Israeli farmers face higher grain prices and a harsher existence.
By LARRY DERFNERwheat 63(photo credit: )
In front of the cowshed at Kibbutz Mizra, just north of Afula, sits 3,000 tons of cattle feed. It's piled two meters high in a concrete reservoir the size of half a soccer field, and covered with a tarpaulin. This feed, a mixture of corn, grain and clover, represents about nine months worth of food for Mizra's 600 cows - 450 heifers and 250 calves - which produce 6.5 million liters of milk a year. Like nearly all the feed used by dairy and chicken farmers here, this vast mound of grain was purchased from abroad. There isn't enough land, water or government subsidies to grow grain profitably in this country.
Two years ago, Mizra and Kibbutz Givat Oz, which are partners in the cowshed, were paying NIS 1.2 million for all that grain, says manager Doron Haran. This year, he says, it cost NIS 2 million.
"A couple of years ago, the cowshed supported six or seven families here. Now it supports four or five," he continues. "The kibbutzim aren't going to keep it going just to feed one or two families, and I'm worried about the future because I don't see these feed prices going down. The danger is that we'll get to the point where we can't pay our bank loans back anymore and there will be no economic reason for the kibbutzim to keep the cowshed running."
Lately the idea has gotten around that the steep rise in worldwide food prices has fallen especially hard on dairy and poultry farmers, given that the most dramatic increases have come in the price of feed grain. This notion, though, is debatable; while dairy and poultry farmers like Haran talk only about how their feed costs have skyrocketed, some agricultural economists argue that the dairy farmers have been more than compensated for their higher costs by the rising consumer price of milk and the lifting of their milk production quotas last year.
"In the Israeli agriculture sector, the dairy farmers have profited most during the world food crisis; 2007 was an excellent year for them," says Yitzhak Ben-David, the Agriculture Ministry's general manager for production, adding that the increases in the consumer price of chicken has likewise gone a long way toward compensating poultry farmers for the rising cost of chicken feed.
The farmers, however, don't see it that way. At the micro level they see their expenses rising faster than their income, they see their loans coming due, and what's more, the thing they see that can't be debated is what's happening at the macro level - that since the 1970s, farmers, who used to be symbol of this country, have become a rapidly diminishing, if not dying, breed.
SITTING IN HIS office under a photo of his late parents, who were the first generation of farmers in his family at Moshav Be'erotayim near Netanya, Menahem Klein says that in the old days, all 60 families at the moshav used to have "10, 20, 30 cows." Now, the great majority of the moshavniks commute to work in offices. "There are only six cowsheds left at the moshav, with 11 families working them, plus another seven or eight families growing flowers."
Like other dairy farmers, Klein says his biggest worry is not the rising price of cattle feed, but the loan payments on the new waste treatment system he was required to install by a 1998 environmental reform just now beginning to come due. Since the reform became law, the number of working cowsheds in the country dropped from about 1,400 to 1,000.
"A lot of farmers in their 50s and 60s who didn't have children willing to take over the family cowshed decided it wasn't worth investing in the reform, so they just closed down their shed and leased the land," says Klein, 60. "If I didn't have a son to take over for me, I wouldn't have invested NIS 2.5 million in the new system." (He notes, though, that the government gives dairy farmers a 30%-40% rebate on this forced investment.)
Klein's son, Arik, 36, is the third generation of farmers in the family. His two brothers are in hi-tech. "I like working with the cows," he says. "I decided to go into farming 10-15 years ago, when the economics of the situation looked better. If I had to do it over again, with the way the business has gone since then, I don't think I'd become a farmer now," he says. On second thought, he smiles and says, "But maybe I would."
The world food price rises only made the headlines a month or so ago when everybody learned that the price of rice was going to skyrocket - and so it did. But dairy and chicken farmers here and in the rest of the world have been feeling it for three years, says Prof. Ayal Kimhi, head of the agricultural economics unit at Hebrew University's Faculty of Agriculture.
