Israeli Agricultural Reform: lowering import tariffs and other barriers to trade

In a bid to lower the high cost of living in Israel, the Government has implemented a major reform to increase competition in the agricultural industry, increase the range of products available to the consumer and lower the prices of fruits, vegetables and eggs.  The program is expected to save Israelis some NIS 2.7 billion (790 million CHF) a year, or NIS 840 (246 CHF) per household.

The five-year plan, which is included in the Economic Arrangements Law that accompanies the 2021-2022 budget, will increase competition through a broad and gradual reduction in import tariffs for all fruit and vegetables, as well as immediate price cuts for a variety of products such as eggs, avocados, garlic, peas, figs and artichokes.

In addition, Israel will recognize European standards for fruits and vegetables, and regulations of produce imported from Europe will be reduced. This will lead to a significant increase in the range of products expected to be imported, such that, for example, nectarines and apricots can be consumed throughout the year and not just in the summer months. Other products that are currently inaccessible to the Israeli consumer, such as berries and the durian fruit popular in Thailand, will be able to enter the market as well.

The program offers a broad support package for the agriculture industry that includes: direct budget support for each farmer per cultivated dunam, support for the egg industry, expanded tax benefits to encourage capital investment, support for complying with local produce marking standards, lowering the cost of farming inputs, and an investment of over NIS 2 billion for raising productivity in the agriculture industry. Grants will be available for farmers to purchase new equipment, and collaborations with start-ups will be encouraged.

The program, which follows OECD recommendations, goes hand in hand with other efforts to ease the regulatory burden on importers across the board and allow more imports in order to reduce the cost of living.