The Minister of Finance blamed the previous government, but the problem is not with the identity of those serving in the government, but with the actual method (Photo: Image processing, Niv Aharonson, Yonatan Zindel Flash 90)
In Israel, there is, rightly, no control over the prices of furniture.
Any manufacturer, importer or marketer can set the price as he sees fit and hope for the maximum return from his business activity, as he sees fit.
The prices of furniture and home equipment decreased in the last year by 1.4%, according to the CBS data for the month of March, this despite the fact that the price of the dollar (in which most transactions are made) has become more expensive in the last year by 13%.
The reason is simple: without supervision, there is real competition in the market.
Every manufacturer tries to become more efficient, to introduce modern equipment accompanied by a computer system that reduces depreciation, while making maximum use of the raw materials.
Advanced software monitors the manufacturing processes, the production, the inventory, the accompanying accounting and the relations with suppliers and customers.
The same goes for importers looking for cheap and competitive sources of supply of the appropriate quality as well as viable marine transportation systems from the source of supply.
What helped the importers was the drop in sea freight prices, such as from Southeast Asia, China, a drop of about 82% in sea freight prices in the reported period, so the final consumer also benefits from the change in trend.
More lies about price increases
- https://finance.walla.co.il/item/3576116
Has it become more expensive all over the world?
In Israel the price of milk is double than in the USA
- https://finance.walla.co.il/item/3575556
Bulgarian cheese.
The prices of cheeses in the world dropped by tens of percent this year.
Only in Israel do we have to raise prices? (Photo: ShutterStock)
dairy goat
The price of milk decreased in the open markets of the world in the last year before March by 24%, the price of cheese in the world decreased by 24%, the price of butter decreased by 35%.
In Israel, the price of butter should have decreased in the last year by about 27%, but in practice the price increased by 4.9%.
The price of yellow cheese should have decreased by 14%, but actually increased by 6%, all this without neutralizing the increase in the value of the dollar in the last relevant year, by 13%.
This week the situation worsened, the government and its officials vis-à-vis the dairies stepped up and decided to raise the prices of controlled dairy products by 9% instead of 16% as required by the agreements between the state officials and the dairies.
In other words: introduce a goat of 16% and then wait for the public to feel "well-being".
How did they do it?
They promised the dairies that in the future they would be allowed additional increases of another 7% or more, in order to comply with the calculations in the agreements with the dairies that the government violated.
Instead of guaranteeing further price increases, the government should almost completely stop the supervision of dairy products, allow extensive imports of dairy products, without quotas, of up to 50% of the current consumption, reduce the planning of the dairy farm to a minimum at the same time allow the movement of cruise ships filled with all the goodness of dairy products from Turkey , Greece and even Italy, on a daily basis.
The transportation of dairy products between European countries is done every day in ships suitable for the task, without any problem.
In the last year the price of oats decreased by 54%, the price of sunflower oil decreased by 50%, the price of wheat decreased by 41%, the price of coffee decreased by 15%, the price of canola, from which edible canola oil is produced, decreased by 36% , the price of corn decreased by 22%, the price of chicken decreased by 17%, the price of tea decreased by 12%, the price of meat decreased by 12%, the price of rice remained unchanged.
There were also increases: the price of cocoa increased by 20%, the price of sugar increased by 39% and the price of potato increased by 69%.
Excluding the shekel's devaluation, wheat prices have fallen by 33% in the past year, which does not at all justify the 7.2% increase in the price of bread in the past year, and of course, following it, all bakery products and cakes, up to the falafel stand on the street corner.
The conclusion is to remove the bread from the supervision that leads to an increase in prices.
This way we can also save on officials dealing with accounts with the bakeries.
The price of beef in Israel was supposed to remain unchanged taking into account the dollar exchange rate, but in practice it increased by 4.5%.
So how did food prices rise last year by 5.3% despite the collapse of most food prices in the world?
How is it that you are paying even higher prices this week for Niger milk and its derivatives?
Why are food prices rising?
The reason is the control over prices, as we saw this week in the milk refrigerator at the supermarket.
Perhaps it would have been wise to monitor the prices of food products in the first decades of the country with a Yanuko industry, a country surrounded by enemies, where we must have food that is too accessible to the hundreds of thousands of immigrants, refugees through no fault of their own and unsafe supply lines to and within Israel, this alongside the need to find immediate employment for Hundreds of thousands of unskilled workers.
But today in a country that claims the title START UP NATION, approaching ten million people, with a population that wants to work in very advanced industries?
This is employment with high added value.
And the higher the added value, the higher the salary of the workers and guarantees a higher standard of living, most of which is composed of capable people rooted in the being of the world.
