The report of the Association of Food Industries, based on CBS data, indicates a reduction in food prices in Israel by 2% • Association of Chambers of Commerce: Rise in fruit and vegetable prices in the past year
The index fell, but fruit and vegetable prices soared by 4.4%
Photo:
Joshua Joseph
Food prices in Israel have dropped significantly compared to the Western world in the last decade, according to a report by the Israeli Food Industries Association of the Manufacturers' Association.
The report is based on a processing of CBS and OECD data published in the last decade.
The data show that since the cottage protest and the social protest in 2011, food products in the OECD countries and the European Union have risen in price by 13% more than in Israel.
The Israeli food industry has reduced food prices by 2%, while the price of food to the consumer has risen by 2% in the last decade.
Following the trend of the food industry in the last decade and lower prices, the share of expenditure on the food sector in total monthly expenditure has also decreased by 10% over the past decade.
Meaning: Assistance mainly to the weaker sections, who naturally have a higher expenditure on food relative to their income compared to the upper deciles in society.
According to the authors of the study, during the Corona period the Israeli food industry continued the trend, and despite the significant increase in production costs, employment restrictions and more, maintained a stagnation in food prices, while in most countries the world rose by an average of 3.4%.
The significant reduction is due in part to the growing openness of the economy to food products from abroad: in the last decade the growth rate of food products has tripled compared to locally produced food products, which naturally greatly weakened the power of large food suppliers and led to a significant decline in their share. Food Market Importers have entered this vacuum, a move that has increased competition in the economy and naturally lowered prices.
According to Dun & Bradstreet, the top five food retailers for 2020 were Shufersal (by a considerable margin from others), Rami Levy Sycamore Marketing, Merav-Mazon Kol, Yochananoff and Kalbo are semi-free.
The Association of Food Industries in the Manufacturers' Association represents all food producers in Israel and has more than 250 food and beverage establishments.
Despite the clear data indicating the significant contribution of imports to reducing the cost of living in the food sector, the Food Association prefers to emphasize the "food security" component - a synonym for increasing reliance on local production.
According to Dudi Manevich, Chairman of the Israeli Food Industries Association in the Manufacturers Association, "The significant reduction in the prices of food products in the Israeli food industry, compared to OECD countries in the last decade, and also in the Corona period, emphasized the importance of the local food industry. And the supply of food products on an ongoing basis, while absorbing production costs and lowering food prices. "
Assist farmers directly - not at the expense of the consumer
Meanwhile, the Association of Chambers of Commerce says that it is the policy of the Ministry of Agriculture that caused the increase in the index of fresh fruits and vegetables in 2020. According to the CBS, the consumer price index fell by 0.7% in 2020. But in terms of consumer price index components, The price index of food without fruits and vegetables decreased by 0.6%, the price index in the housing sector decreased by 0.2%; in the field of furniture and equipment for the index the index decreased by 0.1%; in the field of clothing and footwear the index decreased by 5.7% and in the health sector 0.6% .
But despite the declines in the various components of the index, the fresh fruit and vegetables index rose by 4.4%.
The Economics Division of the Association of Chambers of Commerce analyzed the items in the fruit and vegetable index and found that the fresh vegetables for which the highest increase was recorded were tomatoes, which rose by 17.3%, dried and green onions, which rose by 16.4%, cabbage, which rose by almost 26% and eggplant, which rose by 11%. .
Overall, this is an increase in the consumer price index of fresh vegetables by about 6.3% compared to 2019.
Fresh fruit prices have also risen by about 5% over the past year.
The sharpest increases were in avocados, which rose by 14.4%, bananas, which rose in price by 5.9%, and oranges, which rose in price by 9.1%.
1,000 shekels a year
According to the Department of Economy, vegetable and fruit prices are affected by declining supply due to weather conditions, increased demand from households, especially in the corona period, shortage of suitable manpower, Ministry of Agriculture policy preventing imports, and of course high import tariffs on fruits and vegetables.
For example, garlic is subject to a 60% duty, tomatoes - 30%, pineapple is taxed at 60% (including air freight) and a 40% tax is levied on pear imports.
An examination of household expenditure shows that in the years 2019-2018, expenditure on fruit and vegetables was about 20% of total food expenditure and amounted to an average of NIS 600 per year.
In 2020, the year of the corona, the Economics Department estimates that the expenditure on fruit and vegetables per household jumped to about NIS 1,000.
According to Adv. Uriel Lin, President of the Association of Chambers of Commerce, "One way to alleviate the weaker sections is to carry out a reform in the protection of the agricultural sector in Israel.
Instead of draconian protective caps, which reach levels of hundreds of percent, a direct subsidy should be given to the farmer as is customary in a large part of Western countries.
In this way, we will be able to lower prices for the weaker sections, and those who will finance it will be those who pay income tax, who are no more than half of the population. "