Local dairy farmers cut companies producing dairy products off from their milk supply on Monday to protest the advancement of a sweeping reform to the dairy sector championed by Finance Minister Bezalel Smotrich.
Numerous supermarkets across the country posted signs limiting the number of milk cartons each shopper could purchase as shelves ran low. The Israel Dairy Board confirmed the farmers’ strike to The Jerusalem Post.
Lawmakers clashed over the advancement of dairy reforms throughout the day in the Knesset’s House Committee.
Following a day of farmer strikes, Smotrich announced that he intends to issue an order to abolish tariffs in the dairy market for an extended period in the coming days.
The finance minister said the decision comes “against the backdrop of a deliberate shortage being promoted by elements within the industry, and is intended to enable a steady supply of milk to Israeli consumers.”
Smotrich notified in advance that he would remove all tariffs on dairy products during a speech in the Knesset’s plenum on Monday evening.
“If you stop producing milk, I will unilaterally remove all tariffs and open the market to competition. This is my authority as finance minister,” he said.
The finance minister added that three Israeli dairy companies, Tnuva, Tara, and Strauss, control 85% of the market and charge exorbitant prices.
Dairy reform attacks monopolies, opens economy to free imports
Aiming to lower milk and cheese prices by addressing monopolies that dominate the market, the dairy reform is set to enact sweeping changes to the dairy sector.
The reform has raised concerns over shutdowns and harm to hundreds of local dairy farms. It will reportedly open the economy to free imports by abolishing all protective tariffs on dairy products.
Such measures would result in the closure of about 400 dairy farms, representing about 70% of all dairy farms in the country, according to KAN News.
Rather than advancing the dairy reform as a standalone bill, it was included in a series of bills as part of Israel’s 2026 state budget, which passed its first reading in the Knesset last week.
The reform is currently included in the state budget’s Amendments Bill.
By law, the state budget must be passed by the end of March in all three readings, or else the Knesset will automatically dissolve, and elections will be called.
This gives the dairy reform a narrow window to pass and will require it to be deliberated within the lengthy state budget bill, which runs hundreds of pages.
A full day of meetings was held in the House Committee to decide whether to remove the dairy reform and other sections from the state budget’s Amendments Bill and advance them separately.
The Knesset’s legal adviser, Attorney Sagit Afik, issued a letter on Monday recommending that the dairy reform be separated entirely from the state budget and advanced independently.
Afik noted that this year the Amendments Bill comprises approximately 420 pages and that there has already been a significant delay in its submission.
“There is no such thing as a bill that arrives containing dozens upon dozens of subjects, because it is clear that this makes the legislative process extremely cumbersome, harms the work of the Knesset, and undermines the ability of MKs to participate in a meaningful and proper way in the legislative process,” she told the panel.
MK Naama Lazimi (the Democrats) said it was impossible to thoroughly review legislation of such length in two months.
Agriculture and Raw Food Security Minister Avi Dichter (Likud), an outspoken critic of the reform, has expressed concerns over the damage it could cause to local dairy farms.
“The dairy reform being advanced by the Finance Ministry will not pass,” Dichter said on Monday.
“My Likud colleagues and I will insist that the reform be removed from the Amendments Bill and discussed with the government ministries responsible for Israel’s food security through serious, professional deliberations,” he added.
Other Likud MKs have also spoken against the dairy reform.
Outside the Knesset meeting, clashes were registered between Prime Minister Benjamin Netanyahu’s adviser Nevo Katz and Finance Committee chairperson MK David Bitan (Likud) over the dairy reform.
“You won’t convince MKs against the reform,” Katz yelled, leading Bitan to respond: “I don’t work for you – you are Smotrich’s slaves.”