Israel's Agriculture Minister Isn't Working for Israelis

Yair Shamir’s policies mean Israelis will continue to pay exorbitant prices for dairy products from cow’s milk, and insane prices for products from sheep’s milk.

Nehemia Shtrasler
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Agriculture Minister Yair Shamir, December 2013.Credit: Olivier Fitoussi
Nehemia Shtrasler

Yair Shamir is one great disappointment. Not just because of his extreme political views and his opposition to anything that even smells like peace – we were prepared for that – but because of his work as minister of agriculture.

Once, before he entered politics, I met him. He was then chairman of Israel Aerospace Industries, and in the conversation that developed he sang the praises of the market economy, free competition, reducing government involvement in the economy and privatizing government companies – including IAI, which he wanted to issue on the stock market.

Of course the stock issue never took place, but when he was appointed agriculture minister, I hoped he would implement something of the flowery vision he described to me. I thought he might be the first agriculture minister to carry out the necessary reforms in the sector, for the good of Israeli agriculture and to help lower the outrageous prices for all types of food: milk, meat, poultry, fish, eggs, fruits and vegetables, olive oil, honey, tomato paste and more and more and more.

But rather quickly Shamir turned into an exact replica of his predecessor, Shalom Simhon, a sort of small-time politician who is interested in keeping his job, and to hell with competition, efficiency, economic growth and lower prices. Screw the people of Israel. The important thing is for me to be a minister.

The best example of this is the dairy industry. It is a Bolshevik sector managed from above by the “Dairy Board” that determines everything: how much of a quota every dairy farmer receives, his costs and at what price he sells his milk to Tnuva. Like in North Korea.

On this Bolshevik board, which Shamir needed to dismantle (based on what he said just before he took up his post), sit the dairy farmers alongside Tnuva, Strauss and Tara, the large dairies; and decide on the price of raw milk. The result: In 2013 this price was 25 percent (!) higher than the price in other OECD nations. The dairy farmers and the companies are also fighting hand in hand against any proposal to lower the enormous customs duties on milk and dairy products, which reach tens – and even hundreds – of percent. Truly, the cats are guarding the cream, so dairy product prices here are 30 percent to 100 percent more expensive than elsewhere in the world. (Example: Milky in Berlin.)

Three months ago something interesting happened. The finance and agriculture ministries proposed a reform in the sheep industry, which is a very small part of the overall dairy industry. The Agriculture Ministry itself proposed phasing out the central planning in the sector and opening it up so anyone could raise as many sheep and goats as they want, as is accepted in normal countries. Sheep farmers were supposed to receive quite respectable compensation, and the price of sheep’s milk, yogurts and cheeses that today are double (!) the prices for the same products in Europe and the United States, would have fallen by tens of percent.

But Shamir blocked it all. Just before the socioeconomic cabinet was to vote on the reforms, he asked to postpone the vote for a week. The Finance Ministry, in its stupidity, agreed. But the week turned into a month, and the month turned into an organized plan to scuttle the entire reform, which was buried before it was even born.

To the great regret of those praying for a lower cost of living, Finance Minister Yair Lapid did not go out to battle with Shamir and the dairy farmers. He does not like to fight the strong ones. He may say that the Milky protest is justified and the cost of food must be lowered, but when it comes to taking real steps, he retreats instead.

Shamir torpedoed the reform because the party he belongs to, Yisrael Beiteinu, has a large group of activists from kibbutzim and moshavim who are involved in the dairy industry. They oppose the reforms, and their support and votes for Yisrael Beiteinu are more important to Shamir than the rest of Israelis put together.

The result is that all of us will continue to pay exorbitant prices for dairy products from cow’s milk, and insane prices for products from sheep’s milk. But Agriculture Minister Shamir has the last laugh. What does he care about the people of Israel? What’s important is that the farmers like him.

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