High Fruit Prices in Israel: ‘Gov’t Looks Out for Farmers, Not Shoppers’

Israel forbids the import of dozens of types of fruits and vegetables, and when it permits imports, they’re often subject to high import duties and draconian limits

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Apples at the wholesale market in Tzifrin, Israel, 2016.
Apples at the wholesale market in Tzifrin, Israel, 2016.Credit: Ofer Vaknin

Shopping for kiwi? You’ll pay 25 shekels per kilo at the grocery stores, and 35 shekels at greengrocers. The high price is because the retailers themselves aren’t getting it cheaply - they pay on average 24 shekels per kilo. One hour away by plane, in Greece, retailers buy kiwi for about 1 euro per kilo. But Israel’s Agriculture Ministry forbids importing kiwi from Greece; instead, the only country cleared to export kiwi to Israel is far-off New Zealand, and only one company has a permit to do so - Perot Aviv. Israel’s grocery chains say Perot Aviv sells them kiwi for some 20 shekels per kilo.

This isn’t a problem limited only too kiwi. Israel forbids the import of dozens of types of fruits and vegetables, and when it permits imports, they’re often subject to high import duties and draconian limits regarding which countries they can come from. As a result, fruits and vegetables are significantly more expensive in Israel than in many European countries.

As it is, fruits and vegetables have been rapidly becoming more expensive in Israel over the past few years.

Importers and grocery chains blame the Agriculture Ministry and Finance Ministry for dragging their feet and imposing burdensome regulation, and say that they intentionally hurt imports due to pressure from the agricultural lobby.

The Agriculture Ministry’s division for plant protection is one of the entities responsible for approving imports. The plant protection division has a risk management section, which has about three employees and is responsible for deciding what can and can’t be imported, says Roy Shefler, a vice president of the produce import company Triple Sal and chairman of Israel’s produce importers association.

“Due to the lack of manpower and the inefficiency, it can take years for them to get to import requests,” he says. “De facto, no new fruits have been approved for import over the past decade.”

“For more than a decade we’ve been unsuccessfully trying to import citrus, avocado, mango, kiwi, pineapple, apricot, plums, nectarines, cherries and more. It’s simply not allowed,” he says. “Everything is stuck on the risk management section’s desk.”

Shefler says the Agriculture Ministry’s import restrictions don’t make sense. Restrictions remain in place even when fruit is out of season in Israel; as a result, during the off season, avocado can sell for as much as 40 shekels a kilo in Israel.

Pineapple, for instance, may be imported only without the leaves, which shortens its shelf life to days instead of weeks, and means it needs to be airlifted, which is three times as expensive, he adds. Europe, the United States and China all permit pineapple to be imported with the leaves, but not Israel, he adds. Furthermore, pineapple is subject to a 25% import duty, even though Israel’s climate isn’t suited to pineapple and there are only a handful of local growers.

Apples, in comparison, can be imported from multiple countries, and thus the price never reaches 20-30 shekels a kilo, he points out.

And then there’s the issue of import duties: Grapes are subject to a 2-4 shekel per kilo import duty even when they’re out of season in Israel; Israel imports 90% of its garlic but that vegetable is still subject to a 7-shekel-per-kilo import duty; and types of apples and pears that aren’t grown in Israel are still subject to the 2-shekel-per-kilo tax, says Shefler.

>> Trade war reaches Jerusalem: U.S. pushes Israel to drop produce import duties

“Take pink lady apples,” says Shefler. “They’re almost none grown in Israel, and yet they’re still subject to a 2-shekel per kilo import tax, because the Finance Ministry doesn’t know how to differentiate between apple types.”

According to Agriculture Ministry figures, Israel has imported on average only 3.7% of the fresh produce it consumes. The country has about 10 big and medium-sized importers, and dozens of smaller ones.

The country’s retailers say they pay much more for fresh fruit and vegetables than their counterparts in Europe. For instance, local retailers say they pay 15-18 shekels for a kilo of plums, versus 6 shekels in Europe. The wholesale price for grapes is currently 22-25 shekels a kilo, they say, versus 7.50 shekels in Europe. Kiwi has a wholesale price of 24 shekels per kilo, versus 4 shekels in Europe, while retailers say they pay 4.70 shekels per kilo of cucumber, versus 2.13 shekels in Europe.

An executive at a grocery chain said Israel needs to move to a more modern way of protecting farmers - by offering subsidies instead of limiting imports so drastically. Israel hasn’t internalized that the country is no longer a farming powerhouse, says the executive.

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“Some 30-40 years ago we were a farming powerhouse just like we’re a high-tech powerhouse now,” he said. “But the equation changed - we don’t have enough water for farming, and the water we have is very expensive; we don’t have enough land; labor is expensive and Israelis don’t want to work in agriculture. An hour away, in Turkey, it’s completely different. Water is free, laborers are paid $10-$15 a day, pesticides are not subject to import duties. It’s no surprise that Turkey produces 20 tons of tomatoes per dunam, while we produce 6-7 tons.”

An Agriculture Ministry source acknowledged the problems, but blamed the farm lobby. “There’s no chance that the lobby would permit duties to be lowered or imports from another country. If a chain or an importer wants to introduce new imports, someone from the lobby will show up quickly at the ministry’s offices and make sure the relevant official doesn’t approve it,” said the source.

The ministry is more interested in protecting farmers than in consumers, said the source.

Farmers reject the allegations. “The agriculture lobby has very little electoral power,” says Israeli Farmers Association Chairman Avshalom Vilan. “Some 12,000 farmers and their families are less than one Knesset seat.” He blamed retailers for the high prices.

The Agriculture Ministry rejected the claims, saying that produce imports are growing every year, and that anyone can apply for an import permit. The ministry’s main job is to protect farmers, it added.

The Finance Ministry declined to respond.

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