Israbloff Dairy Products: Will We Pay More in the End?
Was the declaration of the Ministers of Finance and Agriculture regarding a reduction of "tens of percent" in the prices of dairy products, following the reduction of tariffs, only a camouflage that the prices of dairy products under supervision are about to rise?
Examination reveals that the "festive" reduction of tariffs is nothing but confirmation of the agreements with the milk producers, which were achieved in January 2020
Wednesday, 08 December 2021, 10:38 Updated: 11:01
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On Tuesday, Finance Minister Avigdor Lieberman and Agriculture Minister Oded Forer announced the abolition of tariffs on some dairy products and an increase in duty-free quotas for hard cheeses - an important move on the way to lowering the cost of living that took effect immediately.
At the same time, it is probably a move designed to "sweeten the pill" that is expected to land on consumers in the dairy market in the near future - a rise in the price of dairy products under control. A month ago, it will be recalled, Terra Dairy applied to the inter-ministerial price committee for an increase in the price of dairy products under the supervision it markets more than 9%.
At the basis of Tara's request is a well-known claim that has been heard frequently in recent times - and that is the rise in the price of inputs: the price of raw milk, or the target price at which the dairy purchases the milk from dairy farmers and other raw materials used for packaging.
The decision on the issue is expected to be made in the coming month, and if Laker is indeed recommended - the ministers of finance and agriculture will have to decide on the issue.
This will not be easy to do against the background of the explosiveness of the cost of living issue.
It will be recalled that even three years ago the dairies submitted a request to raise the prices of regulated dairy products, but the then Minister of Finance Kahlon did not agree to approve the recommendation of the Prices Committee.
Only after the High Court decision on the matter, the prices of regulated dairy products went up, and have not changed since.
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Tara Cottage: About a month ago, a request was made for a 9% increase in the price of dairy products under supervision (Photo: Adali Conceptica Photo)
Reform or recycling of understandings with the Parthians?
Those who are likely to be hurt by the Treasury's attempt to increase competition in the dairy market by opening it up to import are local dairies that have so far not responded to the Treasury's decision, and their silence may be explained by the assumption that regulated product prices will rise soon.
According to industry sources, so far only Terra has submitted the application to price supervised products, this is a dairy with a lower market share than Strauss and Tnuva.
It will be recalled that the dairymen, seemingly surprisingly, were quick to welcome the signing of the order that was supposed to harm them, and the reason for this lies in the fact that this is the implementation of an old agreement with the Treasury reached by the previous government in January. According to the agreement, the expansion of imports of dairy products will be given in exchange for maintaining the planning of the dairy farm and the "target price" mechanism until the end of 2023, ie until then the dairymen feel protected.
In other words, there is a fear that the reduction of tariffs is a kind of "Israbloff": we may receive some "gifts" in the form of discounts on certain imported products, but in practice we will pay more for our overall dairy basket.
Zvi Werftag, a veteran cowherd from Moshav Givat Yoav in the Golan Heights (Photo: courtesy of those photographed)
The cowboy's word: "A stable but not fantastic livelihood"
Zvi Werftag, a veteran dairyman from Moshav Givat Yoav in the Golan Heights,
explains in a conversation with Walla! Money because in his view "the dairy farm does not know how to be unplanned, to keep a herd of cows is not like sowing onions, it is a process of many years of herd cultivation, of purchasing equipment, it is an industry that must maintain stability and does not know how to work in other conditions."
"We cowherds have been working in an orderly fashion for years, we have the target price for raw milk that relies on the prices of inputs - how much does it cost me to produce a liter, how much does it cost me the price of seeds, etc. We live from it as we live and the livelihood is stable but not fantastic."
Regarding the opening of the dairy market for imports, Werftag sounds reluctant and says: "The issue of imports is funny, because in classical Europe the dairyman does not get much money for milk, but has a complement in the form of direct support. Direct support is a chorus we know well, but we are not Europe. "Here the government changes every hour or so and it is difficult to trust promises of direct support, and we as cowboys do not want support from anyone.
Let us live as we are. We have been working in an orderly manner for many years, do not give support, let us work as we know it."
Warftang believes that the control of dairy products should be kept, and explains: "The price control is intended to allow the weaker sections to buy products at a controlled price. Take the butter, for example.
I can put salt alone on the butter, no need to import for it.
I think that dairy products should be kept under control, so that families with many children will be able to buy the basic ingredients at a reasonable price. That's all. "The
Ministry of Agriculture responded
: To the Ministries of Agriculture and Finance. "