"There's no telling how long it will go on because I don't see a solution to the rising fuel prices [a central factor in the rise of food prices]," he says. The exorbitant increase in fuel prices is not only raising the price of farming, it's leading many farmers, especially in the US, to grow grain for highly profitable biofuels instead of for farm animals, which means there's less grain for cows and chickens, which is another reason why they're paying more for grain at Kibbutz Mizra and Moshav Be'erotayim.
Another reason for the rise in grain prices is the sharply rising demand for food in India and China, which account for about one-third of the world's population. Then there was the drought that killed the year's wheat crop in Australia. Finally there are the big agricultural combines like Cargill and Monsanto buying up all the rice and grain to corner the market and drive prices up further, explains Kimhi.
But for 30 consecutive years before food prices began shooting up in 2005, they were coming steadily down, mainly due to improvements in technology, and this is a critical reason why the number of Israeli farmers contracted dramatically over the decades - the return on crops kept getting smaller and smaller. (At the same time, though, the agricultural technology industry flourished.)
Beginning in the 1970s, generous Israeli farm subsidies became progressively less generous in comparison to those of Europe and the US, and with water and land so scarce, and the aforementioned steady drop in food prices, farmland began being concentrated in fewer and fewer hands, and the Jewish farmer began giving way to the Arab farmer and Thai farmer.
In 1960 there were 75,000 Israelis working their own farms, mainly kibbutzniks and moshavniks. Another 45,000 worked the farms on salary, mainly poor Mizrahi immigrants in development towns. By 2005, there were only 20,000 farmers working their own land, with 55,000 salaried farm hands, divided roughly evenly between Israeli Arabs in the North and Thais in the South, says Kimhi.
The amount of farmland continues to diminish, with more and more of it being converted by kibbutzim and moshavim to residential and commercial property. The farmland left over has been and continues to be concentrated into fewer and fewer hands, as moshavniks lease their farms either to large food companies such as Pri Hadar, or to the dwindling number of moshav farmers who are still making a go of it.
AT MOSHAV Kfar Mordechai near Gedera, poultry farmer Alon Joels opens a door and 31,000 chickens suddenly come into view. This is the larger and newer of Joels's two coops - 152 square meters of chickens lined up in rows, clucking to the sound of the generators running the fans. Nearby is another, older, fenced coop that holds another 6,000 chickens.
"By rights, I shouldn't be able to make a living with so few chickens," says Joels. He is a thickly-muscled, T-shirted, 53-year-old "small farmer." Born on Kfar Mordechai, his parents immigrated from England and were among the moshav's founders in 1952. His father, who's 80, still raises a few thousand chickens for eggs on another of the moshav's farms. In addition to his chicken coops, Joels used to grow citrus, but he cut down his orchards long ago when the price of water became prohibitive, and now he grows olive trees and grain crops, but they're secondary to his main source of income - chickens for slaughter.
Complaining about the business, about the government's "hostility" to farming, Joels can hardly decide if he likes the work or not. "I was born into it, I'm sorry to say," is the best he can offer.
Many of Kfar Mordechai's original immigrants, he says, went back to England after "paying enormous amounts of money to build their homes here," then finding out how tough it was to make a living from farming. Many stayed on though, and newcomers bought into the moshav; and as of the 1970s, all 60 families were working their farms. "Today there are only four farms left," he says. "There are a lot of new people who've moved in lately - people in finance, hi-tech, doctors, contractors."
Joels, however, isn't poor by a long shot. His two-story house is large and beautifully decorated by his wife, Orly. Serving us mint tea on the veranda, she says, "There's nothing like living in nature," noting that when the chickens lay eggs, she invites local school classes to the coop to gaze at "the sea of yellow [from the newly hatched eggs]. It's beautiful." She says her husband loves living in the country and working outdoors. "But it's a hard business," she adds.
