The Government of Israel Against its Citizens (3)

This is the third article based on economist Hay Badra’s work at Dror Israel (www.drorisrael.org.il) outlining the government’s ongoing efforts to damage the economy while at the same time trying to make believe that it is helping the “Middle Class”. While this is, for the time being, the last part in the trilogy, I am afraid that Mr. Netanyahu and his government will continue to supply ample material for further articles of this kind as long as they are running this country.

Following the last article which outlined the impending transfer of parts of the Israeli economy to foreign elements, here we describe the goverment’s intention to severely damage the over 100 year old Zionist enterprise of Jewish agriculture. Under the heading of “lack of competition”, the Kedmi committee is about to sacrifice Israel’s agriculture by opening the doors to more imports.

Destructive Impact on the Food Industry

A report commissioned by the Kedmi Committee prepared by a company called “Monitor”, determined that competition in the food industry is less than what is generally accepted in the OECD. Monitor’s conclusions are in agreement with the findings of the Trachtenberg Committee whose conclusions are similar: Increase imports.

In a token of integrity, “The Marker” published an article explaining why increased imports will make the situation worse  and how the government’s policy will increase prices:

1. Dependence on imports will harm food security and a good example is what happened with the natural gas supplies from Egypt.

2. Direct subsidies to agriculture in Israel were 17% of the value of the produce whereas in the OECD it is 25%. Israel is thus in 33rd place, the 3rd to last among the countries in the OECD.

3. In the EU, 5% of the milk products sold to consumers are imported (milk and milk products made from milk powder) whereas in Israel, the amount of products made from milk reconstituted from milk powder is about 20% of total consumption.

4. In Spain, olive growers are subsidized to the tune of 10 Shekels per kilo oil, about 50% of production costs. In Israel, olive oil is not subsidized at all.

5. In the last decade, between 1/3 and 1/2 of the budget of the European Union has gone to agriculture.

6. In the last 5 years, tomato growers in the Arava valley have reduced their output by 80%, due to lack of government support and a shortage of workers.

As a result, the government’s efforts to increase imports will not result in a reduction but an increase in prices (as it happened when tomato growing areas in the Arava were reduced) and will also cause an increase in the fluctuation of food prices.

The government of Israel is now working to destroy on of the last vestiges of the Zionist enterprise, Israeli agriculture. This under the cynical heading of “responding to the social protests”. Instead of acting as the other OECD countries do, by lowering food prices while ensuring a steady supply through subsidies, the government increases imports and lowers custom duties. As a result we will get large price fluctuations and only the well-off will be able to afford the food they like to eat.

You can rest assured that this government will continue to look for more ways that will harm the economy.  Either they don’t know what they are doing, or they do. Both options are rather unsavory and it’s the citizens who suffer.