Shalom Simhon 311.
(photo credit: Ariel Jerozolimski/The Jerusalem Post))
The Agriculture Ministry held Israel’s first event as an OECD member on Tuesday,
where the Paris-based organization’s Trade and Agriculture Directorate’s
director Ken Ash presented a report on Israeli agricultural policies.
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report, a 20-year survey on the nation’s agricultural development, praised
Israel’s investment in agricultural research and development, but criticized its
Agriculture Minister Shalom Simhon said his
ministry would study the report and work toward implementing some of its
Ash presented the highlights of the report to Simhon and
Agriculture Ministry directorgeneral Yossi Yishai at a conference in Beit Dagan,
before an audience of 100 people from across the industry.
the report, the relative importance of agriculture in the Israeli economy has
declined over the past two decades, now making up only 1.7 percent of the Gross
Domestic Product (down from 2.7%), but that at the same time, a string of
reforms in the sector between 1990 and 2007 caused a 60% rise in output leading
to an annual average growth rate of 2.2%, higher than any other industry and
higher than in most OECD countries.
The report states that Israel enjoys
advantages in season and expertise, which allow it to successfully export many
of its crops to the European market, but that its primary source of agricultural
export is in technology. According to the document, in 2007 agricultural
technology exports amounted to $2.2 billion, eclipsing agro-food
The main criticism found in the report is that “While the level
of agricultural support has been falling (from 24% to 17%), the share of the
most distortive types of support has increased over the last two decades. This
mostly reflects continued high border protection for agricultural commodities
pushing domestic prices above international levels and resulting in high market
Ash explained that the government, instead of offering
direct budgetary support to farmers, supported them by placing high tariffs on
international competitors, rendering them incapable of breaking into the local
market. He said that while Israel was far from being the only country to
practice such policies, it had a bad long-term effect because it was an
inefficient means of support.
“Recent reforms in Israel have
substantially increased efficiency of agriculture and its environmental
performance, especially water use efficiency, but have nevertheless left a large
part of the production planning system intact. In particular, the state remains
strongly involved in the allocation of key factors of production such as land,
labor and water,” read the report.
Its authors suggested that further
reforms to Israel’s agricultural and water policies are needed to reduce costs
to consumers and taxpayers, and improve agriculture’s environmental performance.
The required reforms include: Lowering and simplifying import tariffs, reducing
administrative costs linked to farmland transactions, improving enforcement of
labor market laws and allowing water quota trading.
Simhon said: “Israel
is aware that its acceptance into the OECD requires that it adopt
economical patterns that are approved by the other member states.
Israel is capable of contributing to the enrichment of ideas and
other countries for its experience.
“Israeli agriculture performs
additional functions, like providing environmental benefits, assisting
population dispersal and providing its rapidly growing public with ‘food
security,’ by producing most of its food basket locally. These aims
always be measured by financial indicators,” the minister
Yishai said the main value of the review was that it allowed
the ministry to revisit all of its policies from a new perspective and
strategic thinking. He also said he took the report’s criticisms of
indirect support for farmers to mean that the ministry budget would have
“If we want to support the farmers directly instead, we have to
increase the budget tenfold,” Yishai said.
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