Two years after the agreement was shelved: preliminary understandings towards an agreement in the dairy industry

Two years after the signing of the previous agreement shelved due to the change of government, an outline is being promoted for an agreement that will regulate the dairy industry. Today, the Ministry of Finance updates that in discussions held between the Ministry of Finance, the Ministry of Agriculture and representatives of the dairy industry, understandings were reached regarding milk production in the local market and imports for the coming years. However, the dairy industry responded to the announcement tonight, claiming that all the details have not yet been closed and that the agreement is not yet a fait accompli. Also, the Treasury did not say today what the budget scope of the plan has not yet been finally signed.

According to the Finance Ministry, it has been determined that the current target price mechanism will be extended by three years with an option to extend it for another two years by the Ministers of Finance and Agriculture, through a government bill.

At the same time, the Minister of Finance has decided that within three years 65% of the increase in milk consumption will be provided through imports of duty-free quotas. The outline will start at 50% starting in 2021 and will gradually increase every year. The rest of the increase will be provided by increasing milk production in the local market. The Minister further decided that to the extent that the domestic market does not satisfy such demand, the scope of the duty-free quotas will increase accordingly.

In addition, the Ministry of Finance states today that “it has been decided to establish a dedicated team to promote immediate pilot in the group of dairy products of transition to direct support.” As part of the pilot, direct support will be given to local growers while increasing exposure to imports and reducing tariffs on those products, in order to lead to lower prices for consumers while maintaining the competitiveness of local production.

In addition, despite various agreements reached by the recently reported representatives of the Ministry of Finance and Agriculture, the Minister of Finance stated that he had signed an extension of the exemption from customs duty on butter imports for another year.

Dairy Council CEO Itzik Schneider said today that in a meeting we held last night with the Minister of Finance significant understandings were reached, but the agreement has not yet been signed, we expect that we will reach understandings on all issues early next week, and sign an agreement, which will bring certainty to all. In the dairy farm. “

The CEO of the Dairy Producers Association in Israel, Lior Simcha, said in response that “the heated discussions with the Ministry of Finance led to the promotion of a long-term planning agreement in the dairy industry in Israel, but all the details have not yet been closed and the agreement is not a fait accompli. I sincerely hope that in the coming days we will succeed in reaching final understandings, in a way that the Ministry of Finance will indeed encourage and actually support the increase in local milk production and thus bring a real message to Israeli milk producers and the general public. “