Butter iStock

The Economy Ministry has recommended that the Agriculture Ministry solve Israel's butter shortage by canceling taxes and supervision on imported butter.

Economy and Industry Minister Eli Cohen (Likud) said: "Canceling taxes and quotas are important issues to advance in general, but especially when it comes to things for which there is no local production."

"In accordance with this, solving the butter shortage via the free market means completely canceling the taxes and quotas on butter. This will increase competition and variety, and prevent the butter shortage."

The current tax for imported butter ranges from 126-140% for table butter and 144-160% for industrial butter.

Israel's government has capped the price for 100 grams of table butter at 3.94 NIS ($1.12). As a result, Israeli dairy farmers struggling to earn a livelihood have begun concentrating on producing more profitable dairy products, while at the same time exporting their butter.