From the Liveblog of
Tuesday, March 10, 2026
Smotrich’s contentious plan to expand dairy imports removed from state budget agenda
Add ToI as a Preferred Source on GoogleAriela Karmel is a political correspondent at The Times of Israel. She previously reported for Calcalist and Haaretz. She holds an MA in Middle Eastern and African History from Tel Aviv University and a BA in Political Science from the University of British Columbia.
Finance Minister Bezalel Smotrich’s dairy reform has been removed from the 2026 Arrangements Law, a critical piece of legislation whose passage is needed in order to adopt the 2026 state budget.
Following Hebrew media reports that Prime Minister Benjamin Netanyahu had insisted on removing Smotrich’s controversial reform from the law in order to pass the budget, a spokesperson for the finance minister’s office tells The Times of Israel that “it was decided to split issues that are in dispute, such as the dairy reform, from the Arrangements Law,” and that the decision was made by the prime minister and Smotrich together.
“At the moment, the main task is to ensure the passage of a budget that addresses all security needs and provides stability for the economy,” the finance minister’s office says.
The office adds that “in coordination with the prime minister, it was agreed that the reform will continue to advance in committee and, after the war ends, will be promoted as legislation under coalition discipline.”
As part of a broader plan to lower the cost of living, Smotrich’s proposed legislation would slash milk production from the current 1.5 billion liters to 1 billion, cut the price per liter that dairy processors pay to farmers by 15%, and abolish tariffs of up to 40% to flood the Israeli market with imported dairy products.
Though the plan was approved by the government in December, it needs the Knesset’s authorization to pass.
The reform has generated significant opposition from farmers who argue that it will cause widespread job losses and harm national food security, as well as within Prime Minister Benjamin Netanyahu’s Likud party, including Agriculture Minister Avi Dichter and Economy Minister Nir Barkat.
The dairy reform is the latest Smotrich-backed measure to be derailed. Last month, the Knesset revoked his order allowing Israelis to purchase up to $150 of personal goods, up from $75, from overseas websites without paying the 18% VAT, after Netanyahu declined to impose coalition discipline despite initially saying he would.
The Times of Israel Community.