WORLD TRADE
ORGANIZATIONG/SCM/N/38/CHE
15 July 1998
(98-2793)
Committee on Subsidies and Countervailing Measures Original:  French
SUBSIDIES
 New and Complete Notification Pursuant to Article XVI:1 of the GATT 1994 and Article 25
of the Agreement on Subsidies and Countervailing Measures
SWITZERLAND
The following communication, dated 16 September 1998, has been received from the
Permanent Mission of Switzerland.
______________
TABLE OF CONTENTS
Page
PART ONE:  INDUSTRY ...........................................................................................................3
I. ASSISTANCE FOR ECONOMIC ZONES WHICH ARE BEING
 REORGANIZED ...........................................................................................................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.............................................................................................11
 I(e) Dairy-policy m easures taken .....................................................................................12
II.  BREEDING AND DAIRY CATTLE ..............................................................................13
 1. Promotion of sales within the country .......................................................................14
 2. Export su bsidies ........................................................................................................14
III. HORSES ...........................................................................................................................16
1. Breeding bonuses.......................................................................................................16
2. Export subs idies.........................................................................................................16G/SCM/N/38/CHE
Page 2
Page
IV. WOOL ..........................................................................................................................17
Purchase of domestic wool ............................................................................................17
V. EGGS ............................................................................................................................18
Price equalization fund for eggs and egg products........................................................18
VI. BOVINE MEAT ..........................................................................................................19
Temporary measures:  valo rization of bov ine meat.......................................................19
VII. FEED GRAINS ............................................................................................................20
Bonuses to promote the growing of feed grains, apart
from maize, and s eed legumes.......................................................................................20
VIII. OIL-SEEDS ..................................................................................................................22
Price support.................................................................................................................. 22
IX. SUGAR BEET ..............................................................................................................24
Price support.................................................................................................................. 24
X. POTATOES .................................................................................................................25
Encouragement of the use of potatoes ...........................................................................25
XI. FRUIT ...........................................................................................................................28
Valorization of domes tic produc tion .............................................................................28
XII. WINE, GRAPE JUICE, DESSERT GRAPES ..........................................................30
1. Maintenance of quality by veri fication of the gr ape harvest..............................30
2. Non-alcoholic use of grap es (dessert grapes).....................................................30
XIII. PROCESSED AGRI CULTURAL PRODUCTS .......................................................32
Export contributions ......................................................................................................32G/SCM/N/38/CHE
Page 3
PART ONE:  INDUSTRY
I. ASSISTANCE FOR ECONOMIC ZONES WHICH ARE BEING REORGANIZED
1. Title of the programme
Assistance for economic zones which are being reorganized.
2. Period covered
1 July to 31 December 1997.
3. General goal and/or purpose of the subsidy
Promotion of projects coming under the private economy aimed at creating and redeploying
jobs in economic zones which are being reorganized.
4. Background and authority
The Federal Order on economic zones which are being reorganized of 6 October 1995, in
force since 1 July 1996, and the Orders of 10 June 1996 and 30 June 1997.
5. Form of the subsidy
Financial assistance is allocated in the form of:
(i) Sureties to guarantee investment credits;
(ii) contributions to servicing the interest on investment credits;(iii) tax reductions.
6. How the subsidy is granted and to whom
Financial assistance is granted to industrial firms and service firms closely linked to the
production process.  The amount of the credit granted amounts to a maximum of one third of the total
cost of the investment project.
Under the Order of 10 June 1996 zones considered to be undergoing reorganization are those
where:
(a) The average unemployment over the last three years has exceeded the national
average by at least 10 per cent;
(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 foregoing situations will occur
shortly, in particular that the prospects for the most important sectors of the economy
and for the largest firms are unfavourable.G/SCM/N/38/CHE
Page 4
The subsidies have been reduced by introducing a ceiling of Sw F 5 million for the credit for
which interest contributions may be paid.  The maximum subsidy which can be granted in each case
(Confederation plus Canton) comes to Sw F 625,000 (5 per cent interest rate).
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 51.1 million in guarantees has been granted under the new legislation since
the Federal Order of 6 October 1995 came into force.
8. Duration of the subsidy and/or any other deadline connected with the subsidy
The assistance programme for economic zones which are being reorganized remains in force
for five years.  The maximum duration of financial assistance in each case has been reduced to eight
years for guarantees and five years for interest contributions.
9. Statistical data enabling the effects of the subsidy on trade to be assessed
The effect of the subsidy 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
1997.
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.  The criteria determining the
aid requirement in a mountain area are to be found in the Federal Law on investment assistance inmountain areas (RS 901.1) of 28 June 1974 and in the Order (RS 901.11) of 9 June 1995.
An area is regarded as needing assistance when disadvantaged municipalities account for over
50 per cent of its area and at least 20 per cent of its population.  Disadvantaged municipalities are
deemed to be those for which the application of at least two of the criteria given below producesresults falling below a threshold value fixed by the Federal Department of Public Economy;  these
criteria are:
(i) Long-term demographic development (denoted by the average of the development
factor and of the population age-structure factor, as these factors are defined by thelaw);
(ii) economic capacity (a function of the factor denoting income, as defined by the law);G/SCM/N/38/CHE
Page 5
(iii) existing collective facilities (measured by the factor indicating the locality's power of
attraction as defined by the law).  These indicators are defined in Articles 5 to of the
Order on Investment Assistance in Mountain Areas (RS 901.11) of 9 June 1975.
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.  The
subsidy does not relate to a specific product or sector.
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 28 June 1974.  Payments are made
only 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 1997, the Confederation's total share of the losses on guaranteed loans was
Sw F 3.5 million, with federal commitments as a whole amounting, at year end, to Sw F 48.6 million.
The contributions to interest servicing paid out in 1997 totalled Sw F 0.4 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 taken
in 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.G/SCM/N/38/CHE
Page 6
(Millions of Sw F)
Accounting period 1997
Expenditure
1. Disposal of butter313.2
2. Disposal of cheese 391.2
3. Contribution to cow keepers  whose milk is not marketed 93.3
4. Special price reduction for soft and semi-hard cheese 50.5
5. Other measures (including valorization of preserved milk products) 36.2
6. Supplements on milk converted into cheese
Total expenditure63.5
1,073.8
Coverage
1. General resources of the Confederation 789.3
2. Special-purpose revenue 206.0
3. Share of losses payable by producers 78.5
Total receipts 1,073.8
I(b) Butter
1. Title of the subsidy programme
Item 1 of the dairy account above:  disposal of butter
2. Period covered
1997.
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,G/SCM/N/38/CHE
Page 7
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:
(Millions of Sw F)
Accounting period 1997
1. Reduction in the price of table butter (choice, full-cream and whey-based butter) 162.8
2. Reduction in the price of cooking butter and resolidified butter, and storage,
transport and interest costs72.5
3. Advertising costs 10.0
4. Subsidy for fresh skimmed milk intended for animal feed and special uses 47.6
5. Miscellaneous contributions 20.3
Total expenditure on disposal of butter 313.2
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.G/SCM/N/38/CHE
Page 8
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:
Retail price (in Sw F per kg.)
As of 1 April 1995 As of 1 April 1997
Choice butter (200 g. packages) 15.50 15.50
Fresh cooking butter (250 g. packages) 12.40 12.40
Resolidified butter (450 g. tins) 12.67 12.67
Production, trade and consumption (in tonnes)
Year Production Of which choice butter Imports Consumption
1997 38,589 32,047 4,458 44,509
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:G/SCM/N/38/CHE
Page 9
1. Disposal of cheese
2. special price reduction for soft or semi-hard cheeses
2. Period covered
1997.
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.
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 arecharged to the dairy account of the Confederation.
                                                     
