The Bottom Line / Anyone but the Farmers

The treasury proposes raising the price of water because water from desalination plants costs the government NIS 3 per cubic meter.

Each year, like clockwork, the treasury proposes raising the price of water. In their explanatory notes to the Economic Arrangements Bill, which is slated to come up for its first reading in the Knesset (possibly) tomorrow, officials have written that the price of water must be increased because from 2005, the government will start receiving its water supply from desalination plants at a cost of NIS 3 per cubic meter.

Households currently pay NIS 2.05 per cubic meter of water (the Mekorot price before the high premium slapped on by the local authorities); industry pays NIS 2 per cubic meter; and farmers pay just NIS 1.06 - just about half of what everyone else pays - for each cubic meter of water they use.

Every student of economics knows that in order to achieve economic efficiency and avoid wasting resources, price must equal marginal cost, and be identical for all users. So the moment the desalination begins, the price increase will be unavoidable - for the information of economists like Yaakov Sheinin who is a great fan of desalination, and for the politicians like Avraham Shochat who supported it too. It is easy to be popular; but pay-up day will come.

First and foremost, in any event, the price charged to the agricultural sector should be increased so as to bring it in line with water charges for households. As soon as the prices to the farmers are raised, they will move over to less extravagantly water-dependent crops, and they'll stop exporting water to Norway via peppers for example - and then we can save our treated water, and there won't be any need for desalination.

But then again, this won't happen because of the strongest lobby in the country - the farmers' lobby. The treasury's budgets division is also at fault, by suggesting that the price of water be raised by a flat 20 agorot across the board. They seem to have forgotten the basic laws of economic theory and natural justice, or maybe they are just plain scared, and looking after their own backsides.

When the matter comes up in government, the situation just gets worse. The government decided to raise water prices to farmers by only 15 agorot, but for industry and households by 20 agorot - because households and industry don't put pressure on the government. They only constitute 97 percent of the public, but they don't have one vote in government. Even Shinui kept shtum.

And this isn't the entire story, because now the price increase requires the approval of the Knesset Finance Committee, where the farmers lobby has the seats. The agriculture minister (a pathetic revolutionary) managed to declare in the Produce Council news letter, "Growth Point," that "farmers do not need to finance the cost of desalinating water." MK Avshalom Vilan, chairman of the farmers's lobby wasn't far behind. He is quoted in the "Water and Irrigation" monthly as saying: "In principle, I am against raising the price of water to farmers."

In other words, let's desalinate the entire Mediterranean Sea; let's increase water allocations to agriculture; and let's thrust the cost on the 290,000 unemployed, on Vicki Knafo and her friends, on the 650,000 workers on minimum wage or less, wherever, just as long as it is absolutely not on those who use the water, not on the farmers that have brought us to this state - that's the idea from the likes of Yisrael Katz, Avshalom Vilan and Ariel Sharon.