Tap water [illustrative].
(photo credit: INIMAGE)
The pricing and tax regiment for the agricultural sector’s water supply is making crop growth unsustainable, representatives of agriculture, kibbutz and moshav movements argued on Monday.
The heads of the Moshav Movement, the United Kibbutz Movement and the Farmers Federation of Israel sent an urgent letter on the matter that day to Finance Minister Lapid and National Infrastructures, Energy and Water Minister Silvan Shalom. Following a compromise reached between the Water Authority and the Agriculture Ministry regarding water pricing on Thursday, the movement heads called for an overhaul of the water sector.
Specifically, they demanded the development of an agreement on water for agriculture, the cancellation of an increase in production levies scheduled for January 2015.
“Raising water prices, as well as raising production levies, is not destined for the improvement of water infrastructure in Israel but as income directly to the Treasury’s coffers,” they wrote. “We oppose the compromise reached last Thursday by the Agriculture Ministry and the Water Authority. Agriculture cannot be sustained at the absurd amount of NIS 2.15 per cubic meter in use today, and not at any other amount above it.”
The water prices in Israel have reached “unreasonable amounts” that are equivalent to about 10 times the price of most OECD countries, the movement representatives argued. Excessive costs associated with water for agricultural use are yet another example of decrees imposed upon growers by the government, which include production levy increases, imposition of an employers’ tax and eliminating credits for foreign workers, they said.
Under the terms of the recent agreement, the price of water for agriculture would be NIS 2.15 per cubic meter, increasing to NIS 2.8 per cubic meter in the future. Adding 30 agorot for distribution, the total then becomes NIS 3.10 per cubic meter, the movement representatives explained.
In addition, raising taxes on production will inflict the agricultural sector with tens of millions of shekels of damage, prompting a drastic increase in consumer prices and reduction of farming areas, the writers said.
“Growers in Israel cannot withstand the water prices in Israel, or the rest of the edicts that the government decrees upon them arbitrarily, and with the aim to enrich its coffers, irrespective of the objective difficulties faced by the farmers,” they added.
The National Infrastructures, Energy and Water Ministry, which houses the Water Authority, provided no comment in response to the letter.
Meanwhile, the Finance Ministry said that the Water Authority Council is the body responsible for setting water rates, and that these rates are determined according to an agreement signed among the Agriculture Ministry, the Finance Ministry, the Water Authority and the Israel Farmers Federation. The Israel Farmers Federation is an entirely different association from the Farmers Federation of Israel, responsible for sending the letter.
The Israel Farmers Federation is an umbrella organization for a wide range of agricultural groups. Originally established as the Agricultural Center in 1919, the center was united in 2001 with representatives of various agricultural organizations, kibbutz and moshav movements into the Israel Farmer’s Federation.
The federation is administered by former MK Avshalom Vilan.
The Farmers Federation of Israel – also known as the Farmers Association in Israel – was founded in 1922 and today defines itself as a union for private farmers, who are not affiliated with kibbutzim, moshavim or cooperative villages.
Its president, Dov Amitai, was one of the three signatories of the letter to the ministers.
In their response to the letter, Finance Ministry officials stipulated that under the agreement made, agricultural water tariffs rise gradually to cover the average water costs for farmers, stressing that the process is accompanied by full compensation from the state budget to farmers.
“To date, hundreds of millions of shekels to farmers under the framework of the agreement have been paid, and in the year 2015, the budget designated for this stands at more than NIS 100 million,” the ministry said.