Stats Prove: We Get Less Fruit for Our Labor

Grapes doubled in price in 5 years, plums rose 81%: Climate change is one reason.

Fruit prices have risen by double-digit percent during the last five years, while wages have increased by far less. The problem isn't only the rising cost of production for farmers: Climate change affecting cultivation is one chief culprit, say agriculture experts. Another is the coupons that retailers are cutting for themselves, they add.

Israeli consumers are feeling the heat. There's nothing quite like walking into the local store at the start of summer and seeing the first grapes, peaches and seasonal fruits beckoning from the shelves. One problem is that in the first weeks of the season, fruit prices are especially high. Many families can't afford the start-of-season prices and are accustomed to waiting for the supply to increase and the price to fall. A second problem is that the price hasn't been falling as far as it used to.

Fruit at mega in the city - Ofer Vaknin - June 29 2011
Ofer Vaknin

The Central Bureau of Statistics compiles data on average prices to consumers of certain products and services - and of fresh fruit. The data shows that fruit prices have risen by tens of percent, some even doubling, from 2006 to 2010. But meanwhile, from 2006 to 2010, the average wage increased by just 2.6% in real terms (adjusted for inflation ).

Take black grapes. Their price rose from NIS 8.20 a kilo in July 2006 to an average of NIS 16 per kilo in July 2010. That's nearly double. But that wasn't the end of the story. The bureau reports that from the summer season of 2010 to the start of summer this year, fresh fruit prices increased on average by another 10%.

Peaches cost NIS 8.30 per kilo in May 2006. In May this year, a kilo of peaches would set you back NIS 13.10 on average, an increase of 57%.

Plums increased by 81% from May 2006, from NIS 7.60 per kilo back then to NIS 13.80 on average now.

Moving onto apples, Granny Smith apples cost NIS 9 per kilo on average in May 2006. In May 2011, their price averaged NIS 10.14.

In the last year alone, watermelon rose from NIS 3 a kilo on average to NIS 4.17 this year.

Blame climate change

Why have fruit prices risen so much? Ilan Eshel, chairman of the Israel Fruit Growers Association, blames the usual culprits, including the climbing price of water and of manpower costs, and climate change that affects supply.

"The cost of water to farmers has risen by 10% to 15% in two years," Eshel said yesterday. "Labor costs have increased by 5% a year."

And there you have it: While labor costs for farm workers rose by 5%, consumer prices of fruit have risen by double-digit percent. The average wage has increased by 2.6% in the space of five years, after adjustment for inflation. Nor have prices of fertilizers stood still, Eshel adds: that alone increased by 15% in the last year.

Zvi Alon, head of the Plants Production and Marketing Board, contends that climate change is the true culprit behind the steep increase in fruit prices in the last two years, more so than the rising price of inputs. Winter has failed to arrive and fruit crops are directly affected, with harvests smaller than average.

Yet both Alon and Eshel say there's another culprit - the end sellers' margins.

Farmers don't profit at all from the increase in fruit prices, they say. "They get no bonus and have no control over the final price [to consumers]. Except at the start of the season, when they really can sell fruit for a lot, in the rest of the season the farmers get a price that enables them to eke out a living, no more," Eshel says.

Wholesalers make 20% to 25% - that's their margin between buying from farmers and selling onward to stores. But retailers are helping themselves to margins of 40% to 100%, Eshel claims.

Alon counsels shoppers to go to the markets, not to stores.

Balderdash, says a top source in the retail business, accusing the sources of deflecting fire at the stores' expense. If fruit imports hadn't been forbidden, he says, he could lower prices.

As for chains, by and large (as shown in the table ), Rami Levi proved cheapest in most categories of fruit, according to a check on June 27.