I ask Joels if his livelihood is threatened, if there's a chance the farm could go under in the next few years. "No," he says, "we don't live under that sort of threat. But the farm is heavily mortgaged. We live with a certain risk." Does he regret taking that risk? "Ask me in 10 years," he replies.
The farmers like him who've stuck it out, he says, "are idiots. Everyone's sorry they're still in farming." So why didn't he quit and lease his land like so many others and go do something else? "I didn't have any other skills," he answers, "there's nothing else I can do."
Joels has no sons to pass the farm on to, only grown daughters, and so far they don't seem interested - which suits Joels perfectly. "I pray to God they don't become farmers," he says. And if they do? "Then we raised them wrong."
AT KIBBUTZ Mizra, Moshav Kfar Mordechai and Moshav Be'erotayim, the dairymen and poultrymen flatly reject Agriculture Ministry official Ben-David's contention that their increased costs are being covered and then some by rising consumer prices and increased production. "I have to run tractors, I have to run machinery, I have electricity bills - all this is based on fuel costs, which are going through the roof," says Mizra's Haran. He and Be'erotayim's Menahem Klein also complain that the quarterly updating of consumer milk prices do not keep up with the constantly rising price of cattle feed, which leaves them running continuously behind.
Ben-David points out that consumer milk prices have gone up 14% since the start of last year, yet Klein counters that the cost of cattle feed has gone up about about 80% in the same period. And although Ben-David says dairy farmers now have no quotas on milk production (the reason being that foreign-made hard cheese, butter and milk powder have priced themselves out of the local market, allowing Israeli farmers to step into the breach), Klein says the lifting of quotas only makes a difference to large dairy operations (such as Mizra's), not to the more numerous small farmers like himself.
The Kleins' operation is an illustration of how farming has changed over the years, how it's become a hi-tech business. Showing me the microphones and monitors that attach to their 140 cows in the shed, Arik Klein explains that these keep track of "how much the cow is chewing, how much it's moving around [an indication that the cow is in heat and ready for artificial insemination]," and that the information is fed into computer software.
Calling up a set of graphs on the computer screen, he says, "I can see right here how each cow is doing, and what sort of adjustments in care and feeding we need to make. I know what's going on with the cows better from looking at this screen than from being right there with them in the shed. Pretty soon they'll be able to run Israel's cowsheds from an office in India," he jokes.
The upshot from these and other technological advancements is that farming has become much more efficient, with farmers getting steadily higher yields from their crops and animals. But still, it ain't like it used to be.
"Little by little, the city is encroaching on us," says Arik. "I know dairy farmers who tell me their new neighbors complain that they milk the cows so early in the morning and wake them up. There was a court case recently where a moshav - I think it was Mishmar Ayalon - was ordered not to milk its cows between 11 at night and 6 in the morning because it disturbed the neighbors."
Klein's daughter and two sons are too young to decide what they want to do when they grow up, but he doubts they'll choose farming. "In today's conditions, it doesn't pay. How are they going to get the money to build houses here? Not from raising cows." So he figures he's not only the third but also the last generation of Kleins to spend their lives farming at Be'erotayim. "One day I'll probably sell the cowshed and lease the land to someone else," he suggests. "Who knows what they'll do with it?"
Doron Haran, whose father and grandfather before him were also Mizra dairy farmers, says, "There isn't the same respect for farmers that there used to be in this country." A lanky, slow-moving man, economical with his words, Haran says that despite the continuous dropout rate among Israeli dairymen, he can't imagine them disappearing altogether. "You drive through the Golan, through the Negev, through the Arava, you see cowsheds. Without them, it wouldn't be the same country."
Even while admitting that he has no concrete reason to believe it, Haran insists that grain and food prices will come down sooner or later. "This isn't the first food crisis in the world; eventually things balance out, they always have," he says, walking past his stacked-up bales of hay.
So you're optimistic, I suggest to him, and he stops.
"What else can I be? Good or bad, I have to milk the cows three times a day. If you're not optimistic," he says, "you have no business being a farmer."
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