Subsidy for fresh skimmed milk intended for animal feed and special uses 44.3
5. Miscellaneous contributions 23.4
Total expenditure on disposal of butter 308.6
All these contributions are paid directly to BUTYRA.
Since 1 July 1995 a contribution per kg. of milk fat has been paid when milk fat in the form of
milk, yoghurt or cream is used to make edible ices.
6. How the subsidy is granted and to whom
The price-reduction contributions mentioned in points 1 and 2 are granted by BUTYRA to
manufacturers (amount per unit).
The beneficiaries of the measures under the fourth item in the table in point 5 above are
breeders who use skimmed milk or manufacturers of special products such as acid casein, caseinates
or milk substitutes.
7. Amount of the subsidy per unit
Butter subsidies varied as follows according to quality:
(Sw F per kg.)
Choice butter Cooking butter Resolidified
butter
As of 1 January 1998 4.36 1.17-7.36 3.83-8.80
As of 1 March 1996 4.66 1.47-7.66 4.06-9.03
8. Duration of the subsidy
Subsidies are entered in the dairy account annually.  The dairy-account period lasts from
1 November to 31 October of the following year.
9. Statistical data enabling the effects of the subsidy on trade to be assessed
The tables below show the trend of butter prices and consumption:G/SCM/N/48/CHE
Page 8
Retail price (in Sw F per kg.)
As of 1 April 1995 As of 1 January 1998
Choice butter (200 g. packages) 15.50 15.96
Fresh cooking butter (250 g. packages) 12.40 11.43
Resolidified butter (450 g. tins) 12.67 12.79
Production, trade and consumption (in tonnes)
Year Production Of which choice butter Imports Consumption
1998 39,804 33,431 5,512 44,781
Switzerland exports virtually no butter.
I(c) Cheese
1. Title of the subsidy programme
Subsidies cover items 2 and 4 of the dairy account under I(a), i.e:
1. Disposal of cheese
2. Special price reduction for soft or semi-hard cheeses
2. Period covered
1998.
3. General goal and/or purpose of the subsidy
The fact that the Confederation covers part of any deficits in the dairy account (the remainder
being borne by the milk producers) offsets the difference between, on the one hand, earnings from
cheese sales on domestic and foreign1 markets and, on the other, the production costs of the same
cheese established according to the base price of milk.
4. Background and authority
- Agriculture Act of 3 October 1951;- Federal Assembly Order of 29 September 1953 concerning milk, dairy products and
edible fats;
- Dairy Economy Order of 16 December 1988;- Federal Act of 27 June 1969 on cheese marketing.
                                                     
1Allowing for fluctuations in stocks.G/SCM/N/48/CHE
Page 9
5. Form of the subsidy
The cheese-disposal subsidy consists of coverage by the Confederation of the deficit resulting
from the operations of the Swiss Cheese Union (USF), which is responsible for disposing of certain
cheeses.  As regards the other kinds of cheese not managed by the USF, the Confederation covers
certain expenses such as price reductions, export subsidies, general expenses and advertising costs.
Under the legislative measures set out above, the organizations of milk producers and cheese
manufacturers and exporters set up the Swiss Cheese Union (USF).  This body is responsible for
purchasing the domestic production of hard cheeses (Emmental, Gruyère and Sbrinz, representing
about 60 per cent of total output) at fixed prices for resale through private firms at the best prices
obtainable in Switzerland and abroad.  However, in these operations, USF incurs losses which are
charged to the dairy account of the Confederation.
The different forms of subsidy for cheese disposal are:
Accounting period 1998
1. Coverage of market organizations' losses 323.6
2. Price-reduction contribution to producers of soft and semi-hard  cheese 39.7
3 Contribution to the costs of holdings producing for a half-year 8.1
6. How the subsidy is granted and to whom
Subsidies are granted to the following beneficiaries as detailed below:
(a) Cheese manufacturers:
- contribution to the price reduction per kg. of cheese;- contribution to the holding per kg. of milk;
(b)  Cheese dealers:
- contribution to the price reduction per kg. of cheese (export subsidies);
(c)  Market organizations:
- contribution to the price reduction per kg. of cheese (export subsidies);- coverage of deficits.
7. Amount of the subsidy per unit
The losses due to cheese disposal vary from one market to another.
