Farmers: Gov’t Is Putting Us Out of Business

Israeli farmers drove hundreds of tractors to demonstrate demanding Prime Minister Benjamin Netanyahu to intervene in the crisis in the agricultural sector, in front of the Knesset and the Finance Ministry in Jerusalem on November 9, 2015. Photo by Hadas Parush/Flash90 *** Local Caption *** ????? ?????? ?????? ????? ????? ??????? ???? ????? ?????? ???? ????? ????
Israeli farmers protest the government’s agricultural policies. (Hadas Parush/Flash90)

Hundreds of farmers demonstrated Sunday morning at several key intersections on Israeli roads, protesting against government plans to relax or eliminate duties on a wide variety of agricultural products. The government’s decision to allow for the free import of large amounts of eggs, tomatoes, cucumbers, cheese, meat and many other fruits, vegetables, and farm products “is going to kill the Israeli agricultural industry,” protesters said.

Duby Amitai, head of the Israeli Farmers Association, said that with its policies “the government is decimating farms and impoverishing farmers. We have come to protest not only to protect our own pocketbooks, but also the food security of Israel. Agriculture is a basic building block of Israel and we do everything we can to help it. We are relying on Turkey’s Erdogan and Hamas’s Haniyeh to feed us,” he said, referring to the importation of fruits and vegetables from Turkey and Gaza.

In recent months, Finance Minister Moshe Kachlon has instituted numerous changes in import policy, removing duties and taxes from butter, meat, dairy products, vegetables, and other food items. Over the previous year, Kachlon said in a report issued in September, that increased duty free imports of agricultural products had led to dramatic cuts in the price of food items. Among the discounts was a dramatic drop in the price of fresh carp, tilapia, and mullet to NIS 36 a kilo; a reduction in the price of frozen tilapia to NIS 20 a kilo; a fall in the price of fresh meat by 20 percent to 30 percent, thanks to increased imports; and a reduction in the cost of cheese by 20 percent to 30 percent, also due to imports.

The imports have raised the ire not only of farmers, but of food manufacturers. In an interview with business daily Calcalist, Dan Propper, one of the heads of Osem, Kachlon is ruining the Israeli economy with his policies. “I am not strictly opposed to imports,” he said. “For me, as an owner of Osem, it’s actually easier to import than to produce. But if I do that, I close down a factory because I don’t need the workers. Statistically, every million dollars in imports costs 4 to 5 manufacturing jobs. I and others can import without limit, but this would ruin the economy.”

Propper suggested instituting a differentiated VAT rate for basic foodstuffs. “In some European countries they have 17 percent or 18 percent VAT on purchases like we do, but only 7 percent VAT on food,” said Propper. He added that as far as he knew, food in Israel cost as much or as little as in Western Europe. “It’s possible that here and there sellers unfairly raise prices, but the majority of prices are the same here as elsewhere,” Propper said.

Shraga Brosh, head of the Israel Industrialists Association, expressed similar thoughts, telling the MKs that the government had failed Israeli manufacturing by failing to invest enough money in production technology. “If there was a lower VAT rate for food, the cost of food would drop significantly,” he said. “In Britain VAT on food is zero percent, and in other parts of Europe it is 7 percent or 8 percent. There is no reason Israel should charge 17 percent VAT on basic food.”

“We need to prevent unregulated imports and strengthen Israeli agriculture,” said Meir Tzur, head of the Moshav Movement organization at Sunday’s protest. “Instead of helping Turkey, Jordan, and the Palestinian Authority, help Israeli farmers to grow our own food instead of having to import it. Let the government reduce the cost of water, and the other expenses that make food expensive.”

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