1Allowing for fluctuations in stocks.G/SCM/N/38/CHE
Page 10
The different forms of subsidy for cheese disposal are:
Accounting period 1997
1. Coverage of market organizations' losses 381.7
2. Price-reduction contribution to producers of soft and semi-hard  cheese 50.5
3 Contribution to the costs of holdings producing for a half-year 9.5
4. Contribution to improving the structures of small-scale dairies -
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/38/CHE
Page 11
9. Statistical data enabling the effects of the subsidy on trade to be assessed
 Cheese production and consumption 1997
Production (in tonnes)
- Domestic production 135,950
- Additional raw material output intended for processed cheese
manufacture4,700
- Imports 30,786
Total quantity 171,436
- Domestic quantity exported 60,824
- Variations in stocks -1,320
Consumption (in tonnes)
- Domestic quantity 81,146
- Imports 30,786
Total domestic consumption 111,932
Percentage share of domestic quantity 72.5
Percentage share of imports 27.5
Consumption (in kg. per head per year) 15.6
- Share of domestic quantity 11.3
- Share of imports 4.3
I(d) Preserved milk products
1. Title of the subsidy programme
Export subsidy for preserved milk products.
2. Period covered
1997.
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.
5. Form of the subsidy
Payment to exporters of preserved milk products.G/SCM/N/38/CHE
Page 12
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 1988 As of 1 March 1996
Sterilized milk 50 50
Cream 50 65
Preserved milk products 50 60
Yoghurt 50 60
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, Trade and Consumption2
   (in tonnes of fresh milk used)
Year Production Imports Exports
CommercialAssistance
schemesConsumption
1997 187,000 n.a. n.a. n.a. n.a.
I(e) Dairy-policy measures taken
1. Title of the subsidy programme
Milk-price support.
2. Period covered
1997.
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 asuitable milk production level in Switzerland whilst ensuring a regular income for producers.
                                                     
