The Agriculture Ministry is allocating a NIS 10 million budget toward encouraging individual farmers to organize into cooperative units, in order to strengthen the power of smaller family farms, the ministry said on Monday.
The purpose of the program is to provide incentives to individual farmers in their operations as well as fortify agricultural settlements, the ministry said. By organizing into associations, they can benefit from the advantages of economy of scale and thereby maximize their strength and the revenues of their businesses. All the while, the farmers can preserve the small family farm lifestyle, the ministry said.
“This move is expected to maintain and strengthen the small family farm by increasing the bargaining power and profitability of the farms,” said Agriculture Minister Yair Shamir.
The NIS 10m. budget, which will be allocated for 2014-2015, was formulated during discussions regarding an amendment to the Antitrust Law, the ministry said. The new amendment, coming into effect March 2015, will prevent wholesalers who are not farmers themselves from coordinating product prices and quantities in the market. By organizing together into cooperative associations, however, farmers will be able to continuing taking advantage of the exemption from the law that they already enjoy.
By joining forces in associations, farmers can increase their bargaining power and save in costs related to training, control, purchasing, branding, packaging, marketing and more, the ministry explained.
They also may be able to contribute to improving the quantity and quality of products demanded by the market, the ministry added.
Through its new program, the ministry said it will be providing support according to three different tracks. The first track will provide assistance for examining the feasibility of participating in such associations, including consultancy services.
The second track will involve contributions to the preparation of legal documents and legal infrastructure required to build such associations. The third track will provide support for the costs of managing the organization and performing activities, like marketing.
In announcing its decision to financially support the organization of farmers into associations, the ministry cited the EU’s efforts to do the same. It supports organizational initiatives among farmers, such as efforts involved with planning production, improvement and preservation of product quality, experimental studies, crisis prevention, management tools and environmental activities, the ministry said.