Smotrich cancels duty on imported milk

Israel’s Minister of Finance Bezalel Smotrich today announced the cancelation of duty on imported milk, which currently stands at 40%, for a period of three months, until after the holidays. “Citizens of Israel, I have taken an historic decision,” he said, “In a moment I will sign an order canceling the duty on imported milk for three months until the holidays.”

Smotrich added that the measure has been taken, “With great caution and the required responsibility to eliminate the shortage in milk on the shelves that Israelis are experiencing in recent weeks. This is the most correct step to end the shortage. In recent years we have been exposed to a shortage of milk on the shelves. It is the most sold product in Israel. This is a situation that cannot be accepted in the summer when children are on vacation and ahead of the Tishrei holidays.”

While for years there have been claims that it is technically impossible to import liquid milk due to its short shelf life, the Ministry of Finance spoke with importers and professionals who say that this is actually feasible. Due to the shortage, there are importers who are willing to import milk even with customs duty and lowering makes it possible to bring in the required quantities at an appropriate price.

The Israeli dairy industry is managed through centralized planning by the Dairy Council and the Ministry of Agriculture, which distribute government production quotas to each dairy farm, which must not be exceeded. Dairy farmers also receive minimum prices while consumers are protected by a maximum price, which makes the industry unusual both in relation to other industries in Israel, and in relation to the dairy industry in most of the West.

At the same time Smotrich reiterated the government’s commitment to Israeli agriculture. He said, “Israeli agriculture and Israeli farmers are very important to me. They have achieved Zionism, and without Zionism Israel will not survive. They get up every morning and do the hardest work to protect the land, and maintain food security.”

He added, “Just in the last budget I decided on billions in grants for capital investments and innovation in agriculture over the coming years. I decided this because I believe in Israeli agriculture, I believe in Israeli farmers and I believe in the significant value they bring to Zionism, society, food security and the Israeli economy.”

The Israel Dairy Council does not welcome the move, and said, “A few days ago, the Dairy Council informed the Minister of Finance and the Minister of Agriculture that the Golan Heights dairy is increasing the milk production under supervision, so that it will respond to all the demand in the Israeli market. Unfortunately, the government chose to act unilaterally, and instead of supporting local production on the Golan Heights, it chose dairies in Poland. In the short term, the public may pay one shekel less, but in the long term, we will be captive to the whims of importers and the price will rise, as happened with butter, when the real price is a serious injury to a first-rate Zionist enterprise.”

Published by Globes, Israel business news – en.globes.co.il – on July 14, 2023.

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