The Swiss government has announced it will pay out over SFr70m (US$47m) in compensation to around 7000 dairy farmers who were badly affected by the collapse of Swiss Dairy Food.

The milk processing company went into receivership because of its enormous debts, still owing large sums of money to farmers. The government has pledged to repay around 80-90% of the money owed to farmers by the company.

Swiss Dairy Food was one of Switzerland’s biggest dairy processors and controlled 20% of the milk market. The cheese and ice-cream divisions are likely to be sold, thereby guaranteeing jobs for around two-thirds of the company’s 1600 employees.