"No one in his right mind would have considered publishing such a report. This is an announcement that could permit price hikes in the market and panic the public. This was not supposed to be for publication. This was supposed to be for internal consumption," a senior Ministry of Agriculture official told "Globes" today about a ministry report last week which predicts price hikes of 6-17% in dairy products, eggs, and poultry. The estimate is based on rising agriculture commodities prices in the world.
It turns out that only in late July, a few days before the report was published, the Ministry of Agriculture decided to examine the effect of rising inputs prices on the retail prices of dairy products and eggs, and concluded that there would be no change, and that the price of eggs might even fall a bit. The Ministry of Agriculture controls prices for eggs, milk, butter and some dairy products.
"As of July 2012, the change was zero, which is why prices were not updated. The prices of eggs were even supposed to fall slightly that month, but there was no point in lowering the price if VAT was due to rise by 1%, and the prices of cereals were already beginning to have an effect," confirmed Ministry of Agriculture deputy director general economic research and strategy Uri Tzuk-Bar, whose office published the report.
The remarks are raising questions about the decision to publish the dire report. "The report gives producers courage to raise prices. It gives them legitimacy," a top retailer told "Globes".
Another retailer added, "You hear about such a report and realize that suppliers have no choice but to raise prices. If the price of eggs and milk go up, then everything will probably go up. Consumers also hear, and realize that there is no choice, this is written in stone. That's just the way it is. This report ranges from criminal and irresponsible. If we as consumer cannot believe in the data that the state feeds us, what's next? There's a minister of agriculture who is responsible, and she should go home."
An aide of Minister of Agriculture Orit Noked said in response, "The Ministry of Agriculture is committed to food security for the country's people. Due to global events and processes, the ministry's management instructed the ministry's economic research and strategy department to monitor strategic developments that are liable to affect Israel's food security. The research department's report has not yet been discussed by the ministry's management or presented to the minister. Before the report was discussed and before tools for dealing with the situation were discussed, the report was distributed to the general public by the ministry's spokeswoman without permission or authority."
Published by Globes [online], Israel business news - www.globes-online.com - on August 20, 2012
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