Wholesale Fruit and Vegetables, Israel’s Unknown Cash Kingdom

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A tomato vendor at Shuk HaCarmel.
A tomato vendor at Shuk HaCarmel. Credit: Ofer Vaknin

It’s a Wednesday, midnight. The first thing that catches my attention at the entrance to Tzifrin’s wholesale market is the bunch of jeeps parked outside. Shiny Pajeros and Land Rovers stand on the sidewalk outside the entry gate, which can be used only by vans and trucks that arrive to load produce.

After a brief search I find a respectable parking space behind a white BMW jeep and in front of an identical black one.

The cars hint that there’s money in fruits and vegetables. I recall that billionaire Teddy Sagi also began his business career as a vegetable salesman, long before he started investing in real estate and companies that provide a tech platform for internet gambling. On the other hand, even Thomas Edison is said to have sold vegetables before getting into the electricity business.

“It’s not that we’re poor, but the jeeps that you see at the entrance aren’t ours. They belong to the customers,” says a man who gives his first name as Nashed, the owner of a fruit-and-vegetable outfit. “We park in a different parking lot. Besides, today you can buy a jeep for 1,500 shekels [$390] a month and a bank loan. If they take it away from you in the end – let them take it.”

When asked how much he earns, he says “we take a fee of 12% to 14%.”

In the cost-of-living chain, you’ll never find anyone who’ll confess that he’s the guilty one. At the same time, in recent weeks the country has been flooded with initiatives for Israelis to buy fruit and vegetables directly from the farmers. It’s an attempt to override the profit margins that the wholesalers and retailers reap.

The Israeli consumer simply finds it hard to understand how the farmers are selling a loss while he buys at a supermarket at prices a few times higher.

In any case, I walk inside to the market. For a first-time visitor it’s a frightening experience. The workers walk around indifferently, but I’m constantly dodging the forklifts racing around. It takes me time to realize that, just like in India’s chaotic streets, there’s invisible order.

The stores in the wholesale market are actually dozens of hangars containing mountains of crates of fruits and vegetables. They arrive from every moshav and kibbutz you can think of – about 15% of Israeli agricultural commerce passes through here. The trucks sent by the farmers unload the produce at the site, and the money is transferred to them at the end of the day.

The customers – small grocery stores, catering companies or market stalls – close the deal over the phone, or send someone to come and wander among the stalls. Both Arabic and Hebrew are used here, and many of the merchants come from the West Bank.

When you see the volume of trade you quickly understand that the direct-sales initiative, though maybe a nice protest, is no solution for the thousands of tons of produce that pass through here.

‘The farmers want to destroy us’

I feel uncomfortable showing how tired I am. The people here are used to being here night after night, every day of the week, whether wholesalers, owners of stalls and grocery stores, or drivers and workers.

The main hours are 9 P.M. to 6 A.M. Monday through Friday, and Saturday night, but some wholesalers say they’re open 24 hours.

“I’m here every day from 10 P.M. to 6 A.M.,” says Nashed. “Only on Friday can we get away from the business a little.”

So when does he sleep? “In the morning I take a few hours,” he says.

In another store, beneath a sign saying Metula Crops, stands seller Avishai eating a peach while closing a deal on his phone. “What peaches do you want? I have for 10 shekels, seven shekels and two shekels. I have Friedman peaches, something special,” he explains to the customer.

I ask him if he has heard of the direct-purchase protest.

“Yes. We’re also being massacred here. I don’t know why the farmers want to destroy us. They think we make millions. But the truth is, the market has to be organized,” he says.

“The merchant next to me opens his store at 6 P.M., long before me, and by now he’s already sold all his produce. There’s someone here who controls seven or eight stores in the market and isn’t willing to close them during the hours the market isn’t active.”

So why doesn’t Avishai open early too?

“How many hours can I work? Should I bring my wife and children to stand here?”

Is he afraid his customers will buy directly from farmers?

“They pay the farmer in cash,” he says. “They pay me on credit three months ahead. The farmer can’t offer the store owner everything he wants either.”

There isn’t a fruit or vegetable you won’t find here. They’re all beautiful and shiny, and not because of the special lighting or mirrors that the supermarkets have.