8. Duration of the subsidy
The accounting year valid for the dairy account.  The period of the dairy account lasts from
1 November to 31 October of the following year.G/SCM/N/48/CHE
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9. Statistical data enabling the effects of the subsidy on trade to be assessed
 Cheese production and consumption 1998
Production (in tonnes)
- Domestic production 133,080
- Additional raw material output intended for processed cheese
manufacture4,302
- Imports 30,525
Total quantity 171,597
- Domestic quantity exported 56,612
- Variations in stocks 2,871
Consumption (in tonnes)
- Domestic quantity 81,589
- Imports 30,525
Total domestic consumption 112,114
Percentage share of domestic quantity 72.8
Percentage share of imports 27.2
Consumption (in kg. per head per year) 15.5
- Share of domestic quantity 11.3
- Share of imports 4.2
I(d) Preserved milk products
1. Title of the subsidy programme
Export subsidy for preserved milk products.
2. Period covered
1998.
3. General goal and/or purpose of the subsidy
The subsidy is aimed at safeguarding traditional exports of preserved milk products.  It is paid
on the basis of the quantity of milk used to manufacture those products.
4. Background and authority
The legal bases are the same as for butter.G/SCM/N/48/CHE
Page 11
5. Form of the subsidy
Payment to exporters of preserved milk products.
6. How the subsidy is granted and to whom
Payment to exporters of preserved milk products on the basis of the quantity of whole milk
used to manufacture those products.
7. Amount of the subsidy per unit
The export contributions per kg. of milk used to manufacture these products are as follows:
(In centimes per kg.) As of 1 January 1998
Sterilized milk 50
Cream 50
Preserved milk products 50
Yoghurt 50
8. Duration of the subsidy
The accounting year valid for the dairy account.  The period of the dairy account lasts from
1 November to 31 October of the following year.
9. Statistical data enabling the effects of the subsidy on trade to be assessed
Production, 1998
(in tonnes of fresh milk used)
Yoghurt 99,978
Cream 440,615
Preserved milk products 145,202
I(e) Dairy-policy measures taken
1. Title of the subsidy programme
Milk-price support.
2. Period covered
1998.
3. General goal and/or purpose of the subsidy
Milk plays a fundamental role in the country's agricultural policy.  Dairy production accounts
for about a third of the final output of agriculture.  The aim of producer price support is to maintain a
suitable milk production level in Switzerland whilst ensuring a regular income for producers.G/SCM/N/48/CHE
Page 12
4. Background and authority
- Agriculture Act of 3 October 1951;
- Order of the Federal Assembly of 29 September 1953 on milk, dairy products and
edible fats;
- Federal Act of 21 December 1960 on goods at protected prices;- Order of 16 December 1988 on the dairy economy.
5. Form of the subsidy
Support for the base milk price.
6. How the subsidy is granted and to whom
The price to milk producers is guaranteed.  However, guaranteed payment of the base price
for milk is limited by a quota system.  Under this system, which has been modified several times, an
individual quota is allotted to every milk producer.  Within this quota, the base price is paid, less the
normal deduction amounting to 2 centimes per kg. until 1 November 1989 and 4 centimes per kg.
since that date.  The producer pays an individual charge of not more than 85 per cent of the base price
on any surplus.  Since 1 November 1989 an additional charge of up to 5 centimes per kg. has beenlevied on producers for milk deliveries of between 80,000 kg. and 200,000 kg.  This charge can reach
a maximum of 10 centimes per kg. for deliveries over 200,000 kg.
7. Amount of the subsidy per unit
The base price to milk producers has been fixed by the Government as follows:As of 1 March 1996 87 centimes per kg.
8. Duration of the subsidy
The milk price is fixed periodically by the Federal Council.
9. Statistical data enabling the effects of the subsidy on trade to be assessed
Milk deliveries:
Period In thousands of tonnes
1996/97 3,055
1997/98 3,090
The figures show that the milk-production quota system has stabilised deliveries.G/SCM/N/48/CHE
Page 13
II. BREEDING AND DAIRY CATTLE
1. Title of the subsidy programme
1. Promotion of sales within the country.
2. Export subsidies.
2. Period covered
1998.
3. General goal and/or purpose of the subsidy
The various measures taken in this sector are intended primarily to improve the farming
situation in mountain areas, where animal husbandry is  the main, if not the only, source of livelihood.
