New Import Strategy Promises Cheaper Food

Years of rhetoric in the struggle to bring down the cost of living has passed to action, according to Finance Minister Moshe Kahlon, who pledged on Sunday to reduce food prices with a new loosening of import restrictions.

Recently released data has confirmed what consumer advocates have long claimed and Israeli shoppers have long known—that commodities in Israel are much more expensive than they are in Europe. High tariffs and import barriers are widely blamed for the situation.

“In principle, we are planning on reducing import duties. At the moment, the things that are making fresh food in Israel expensive are high import duties and import caps. We intend to dramatically open, in the coming days, imports on meats and other items such as vegetables, fruits, and whatever is necessary in the food basket,” Kahlon told Ynet.

Kahlon said further that the restrictions would be selective, aimed at ensuring that the savings will reach the consumer, not scooped up by the big import companies.

He also said the ministry would place limits on large importers to preserve competition. If Tnuva imports dairy products, he said, it does not increase competition in the market. Ways will have to be devised to compensate Israeli farmers, who stand to suffer from an influx of imported produce, but Kahlon did not elaborate on how this would be accomplished, through higher subsidies or some other approach. “We’ll find a way to compensate the farmers, but writ large we have to protect the consumers,” Kahlon said. The OECD’s economic survey of Israel in January found that fruits and vegetables were actually lower than the OECD average, yet that meat, fish, bread and cereals, beverages (both alcoholic and not), milk, cheese and eggs were in the realm of 20-55% higher.

All in all, the report said, “distortive interventions – quotas, price guarantees and customs tariffs – still account for over 80 percent of total agricultural support in Israel, compared to around 20% in the United States and the European Union.”