2Allowing for fluctuations in stocks.G/SCM/N/38/CHE
Page 13
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 priceon any surplus.  Since 1 November 1989 an additional charge of up to 5 centimes per kg. has been
levied 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
1995/96 3,061
1996/97 3,055
The figures show that the milk-production quota system has stabilized deliveries.
II. BREEDING AND DAIRY CATTLE
1. Title of the subsidy programme
1. Promotion of sales within the country.
2. Export subsidies.G/SCM/N/38/CHE
Page 14
2. Period covered
1997.
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 authorized 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/38/CHE
Page 15
7. Amount of the subsidy per unit
  Total (in thousands of Sw F)
1997
Promotion of sales within the country:
- Subsidies to relieve market pressure 2,094
 Export subsidies 104
Total 2,773
Per unit (as an average, Sw F per livestock unit)
1997
Promotion of sales within the country:
- Subsidies to relieve market pressure 572
Export subsidies 250
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 250,00030
Switzerland imports practically no dairy cattle. Exports are zero because of restrictions in the
importing countries due to BSE.
                                                     
3Estimate .G/SCM/N/38/CHE
Page 16
III. HORSES
1. Title of the subsidy programme
1. Breeding bonuses.
2. Export subsidies.
2. Period covered
1997.
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 1997 amounted to Sw F 140,000.
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 3,414 60-200 400-700
8. Duration of the subsidy
The subsidy has been in force since 1960.G/SCM/N/38/CHE
Page 17
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 Trade4
(Head)
Year  Horse numbers Imports Exports
1997 45,799 2,590 1,930
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
1997.
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 1.8 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
purchasing the wool.  This reimbursement is intended to cover the price difference mentioned and thevariable amount granted by the CLI.
                                                     
4Enumeration is carried out in April of each year.  Horses intended for slaughter are not included.G/SCM/N/38/CHE
Page 18
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)
1997 1,556 2,568
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 trade5  to be assessed
(in tonnes)
Year  Production Imports Exports
1997 606 5,300 716
V. EGGS
1. Title of the subsidy programme
Price equalization fund for eggs and egg products.
2. Period covered
1997.
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.
5. Form of the subsidy
Contributions (grants).
                                                     
5Wool, etc. falling under Headings Nos. 5101.1100/1900, 5101.2100.2900, 5101.3000,
5105.1000/2900.G/SCM/N/38/CHE
Page 19
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 forimporters 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)
1997 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
1997 663 377 888
    