Israel therefore no longer needs price controls, not even on dairy products.
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Children's clothing.
There are no controls on clothing and footwear and the import tax is low.
What is the result?
Prices are dropping! (Photo: ShutterStock)
More or less
Why does price control lead to an increase in controlled prices?
Not because the milkmen or the dairies or the cheesemakers are trying to deceive the public.
The method itself is bad, price control is essentially similar to the "Cost Plus" method (cost to the manufacturer or importer plus a fixed percentage of profit), notorious in the first decades of Israel after the establishment of the state.
What does the method say?
You the manufacturer, or the service provider, will submit expense accounts to the sovereign from the foundation to the taphof, I the government will check, argue a little and approve.
The invoices submitted by the manufacturers are correct, there is no cheating, everything is correct numbers, but there is also no incentive to be efficient as in the free market, as in the case of the furniture.
What is the point of the manufacturer trying to find ways to cheapen the production, mechanization, processing, marketing and computerization processes, if in the end everything is based on recognition of expenses, plus a reasonable profit?
After all, if it becomes more efficient, that is, its expenses decrease, then all the efficiency will be reflected by the officials in reducing the price for the consumer, and therefore, what good did the sages (who became more efficient) do in their regulation?
Without supervision, perhaps some of the producers would import cheaper raw materials for the dairy industry, or finished products to diversify their basket of goods, or establish Israeli dairies overseas (nearby) to satisfy their needs cheaply, or more effectively regulate the supply between the seasons in Israel, let's say during the holidays compared to other seasons.
What's more: "the kosher problem", shout those who hold the current system, which is convenient for suppressing the standard of living of the public.
And I ask: in Europe, the USA and Latin America, Jews don't eat kosher?
The connection of silence also exists in other areas: why does the government allow slaughterhouses, butchers, meat importers and fish pond owners and fish importers to raise prices for the holidays every year? In order to humiliate the Jews around the table the holiday?
International food prices cannot be a reference point for Israel, which is like an island to which all transportation by sea is expensive, argue those in love with the current system.
So precisely if Israel is a kind of island, in the middle of the ocean economically and economically, this would be the place to allow unlimited imports of food, without tariffs, without quotas - and we'll see how the market will behave!
Maybe up to 50% of consumption can be allowed to be imported?
Because prices in the world continue to fall, in March the world prices of food products fell according to the index of the United Nations for the twelfth month in a row, a low since July 2021, 20.5% less than the prices in March 2022.
Desperate UN, said Israel's first prime minister David Ben-Gurion, you were told that the prices of the UN's dairy products fell in the last year before March by 9.6%, not pleasant.
The guardians of Israel's agriculture and production will come and say and argue for the collapse of the industry.
No problem, the government can give them capital grants for efficiency, which will lead to more efficient dairy farms as well as new investments as much as they want, but the quota system that prevents a freer market in milk and its products should also be abolished.
"The land of the nation" will be shouted by those who want to keep the lands that have been redeemed with blood, literally, for about 140 years.
There are other solutions to holding on to the land, it is possible to preserve the native land even without predatory control over the prices of dairy products and other fish and vegetables, through archaic production councils that young people have never heard of, with a careful regulation of what is allowed and what is not allowed, which causes very low productivity in the agricultural sector compared to other countries are developed and hence the declining export weight of Israeli agriculture.
According to a report by the Knesset, in the dairy and egg industries, the regulation is relatively high, especially regarding production quotas and import quotas, which leads to slow development of those industries, to relatively high prices and inefficient allocation that limits the production of products in which there are relative advantages. In simple words, a waste of resources Your account.
There is no control over clothing and footwear, the import taxes are zero, any importer or manufacturer can do as he pleases in the free market, importing luxury shoes, work shoes or flip flops to the sea. If there was control
over clothing prices, the method would be simple: check with the cost plus method, Cost with added profit, and we approve. In the early 1990s, when I served as an economic advisor and responsible for economic programs in the Treasury under the late Minister Yitzhak Modai, we abolished all tariffs on clothing and footwear gradually, over six-seven years, so that the local manufacturers could adapt to the new situation.
All the claims that the tariff reduction will not reach the hands of the consumer have been falsified, the prices of clothing and the cost have fallen dramatically in the last generation, some of the family's expenses have decreased dramatically.
What happens when there is no government supervision that pollutes the citizen's standard of living?
In the last year, the prices of clothing and footwear decreased by 5.5%, straight into the pocket of the employee, the employee or the pensioner, especially women's clothing which decreased by 18% in the last year, imagine what would happen if there was supervision of a fictional council for the production and marketing of women's clothing?
Of money
Tags
milk
Supervised products
Cost of living
food prices