Fiat SpA is to shut its CNH Global farm equipment plant at Imola, Italy, in two years, a company spokesman said on Wednesday.

The northern Italian plant employs about 500 workers, according to Reuters. The global agricultural equipment market has been hard hit by the recession as farmers hold off making big-ticket purchases.

Union leaders called the move unacceptable, Ansa news agency said.

Fiat last week said it planned to halt car output at its plant in Sicily in 2011 and also planned changes to production at a site near Naples. It has now also scheduled temporary layoffs at the Sicilian Termini Imerese plant in Sicily from 22 July to 2 August, an Italian media report said today.

The company called on Italy's government and unions last week to back efforts to keep jobs while cutting output in Italy.