Moshe Ben Meir, a member of a kibbutz down south in the Negev, received a certificate last week, signed by the kibbutz accountant and chairman of the management. The document attested that Ben Meir owned a 0.5% share in each of the kibbutz's productive assets.
Kibbutz members call these certificates "shares". The paper that Ben Meir, his wife and 200 other members of the kibbutz received were the culmination of a protracted saga, in which the kibbutz transferred 49% of its productive assets to a corporation that the members had established.
To be accurate, the Ben Meirs did not receive certificates that they could hang on a wall, for instance. They received notification from the kibbutz secretariat, that a document with a list of members who owned "shares" had been submitted to the debt-restructuring unit, to exempt them from capital gains tax.
What is that "certificate" worth to the Ben Meirs, who finally own property after 40 years' service on the kibbutz?
An appraisal of that kibbutz's assets showed that its manufacturing assets are worth NIS 40 million. Ergo, the Ben Meirs' certificate is worth NIS 200,000, take or leave a little.
A fortune, to some
The capital gains tax exemption is worth NIS 50,000. Now, NIS 200,000 is not the kind of money to pole-ax a city slicker. But for a veteran kibbutznik whose personal property had amounted to a couple of rickety chairs and a small personal budget, it's a lot.
That "share" that the Ben Meirs own can't be traded on the stock exchange. At least not yet. But it gives its holders the right to receive part of the kibbutz's profits, and a share in the profits of any industry the kibbutz runs. That can be monumental: kibbutzim have holdings in Tnuva ,the Alon fuel company, and in insurance as well.
Also, the share can be left to heirs and people outside the kibbutz, depending on the articles of association. Or it can be sold to the members' corporation or to another party, again subject to the kibbutz's rules.
Naturally, assets that the state gave to the kibbutzim, such as land, water quotes and production quotes, cannot be sold.
A million-shekel share
The kibbutz on which the Ben Meirs live is average, in terms of its assets. Accountant Doron Stein, a senior partner in the kibbutzes division of BDO-Ziv-Haft which handles 25 kibbutzes, says most have equity of NIS 30 million to NIS 50 million. A handful can boast equity of half a billion shekels. A veteran member of one of the wealthy kibbutzim could end up with a share worth a million shekels.
The proponents of this asset disbursal, from the kibbutz to the members, is partly designed to halt the social and economic jolts that the kibbutz movement has suffered in the last twenty years, upheavals that brought the entire kibbutz model into question. In the mid-1990s the government decided to allow kibbutzes that wanted to, to make far-reaching amendments to their ancient cooperative charters that define the economic relations between a kibbutz and its members.
In the past, kibbutzniks had no right to the cooperative's assets, and they could not bequeath their rights to heirs. The new way will restore the kibbutzniks' confidence that had been badly shaken by the dreadful slide into debt during the last 20 years, argue proponents.
Kibbutzim are attacking the issue of "privatization" on three fronts: productive assets, housing, and income from work. The ones doing some or all the above are called "renewing" kibbutzes, while the ones eschewing the whole process and maintaining the old regime are called "traditional". About 200 of Israel's 300 kibbutzes are renewing; about 50 are in the process of reorganizing the ownership of productive assets. Some have finished and their members, like the Ben Meirs, are the proud owners of shares, whether in a document framed on the wall or not.