Daily Israel Report

Government to Approve Recommendations on Dairy Prices

Israeli government to approve the recommendations on lowering of dairy prices, following the great cottage cheese protest.
By Elad Benari, Canada
First Publish: 8/5/2011, 8:30 PM

Dairy products
Dairy products
Flash 90

The Israeli government is set to approve on Sunday the findings and recommendations by the team appointed by Prime Minister Binyamin Netanyahu to investigate the price of dairy products.

The steps taken will increase competition in the dairy market and lower the prices of dairy products, which have risen significantly in recent years and were the subject of recent protests on Facebook.

Netanyahu noted on Thursday that there is no reason for the Israeli public to pay such high prices for dairy products compare to most western countries. “We must deal with the failures of the dairy market and open it to competition,” he said.

According to the plan, which will be implemented over a period of five years, several measures will be taken to open the dairy market to competition, including exposing it to competing imports from abroad, thereby reducing the consumer price index.

Among the measures to be taken are:

Milk production, which is currently regulated by production quotas, will be partially opened for competitive production. This goal can be achieved by allowing limited imports of raw materials such as milk powder at a competitive price.

Small dairy farms, which are ineffective at the present, will be given the opportunity to grow and be competitive. Subsidies will be given to those small dairy farms in order to allow for growth.

The target price, which is the minimum price dairies are committed to pay for one liter of milk, will be calculated so as to take into consideration the production costs of those farms which are most effective.

The import quota for hard cheeses will be increased and at the same time, the import tax will be significantly reduced – from 70% to 20%, thus also making the hard cheese market more competitive.

In order to increase the supervision on dairy prices, dairies and supermarket chains will be required to report on their profits from the sale of dairy products.

It was also decided that in order to avoid hurting customers, products under supervision will be marked accordingly and their prices will be made public.

The dairy farmers have expressed their concerns over this plan, saying it would hurt their business. They announced earlier this week that they are planning to set up a protest tent opposite the home of Minister of Trade and Labor Shalom Simchon.

(Arutz Sheva’s North American Desk is keeping you updated until the start of Shabbat in New York. The time posted automatically on all Arutz Sheva articles is Israeli time.)