The Secret to Kibbutz Be’eri’s Successful Socialism: Being Rich

With its printing business facing a dim future, the kibbutz is searching 
for a business model that it will enable it to stay wealthy and collectivist

Hagai Amit
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Credit: Ofer Vaknin
Hagai Amit

It was noon when we arrived at Kibbutz Be’eri’s dining hall. It felt like a journey 30 years back in time. The vast majority of the dozens of kibbutz members who came to the dining room arrived on bicycles. A few came in mobility scooters. Some even walked in barefoot.

Because of coronavirus restrictions, the tables were outside the dining room, under parasols. The meal was high quality, with several meat options and a vegetarian one, all handed out freely. Nobody recorded the diners’ names or took tickets from them. The dining room serves three meals a day, and it’s completely cooperative. Nor is this practice confined to food; it pops up again and again throughout our stay on the kibbutz. Vehicles, health care, housing, salaries – everything is jointly owned.

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Today, there are around 30 kibbutzim like Be’eri left in Israel that have stuck to the old cooperative model. They are the last remnants of the almost 300 that survived unchanged from the great kibbutz privatization wave of the 1980s and 1990s. Kibbutzniks used to say that the only kibbutzim that remained cooperative were the very wealthy ones, which could afford to do so; the very poor ones had no choice but to run more like businesses.

Ironically, those that remain cooperative rely on some property or business that produces enough money to maintain a collectivist lifestyle. For instance, Hatzerim owns a significant chunk of Netafim, the drip-irrigation company. Ma’agan Michael owns Plasson, while Sdot Yam owns Caesarstone. In Be’eri’s case, it’s Be’eri Printers, which has an annual turnover of hundreds of millions of shekels and generates more than 80 percent of the kibbutz’s income. Be’eri Printers doesn’t hand their profits over to an elite of controlling shareholders but divides them among its hundreds of residents, enabling each of them to enjoy the lifestyle of Israel’s upper classes. The kibbutz has even handed out dividends of up to 250,000 shekels ($77,000) per member.

Naor Pakciarz, the kibbutz’s financial director, wouldn’t admit to any flaws in the system. Doesn’t the chronic disease of the kibbutzim – hidden unemployment in unproductive industries – exist here as well? If we go to the grocery store or the laundromat, won’t we see 10 people working in a place that doesn’t need more than two?

“Such things also happen at your newspaper,” Pakciarz replied. “How many people there actually work?”

Later, the chairman of the kibbutz’s economic corporation, Avshalom Haran, echoed that argument. “Parasites exist everywhere,” he said, but stressed that Be’eri doesn’t tolerate goldbricking.

“At some kibbutzim, they’ve transferred responsibility for work [standards] to a member,” Pakciarz explained. “We did that here, too. I’ll check how many days of work you did each year. If I don’t know how to justify a position, it will be abolished. For each position, we check whether it improved service to the residents and whether it’s worth investing in another worker.”

He said that if some kibbutz member doesn’t want to work, that person’s job is to find another position. “There’s no such thing as ‘not working,’” he said. “If you don’t find work, go fold clothes.”

Pakciarz said kibbutz members can be fired for doing a terrible job. In such cases, they have two weeks to find another job.

Credit: Ofer Vaknin

“The person can use saved-up vacation days, and afterward, we’ll assist with vocational guidance and the human resources committee will summon them to discuss their situation,” he said. “At the end of the process, if they don’t find work, they’re summoned for a talk with the secretariat, and in the end, financial restrictions could be imposed on them. For instance, if we hand out a collective bonus at year’s end due to a good business year, they’ll get 700 shekels ($215) instead of 1,000 shekels. Beyond that, this is a community that knows how to apply peer pressure. It’s not a good feeling to be the only person who’s not working in a community where everyone works.”

When kibbutz members need cars, they goes online and choose from the kibbutz’s approximately 100-vehicle fleet. Only about 20 kibbutz members have their own car.

Pakciarz said the residents with their own cars are mainly ATV enthusiasts and a handful who are frustrated they can’t always get the vehicle they want from the pool. Anyone who buys a car does so with their own savings, which come from the funding allotted to each family, which is based on family size.

How well-off are Be’eri members? In pre-coronavirus Israel, household income of 25,000 shekels a month puts a family into the top 20 percent. The kibbutz says its members don’t make that kind of money, but in reality it’s hard to put kibbutzniks into the standard income categories used in Israel because the kibbutz provides almost all their needs. Their cash income is secondary.

Theoretically, the kibbutz also accepts residents who aren’t members, but applications are currently limited largely to former members or their spouses. It’s a long haul to acceptance – about eight years, starting upon release from the army. During this period, applicants can choose to take a leave of absence during which the kibbutz funds their studies or other training, or they can remain on the kibbutz in exchange for 600 hours of paid work a year. After the eight years are up, they must either leave or join the membership track.

Between 70 percent and 80 percent of the “children,” as they are called here, do return to the kibbutz after finishing their army service and college. Roughly 10 new families are admitted each year. Altogether, the kibbutz has around 1,300 residents, of whom just 600 are members.

At Be’eri, there are homes set aside for members’ children. When new families are admitted, new homes are built. But new members are at the end of the line and receive older homes. The new homes are allocated on the basis of seniority. These aren’t luxurious villas, but neither are they slum dwellings. There are no protruding paving stones or unchecked vegetation such as can be seen at many of the country’s privatized kibbutzim.

