State Comptroller Yosef Shapira on Wednesday slammed the Finance; Energy and
Water; Industry, Trade and Labor; and Agriculture ministries for failing to
control skyrocketing food and dairy prices during the years
“Social justice is not just an empty code word,” he said,
declaring that the ministries in question ignored social justice considerations
in determining their regulatory policies.
Shapira emphasized that the
government must address the “defects” in policy that he had noted and ensure
that the basic food needs of the country were protected.
were published in a 58-page report, against the background of protests and
public outcry about the rise in food and dairy prices, among other problems
falling under the “social justice movement” umbrella.
Coming on the heels
of the government-commissioned July 2012 Kedmi Report on similar issues – named
for Industry, Trade and Labor Ministry director-general Sharon Kedmi – the
document was the first Shapira had published since becoming state comptroller in
While the report does not necessarily give an acrossthe- board
picture of what Shapira’s style and the main focus in his new post will be, he
certainly did not shy away from harsh criticism of the government ministries. He
held them primarily responsible for the prices of food spiraling out of
Shapira also said he would be vigilant in addressing “social
justice” issues in the future.
Specifically, the state comptroller said
that this report was only the first of many that he would publish to ensure
oversight of the country’s social justice problems.
Shapira also noted
that at the time that he testified before the Knesset as a candidate for
comptroller, he emphasized that he believed the social justice protest movement
was a positive development addressing serious issues confronting
His predecessor, Micha Lindenstrauss, made a name for himself as
practically establishing a fourth branch of government.
showed that the State Comptroller’s Office was capable of investigating almost
any issue and struck fear into the most powerful politicians when they found
themselves in his crosshairs.
The report said that the real price of food
during the period in question rose around 8 percent, while the average real net
wage nationally fell.
The higher price-to-wage ratio hit the economically
disadvantaged the hardest, according to the report.
Among the harshest
criticisms aimed at the ministries was that it had not remotely considered the
social or health-related impacts on society as a whole by allowing the prices to
rise out of control.
Opening with the words, “Food is a basic and
fundamental need of human beings,” the report said the ministries essentially
had not weighed the interests of consumers as a factor in their regulatory
Moving on from food prices in general to dairy products – on
which the report said consumers spend NIS 9 billion annually, Shapira said the
Finance and the Energy and Water ministries had allowed an even worse scenario
Shapira criticized the ministerial deregulation of the dairy
market without first ensuring there was sufficient marketplace competition to
keep prices down – had this been the case, deregulation might have forced
sellers to keep prices low.
But without such a market in place, the only
beneficiaries of deregulation were the sellers, who simply raised prices without
having to worry about regulation or competition, said the report.
glaring examples of what Shapira’s report characterized as actions ignoring the
public interest, the ministries ignored a 2005 government decision maintaining
certain regulatory standards and a 2008 Health Ministry recommendation regarding
a person’s basic food needs.
Instead of complying with the above
directives, the ministries reduced oversight of cheese and cottage products’
pricing in July 2006 with no regard to the impact on basic food
Within a short time, said the report, prices jumped around 35%.
Other dairy prices also went up between 33% and 38%.
In contrast, other
dairy products that were still under the same supervisory rules only saw a rise
in price of 10%.
All of this happened in parallel to a 10% reduction in
the gross price of milk to producers, from the start of 2009 until September
The report slammed this finding, saying that customers did not see
any sign of this price reduction in the costs that they had to pay.
report also criticized the Finance Ministry for fighting attempts as late as
January 2012 – months after the social protest movement had erupted – to
reinstate greater price regulation by a new food prices regulator.
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