“Are the tomatoes green like that on purpose?” I ask Nashed, pointing to the crates. “Those are even too red,” he says. “In the summer you have to pick them when they’re still yellow.”

After 16 years as a wholesaler in the market, Nashed has a philosophy about the industry’s problems.

“All the problems began 15 years ago,” he says. “Rafael Eitan was the agriculture minister, and he did away with supervision in the industry. Since then anyone who wants to can take a truck, load it up and distribute produce.

The minister doesn’t know

He says that today the smallest greengrocer gets produce for his store. The fruit and vegetables council only takes the money from the farmers without providing supervision, “and nobody will compensate either us or the farmers.”

“After all, I pay a fruit and vegetable tax and pass on the cost to the farmers, so the farmers are paying for useless council officials. Anyone can plant whatever he wants and there’s no planning,” he says.

“They used to tell everyone ‘You grow 30 dunams [7.4 acres] of cucumbers, you grow 30 dunams of tomatoes.’ Today the market is flooded and the price falls. Two weeks ago we were flooded with cucumbers and threw everything out.”

Why did you throw them out? Don’t you tell the farmer in advance not to bring them?

“And what should he do with the produce? To some of them I say on the phone, ‘Forget it, don’t waste money on transportation and crates,’ but sometimes he brings it because he doesn’t want to throw it out.

“the farmers forget the power of the market. If I have 10 platforms of eggplant, the price will fall and there’s nothing to be done. The politicians don’t work. Give me one agriculture minister who was a professional. Who’s the minister now? I don’t even remember. Before him was Yair Shamir; I don’t think he even knew what beets are.

“The government doesn’t want agriculture to survive, and that would be a disaster because it’s an industry that supports many families. In Israel we produce more fruits and vegetables than we eat. So last year nature did the thinning out, but this year there’s a big crop. Look at the peaches and nectarines – there’s loads of fruit here. If you want to go further back to the reasons for the situation, go back to the autonomy agreement.”

The Oslo Accords?

“We call it the autonomy agreement. They gave small compensation to Israeli farmers, who were happy that they got money they hadn’t planned on, but the agreement made it possible to bring produce here from the West Bank without supervision, and harmed profitability.

“Besides, the Thais started all the farmers’ problems. When the farmers’ laborers came from the territories, they paid them for a day’s work. We now pay the Thais a monthly fee and promise to employ them eight hours a day.

“So the Israeli farmers began to grow 40 tons instead of 20, and if there used to be farmers who worked seasonally, they would grow hothouse flowers in the winter and in the summer they would go to the beach and vice versa. Now everyone works around the clock.

If you have 10 Thai workers you have to produce something all the time. The only problem in agriculture is the Thais. The solution to the problem in this industry has to be an overall ne. If a Jew is stabbed in Tel Aviv everyone immediately runs to a microphone to be interviewed, but nobody’s interested in what’s happening here.

“With all due respect to the Thais and the fruit and vegetables council, the greatest enemy of the wholesalers here is the big supermarket chains. The major players in the industry – Super-Sol, Rami Levy, Yenot Bitan – rarely buy their produce here, they buy it via wholesale companies jointly owned by them and the Bikurei Hasade Darom product marketing company – the strongest player in the Israeli fruit-and-vegetable trade. The Tzrifin wholesalers don’t mention the name of Bikurei Hasade, but they talk about the supermarket chains that work with it.

Meanwhile, a seller standing beneath a Atzmona Potatoes sign points to a customer.

“Look at that guy: Rami Levy opened a branch next to him and broke him. Because of Rami Levy’s war against Super Dosh, this greengrocer was broken. He’s finished. He’s dead here today. There’s no traffic. If all the chains would buy through the market, there would be commerce here. Direct sales by the farmers to the supermarket chains has to be abolished.”

In the cost-of-living chain everyone takes care of himself, and the minister who is supposed to take care of the overall picture watches from the sidelines.

“We’re happy that the farmers are uniting against the marketing chains,” said Agriculture Ministry Uri Ariel a week ago, after a meeting with the secretary general of the moshav movement, who’s also the chairman of the Israel Farmers Association.

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