Israel: overcoming a diluted produce industry

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Israel: overcoming a diluted produce industry

Israel has managed to keep fruit and vegetable shipment volumes steady since the bankruptcy of leading shipper Agrexco in 2011, but the country's export promotion agency sees challenges ahead from a changing grower structure.

Ofer Sachs

Ofer Sachs

Israeli Export Institute CEO Ofer Sachs told Agrexco was very innovative in bringing new products to market that could yield good prices, but without the company around the industry had to find new ways to add value.

The overall grower structure has also become more diluted over the last couple of years. Click here for a list of Israeli exporters.

"Instead of seven or nine big players and 50-60 small and medium players, we have now about 150 small and medium players and four or five big players. There are now a lot of small companies that want to find their way," he said during Fruit Logistica in Berlin.

"From this respect Israel is under some changes of course in how farmers conduct themselves, and we are happy to see that at the end of the day the changes are not significant.

"Europe is still our target market but because of the situation there it becomes more difficult to increase our exports there - then the farmers and the companies need to find some solutions, like Russia, like the Far East, like the former Soviet Union countries."

He adds that Russia now takes in a "significant chunk" of Israel's fruit exports.

Sachs highlights the country's avocado industry is still very big and growing, along with increasing clementine volumes, while Israel has also found a place in markets for sweet peppers, tomatoes, mangoes, litchis and other exotic fruits.

"We also export fresh herbs, potatoes, carrots and many niche products, and we are trying to use some opportunities in the market to penetrate with high quality but low quantity products."

Water and competition

Because of Israel's water issues, almost all vegetables come from protected farming, and the country is famous for advanced irrigation techniques.

"We are reclaiming 80% of our water to agriculture, which means the water that comes out of the big metropolises are being purified, treated and delivered for secondary use in the agricultural sector.

"No other country is doing the same, but on the other hand we are desalinating water from the Mediterranean - all that of course has a very strong impact on the price of the water we are using and the price of the product.

"It means that only high quality and good prices of our products are actually economically feasible."

These high costs means Israel tries to avoid direct competition with growers in north African countries, the Netherlands and Spain, but with the latter it has managed to compete well in avocados.

Labor supply

He adds Israel's farm labor is mostly supplied by foreign workers, with the government setting strict standards that can be costly.

"They come for temporary periods of three or four years, especially from the Far East, Thailand, Vietnam, Sri Lanka, and the labor law in Israel sets a minimum wage which is quite high, at €1,000 (US$1,335) per month.

"On top of that you need to pay for the accommodation, food, and additional taxes because the government on the other hand wants to decrease the number of non-Israeli workers.

"This is because they want to bring unemployed Israelis into this market, but of course they are not running to pick up the fruits from the trees.

Political issues

Sachs emphasizes that conflicts in Israel have had "zero influence" on the ability of growers to produce, or to get to market on time.

"The things that appear in the media that are very dramatic are not always so dramatic in real life," he says.

He says Israel does not export enough fruit and vegetables to the logical market geographically of the Middle East.

"In this respect there is a political issue, because they don’t always want to buy products from Israel.

"All of us want to see the day in which a truck can cross the border into Jordan and go immediately into the Gulf countries – it’s so obvious, it’s something that everyone wants to see, but we’re still not there."

On the final day of Fruit Logistica, protesters from BDS (boycotts, divestment and sanctions) Berlin stood in front of the conference hall calling for a boycott of Israeli produce from European supermarkets until the country complies with international law and gives rights to Palestinians.

"It worked against the apartheid in South Africa, so why can't it work now?" one protester told

Last year, British supermarket Co-op announced a ban on any products from Israeli suppliers known to source from settlements in the West Bank.

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