State Comptroller: Agriculture Ministry Rewards the Guys Working the Fields - at the Public's Expense

Report finds state money is going to farmers who haven't earned it.

How much do you know about the Ministry of Agriculture? Just as one can assume that most (though not all ) readers of TheMarker have long-forgotten their days working the fields, it is also more than likely that readers' knowledge of this esoteric ministry is quite limited. Fortunately, the country's state comptroller comes around once a year to enlighten us on the quirky workings of inscrutable ministries such as this one, which often behave more as lobbyists than as servants of the public.

The comptroller published his annual report this week, which included a review of decisions taken with regard to two financial awards given by the Agriculture Ministry, with the backing of the Finance Ministry. In both cases, funds were supposed to be allocated for projects that were deemed to be of particular significance to the Israeli economy. Instead, they were allocated to farmers, who some cynics might say are deemed to be of particular significance to Israeli politicians.

In one case, the objective was to reduce foreign labor in agriculture. To this end, the Ministry of Finance set up a NIS 325 million prize for farmers who introduce mechanized equipment to replace human workers. The second award, totaling NIS 420 million, involved grants for projects designed to encourage water-saving. Both projects are definitely important ones, and farmers should receive state support for striving to reach these goals. The implementation of the Agriculture Ministry awards, however, seems to be somewhat problematic.

There are very clear, legally-defined guidelines for distribution of funds to farmers. The ministry, however, decided on its own initiative to define these special awards as 'administrative' funds, and thus allowed itself to ignore the burden of following the stipulated guidelines. Funds were given to farmers who did not meet defined minimal requirements, and money was paid out in amounts far exceeding designated ceilings.

This bypassing of legalities also morphed into eventually ignoring the original intent of the awards. While funds still went toward buying mechanical alternatives to human labor, they were often awarded for the purchasing of additional routine equipment, rather than new items designed to more effectively reduce the labor force. In fact, much of the funding went to dairy farms to buy milking robots, although these farms very rarely employ foreign workers. To top it all off, farmers received the funding without making any commitment to stop employing foreigners.

Ministry officials claim that farmers would not have applied for the awards if they would have had to commit to cutting their foreign labor force. Funds were therefore distributed to any claimant, with no follow-up to verify that this had indeed led to reductions in the hiring of foreign laborers. The inevitable result was that between 2009 and 2011 the state invested NIS 100 million in an effort to reduce foreign labor, but the number of foreign workers actually rose during this period.

Wasteful distribution of funds

The allocation of funds with no regard to their intended purpose was also a feature of the second ministry award, intended to restrict water usage. Farmers were basically given money without producing any program designed to yield savings in water consumption. All in all, the Ministry of Agriculture transferred NIS 240 million to farmers for water-saving schemes, with no investment on their part in water-saving schemes.

In contrast, a different Agriculture Ministry project was fully implemented. This one was aimed at reduced consumption of drinking water in agricultural settlements that do not receive treated recycled water.

The ministry had issued a tender for this award. Curiously, its specifications were a perfect match for nine settlements in the Ma'ale Yosef regional council in the Western Galilee. The tender was issued just as the council was concluding a plan to invest in improved water usage.

The match between the council plans and the tender, as well as the very short time line for application, ensured that the applicant with an already fully-developed proposal would stand the best chance for getting funded.

Not surprisingly, the nine settlements were the only winners of the award. They received NIS 19 million, although they were supposedly only entitled to receive NIS 1.5 million. Incidentally, the firm preparing the plan for the regional council strongly advocated for the plan at the ministry.

"Over the period covering the years 2006 to 2011", wrote the comptroller, "the Ministry of Agriculture often distributed award funds in a wasteful manner, with no centralized planning and with no assurances that funds were given based on sound investment plans, and with no evaluation processes ensuring that goals had been met.

This conduct impaired the achievement of the stated objectives. These awards are given from public funds, and their use must adhere to the law and address the aims toward which they are granted. The Ministry of Agriculture is obliged to verify that goals are met, and not be satisfied merely with transferring of funds."

In other words, the ministry must bear in mind that public funds are designed to achieve specified goals, and are not meant to benefit the old boys' network of the farming community.

For this, officials must remember that this branch of government is meant to serve the larger community, and was not set up as a conduit of funds for farmers, at public expense. It is doubtful that this is the case.