Israel chops duties to promote produce imports

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Israel chops duties to promote produce imports

Tariffs on fruit and vegetable imports into Israel are being abolished and lowered after local produce was badly damaged in December snow storms. Israel Produce sq - Wikimedia Commons

Israeli government ministers held emergency meetings over the weekend to discuss customs duties on imported fruit including apples and pears from the Far East and North America, as well as cucumbers, tomatoes and zucchinis from Jordan.

The agriculture and financial ministers decided to allow duty-free imports to maintain the cost of living in the country, which was badly affected by a hurricane that battered much of the Israel’s key agriculture land in late 2013.

Damage to the fruit and vegetable crops has since led to sharp increases in local markets and concerns that prices were skyrocketing out of control.

The price of tomatoes has gone through the roof over the last month with costs going up from ILS2.50 (US$0.71) per kilogram to ILS7 (US$2), while the list price for zucchini now stands at ILS8.2 (US$2.34) compared with ILS2 (US$0.57) just a few weeks ago.

Customs duties have been abolished on apples and pears for the entire year of 2014 beginning in March, while restricting quotas to 8,000 metric tons (MT) and 3,000MT respectively.

Zucchini, eggplant and lettuce will remain duty-free until Feb. 28, 2014 and an estimated 3,000MT of tomatoes and 1,500MT of cucumbers will have duties suspended until at least the end of March.

Quotas on quantities have also been put in place, which the Israeli government says will protect the country's agriculture sector.

A Ministry of Agriculture representative told that traditionally it was against market liberalization, but following the recent harmful weather it was now trying to "balance the cost of living" without adversely affecting Israel's agriculture sector.

The suspension of duties on fruit and vegetables comes just two weeks after ministers signed an order to place white cheese and whipping cream under price controls, reducing the price dairy products by around 20%.

"The move is added to the series of steps taken by the Ministry of Agriculture to reduce the cost of living in Israel by reducing family food basket in milk and eggs," Minister of Agriculture Yair Shamir said.

"The Ministry of Agriculture will continue to increase competitiveness in agriculture in Israel, but the side will take care to allow fair compensation to producers with an emphasis on strengthening the family farm."

Meanwhile, farmers and growers are expecting to receive compensation for their lost crops but may have to wait a considerable time before that becomes a reality.

Compensation, decades in the making

Coincidentally, this weekend also brought some good news for around 3,000 fruit growers whose crops were severely damaged in snow storms that happened 22 years ago. The Fruit Growers Association says an additional ILS50 million (US$14.27 million) has been earmarked for farmers affected by a natural disaster that occurred during the winter of 1991-92 when crops were virtually wiped out by adverse weather.

The association brought the case to the High Court of Justice arguing that growers should receive more compensation from the government, in addition to the original payout, to account for inflation increases.

Many of the growers are now retired but will still receive compensation once the FGA locates everyone who was affected at the time.

Photo: Wikimedia Commons


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