Exports are negligible.
VI. BOVINE MEAT
1. Title of the subsidy programme
Temporary measures:  valorization of bovine meat.
2. Period covered
1997.
3. General goal and/or purpose of the subsidy
Special measures to support the beef market have been taken as a result of the problems
caused by BSE in Europe.
4. Background and authority
- Agriculture Act of 3 October 1951;
- Order of the Federal Council of 9 December 1996:  25 million (non-repayable);
- Order of the Federal Council of 17 September 1997:  15 million (non-repayable).G/SCM/N/38/CHE
Page 20
5. Form of the subsidy
See item 4.
6. How the subsidy is granted and to whom
Three types of measures have been introduced in order to deal with the crisis:- Market intervention (purchase and storage) by the Swiss Cooperative for the Supply
of Slaughter Cattle and Meat (CBV);
- a targeted reduction of meat prices for the needy;- the provision of meat for Swiss humanitarian aid purposes.
7. Amount of the subsidy
The measures represent a total amount of Sw F 40 million.
8. Duration of the subsidy
- Order of 9 December 1996:  until 31 March 1997;- Order of 17 September 1997:  until 31 December 1997.
9. Statistical data enabling the effects of the subsidy on trade to be assessed
Prices to producers steadied between 30 August 1996 and 20 December 1996 owing to
reduced supplies and the pressure-relieving measures taken.     
Animal category 5.1.96
Sw F/kg. DW620.12.96
Sw F/kg. DW27.6.97
Sw F/kg. DW19.12.97
Sw F/kg. DW
Cows (VK A3) 4.55 2.77 4.94 3.82
Heifers (RG T3) 7.89 6.29 6.87 7.04
Bulls (MT T3)  8.77 7.34 7.56 8.38
VII. FEED GRAINS
1. Title of the subsidy programme
Bonuses to promote the growing of feed grains, except maize, and seed legumes.
2. Period covered
1997.
                                                     
6Dead weight.G/SCM/N/38/CHE
Page 21
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.
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, einkorn7, and emmer8 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 1997 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
1997 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
1997 374 26 400
                                                     
7From 1996.
8Provisionally.G/SCM/N/38/CHE
Page 22
VIII. OIL-SEEDS
1. Title of the subsidy programme
Price support.
2. Period covered
1997.
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 theirmanufacturing 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 20,000 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/38/CHE
Page 23
7. Annual amount of the subsidy
Year Colza
Total
(thousands of Sw F)Per tonne of seed
(in Sw F)
1997 32,403 647
Year Soya
Total
(thousands of Sw F)Per tonne
(in Sw F)
1997 3,562 571
Year Sunflower
Total
(thousands of Sw F)Per tonne
(in Sw F)
1997 1,724 587
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 supported 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 hasbeen limited to 20,000 hectares at the same time, w ith the colza area restricted to 16,000 hectares at
most.
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
1997 50,091 18,928
Imports of colza seed and oil are irregular and small.  There are no exports.
(in tonnes)
Soya
Year  Soya seed production Soya seed import Soya oil exports
1997 6,239 96,545 13,473
(in tonnes)
Sunflower
Year Sunflower seed production Sunflower seed imports Sunflower oil exports
1997 2,937 30,057 535G/SCM/N/38/CHE
Page 24
IX. SUGAR BEET
1. Title of the subsidy programme
Price support.
2. Period covered
1997.
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.
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 ofdomestic 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.G/SCM/N/38/CHE
Page 25
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
1997 22,008 12
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 introduced
on 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 Imports9Exports10
1997 182,790 119,000 275
X. POTATOES
1. Title of the subsidy programme
Encouragement of the use of potatoes.
2. Period covered
1997.
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.
                                                     
9Customs tariff headings:
     1701.1100/1200/9100/9900/9991/999/(1994);     1701.1100/1200/9100/9991/9999/999/(1995/96).
10Id.10.G/SCM/N/38/CHE
Page 26
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 potatoes for
human consumption and of potato products;
3. financial assistance to potato organizations;4. financial assistance for research;5. 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.  Financial assist ance may also be provided to support research in
the fields of technology, food and fodder and to disseminate know-how.
2. Price support
For the 1996 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 Federal Council after consultation with interested
parties.  In fixing the prices, due account will be taken of specific quality requirements.
Type of subsidy Recipient
Transport subsidy Business housesSubsidy to reduce the price of Producers, buyers, cattle keepers
ordinary potatoes intended for
fodder.                            
Flat-rate allowance for the Dehydration factories
processing of surpluses            G/SCM/N/38/CHE
Page 27
Financial assistance for potato Commission suisse de la pomme de terre
organizations                      
Financial assistance for research Commission suisse de la pomme de terre/
Federal Agricultural Research Station
Financial assistance for Commission suisse de la pomme de terre
advertising to promote potato
consumption
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 specialinstructions and directives.
7. Amount of the subsidy
Utilization of potatoes
(in thousands of Sw F)
Year Total expenses
1997 40,195
Amount per unit
(Sw F per tonne)
Year Utilization of surpluses
1997 198,45
8. Duration of the subsidy
Subsidy for the utilization year From 1 September until the end of the utilization year
Subsidies to organizations and Single amount for the whole year
for research
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)
(in thousands of tonnes)
Year Crop Imports Exports Share of crop intended for domestic
human consumption
1997 687 16 3 390G/SCM/N/38/CHE
Page 28
XI. FRUIT
1. Title of the subsidy programme
Valorization of domestic production.
2. Period covered
1.07.1996-31.12.1997
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 capita
consumption 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-rateor 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 arepaid to exporters in order to safeguard exports of cherries and certain fruit products,
in particular pip-fruit juice concentrates to traditional markets.  The granting of these
subsidies is conditional on adherence to the minimum prices fixed by the Federal
Council for cider fruit.  The subsidies are fixed sums per unit which are determined
according to market conditions;
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.G/SCM/N/38/CHE
Page 29
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 11
1996/97126,6877 3,630 1,042 2,205
1996/971310,316 7,269 597 2,450
Amount per unit
The contribution for reducing the price of apricots intended for industrial processing came to
54 centimes and 31 centimes per kg. of processed apricots for 1996 and 1997, respectively.
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.
Production and trade
(thousands of tonnes)
Production Imports Year
Total14Of which apples Chapter 08 Heading
0808/0809
1997 n.a. n.a. 436 65
                                                     
