Bowing to Farmers' Pressure, State Nixes Cheap Cheese

The government's statement came in response to a suit filed by the Israeli Dairy Board and the Israeli Cattle Breeders Association.

The government won't be going through with a move designed to lower dairy prices to consumers, it informed the High Court of Justice over the weekend.

The government's statement came in response to a suit filed by the Israeli Dairy Board and the Israeli Cattle Breeders Association.

Cheese - Stijn Nieuwendijk - December 2011
Stijn Nieuwendijk

In the wake of this summer's cost-of-living protests, which focused on dairy products among many other items, a committee headed by Industry, Trade and Labor Ministry Director General Sharon Kedmi had recommended allowing the state to issue permits for importers to bring in another 22,000 tons of hard cheese between 2013 and 2016. The importers would be granted discounts on the standard import duties.

The dairy farmers had petitioned against the committee's recommendations, and had named the prime minister, the finance minister, the industry, trade and labor minister and the agriculture minister as defendants in their suit.

The state issued its response during a court hearing this weekend. It stated that the government had delayed discussing the recommendations until March, and that the discussion was unlikely to be held because many ministers objected to the committee's recommendations.

The committee, tasked with examining food prices, had recommended allowing in more cheeses at reduced customs rates. It recommended increasing the quota for hard cheeses, including blue cheeses, from 1,300 tons to 3,000 tons in 2012, and increasing it by another 1,500 tons every year, until 9,000 tons of cheese would be imported at reduced rates in 2016.

Finance Minister Yuval Steinitz had published an order allowing for the imports soon after the committee released its recommendations, even though the cabinet had not yet approved the measures.

However, the court ruled that the permits issued to import 3,000 tons of cheese in 2012 should still stand.

About 30% of Israel's milk production is used to make hard cheeses, the large majority of them at Tnuva's dairy in Tel Yosef.

The state also told the court it would formulate an official response to the petitioners by June.

The dairy farmers are arguing that the recommendations, if implemented, would cause them serious financial damage and may force hundreds of family dairy farming operations to close. Farmers are already in financial straits because they receive so little for the raw milk, they say.

Raw milk prices are regulated, so they sell it to the dairies for NIS 2.15 per liter - which leaves them 18 agorot to 20 agorot per liter after expenses, they say.

The committee had also recommended cutting the price of raw milk by another 6 agorot per liter.

The court stated that the committee needed to hold a hearing for the dairy farmers to express their reservations, and to ask the state regulatory authority, the Israeli Dairy Board, to give it an opinion on the matter.

It also demanded that the committee work with Agriculture Minister Orit Noked while drafting its recommendations.