Following more than a year of negotiations, the Ministry of Finance, the Ministry of Agriculture and Rural Development, and the dairy farmers have signed an agreement regulating the dairy sector for the next decade.
The agreement preserves planning in the dairy industry and the target price mechanism. It both includes grants and investment for dairy growers and opens the market to imports, with a gradual reduction in customs duties.
The regulated target price of milk will be gradually reduced each year until 2025.
Customs duties will be cut to NIS 4.90 per kilogram in 2019 and NIS 3.20 per kilogram in the final year of the agreement. If the target price is lower, customs duties will be lowered to NIS 3 per kilogram.
The agreement will be extendable for another year by the ministers.
After the agreement was signed, Israeli Cattle Breeders' Association secretary general Avitar Dotan said, "The Association worked hard to find the right balance in the agreement. Now that it has been signed, it can be said that the Locker agreement was a retirement agreement. This agreement is a development agreement that ensures resources and certainty for people in the sector. The agreement includes a mechanism for dealing with regulation, such as building permits and foreign workers, plus a team for handling partnership and merger rules. All of this is designed to provide an environment for growth in the sector without hindrance."
Dotan added, "This outstanding agreement balances the government's wishes against our desire to earn a respectable livelihood and maintain Israeli cattle breeding throughout the country. A way was found for substantial investments after two years with no investments, fair retirement conditions, and solutions for regulatory problems.
"Adapting to the agreement terms is not easy. Efficiency measures have always prevailed in the sector, and we are committed to preserving this splendid industry."
Published by Globes, Israel business news - en.globes.co.il - on October 29, 2018
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