Assistance can thus be given to small holdings in mountain areas, which are placed at a disadvantage
both by their geographical situation and by the climate.
The specific purpose of these measures is to ensure that good-quality breeding and dairy
cattle can generally be sold at prices which cover production costs.
4. Background and authority
- Agriculture Act of 3 October 1951;- Federal Act of 15 June 1962 on the sale of cattle.
5. Form of the subsidy
Contributions (grants).
6. How the subsidy is granted and to whom
1. Promotion of sales within the country
In order to avoid difficulties in the disposal of breeding and dairy cattle from mountain areas,
the Confederation grants subsidies to Cantons and authorised bodies which purchase animals from
stockbreeders in those areas at markets, shows or fairs at prices which are higher than the selling
prices.
When farmers are no longer able to dispose of their livestock, sales are organized to enable
animals to be bought for temporary withdrawal from  the market.  As soon as demand revives, these
heifers or cows are then sold as dairy animals.  If there are no buyers, the animals are slaughtered,
which gives rise to costs which are borne by the Confederation (up to a maximum fixed by the Act).
2. Export subsidies
Subsidies are granted in order to bring the prices of exported livestock into line with those
charged in traditional export markets.  These contributions consist of a fixed base amount and a
variable amount depending on the quality of the animal;  they are paid up to a fixed maximum.  TheConfederation also pays the cost of transport to the Swiss frontier.G/SCM/N/48/CHE
Page 14
7. Amount of the subsidy per unit
  Total (in thousands of Sw F)
1998
Promotion of sales within the country:
- Subsidies to relieve market pressure 3,484
 Export subsidies 0
Total 3,484
Per unit (as an average, Sw F per livestock unit)
1998
Promotion of sales within the country:
- Subsidies to relieve market pressure 750
Export subsidies   0
8. Duration of the subsidy
Subsidies to relieve market pressure have been applied since 1958.  Export subsidies have
been applied since 1954.
Expenditure for the promotion of livestock sales is entered annually in the Confederation
budget.  Export subsidies are allocated in not more than two payments a year.  Payments for purchases
to relieve market pressure are generally made in one annual instalment.
9. Statistical data enabling the effects of the subsidy on trade to be assessed
Purchases intended to relieve market pressure are limited in time and geographically.  Their
purpose is to prevent a collapse of livestock prices in mountain areas and they thus help to stabilize
the income of farmers in those disadvantaged areas.
The export bonuses have made it possible to maintain traditional exports of cattle, mainly in
the interests of breeding in mountain areas.
Production and exports of breeding and dairy cattle
(Head)
 Year Stock calves up to one year Exports of heifers, cows and
bulls
1997 250,00020
Switzerland imports about 700 dairy cattle annual. Exports are nil due to restrictions in the
importing countries due to BSE.
                                                     
2Estimate .G/SCM/N/48/CHE
Page 15
III. HORSES
1. Title of the subsidy programme
1. Breeding bonuses.
2. Export subsidies.
2. Period covered
1998.
3. General goal and/or purpose of the subsidy
The Federal Council takes measures designed to maintain domestic horse-breeding for the
needs of agriculture and the army.  These measures apply to horses of the Franches-Montagnes and
Hafling breeds, half-bred horses and mules.
4. Background and authority
- Agriculture Act of 3 October 1951.
5. Form of the subsidy
1. Breeding bonuses
Annual or one-time bonuses are paid to owners or  groupings of horse-breeders, in particular
for the breeding and maintenance of good-quality stallions, fillies and geldings and for foaling.
2. Export subsidies
A Federal financial export aid is paid to horse-breeders for exports of horses of the breeds
encouraged by the Confederation.  Total export subsidies in 1998 amounted to Sw F 167,000.
6. How the subsidy is granted and to whom
The subsidy is granted to breeders who export.
7. Amount of the subsidy per unit
 Year Total
(in thousands of Sw F)Foaling bonus
(in Sw F)Annual bonus per foal aged
1.5 years to 3.5 years
1997 3,005 60-200 400-700
8. Duration of the subsidy
The subsidy has been in force since 1960.G/SCM/N/48/CHE
Page 16
9. Statistical data enabling the effects of the subsidy on trade to be assessed
Between 1951 and 1990 the number of horses declined from 131,000 to 45,000.  The
measures introduced should allow a limited number of horses to be maintained in agriculture and
should encourage horse-breeding for equestrian sports.
