Farmers have long blamed the high food prices in Israel on manufacturers and middlemen, saying that they receive only a small percentage of the full cost of food products for their raw materials – and the government has decided to follow up on that complaint. In a discussion, Finance Ministry officials told the Knesset Economics Committee that they intended to demand answers from middlemen regarding how much they raised costs to either manufacturers or consumers, and why.
Data on the cost of fruits, vegetables, grains, milk and other farm produce will be provided by farmers to a unit of the Finance Ministry, whose job it will be to keep track of prices, the officials said. Price data on each category of produce will be recorded at each stage of sale and production – from farmers to wholesalers, from wholesalers to retailers and/or manufacturers, and finally to the consumer. The Ministry will issue a report determining where price hikes took place, and the government will reserve the right to investigate why prices rose at a particular point in the process.
The discussion took place in the context of attempts by the Ministry to reduce import duties on imported food items. The Ministry had planned to dramatically increase the amount of fresh meat that could be imported into Israel duty free, in the hopes that this would drive consumer prices down, but Israeli producers, most notably Tnuva, threatened to stop their own production if the move was implemented.
Yet something needs to be done, Ministry officials told the Committee. Food prices for meat, dairy and fish are on average 22 percent higher in Israel than in Europe, and experience has shown that allowing imports in the food business indeed increases competition and reduces prices.
Committee chairman MK Eitan Cabel (Zionist Camp) said that the problem was not producer prices, “but those who corner the market and take the opportunity to extort huge sums from hapless consumers.” With that, he said, the government’s legitimate war on high prices “cannot come at the price of ruining farmers. However, we have come to a point where the concept of a ‘family farm’ is nearly a thing of the past. We need to decide what kind of agriculture we want in Israel.”