Customs duties to be abolished — the state will support sheep and goat farmers

The state will provide direct support to the dairy sector for the first time. Calcalist has learned that an agreement is expected to be signed today between the Ministry of Finance and sheep and goat farmers, under which the state will commit for the first time to direct support for these farmers. This will enable the lowering of prices for goat and sheep cheeses in order to compete with the import of products, which will expand following the removal of customs duties.

The agreement guarantees direct support of approximately 1 NIS per liter of milk. The support, totaling about 24 million NIS per year, will be given to farmers in parallel with the removal of the 8.5 NIS per kg customs duty imposed on goat cheeses. Following the support, farmers will be able to lower the price of the milk they sell to dairies by 25%, in the hope that this will lead to a price reduction for consumers.

The agreement includes a four-year adjustment period, so that farmers who do not adapt or wish to retire will be able to receive full support of 3.6 NIS per liter and exit the industry. Until now, the sheep and goat sector was included in the industry agreement based on cow's milk. Last December, the milk agreement ended, and no new agreement was signed in light of the Ministry of Finance's intention to promote a comprehensive reform and open the market to imports.

The Ministry of Finance failed to pass the reform in the Knesset, and in the meantime, the sheep and goat sector remained exposed to imports that expanded through the distribution of cheese import quotas. The sheep and goat sector consists of about 46 sheep farms that supply 9.8 million liters of raw sheep's milk per year at an average price of 4.8 NIS per liter, and 68 goat farms that produce 12 million liters of goat's milk at an average price of about 5.15 NIS per liter of raw milk. Most of the farms are located in the periphery and are characterized as small farms.

During the discussions on the reform in the sector, industry figures claimed that the Ministry of Finance's plan to abolish planning and open the market to imports would be a death blow to local farmers. The agreement, led by the chairman of the Dairy Board, Itzik Schneider, was crafted after the shelving of the reform, with the aim of reaching a formula that would preserve local production but allow for the reduction of customs duties and competition from imports.