The law requiring stores to display the country of origin of agricultural produce went into effect last week. In the neighborhood supermarket next door, the prices of tomatoes and cucumbers "made in Israel" were 15 shekels per kilogram.
Yesterday, a Knesset committee met to discuss "food insecurity." The discussion in these committees is always the same – how can we give more money to those in need, and this is an important discussion, but it is only one side of the coin. Fruit and vegetable prices have risen by 2023 per cent in 10. It's not really an issue for the agriculture minister.
Less than a month ago, Minister of Agriculture Avi Dichter explained to us that fruit and vegetable prices are a small part of the price index, so there is no need to deal with it. Prices of fruits and vegetables are small money for him, and even so, which committee will increase allowances. What is important for him is to preserve an agricultural cartel and prevent competition at all costs.
It was not for nothing that the regulations of indicating the country of origin arrived. The agricultural cartel's hope was that if it said "Made in Israel," people would be filled with nostalgia. What is actually happening is that the public finally has someone to blame.
The agriculture minister is wrong twice: once when he actively defends the agricultural cartel and makes our living more expensive, and the second time when he excuses his policy by saying that it is small money. Because it's not small money – out of about 3.2% inflation this year, 0.3% is attributed to higher fruit and vegetable prices. And it has an impact on all prices in the economy - inflation affects the interest rate in the economy.
The main task of the governor is to maintain a stable price level, that is, to fight inflation. If inflation is less than 3%, the interest rate will be low. When cucumbers and tomatoes reach NIS 15 per kilogram, inflation exceeds 3%, and the Bank of Israel is obligated to maintain high interest rates. We see this interest rate in our mortgages and loans.
Yes, it's not intuitive, but mortgages are more expensive because the agriculture minister refrains from lowering the prices of agricultural produce. Cucumber prices and housing prices are interrelated. Expensive cucumbers mean a higher payment on both the indexed mortgage and the prime mortgage.
Even before the war, bashing the governor had become a national sport. Gafni and other Knesset members and ministers wept bitterly and attacked the Governor for the high interest rate and its significance for households. But the cry of the road signs was nothing but crocodile tears, because the governor does not set the interest rate in a vacuum - he is obliged to raise the interest rate if there is inflation (the interest rate is a means of curbing inflation). But who is causing inflation? Those irresponsible Knesset members who distribute money without any self-restraint. On the one hand, they distribute money that there isn't, and on the other hand, I come later to cry that the responsible adult (the governor) is restraining the money supply so as not to return to the inflation of the 80s.
The public must understand that cucumber prices and housing prices are interconnected, and that their high price stems from the behavior of politicians. Nor can you complain about the high cost of food and high mortgage rates, while at the same time protecting agricultural cartels. It is impossible to do "occupant price" and "discounted apartment" without understanding that this raises housing prices.
Who is causing inflation? Those irresponsible Knesset members who distribute money without any self-restraint. On the one hand, they distribute money that there isn't, and on the other hand, I come later to cry that the responsible adult (the governor) is restraining the money supply so as not to return to the inflation of the 80s
The Governor lowered the interest rate by 0.25 percent, a decision that could save a few hundred shekels per household in a mortgage. It also indicates an increase in trust. The problem is that this decision only shows the wasted potential.
If Avi Dichter had considered himself the agriculture minister of all citizens and not just of the agricultural cartel, then the prices of agricultural produce would have been lower and the interest rate cut would have come much earlier. If housing ministers saw the good of the state and not the good of certain voters, then the cost of housing would be lower. As a rule, the louder the politician cries, the higher the chance that the situation is his fault.
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