Israeli farmers staring into the abyss

Hit by tight profit margins, labor shortages and cheap imports, small farmers are a dying breed.

By PAUL ALSTER
Lihu Fine, husband of Hadas Fine, poses with tomatoes the growers were forced to give away (photo credit: PAUL ALSTER)
Lihu Fine, husband of Hadas Fine, poses with tomatoes the growers were forced to give away
(photo credit: PAUL ALSTER)
THE DAY after Yom Kippur, just a couple of days before the start of Sukkot, there was a major traffic jam on the outskirts of Binyamina, in semi-rural northern Israel. There had been no accident. There was no roadwork.
The cause of the tailbacks in all directions was a Facebook post that morning from local farmer Hadas Fine offering the public the opportunity to come to her fields and pick top quality tomatoes ‒ for free.
Why? Because not only was the price she had been offered by the supermarkets for her produce significantly less than it cost her to grow the approximately 500-ton high-quality crop, but, to rub salt into the wound, the government had taken a snap decision to import tomatoes from Turkey just before the holidays, flooding the market and pulling the rug out from under the feet of Israel’s already struggling farmers.
Faced with the option of losing more money by having to employ farm laborers to pick the tomatoes, or leaving the crop to wither and die in situ, Fine, who primarily grows peaches, plums and pomegranates, decided to make her point by giving the tomatoes away, highlighting the current plight of so many Israeli farmers.
Standing alongside Fine ‒ whose husband Lihu is a sixth-generation Israeli farmer whose family began tilling this inhospitable terrain in 1890 ‒ we watched together as dusk arrived and masses of local Jews and Arabs filled shopping bags, pick-up trucks and cars full of tomatoes.
It was impossible not to sense the torment and anger she and so many other farmers like her are feeling. “It’s terrible,” she says,” choking up a little, “really terrible. But I would have lost more money having to harvest this crop.”
Many of those I spoke to in the fields that evening genuinely sympathized with the plight of the farmers.
Abu Yazam, his wife and children, had been picking tomatoes but thought this was only after the farmer had picked most of the crop. When told the true situation he said, “That is so sad.
It’s like the government asking the farmers to cut the branch of the tree on which they are sitting.
Very sad.”
“I think the State of Israel should properly support the farmers and not leave the supermarkets to profiteer from them,” says Sharon from Caesarea. “It’s a disaster. They’ve imported tomatoes from Turkey and are selling them for nine shekels – nine shekels. I’ve seen it in the stores. It’s a disgrace.”
A man from the nearby Arab village of Kafr Kara, with a truck overflowing with tomatoes, adds, “It’s such a shame, but better it isn’t wasted. God doesn’t forget good people. If they have given, then God will give them, too. They won’t be forgotten.”
“Instead of fixing Israeli farmers’ problems, and instead of addressing the fact that there are fewer farmers in Israel today than ever before, the [Agriculture] ministry decided to incentivize Turkish farmers,” Meir Yifrah, Secretary General of the Vegetable Growers’ Association, told local media.
A 2014 Israel Farmers’ Association report revealed that the number of farmers in Israel over the last 30 years has declined alarmingly, “by more than 75 percent – from 40,000 to less than 10,000” with the rate increasingly rapid this decade.
Israel very soon could be forced to rely increasingly on foreign imports if the status quo doesn’t change. It’s a scenario that is not only alarming in the hardship it is already causing, but one that many fear could leave Israeli food supplies and consumers vulnerable in the event of regional conflict or international trade embargoes.
“MORE THAN 3,000 people have been through these fields today alone,” Hadas Fine tells The Jerusalem Report. “This is a protest because the prices we get are not enough. It’s the only thing we could do to try to get the government to take notice of what is happening to us. There are always ups and downs with farming ‒ it’s never easy. There’s the rising cost of insecticides that have less chemicals. The previous insecticides we only had to spray once every three weeks. Now, we sometimes have to spray once every three or four days.
“They put taxes on the Thai workers, but no local Israeli Jews or Arabs want to do the work.
Palestinians do, but you need permission from the Shin Bet [Israel Security Agency] and you have to pay extra for the Palestinians ‒ about 65 shekels [$17] per worker, per day ‒ to Israel, not to the Palestinians! It’s just another tax.
They say it is to cover the cost of checking them and other expenses, which might be true, but to charge this amount every day! “And, we don’t get enough water. They sell us expensive recycled water that is not good enough. It’s destroying trees. The wild animals in the area, like foxes, wild boar, jackals etc., which used to break our water pipes to get to the water, don’t damage the pipes anymore because they don’t want to drink it.”
