Shapira: Don’t raise food prices before open debate

State Comptroller takes exceptional step of publicly attempting to delay anticipated ministerial decision to raise food prices.

By YONAH JEREMY BOB
State Comptroller Joseph Shapira 370 (photo credit: Marc Israel Sellem)
State Comptroller Joseph Shapira 370
(photo credit: Marc Israel Sellem)
State Comptroller Yosef Shapira on Tuesday took the exceptional step of publicly attempting to delay an anticipated ministerial decision to raise food and dairy prices.
Shapira published a letter he sent to Finance Minister Yuval Steinitz; Industry, Trade and Labor Minister Shalom Simhon; and Agriculture Minister Orit Noked. He requested that they delay an expected decision to raise food and dairy prices.
The state comptroller said it was important to hold public hearings on his recent report on the issue, particularly regarding the problems the state has caused with deregulation – before prices are raised.
Currently, the Knesset State Control Committee is not scheduled to debate the issue until October 30.
Even that date could be pushed off significantly if the Knesset dissolves in the current atmosphere, in which early elections crowd the headlines on a daily basis.
Shapira added that it was crucial to have advocates for those poorer sectors of the country – who would be most adversely impacted by a rise in prices – as part of the public debate. Only if such advocates are part of the policy decision-making process can any decision on the issue obtain public support and maintain the public trust, he said.
Shapira reiterated his contention from his earlier report that providing food security is a crucial role of government.
Meretz party leader Zehava Gal-On echoed Shapira’s report and his most recent letter, saying that the government was reaping the downside of its miscalculated deregulation policies.
Gal-On added that the government had pushed deregulation on the banner of “free market” reform, but did not check whether there was actually a free market or whether a small and powerful few dominated the market for their own gain, regardless of the impact on the poorer sectors of society.
Shapira’s September 12 report had slammed the Finance Ministry, as well as the Industry, Trade and Labor and Agriculture ministries, for failing to control skyrocketing food and dairy prices during the years 2005-2011.
“Social justice is not just an empty code word,” he said in the report, declaring that the ministries in question ignored social justice considerations in determining their regulatory policies.
The 58-page report had been published against the background of protests and a public outcry about the rise in food and dairy prices – among other problems falling under the “social justice movement” umbrella.
Coming on the heels of the government-commissioned July 2012 Kedmi Report on similar issues – named for Industry, Trade and Labor Ministry director-general Sharon Kedmi – the document was the first Shapira published since becoming state comptroller in July.
In both the report and in Tuesday’s letter, Shapira also said he would be vigilant in addressing social justice issues in the future.
In the report, Shapira had also noted that at the time he testified before the Knesset as a candidate for comptroller, he emphasized that he believed the social justice protest movement was a positive development addressing serious issues confronting society.
The report said that the real price of food during the period in question rose around 8 percent, while the average real net wage fell nationally. The higher price-to-wage ratio hit the economically disadvantaged the hardest.
Among the harshest criticisms aimed at the ministries was that they had not remotely considered the social- or health-related impacts on society as a whole by allowing the prices to spiral out of control.
Opening with the words, “Food is a basic and fundamental need of human beings,” the report said the ministries essentially had not weighed the interests of consumers as a factor in their regulatory decisions.
Moving on from food prices in general to dairy products – on which the report said consumers spend NIS 9 billion annually – Shapira said the Finance and the Industry, Trade and Labor ministries had allowed an even worse scenario to develop.
Shapira criticized the deregulation of the dairy market by the ministries – done without first ensuring there was sufficient marketplace competition to keep prices down. Had they done so, deregulation might have forced sellers to keep prices low.
But without such a market in place, the only beneficiaries of deregulation were the sellers, who simply raised prices without having to worry about regulation or competition, said the report.
Shapira does not have the power to stop the ministers from raising prices before his report is discussed. Nevertheless, his unusual step of not only criticizing their policy, but intervening in the timing of their decisions, could put the ministers in an awkward position in the eyes of the public, particularly on the possible eve of early elections.