High tariffs and import barriers are blamed for Israel's high commodity prices which are much more expensive than in Europe. On Sunday 21 February, Finance Minister Moshe Kahlon, pledged to reduce food prices by loosening import restrictions.
“In principle, we are planning on reducing import duties. At the moment, the things that are making fresh food in Israel expensive are high import duties and import caps. We intend to dramatically open, in the coming days, imports on items such as vegetables, fruits, and whatever is necessary in the food basket,” Kahlon told Ynet.
Kahlon said further that the restrictions would be selective, aimed at ensuring that the savings will reach the consumer, not scooped up by the big import companies.
Ways will have to be devised to compensate Israeli farmers, who stand to suffer from an influx of imported produce, but Kahlon did not elaborate on how this would be accomplished, through higher subsidies or some other approach. The OECD’s economic survey of Israel in January found that fruits and vegetables were actually lower than the OECD average, yet that meat, fish, bread and cereals, beverages (both alcoholic and not), milk, cheese and eggs were in the realm of 20-55% higher.
All in all, the report said, “distortive interventions – quotas, price guarantees and customs tariffs – still account for over 80 percent of total agricultural support in Israel, compared to around 20% in the United States and the European Union.”