Numbers and Trade3
(Head)
Year Horse numbers Imports Exports
1998 46,000 2,673 814
Most exports are not subsidised (subsidies cover about 100 head per year).
IV. WOOL
1. Title of the subsidy programme
Purchase of domestic wool.
2. Period covered
1998.
3. General goal and/or purpose of the subsidy
There are at present some 440,000 head of sheep, the great majority of which are in mountain
areas.  The subsidy enables the Swiss wool indust ry to purchase domestic wool, while at the same
time it guarantees to producers a contribution to their production costs.  Its main purpose is to raise
the income level of the mountain population.
4. Background and authority
Federal Act of 15 June 1962 on the sale of cattle.
5. Form of the subsidy
The Domestic Wool Board (CLI), a subsidiary of the Swiss Sheep Farmers' Federation,
purchases domestic wool from the producers.  The price received by the producer comprises a Federal
contribution fixed by the Department of Public Economy and an amount that varies with the prices
obtained by the Board when reselling in the market.  The Confederation reimburses CLI for any losses
resulting from its operations up to a maximum amount of Sw F 200,000 a year.
The Confederation allocates an annual contribution of Sw F 1.6 million.The subsidy is in the form of price support, based on the difference between the price fixed by
the Federal Council and the market price, and of reimbursement of the losses incurred by the CLI in
                                                     
3Enumeration is carried out in April of each year.  Horses intended for slaughter are not included.G/SCM/N/48/CHE
Page 17
purchasing the wool.  This reimbursement is intended to cover the price difference mentioned and the
variable amount granted by the CLI.
6. How the subsidy is granted and to whom
The greater part of the subsidy is granted to the producer through the price paid by the CLI.
The rest goes to cover the CLI deficit.
7. Amount of the subsidy per unit
Year Total (thousands of Sw F) Per unit (Sw F per tonne)
1998 1,548 2,624
8. Duration of the subsidy
The subsidy was introduced in 1962.  It is provided in two instalments per year.
9. Statistical data enabling the effects of the subsidy on trade4  to be assessed
(in tonnes)
Year  Production Imports Exports
1998 590 3,162 258
V. EGGS
1. Title of the subsidy programme
Price equalisation fund for eggs and egg products.
2. Period covered
1998.
3. General goal and/or purpose of the subsidy
The purpose of the subsidy is to promote the disposal of domestic eggs.
4. Background and authority
- Agriculture Act of 3 October 1951;- Federal Act of 21 December 1960 concerning goods at protected prices and
equalization fund for eggs and egg products.
                                                     
4Wool, etc. falling under Headings Nos. 5101.1100/1900, 5101.2100.2900, 5101.3000,
5105.1000/2900.G/SCM/N/48/CHE
Page 18
5. Form of the subsidy
Contributions (grants).
6. How the subsidy is granted and to whom
The price equalisation fund for eggs and egg products is financed solely from a share of the
special-purpose customs duties levied on imports of eggs and egg products.  It covers the expenses of
the bodies responsible for the collection, transport and distribution of domestic eggs intended for
importers required to take them (imports under the tariff quota alone).  It also contributes to the cost
of advertising to promote egg consumption and can make grants for other measures designed to
facilitate the disposal of domestic eggs.
7. Amount of the subsidy
Year Total amount (millions of Sw F)
1998 5.9
8. Duration of the subsidy
Payments are made on a monthly basis during a calendar year.
9. Statistical data enabling the effects of the subsidy on trade to be assessed
Production, trade and consumption of eggs in shell (millions of eggs).
Year Production Imports Consumption
1998 691 375 896
Exports are negligible.
VI. FEED GRAINS
1. Title of the subsidy programme
Bonuses to promote the growing of feed grains, except maize, and seed legumes.
2. Period covered
1998.
3. General goal and/or purpose of the subsidy
Growing premiums for feed grains are one of the measures designed to safeguard peasant
income and food security.G/SCM/N/48/CHE
Page 19
4. Background and authority
Agriculture Act of 3 October 1951.
5. Form of the subsidy
Payment to the producer (grant).
