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The farmers' struggle against imports is bad for all of us

Farmers' protests against the ease of importing agricultural products are reminiscent of the protests of textile factory owners before we were exposed to imports from China.

Eventually reducing the cost of living will create more jobs, even in agriculture that will have to become more efficient.

With all due respect to farmers, the government must work vigorously to implement the reform

Tags

• agriculture

• reform

• China

• Dimona

• textile

• Cost of living

Dr. Ran Ben Malka, Sapir Academic College

Tuesday, 03 August 2021, 10:16 Updated: 10:45

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If we were now in the early 1990s we would probably hear in the media and social networks (which of course did not exist in those years) the call of textile manufacturers to prevent cheap imports from China.

He would probably be interviewed by a textile factory owner in Dimona and would say that he employs about 1,000 workers and that saving a few shekels on a low-quality shirt from China does not justify harming the industry - so there is no reason to allow cheap imports from abroad.

30 years ahead, "Changed the economic life of all of us. The" exposure plan "approved by the government in 1991, removed customs walls and other import restrictions on products from countries with which Israel did not have trade agreements and thus opened the Israeli economy to imports from China.

Today, thanks to the plan, we can buy much more Clothes at much cheaper prices and we all have a lot more free money left that can be directed to vacations, and other services that create new jobs.That's how the economy works.

It is clear that in the short term the textile factories were damaged and people lost their source of livelihood (most of them by the way, for a period of several months), but the question is whether there was justification for oppressing the public for decades?

For all of us, I hope, the answer is clear.

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To the full article

Farmers' protest against the reform.

According to the Competition Authority, there is no basis for their claim that the high price of agricultural produce stems from the intermediation gaps (Photo: Eli Ashkenazi)

False mediation gaps and fear of competition

Today we are at the doorstep of a very large-scale program that may significantly lower the prices of agricultural products in the long run. I am of course not indifferent to the cry of the farmers, but let us dismantle two of their main arguments, and examine the truth economically and factually:

First argument:

the mediation gaps are the ones that create the cost of agricultural products

. Examination of this claim by the Competition Authority showed that the price increase is not due to this, and that the average difference between the purchase price and the sale price of vegetables and fruits even decreased slightly in 2018 compared to 2017.

In this context I will add my personal buying experience directly from farmers several times through initiatives Personality, I did not check exact data but the feeling is that the prices were not different from the prices in the supermarket and were sometimes even higher.

Second argument: The

products that come from abroad are of poor quality

More, which means that the Israeli consumer will receive a lower quality tomato from Turkey.

This claim is in favor of the farmers from Israel, because if this is really the case then when a consumer comes to the supermarket he will not always prefer the cheaper product but the higher quality, so marking the Israeli products and imported products created competition where Israeli farmers can win, so this claim is irrelevant. .

If farmers believe so much in their product, competition with the world can only improve farmers' profits and certainly not hurt them.

Dr. Ran Ben Malka, Lecturer in the Department of Economics at Sapir Academic College (Photo: Adva Odia Ogen, PR at Sapir College)

An important reform that should not be missed

Let us not let interest groups like the agricultural lobby influence what can determine our future well-being. Every competition, no matter which direction it comes from, improves our position as a society.

True, some inefficient farmers will probably lose their jobs, but we will gain the good farmers who know how to give us quality goods at the lowest price. In the longer term anyone who has lost his job will find his place in the labor market in one way or another, maybe even the inefficient farmers will find a job with the efficient farmers, so we will get a better quality workforce who knows how to give us the best products.

Programs that create competition like the “exposure program” and like the “open skies” in 2013 in the airline industry, always create fears that “cruel” imports from abroad will destroy the entire local industry. But, history is what teaches economics best and shows us that in all Once there was competition, the situation of consumers improved - and eventually local producers got used to the new situation and knew how to continue to give us service and it was even better.

And in a personal tone to policymakers: In the long run and not only on their political success in the short run.

Dr. Ran Ben Malka is a lecturer in the Department of Economics at Sapir Academic College

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