What is the cost of water subsidies for agriculture?
Depends on who you ask • If you look for the figure in the Organization of Developed Countries, you will find that it is NIS 172 million, but the Water Authority shows a much higher number
"The wastewater subsidy is omitted"
Photography:
Eyal Margolin - Ginny
Finance v Ministry of Agriculture: Stop distorting and downgrading agricultural support data provided to OECD.
An OECD report is expected to be published in the near future, and the Ministry of Finance warns that if the Ministry of Agriculture does not correct the defect, the distortion will also be published next year.
Background to the controversy: For many years, Israeli agriculture has been presented as suffering from low government support in international comparison.
The claim is based on OECD reports which show that support for Israel is slightly lower than average compared to the developed countries in the organization. The OECD does not collect the data independently, but relies on those of the Ministry of Agriculture. Documents obtained by "Israel Today" show that these data Significantly lower than the truth. The most prominent example concerns the assessment of the amount of water subsidy for agriculture. According to the OECD report, which is based on data from the Ministry of Agriculture, water subsidy in each of the years 2019-2017 amounts to NIS 171.8 million per year.
On the other hand, a letter that reached us and was signed by a senior official of the Water Authority - Gilad Fernandez, VP of Economics at the Authority - reveals that the "amount of subsidy for agricultural purposes in the water tariff for domestic consumption and other purposes" is much higher The senior official of the Water Authority also states that the calculation does not include a subsidy for effluent water, amounting to NIS 30 million, and about NIS 150 million through the state budget.The Water Authority notes that the data also reflect the volume of subsidies in 2018-2017.
That is, according to the Water Authority, the total amount of subsidy for agriculture ranges from NIS 720-530 million per year - 200% - 300% more than the data reported by the Ministry of Agriculture to the OECD.
Cross-subsidization for water
Last September, the Ministry of Finance asked the Ministry of Agriculture to correct the incorrect data, according to the letter from the Water Authority: "The amount of water subsidy for agriculture exceeds half a billion shekels a year," Eli Morgenstern, coordinator of water, agriculture and ports, contacted Agriculture Nahum Itzkovich The senior finance official notes in his letter that support for agriculture is done through a method of "cross-subsidization", ie, "raising the tariff for other uses - domestic, industrial and others, to help farmers.
Morgenstern asked Itzkovich to "update the appropriate bodies in the OECD on the amount of water subsidies for agricultural consumption - at least NIS 530 million a year."
However, according to sources in the Ministry of Finance, the director general of the Ministry of Agriculture refused to respond to this request as well as other requests. As stated, if no change occurs, the next report will also present Israel as having little support for agriculture - ostensibly in a sinful way.
The Ministry of Agriculture stated: "The Ministry of Agriculture does not subsidize water for agriculture, and in general the entire water issue is the responsibility of the Water Authority. Methodologically, the calculation according to which the ministry reports to the OECD was approved by the organization in 2014. And since then the ministry has been reporting in this way. "
