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The absurd government lottery that allocates quotas for dried raisins and prunes

Last week Israel celebrated Tu B'Shevat, a holiday when families traditionally plant trees and eat dried fruit among them raisins and prunes. This holiday is also an irritating reminder of one of Israel's most absurd import policies.


Israel doesn't produce any dried raisins nor prunes; the last factory closed in 2017. However, strict trade limitations to "protect a no-existing" industry are still in place today.


To this day, the government restricts the import of those dried fruits by a quota system. This restriction is not an oddity in Israel; most fruit and vegetables are subjects to massive protectionist policies. Things start getting stranger and more idiotic when one looks at the way the government chooses to distribute those particular import permits.


The Ministry of Economy allocates quotas by drawing a lottery among licensed importers! The winning ticket is the right to import a certain quota of dried raisins and prunes without being subject to exorbitant customs duties.


The irony in this story is that importers found a "market" way to deal with this ridiculous process; they started to trade the winning tickets among themselves. Some even enter the lottery only to get a draw and, if lucky, sell their winning "quota" to the other importers.


This absurd policy mislocates resources and leads to higher prices for local customers. The only beneficiary is the Tax Authority that levies high customs duties out of the quota limit.


It might be the right time to remind our representatives that they work for the benefit of the citizens and not to only grab their money by creating insane policies.


Alice Abramovich blog entry and interview on Roy Katz show on 102 FM Tel Aviv in Hebrew inspired this entry. Alice is an Israeli lawyer specializing in Customs Law and International Trade

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