11 The 1996 and 1997 calendar years.
121 July 1996-31 January 1997 .
131 February 1997-31 December 1997.
14 Apples, pears, quinces, cherries, plums and prunes,  apricots, peaches, walnuts, kiwi fruit and berries.G/SCM/N/38/CHE
Page 30
The quantities of fruit exported (Chapter 08) came to:
1997 2,508 tonnes
XII. WINE, GRAPE JUICE, DESSERT GRAPES
1. Title of the subsidy programme
The following measures have been taken in order to promote vinegrowing:
1. Maintenance of quality by verification of the grape harvest;
2. Non-alcoholic use of grapes (dessert grapes).
2. Period covered
1997.
3. General goal and/or purpose of the subsidy
The measures in point 1 are designed to promote the disposal of the grape harvest.  The
subsidies for the non-alcoholic use of grapes are intended to promote the disposal of part of the
harvest and certain types of grapes (Chasselas and Americano from the Tessin).
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 measures to promote the processing of grape juice and the industrial use of surplus wine
have been abandoned since 1990.  Subsidies for vineyard renewal were abolished at the end of 1992.
Financing of the vinegrowing promotion measures is provided out of the vineyard fund.  This fund is
financed by a share of the special-purpose customs duties levied on grape juice and wine imported in
casks.
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.
Subsidies for the non-alcoholic use of grapes are granted to dessert-grape traders on condition
that they pay the fixed prices to the producer.  These subsidies must ultimately be passed on to the
consumer.G/SCM/N/38/CHE
Page 31
7. Amount of the subsidy by unit
 (in thousands of Sw F)
Year Verification of harvest Dessert grapes
1997 1,165 1,730
Unit amount:
Non-alcoholic use of grapes (dessert grapes):  between Sw F 1.00 and 2.40 per kg.
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.  As regards the sale of dessert grapes, the
subsidy was considerably increased in 1984.  Contributions are paid in the autumn of each year afterthe sales season, which lasts three to five weeks depending on maturation conditions.
9. Statistical data enabling the effects of the subsidy on trade to be assessed
Production, Trade and Consumption15
Wine
(in thousands of hectolitres)
Year Production Imports Exports Consumption
1996/97 1,304 1,617 13.5 2.930
Grape Juice
(in thousands of hectolitres)
Year Production Imports Exports Consumption
1996/97 0.7 92 2 91
Dessert Grapes
(in thousands of tonnes)
Year Production Imports Exports Consumption
1996/97 0.7 34.8 - 35.5
                                                     
15Figures based on the wine-growing year extending from 1 July to 30 June .G/SCM/N/38/CHE
Page 32
XIII. PROCESSED AGRI CULTURAL PRODUCTS
1. Title of the subsidy programme
Export contributions.
2. Period covered
The period covered by the notification is 1997.
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 andforeign 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 127.8 million in 1997.Export contributions are calculated and fixed periodically (normally every three months) 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 goodsexported.
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.G/SCM/N/38/CHE
Page 33
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 agricultural
commodities.
__________