Daily Israel Report

My Israel: Save the Dairy Farmers

A grassroots Zionist group says the government was wrong to take back its Milk Law and is punishing the farmers instead of Tnuva.
By Gil Ronen
First Publish: 8/10/2011, 11:59 AM

Media-savvy grassroots Zionist group My Israel, which has a large membership on Facebook, is calling upon the government to rethink its policy on the milk market. My Israel says the government reacted hastily to the protest against the high price of cottage cheese and decided to punish the dairy farmers, who are not to blame for the price hike.

In the last five years, My Israel explains, dairy farmers have been receiving about 2 shekels per liter of milk (this is known as the "target price"). Because milk is considered a vital product, the market is not opened up to free competition. In April of this year, the government passed the Milk Law regulating the price of milk.
 
However, when the protest erupted, the government decided to rescind its own law and open up the market to imports of powdered milk – hurting dairy farmers.
 
My Israel says that it was Tnuva, which controls 70% of the dairy market in Israel, which then proceeded to raise the price of cottage cheese. This happened after Tnuva was purchased by an Apax, an investment firm, which prodded it to raise prices. The price went up from 5 shekels per container to 8 shekels. But the farmers continued to receive 2 shekels per liter of milk. Tnuva pocketed the profits.
 
It is therefore Tnuva and people like Zehavit Cohen, Managing Partner and Office Head of Apax Partners Israel, whom the government should have taken to task, explained My Israel. Instead "it chose the weakest link – the dairy farmers – who were not involved in swindling the public."