Agreements were reached between the Ministry of Finance and farmers on an outline for opening the dairy market to competition • "The move may reduce products by 80%"
The Ministry of Finance reached an understanding with the Ministry of Agriculture and representatives of the dairy industry
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After long months of shortage of butter due to a confrontation between the Treasury and farmers, Finance Minister Israel Katz signed an extension of the order exempting customs duties on butter imports for another year.
Katz clarified that "the full supply and variety of butter is essential for the economy, regardless of policy in the dairy industry."
The Ministry of Finance reached an understanding yesterday with the Ministry of Agriculture and representatives of the dairy industry regarding milk production in the local market and imports for the coming years in general.
According to the same agreements, the current "target price" mechanism will be extended by three years, with an option to extend it for another two years by the Ministers of Finance and Agriculture, through a government bill.
At the same time, it was agreed that within three years, 65% of the increase in milk consumption would be supplied through imports of duty-free quotas.
The layout will be gradual to allow for preparation time.
It will start at 50% starting in 2021 and will gradually increase every year.
The rest of the increase will be provided by increasing milk production in the local market.
The Minister further decided that as long as the domestic market does not meet the demand, as stated, the scope of the duty-free quotas will increase accordingly.
It should be emphasized that this is an outline for an increase in milk consumption, which is probably estimated at a not very large rate of 2.5% per year.
In addition, it was decided to establish a dedicated team to promote immediate pilot in a group of dairy products that will move to a direct support outline.
As part of the pilot, direct support will be provided to local growers while increasing exposure to imports and reducing tariffs on those products, with the aim of lowering consumer prices while maintaining the competitiveness of local production.
The CEO of "Our Interest", Elad Malka, who is leading a struggle to open up the dairy industry: "Imports may reduce dairy products by 80%.
"Days will tell if this is an empty statement or a suitable outline for opening up to competition, importing and lowering the cost of living."