The kibbutz is located less than five kilometers from the Gaza border, but the main threat it faces isn’t rockets and incendiary balloons, or even the capitalist world that surrounds it. Rather,it’s the threat to Be’eri Printers, which not only generates profits but employs 150 members.

We met its CEO, Ben Sochman, by chance upon our arrival at the kibbutz. He was biking to the laundromat with a cart full of dirty clothes in tow. Like every other member, Sochman does weekend shifts in the dining room or guarding the gate. He receives exactly the same monthly stipend as other kibbutzniks. Important business decisions have to be approved by the kibbutz members’ general assembly, held every two weeks.

A view shows agricultural fields near the Israel-Gaza border, in the northern Gaza Strip December 10, 2020Credit: MOHAMMED SALEM/ REUTERS

“Twenty-five years at Be’eri. Third generation kibbutznik. Third generation at the printers,” Sochman says as he leads us on a tour of the press. One production line is printing membership cards for the Rami Levy supermarket chain customers’ club; another is printing checkbooks. In another room, they are printing custom photo albums ordered online and elsewhere they are producing greeting cards from Kibbutz Yaviel. Drivers licenses, magnetic cards, pictured on canvas – Be’eri prints everything. However, its main business is printing invoices, which isn’t exactly a growth business in the age of the internet, says Sochman.

To find new growth engines, Be’eri Printers has begun package printing, started the online photo-album business and short-run printing that lets small businesses create professional marketing material. Another new undertaking uses data mining to customize ads appearing on customer invoices while yet another takes the billing and customer-relations process for big companies entirely online.

At the end of October, Kibbutz Be’eri submitted a bid with dozens of others to buy a 20 percent stake in Israel Post. As Sochar and Haran explain, this move isn’t only about growth but rather survival: The state’s Rosen committee recommended that a privatized Israel Post become more competitive in the realm of mass mailing by having its own printing operation. That would make it more effective competition to Be’eri Printers and its mass-mailing subsidiary Messer.

“The post office can simply offer a better package to those who want to send and print through the post. This is a license to kill the printing press,” said Sochman. “We can’t survive without our big customers. Israel Post controls 25 percent of all distribution centers, all private mail and 60 percent of mass mail. If it has a printing operation, Messer will be out of business and Be’eri’s turnover will drop.”

But while the printers are fighting to survive, the hothouses located just a few hundred meters outside the kibbutz may be the key to Be’eri’s future. “It’s the next big story, the one that will lead Be’eri into its post-printing future,” said Ron Salpeter, CEO of the foodtech company Hinoman.

Each of the six hothouses cover six dunams (1.5 acres). Inside you won’t find any ordinary plants. Rather, a stream – spanning four meters across and 30 to 40 centimeters deep – meanders down the middle. The water looks greenish because it contains millions of tiny, rootless aquatic plants, each about half a millimeter in size. They’re called the Mankai, a proprietary, nutrient-rich super-vegetable grown using sustainable hydroponics. Outside it’s a winter day, but inside it’s like a jungle, mimicking the Mankai’s native habitat.

The Mankai plant is used in Israel to purify water but in Southeast Asia to make meat-substitute products. The company wants to do the same, and is marketing the plant by citing studies that show it to be the only plant that contains vitamin B12 in its natural form and that 45 percent of its weight is protein. Its amino-acid profile is similar to an egg. Customers can get the product as a powder or frozen cubes made in a factory in nearby Netivot.

That said, Be’eri has no monopoly in Mankai. A lot of companies in Israel and abroad are producing it as the next superfood. Hinoman’s products are sold in health food stores, but it’s still losing money. Still, at least it’s not a market that’s shrinking. Moreover, one of the kibbutz’s partners in the hothouse venture is the Japanese food and biotechnology giant Ajinomoto, which invested $20 million in Hinoman two years ago while getting exclusive Japanese distribution rights.

“We have 10 corporate patents,” said Salpeter. “Ajinomoto is a strategic investor, which is now in talks with us about investing more in the company for exclusive rights in Brazil and Thailand. Despite the coronavirus, customer have been demanding our product after three articles were published in science journals in the last two weeks that resonated around the world. The Times of London gave us a headline that it was probably the next kale.”

On the way out of Be’eri, I met up with protestors from the Black Flag movement. Standing outside the gates of a nearby kibbutz, they were holding up signs opposing the continued rule of Prime Minister Benjamin Netanyahu while he is under criminal indictment. A group of Netanyahu supporters soon arrived by car and began to argue with the protesters. Before long, the debate shifted over to the kibbutzim. “The government gave them all this land,” shouted one Netanyahu supporter angrily.

Accusations like these reminded me how much Be’eri didn’t want me to write this article. They only agreed to be interviewed after it became clear TheMarker would publish one with or without their cooperation. Even though Be’eri doesn’t have exclusive use of a scenic stream or other natural resources (like Kibbutz Nir David does with the controversial Asi Stream), they didn’t want a headline such as “the richest kibbutzniks in the south.”

As it is, they struggle enough with anti-kibbutz sentiments when Be’eri Printers deals with Communications Ministry regulators or disputes over agricultural lands. “The Israel Lands Authority, the Israel Nature and Parks Authority, the moshavim and the army all want the land surrounding us. It’s a ceaseless struggle,” says Haran.

Again and again, the kibbutzniks stressed their location in a conflict zone. Incendiary balloons from Gaza set their fields afire. Yet, on the sunny and Qassam-free day we visited, walking past children being carried in a farm cart to their afternoon activities, it was hard not to feel that I was in a socialist utopia not found anywhere else in Israel.

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