6. How the subsidy is granted and to whom
Crop bonuses proportionate to the area under cultivation are allocated to domestic producers
of oats, tritcale, barley, einkorn5, and emmer6 high-protein peas and field beans.
These bonuses are financed from a share of the special-purpose customs duties levied on
imported fodder.
The bonuses are allocated annually in the Confederation budget.
7. Amount of the subsidy per unit
In 1998 the following amounts were paid per hectare (in Sw F):
Barley, triticale, oats, einkorn and emmer
First 10 hectares 770
Over 10 hectares 560
For field beans and high-protein peas, the growing bonus came to Sw F 1,260 per hectare in
1998 regardless of surface area.
8. Duration of the subsidy
The measure was introduced in 1951.
9. Statistical data enabling the effects of the subsidy on trade to be assessed
Production, trade and consumption
(not allowing for fluctuations in stocks)
Barley, oats, field beans, high-protein peas
Year Production Imports
(thousands of tonnes)Consumption
1998 388 79 467
                                                     
5From 1996.
6Provisionally.G/SCM/N/48/CHE
Page 20
VII. OIL-SEEDS
1. Title of the subsidy programme
Price support.
2. Period covered
1998.
3. General goal and/or purpose of the subsidy
The measures taken to promote arable farming are aimed at keeping a minimum area under
oil-seeds both for biological reasons linked to the need for a certain crop diversification and for
reasons of food security.
4. Background and authority
Agriculture Act of 3 October 1951.
5. Form of the subsidy
The subsidy takes the form of an annual payment to the oil-processing plants (grant).(a) Colza:  the selling prices of colza oil are fixed in relation to the prices of other edible
oils.  The subsidy consists of the reimbursement made by the Confederation to the
oil-processing plants for the loss resulting from the difference between their
manufacturing price and the selling price of colza oil and oilcake.
(b) Soya and sunflower:  the selling prices of soya and sunflower to the oil-processing
plants are determined in the light of the situation on the world markets and world
market prices.  The subsidy is composed of the difference, which is borne by the
Confederation, between the import price and the oil processors' delivery price.
6. How the subsidy is granted and to whom
The subsidy for oil seed growing consists of price and income support in the form of a
takeover and price guarantee for colza, soya and sunflower.  This guarantee takes the form of a
payment to the oil processors in order to guarantee prices.
The Federal Council fixes the surface area for which it guarantees to producers that it will
purchase the oil-seeds grown.  This surface area is 21,000 hectares, with an upper limit of
16,000 hectares on the figure for colza growing.  Th e Federal Council fixes the price to the producer
taking into account production costs, yields and disposal prospects.G/SCM/N/48/CHE
Page 21
7. Annual amount of the subsidy
Year Colza
Total
(thousands of Sw F)Per tonne of seed
(in Sw F)
1998 29,400 622
Soya
Total
(thousands of Sw F)Per tonne
(in Sw F)
1998 6,900 915
Sunflower
Total
(thousands of Sw F)Per tonne
(in Sw F)
1998 2,200 538
8. Duration of the subsidy
On the basis of the Order of 16 June 1986 the oil processors have obtained an annual
contribution from the Confederation amounting to the deficits resulting from domestic processing of
the colza harvest. Soya growing has been support ed since the 1988 harvest under the same price and
takeover guarantee as that applying to the 2,000 hectare surface area originally allocated.  Since 1994
the rules have also covered sunflower in respect of edible-oil production.  The Order of 24 May 1995
on oil-seeds has replaced the Orders on colza, soya and sunflower.  The surface area for oil-seeds has
been limited to 20,000 hectares at the same time, w ith the colza area restricted to 16,000 hectares at
most. On the basis of the Order of 28 May 1997 the acreage for oil-seeds is limited to 21,000 hectares.The acreage for colza is limited to 16,000 hectares.
9. Statistical data enabling the effects of the subsidy on trade to be assessed
The subsidy has made it possible to keep a minimum area under oil-seeds.  Domestic
production is equivalent on average to 20-25 per cent of Swiss consumption of vegetable oils and fats.
Production, trade and consumption
(in tonnes)
Colza
Year Production of colza seed Consumption of colza oil
1998 47,252 16,250
Imports of colza seed and oil are irregular and small.  There are no exports.G/SCM/N/48/CHE
Page 22
(in tonnes)
Soya
Year  Soya seed production Soya seed import Soya oil exports
1998 7,537 71,700 12,200
(in tonnes)
Sunflower
Year Sunflower seed production Sunflower seed imports Sunflower oil exports
1998 4,090 8,600 340
VIII. SUGAR BEET
1. Title of the subsidy programme
Price support.
