Butter: the good, bad and ugly

Butter is Israel's best saga; it encompasses almost all the discrepancies and contradictions of the country. One side holding to the old socialist ethos and the other side to the new entrepreneurial spirit of the country.

Do you remember a few months ago, before the corona, when butter disappeared for a few weeks? At that time, the minister in charge allowed for "exceptional" butter imports for six months. Within a few days, the supermarkets' shelves were flowering with all sorts of imported butter. Israelis were once again allowed to enjoy a buttered toast.

Last week we reached the end of the "grace" period, and what did our new Minister of Agriculture Alon Schuster proposed to do? To reinstitute quotas and import taxes on butter.

If Schuster and his friends at the Dairy Board, a cooperative composed of farmers and government officials, have it their way, Israelis will soon wake up to a new shortage, fewer choices, and overall lower quality butter. The board is a purely socialist institution hermetically protected from international and local competition through regulation and exclusive arrangements with the government.

Shortages aren't the only harmful effects of a socialized food sector; consumers also pay more when they are lucky enough to find the product. According to JIMS research based on OECD data, consumers face prices 34% higher than they would have in an open economy. On the national level, Israelis families pay 2.9 billion NIS a year for maintaining the privileges of a few farmers.

The very few fat cats are milking millions of Israelis customers, and especially the lowest-income families that spend relatively more of their food budget on dairy products and high prices affect them the most heavily.

It was encouraging to hear our Finance Minister Israel Katz take the side of the customers and support imports of butter without additional tax restrictions. It is a first step in the right direction, but ultimately, a brave minister needs to dismantle all the food boards and open Israel agriculture to international and local competition.

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