The last public video issued by former president Shimon Peres, just a couple of hours before he suffered the severe stroke in mid-September that led to his death two weeks later, was to urge Israelis to support their own farmers and food producers.
“What is a ‘blue-and-white’ product?” asked Peres, famous for his daily intake of locally produced tomatoes and cucumbers accompanied by cottage cheese. “For me, it’s Israeli salad, our wonderful fruits... Can you imagine a meal without an Israeli salad? Can you imagine setting the table without Israeli fruits? ... Our products have an outstanding reputation.”
As a result of a brutal squeeze on profit margins, allegedly instigated by low-cost supermarket chains and wholesalers with serious financial muscle, a growing number of small farmers have been selling fruit and vegetables at a loss ‒ a recipe for financial ruin. Yet, the prices to the consumer have not fallen. Someone, somewhere, is making a massive profit, but it’s not the farmers.
An overview of an August 22 document published by the USDA Foreign Agricultural Service titled “Israeli Farmers’ Federation Warns of Agricultural Crisis” noted, “The report highlights the low farm gate prices and tight profit margins impacting farmers at a time of increasing food inflation in the retail market. The report refers to Israeli farmers as the punching bag for the high food and commodity prices... In spite of this, the retail price for these products remains high, especially during the holiday seasons.”
The Israeli government has wrestled for years with ways to lower the cost of living and has failed miserably on nearly all counts.
All half-hearted attempts to reduce the alarming increase in the cost of real estate have failed; the tax burden on the so-called middle-class is unbearably high; and wages have failed to keep pace with the rising dayto- day living costs for the average family.
The government is clearly aware of the issues facing Israel’s farmers and highlighted the following in a May 18 statement on the website of the Ministry of Agriculture and Rural Development (MARD): “In recent years, we have witnessed a multiyear trend of rising market shares by retail chains, as compared to open-air markets and private fruit and vegetable grocers. According to CBS (Central Bureau of Statistics), over the past decade, the market share of the retail chains has increased from 15% to 50% of the fresh vegetable and fruit retail market. This increase is coupled with the increase in the purchasing power of the chains that currently own fruit and vegetable wholesalers or purchase through a large wholesaler.”
The statement added: “The gross and operating profits in the fruit and vegetable departments of the retail chains is considerably higher than the overall profits of these chains.”
MARD inferred there is a cartel in the fresh fruit and vegetable sectors. It reported that at a public hearing held by the Agriculture Ministry regarding the licensing of wholesalers, “Many complaints were expressed about unfair trade practices in the fruit and vegetable market, such as retroactive and unilateral changes to the terms of transactions; transactions without prices (with no transparency so that the grower is uninformed about payment arrangements); [and] reduction of structured depreciation ‒ indicating unfair exploitation of market power.”
A Ministry of Agriculture official told The Jerusalem Report that they are working hard to help the farmers and are well aware of the issues at hand. The official highlighted a new directive, jointly issued in late October by Agriculture Minister Uri Ariel and Finance Minister Moshe Kahlon, requiring supermarket chains and wholesalers to declare both the prices they pay the farmers and the prices they charge the public, ahead of a possible government investigation on alleged profiteering.
I sought the views of veteran farmer Yosef Hadad of Talmei Elazar, near Hadera, and was left in no doubt that Israeli farmers are a dying breed.
“I THINK there really is a problem,” the 77-year-old watermelon, pumpkin, and sweet potato grower tells The Report. “You hear of people going down like flies. Everything has become more expensive. For example, farmers are still getting the same price for their tomatoes they received 20 years ago when water was a fifth of the price.”
Hadad’s weather-beaten face is testament to a life working outdoors in the Middle Eastern sun, through good times and bad. He started with nothing, leaving school at the age of 12.
“I started at the bottom of the bottom of the ladder,” he points out. “It couldn’t have been any lower. I worked physically hard, so hard, honestly, for so many years. It’s not by chance that I have survived this long. I really love it, but my children, like most people’s children now, don’t want to work [in farming].”
Here is another key problem in Israeli agriculture. In the early days of the state, many Israelis aspired to be kibbutzniks, farming the land from dawn till dusk. But times have changed and most modern Israelis just don’t like getting their hands dirty.
“Here ‒ [Hadad gestures around us 360 degrees] ‒ many of the original farmers were German Jews who wanted their children to do well and encouraged them to train as a doctor or lawyer, etc. God forbid his son should go and work as a farmer! This was 70 years ago.