2. Period covered
1998.
3. General goal and/or purpose of the subsidy
Thanks to the Confederation guarantee, the sugar refineries are in a position to process
domestic sugar beet even when sugar prices on the world market are extremely low.  This meets the
need for food security and the aim of encouraging diversification of crops.
4. Background and authority
Federal Order of 23 June 1989 concerning the domestic sugar industry.
5. Form of the subsidy
The subsidy takes the form of participation in  a financial mechanism, the sugar fund.  The
purpose of the sugar fund is to cover the processing deficits of the sugar refineries resulting from
processing of the domestic sugar-beet harvest.  This fund, which serves to cover the sugar refineries'
deficits, is financed by a share of the special-purpose customs duties and by Confederation financial
assistance entered in the Federal budget.
6. How the subsidy is granted and to whom
In order to enable the sugar refineries to take over, at prices fixed by the Federal Council, the
beet produced under the cultivation contracts concluded with the planters, the Confederation grants
them a subsidy in the form of a guarantee against any deficit.  The price of beet corresponds in
principle to the cost of production on properly run farms.  The sugar refineries must sell the sugarrefined in Switzerland at a price equal to that of imported sugar, customs cleared.  This may involve
them in a loss when the world price is very low.G/SCM/N/48/CHE
Page 23
The Federal Order concerning the domestic sugar industry, which came into force on
1 October 1989, will be in force until 30 September 1999.  Any losses incurred through the sale of
domestic sugar are covered, in the order shown, by:
1. A share in the proceeds of the customs duty fixed by the Federal Council;
2. the revenue from previous years ("positive differences");
3. shares in profits from related sugar-refinery activities and the yield from sugar
extraction;
4. financial assistance from the Confederation.
The maximum quantity of beet for which the Confederation guarantees disposal at the price
fixed is determined each year by the Federal Council.  Since 1996 it has been fixed at
1,100,000 tonnes.
The sugar refineries collect a pre-determined processing margin for sugar-beet processing.
The deficit resulting from processing is defined on the basis of the takeover costs of the beet, the
processing margin and the revenue from the sale of sugar and sugar products.
7. Amount of the subsidy per unit
Year Total (thousands of Sw F) Francs per 100 kg. of domestic
refined sugar
1998 30,165 17
8. Duration of the subsidy
The subsidy is fixed for one sugar year (1 October to 30 September).  Payments are entered in
the Confederation budget for the following year.  The existing financing mechanism was introducedon 1 July 1995.
9. Statistical data enabling the effects of the subsidy on trade to be assessed.
Production, trade and consumption of sugar (in tonnes)
Year Production Imports7Exports8
1998 175,547 108,000 260
                                                     
7Customs tariff headings:
          1701.1100/1200/9100/9900/9991/9999.
8Id.9.G/SCM/N/48/CHE
Page 24
IX. POTATOES
1. Title of the subsidy programme
Encouragement of the use of potatoes.
2. Period covered
1998.
3. General goal and/or purpose of the subsidy
Article 32 bis of the Federal Constitution (RS 101) calls for legislation to encourage the use
of domestic distillable materials - including potatoes - for food or fodder.
This provision is designed inter alia to reduce the production and consumption of potable
spirits with a view to safeguarding public health.  Article 8 of the Alcohol Act authorises the
distillation of potatoes only if the crop cannot be used in a more appropriate manner.  In this context,therefore, the subsidies serve to promote the use of potatoes for purposes other than alcohol
production.
4. Background and authority
Article 32 bis of the Federal Constitution;
- Federal Act of 21 June 1932 on alcohol.
5. Form of the subsidy
The subsidies take the following forms:1. Domestic potato seedlings;
2. utilization of surpluses:  subsidies in the form of aid for the processing of potatoes
into flakes or flour for feed, for use as fresh feed and for the export of potato products
for human consumption;
3. financial assistance with advertising to promote potato consumption.
