OECD knocks Israel’s ‘protectionist’ agricultural policies

Consumer prices driven up by tariffs, says economic organization in report

Part of the organic farm at Hadassah Meir-Shfeyah youth village. (Times of Israel)
Part of the organic farm at Hadassah Meir-Shfeyah youth village. (Times of Israel)

Israeli government support for the domestic agricultural sector has risen despite efforts at reform, stifling imports and raising prices for local consumers, the OECD declared in a report issued this week.

According to the intergovernmental economic organization, while “Israel maintains a transparent and open trade regime overall,” its “high border tariff protection on agri-food products” remain “an important tool in supporting agricultural producers.”

Products such as wheat, fats and oils, walnuts, prunes, maize, citrus juices, beef and sheep meat and various dairy products are all subject to tariffs.

While the overall level of support for producers has experienced a moderate decline since the early 2000s, market price support “rose by 8 percent, due to an increase in price distorting measures” between 2017 and 2018, the report said.

Israel’s focus on price support “effectively raises market distortions and taxes for consumers,” the OECD found, calling on Jerusalem to “continue and intensify its ongoing efforts to diminish the regulatory burden and improve the transparency and competition in the agro-food chain.”

Such a move would “not only reduce trade costs and encourage trade flows, but would also diminish costs for the processing industry and prices for the final consumers of agro-food products,” according to the OECD.

In a report issued last year, the OECD described Israel as one of the countries that could most gain from further liberalization and greater competition in its economy, with its gross domestic product per capita potentially rising by as much as 20% by 2060 should greater economic openness be in place.

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