The price of untreated milk sold by dairy farms will be cut from 2.15 shekels per liter to 2.09 shekels, the Cabinet decided. The decision was reached in a meeting by Prime Minister Binyamin Netanyahu, Finance Minister Yuval Steinitz and Shalom Simchon, Minister of Industry, Trade and Labor.
Dairy farmers intend to protest the cut and have filed an appeal to the High Court.
The cheese market will be opened to foreign competition. Annual imports of hard cheeses will be allowed to grow to 9,000 tons, as opposed to 1,080 today. By 2016, there will be no limitations on imports of hard cheese.
Annual powdered milk imports will be allowed to reach 4,000 tons by 2015.
It was also decided to establish a fourth dairy firm besides Tnuva, Straus and Tara.
Tnuva, founded in 1926 as a cooperative owned by kibbutz and moshav communities, is considered the largest food conglomerate in Israel, focusing on milk products. It has 6,630 employees. The Straus Group, established 1936, includes Elite, Israel's largest maker of coffee and sweets, and employs some 7,000 people. Tara, which has been around since 1942, is by far the smallest of the three dairies, has just 360 employees.