6. How the subsidy is granted and to whom
The types of subsidies allocated are the following:1. Financial assistance by the Confederation
The Confederation grants subsidies and takes other measures to ensure the use of potato
harvests without distillation.  The subsidies and other measures are designed to match potato
production to disposal possibilities.  Within the authorised credits, it allocates financial assistance in
order to encourage the sale of potatoes for human consumption by means of advertising, information,
quality control and similar means.G/SCM/N/48/CHE
Page 25
2. Price support
For the 1998 crop, the producer prices for potatoes for human consumption, the target prices
for potatoes intended for the food industry and the prices of surplus potatoes which are to be
processed into fodder products are fixed by the potato organisations. In fixing the prices, due account
will be taken of specific quality requirements.
Type of subsidy Recipient
Subsidy to reduce the price of Producers, buyers, cattle keepers
ordinary potatoes intended for
fodder.
Flat-rate allowance for the Dehydration factories
processing of surpluses
Financial assistance for Commission suisse de la pomme de terre
advertising to promote potatoconsumption
The subsidies are planned at the beginning of each potato year in accordance with the credits
granted and the size of the crop.  They may vary from year to year and be the subject of special
instructions and directives.
7. Amount of the subsidy
Utilization of potatoes
(in thousands of Sw F)
Year Total expenses
1998 17,412
Amount per unit
(Sw F per tonne)
Year Utilization of surpluses
1998 202
8. Duration of the subsidy
Subsidy for the utilization year From 1 September until the end of the utilization year
Subsidies for advertising Single amount for the whole year
9. Statistical data enabling the effects of the subsidy on trade to be assessed
Production, trade and consumption (potatoes for human consumption, seed and fodder
potatoes)G/SCM/N/48/CHE
Page 26
(in thousands of tonnes)
Year Crop Imports Exports Share of crop intended for domestic
human consumption
1998 575 21 4 390
X. FRUIT
1. Title of the subsidy programme
Valorization of domestic production.
2. Period covered
1998.
3. General goal and/or purpose of the subsidy
Article 32 bis of the Federal Constitution calls for legislation to aim at reducing the
production and consumption of potable spirits and promoting the production of dessert fruit in order
to safeguard public health.  As a result of the measures adopted to that end, Swiss per capitaconsumption of fresh fruit is among the highest in Europe.
Other measures in this sector are aimed at preventing a collapse in the prices of domestic
products.
4. Background and authority
- Article 32 bis of the Federal Constitution;
- Federal Act of 21 June 1932 concerning alcohol;
- Agriculture Act of 3 October 1951.
5. Form of the subsidy
The subsidies are granted in different ways according to their nature:1. Contributions to the costs of quality control and of promoting fruit consumption.  The
contributions are paid to the trade organizations in the sector.  They are either flat-rate
or proportional to the organizations' financial participation;
2. Subsidies to promote the utilization of surpluses without distillation.  These are
primarily intended for manufacturers of concentrated fruit juice and cover the
additional costs resulting from the takeover of surpluses.  In addition, subsidies are
paid to exporters in order to safeguard exports of cherries and certain fruit products,
in particular pip-fruit juice concentrates to  traditional markets.  The subsidies are
fixed sums per unit which are determined according to market conditions;G/SCM/N/48/CHE
Page 27
3. Contributions to extension costs in the field of fruit growing aimed at rationalizing
cultivation and improving fruit quality.  They are granted to cantons which
themselves provide assistance for this purpose;
4. Contributions to the renewal of apricot cultivation and reduction of the price of
apricots intended for industrial processing.  Contributions are paid to the producers.Contributions for cultivation renewal have been included in the action plan which
started in 1995 and which is limited to 1998.  They consist of fixed sums per hectare
and per tonne.
6. How the subsidy is granted and to whom
See replies to Question 5.
7. Amount of the subsidy per unit
Total amount (in thousands of Sw F)
Year Total Points 1 to 2 Point 3 Point 4
1998 25,148 22,431 351 2,366
Amount per unit
The contribution for reducing the price of apricots intended for industrial processing came to
40 centimes per kg. of processed apricots.
The contribution for renewal of apricot cultivation varies from Sw F 3 to 6.50 per square
metre.  The parameters determining the subsidy are the slope of the plot, its layout and the
environmental charges accepted by the producer.
The amounts per unit for the other measures mentioned cannot be shown because they vary
too widely with conditions and with the market situation.
