"All over the world, including countries that symbolize pure capitalism in North America and the EU, in all enlightened nations, the dairy market is supervised and planned," said Israel Dairy Board chairman Shaike Drori in a letter to Prime Minister Benjamin Netanyahu. "Milk is subsidized around the world, but in Israel, as you know, the direct subsidy is zero."
The letter was sent following reports that the Kedmi committee for the review of the dairy market completed its staff work last Thursday, and is due to the submit its recommendations to Netanyahu during a special meeting with Minister of Finance Yuval Steinitz and Minister of Industry, Trade and Labor Shalom Simhon.
The conclusions have not yet been made public, but are expected to help Netanyahu reach a decision on a possible solution to the rise in prices for dairy products. Netanyahu's preferred solution is known to be to boost competition by opening the dairy market to imports.
"A decision on the importing of powdered milk or to raise the quota beyond the current level (20% of the dairy market), and exposure to global economic forces, will boomerang against the Israeli consumer within months," Drori wrote, adding, "The prices of cottage cheese and other dairy products rose even when the price of raw milk in Israel fell."
Drori claims that the price of basic dairy products steadily rose because of the substantial increase in imports. "As the shortage of milk and dairy products worsens, as is already happening in the world, it will be impossible to obtain products in Israel at all - even at high prices, let alone with the necessary kosher certification."
Drori says that the small number of tycoons and importers "in the trough" are liable to take over "what remains of domestic production and supply" following the measure, which is also liable to "destroy the livelihoods of thousands of Israelis in the periphery."
Drori slams the Kedmi committee's staff work and the "dangerous and irresponsible conduct of Ministry of Finance officials". He calls it "a horrifyingly amateurish attempt to learn about the Israeli dairy market in ten days." He warns Netanyahu not to make a decision until he makes sure that "the staff work you rely on is not fundamentally flawed."
Drori concludes by asking Netanyahu not to adopt "centralized thinking that will lead to a destructive decision to destroy 950 dairy farms and harm the dairy industry's 13,500 employees, merely to concentrate the market in the hands of one or two tycoons."
Drori also criticized the lifting of price controls, which he says will "come at the direct expense of the Israeli consumer."
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