"Kahlon is failing to lower the price of housing, so he's taking it out on the farmers. It's a good thing he chose to deal with agriculture, instead of going to war in Gaza," said Moshav Movement secretary general and Israel Farmers Federation chairman Meir Tzur. He attacked Minister of Finance Moshe Kahlon, following the report of the plan by the Ministries of Finance and Agriculture and Rural Development to eliminate production quotas and the agricultural production and marketing boards. "That's the main reason why he issued the plan. They didn't have to do this. We're in the middle of negotiations, and it's not right to issue unilateral statements."
As reported yesterday by "Globes," the Ministries of Finance and Agriculture and Rural Development are planning to eliminate production quotas for eggs and dairy products, and to eliminate planning in the poultry sector. As part of this reform, the ministries are also planning to discontinue the activity of the production and marketing boards under the law, headed by the Israel Dairy Board, the Eggs and Poultry Board, and the Plants Production and Marketing Board. These measures are part of an overall plan to lower the cost of living. In return, the government will compensate the farmers directly, similar to the subsidy given to farmers in Europe. The farmers will undertake not to reduce their current volume of production.
The ministries are thereby seeking to lower the price of raw milk to the average price in the Organization for Economic Cooperation and Development (OECD) countries. In contrast to past policy, in which these sectors were planned in order to ensure a regular supply of merchandise in the market on the one hand, and to prevent market saturation on the other, Kahlon and Minister of Agriculture and Rural Development Uri Ariel want an open and free market in order to increase competition and lower prices.
Another part of the plan concerns an increase in customs duties-exempt import quotas for fresh beef, lamb, yellow cheese, olive oil, frozen vegetables, and fresh vegetables, as well as reduced customs duties on fresh fish imports. The farmers are asserting that the ministries' plan was published in the wake of the report by the Chief Government Appraiser of an 8% rise in housing prices, and that there is a direct connection between the events. Tzur stated, "In fish, we have already reached the end of the negotiations. 90% of fish is imported in any case, and we are closed to agreement with the Ministry of Finance on compensation for the growers. There was no need for all this hoo-hah.
"In dairy products, there is the Locker agreement, so they can't open it for the next two years, and there's nothing behind these statements. In the Locker agreement, we lowered the price; the state invested money in order to cut back on cow sheds, and paid NIS 300 million for it. They lowered the price of raw milk, and as of now, the government has signed an agreement that is valid for the next two years. All these declarations are cheap demagoguery."
"Globes": What are you getting excited about? You yourself said that you are negotiating with the government. It did not come as a bolt from the blue.
Tzur: "If you're negotiating, you don't say, 'I'm making a reform,' and put it all to one side.
"In other words, Kahlon says he's wiping it all out. From 3,000 families making a living from it, he wants to give it all to 10 families." Tzur claims that opening the market to imports of customs duties-exempt yellow cheese and allowing imports of fresh meat without customs duties up to a certain quota did not lower the price to the consumer, and that the plan involved is not expected to generate any significant change.
According to Tzur, "Today, there is no restriction on importing calves brought directly to slaughter, without going through the farmers."
Customs-exempt imports of calves is allowed only up to 500 kilograms.
"But there is no supervision. They import as many calves as they want, with whatever weight they want. They import frozen meat, chilled meat, and it's a fact that consumer prices have stayed almost as high, because it's in the hands of the marketers and chains, and they don't want to bring the prices down. I'm referring first of all to importers, but also to the marketing chains."
Yellow cheese prices have fallen as a result of opening the market to customs duties-exempt imports.
"Only for yellow cheese that is not for human consumption. This yellow cheese contains all the carcinogenic materials present in cold cuts. The price of the basket of dairy products did not fall."
You are making an unjustified generalization.
"The price of imported cheese fell, but it's almost never sold. The price of yellow cheese produced in Israel has not fallen. I want to say that the prices don't depend on the farmer - certainly not the price of cheese or meat. The farmer gets less than 50% of the price at which the consumer buys the egg, even though it’s a planned market. It's unreasonable for the farmer to get NIS 14 for a tray of eggs when the consumer pays NIS 31 for it."
Published by Globes [online], Israel business news - www.globes-online.com - on February 22, 2016
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