8. Duration of the subsidy
For the institutionalized measures during the period covered by the notification, see the
replies to Question 5.
9. Statistical data enabling the effects of the subsidy on trade to be assessed
The main effect of the subsidies is to ensure, to a great extent, that the pip-fruit crop can be
put to non-alcoholic use.  As per capita consumption of all forms of fruit is very high in Switzerland,
domestic production of fruit covers only about half of the country's requirements, according to theyear.G/SCM/N/48/CHE
Page 28
Production and trade
(thousands of tonnes)
Year Production Imports
Total9Of which apples Chapter 08 Heading
0808/0809
1998 206 433 436 60
The quantities of fruit exported (Chapter 08) correspond to:
1998 1,681 tonnes
XI. WINE, GRAPE JUICE, DESSERT GRAPES
1. Title of the subsidy programme
Maintenance of quality by verification of the grape harvest
2. Period covered
1998.
3. General goal and/or purpose of the subsidy
The measure is designed to promote the disposal of the grape harvest.
4. Background and authority
- Agriculture Act of 3 October 1951;- Federal Order of 22 June 1979 instituting measures in favour of viticulture;
- Wine Statute of 23 December 1971.
5. Form of the subsidy
Contributions (grants).
6. How the subsidy is granted and to whom
The financial assistance for harvest verification is paid to the cantons as administrative
compensation for taking responsibility for carrying out the verification.  This assistance covers
between 60 and 80 per cent of expenditure by the cantons.
                                                     
9 Apples, pears, quinces, cherries, plums and prunes,  apricots, peaches, walnuts, kiwi fruit and berries.G/SCM/N/48/CHE
Page 29
7. Amount of the subsidy by unit (in thousands of Sw F)
Year Verification of harvest
1998 858
8. Duration of the subsidy
The subsidy for grape-harvest verification is paid each year after presentation of the cantons'
accounts, in accordance with the relevant legal basis.
9. Statistical data enabling the effects of the subsidy on trade to be assessed
Production, Trade and Consumption10
Wine
(in thousands of hectolitres)
Year Production Imports Exports Consumption
1997/98 1,045 1,765 14.2 2,914
XII. PROCESSED AGRICULTURAL PRODUCTS
1. Title of the subsidy programme
Export contributions.
2. Period covered
1998.
3. General goal and/or purpose of the subsidy
In order to place the Swiss foodstuffs industry on an equal footing with foreign competitors in
respect of the cost of agricultural commodities used in the preparation of processed products, the Act
mentioned below authorises Switzerland to grant contributions on exports.
4. Background and authority
The Federal Act of 13 December 1974 on the import and export of processed agricultural
products, which has been in force since 1 June 1976, and the Order of 18 October 1995 regulating
contributions to exports of processed agricultural products.
5. Form of the subsidy
The contributions are granted for the export of certain agricultural commodities (dairy
products, egg products, cereal products, sugar and molasses) where they are exported in the form of
processed food products.  They are calculated on the basis of the difference between Swiss and
                                                     
10Figures based on the wine-growing year extending from 1 July to 30 June .G/SCM/N/48/CHE
Page 30
foreign prices of agricultural commodities and acco rding to the quantity of agricultural commodities
used in the manufacture of the goods exported.
6. How the subsidy is granted and to whom
The contributions are paid to manufacturers after export.  Requests for contributions may
include exports made during a period of from one to twelve months.
7. Unit amount of the subsidy or, where this is not possible, total amount or budgetized annual
amount of the subsidy
The total amount of the contributions paid was:  Sw F 136.8 million in 1998.
Export contributions are calculated and fixed annually (and adapted periodically in the case of
major changes in Swiss or foreign representative prices) for each of the principal agricultural
commodities used by the foodstuffs industry on the basis of the difference between Swiss and foreign
representative prices.  The amount per unit of processed products also depends on the quantities of
agricultural commodities used in preparing the goods exported.
8. Duration of the subsidy and/or any other deadline connected with the subsidy
Export contributions have been in force since 1 June 1976.  The budget is allocated on an
annual basis from 1 January to 31 December.
9. Statistical data enabling the effects of the subsidy on trade to be assessed
Export contributions make it possible to put Swi ss firms in the same competitive situation on
foreign markets as foreign firms as regards the costs of purchasing the principal agriculturalcommodities.
__________