Tear down Israel’s dairy Berlin Wall

‘THE VERY same government that cannot deliver an infrastructure project on time presumes it can magically guess how much milk we will collectively use.’ (photo credit: KOBI GIDEON/FLASH90)
‘THE VERY same government that cannot deliver an infrastructure project on time presumes it can magically guess how much milk we will collectively use.’
(photo credit: KOBI GIDEON/FLASH90)
It has been nearly 30 years since the collapse of the Soviet Union and the failed communist creed that lay at its foundation.
But, while the Sickle and Hammer and most other vestiges of Marxism-Leninism were thankfully swept away in the decades that followed, you may be surprised to learn that there is still a cozy little corner of Soviet-style economics nestled right here in the Jewish state.
Indeed, tucked away under our very noses, in the dairy section of Israeli supermarkets throughout the land, communist concepts such as central planning and government-set prices, as well as the inevitable shortages of basic consumer goods they produce, continue to prevail, harming the consumer and society as whole.
Why, you might be wondering, does any of this matter?
Well, if you have been to the grocery recently, then you know the answer.
Just two weeks ago, on the Friday before Yom Kippur, I went to the mini-market early in the morning to pick up a few items in advance of Shabbat and the fast.
For the first time that I could recall, the milk section stood completely empty, looking as if it had been plundered by a platoon of parched Vikings. With the exception of some small bottles of a rather unappealing strawberry-flavored dairy drink, the shelves resembled a bovine battle zone, with puddles of milk scattered about and nary a container in sight.
A similar scene greeted me again last week, on the eve of the start of Sukkot, when most of the milk was also sold out at an unusually early hour.
The reason for the sudden shortage is as inane as it is outdated. You see, not everyone is aware of the fact that in Israel, the amount of milk produced is not determined by free-market forces, such as supply and demand, but rather by governmental fiat.
Believe it or not, the agriculture minister signs off each year on a cap on the quantity of milk that can be produced, based on expectations regarding how much will be consumed.
In other words, the very same government that cannot deliver an infrastructure project on time, let alone the mail, presumes it can gaze into the future and magically guess how much milk we will collectively use with our coffee or Cheerios.
Worse yet, once the overall quantity has been fixed, it is left up to the Israel Dairy Board – yes, there really is such a thing – to apportion quotas to various milk farms.
As the board’s website unabashedly states, “Dairy farming is regulated through a ‘quota’ production limit on all existing dairy farm units. Milk can be sold only to the dairies and farmers are not allowed to sell their milk directly to any consumer. The amount of milk marketed by each farmer is controlled through the data received from each dairy.” And should a farmer dare to take the audacious step of producing more milk than the bureaucrats deem appropriate, the board warns that they will be “fined with reduced payments for these liters of milk, which are above the quota of the farm.” This Bolshevik approach was on full display just last month, when Agriculture and Rural Development Minister Alon Schuster of the Blue and White Party inexplicably signed off on a 2% reduction in the 2020 milk quota, even though Israel’s population has been steadily increasing each year by 2%.
As observers noted at the time, the fact that international travel has been disrupted this year by the coronavirus and more Israelis are staying at home would logically dictate an increase in the quota, not a decrease.
You don’t need a degree in economics or an understanding of supply chains to know that given the current circumstances, Schuster’s decision would lead to a shortage, which is precisely what has occurred.
Coincidentally or not – and most likely it is not – Schuster just happens to a member of Kibbutz Mefalsim in the South, which is reportedly the recipient of a generous production quota from the government.
The bottom line is that, in this country, dairy farmers are not free to produce as much milk as they wish, nor can they sell it to whom they wish – nor are they even free to set the price, which is decided upon by the Economy Ministry.
Sadly, milk is not the only product that is subject to communist-style regulation.
Remember earlier this year, during the first wave of the coronavirus, when eggs suddenly grew scarce? It wasn’t because the chickens were holding back in protest. Egg production, like that of milk, is decided upon by the agriculture minister and Israel’s Egg and Poultry Board (yes, this really exists as well).
And then there was last year’s shortage of butter, which got so bad that the government took the radical step of temporarily opening up the market to its import to satiate the public’s palate.
As history has shown, central planning by governments and the imposition of price and production controls, no matter how well-intentioned, predictably skew the market in favor of the few manufacturers who benefit while simultaneously squeezing the consumer.
Last time I checked, we are now in the 21st century, so I think it is time for the government to get out of the business of interfering in people’s business. Stop curtailing the freedom of farmers to produce, stop telling them where and at what price they can market their goods, and let the forces of supply and demand operate unhindered.
Thousands of years ago, the Bible described Israel as a “land flowing with milk and honey” (Exodus 3:8). But in order for something to flow properly, the obstacles and dams in its way need to be removed. And that is what the government must now do.
So let’s tear down Israel’s dairy Berlin Wall and let the milk begin to flow again, unimpeded and unhindered.
The writer served as deputy communications director under Prime Minister Benjamin Netanyahu during his first term of office.