And, so, the son of the farmer who is a doctor, wants his own son to do even better. It’s only natural. Farming doesn’t even come into the equation. My oldest grandson finishes medical school next year. I’m delighted!” Close to us are the citrus groves that were once filled with small owners. Nowadays, nearly all have gone bust, sold out, or simply upped and left.
“Take Pardes Hana. Today, who’s left?” Hadad asks rhetorically. “There are now only two or three farmers in the whole of Pardes Hana.
Me, and a couple of others.”
He explains that before the market was deregulated more than 20 years ago, the Agriculture Ministry oversaw which crops were grown to ensure a constant flow of produce. But, after deregulation, it was every man for himself. You, theoretically, could grow whatever you want. If one season the price of watermelon was very good, he says, the next season you’d find that everyone had moved to grow watermelons. The market would then be flooded with overproduction and the price would collapse. It’s self-defeating.
Many farmers went out of business and still suffer because of the deregulation.
“The [ministry] used to protect minimum amounts of potatoes, carrots, tomatoes, etc., but now those protections ‒ which also help the consumer ‒ are gone. You’d hear of farmers who ran out of money, the banks wouldn’t lend, so they went to black market money lenders and got into more and more trouble until everything collapsed.”
Some might say that’s the way it is throughout the modern world. Little fish struggle to survive and the bigger fish take over. Hadad, like Hadas and Lihu Fine, is considered a medium- sized farmer. He’s not wholly critical of the wholesalers and supermarket chains, however, pointing out that if you can supply them with enough stock, they can sometimes offer a fair price.
It’s not plain sailing, though, if you sign a contract, especially if, as often happens in farming, you are hit by bad weather, disease, a shortage of farm laborers or other adversity.
“Sometimes, what they do is make you agree to supply them for the whole year and they agree to a price. However, you might have a lower yield for any number of reasons, and then what do you do if you run out before the end of the year? You have to go to other farmers and buy their produce, sometimes at a price that is not profitable. If you don’t do it, the supermarkets might not buy from you the following year.
It’s a double-edged sword.”
This method clearly doesn’t work though for those smaller farms who can’t produce the amounts that attract the supermarkets and their agents to buy.
Since the summer of 2015, an attempted fight-back from local producers has gained significant momentum. Israeli consumers seem to love it, but it’s doubtful it will be enough to balance the books.
IN RURAL and semi-rural parts of the country, locals have flocked to any number of farmers selling direct to the public, often at less than half the price the public has grown used to paying in overcrowded and invariably chaotic Israeli supermarket aisles. Straight from the field to the consumer, the produce has never seen the inside of cold storage, where anecdotal reports suggest it is sometimes kept for weeks or even many months at a time before being released onto supermarket shelves.
And, in the cities and the suburbs, farmers’ markets have sprung up and are proving equally popular at a time when most ordinary, working families are genuinely struggling to make ends meet.
“The local stores weren’t so happy about it, but everyone else around us was doing it so we had to do it, as well,” Hadas Fine explains.
“A lot of people came. Most of them understood that if I could have sold for a fair price I wouldn’t have had to do this. For the few who didn’t understand we explained that it costs us almost four shekels per kilo to grow, so how can we sell for one? The locals understand and appreciate that it is fresh, and it’s better quality. You see the farmer face-toface.
You can trust him.”
But it’s not enough.
“What will happen here is that in another year, five years, or maybe 10 years, there won’t be agriculture here,” Yosef Hadad had told me. I suggest to Fine that unless Israel subsidizes its farmers to guarantee their survival – as the EU and other trading areas do – it could be the end of the road for her and many others like her.
“I don’t want anybody to help me,” she says, the frustration etched all over her face.
“Just let me work in peace. If I need workers, let me have them. If I need water, let me have water. They sell us the most expensive water on earth and then limit us and tie us up in bureaucracy. It’s terrible.”
I ask if she agrees with those who say that Israeli agriculture could be finished in as little as 10 years? Fine looks at me and shrugs her shoulders.
“There will not be anything in 10 years.
And remember this: We won’t be able to import enough because every country, except Israel, now realizes they have to look after their own food supplies. I heard there is going to be a global wheat crisis. So countries are going to sell us their wheat? Of course not. They’ll keep it for their people and we’ll starve here. Would you depend on Turkey, or anyone else?
Paul Alster is an Israel-based journalist. His website is www.paulalster.com and he can be followed on Twitter @paul_alster