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Tighter belts for farmers.

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The Swiss government has recently announced a budget of 13.54 billion CHF for farmers from 2008 through 2011. This budget, which is 634 million CHF less than the existing four-year budget, has farmers up in arms.

Farmers have promised to fight the plans and criticised the government for rushing farm reforms. They say they have already taken steps to reduce production costs by 500 million CHF.

Should they manage the reduction, consumers may see the effects reflected in Swiss food prices, which are currently higher than in Europe due to higher production costs.

The drastic budget cut followed on the heels of criticism by the World Trade Organization that the Swiss government had been moving too slowly to curb subsidies.

In a December report, the WTO said the level of state subsidies for farming had not changed for four years, although the organisation did note a gradual move away from price support towards direct payments.

Switzerland signed an international agreement with the Geneva-based WTO last August, which...

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