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January 23, 2019

 

Israel embarks on dairy reform; import tariffs to see drastic fall

 

 

Israel is slated to drastically lower the tariffs imposed on milk and other dairy product imports starting this year as part of an agreement of principles for dairy reform signed by concerned government agencies and industry groups in October last year.

 

Under a graduated reduction, tariffs for all kinds of milk and cream imports, for example, will be cut down from the current 40% to 24% this year and will be further reduced yearly until 2026, when tariff will be down to just 15%.

 

The dairy reform - signed by the Israeli Ministries of Finance and Agriculture, together with the Israeli Farmers Association, the Association of Israeli Cattle Breeders and the Israeli Dairy Association - also includes increases in a number of quotas.

 

Tariffs on powdered cheese and curd, intended for animal feed, will likewise decrease to zero percent beginning in 2020.

 

Some industry groups, however, are currently opposing the reform, according to a report by the US Department of Agriculture's Foreign Agricultural Service. The date of implementation will thus depend on the level of opposition and any potential legal challenges, the report said.

 

The government uses high tariffs to protect the industry, but the Israeli government is slowly liberalizing dairy trade in an effort to lower the cost of living.

 

As of 2017, based on figures from the Israeli Dairy Board, there are 760 dairy farms producing an annual total of 1.513 billion liters, with each dairy farm producing an annual average of 1,991 liters. The 2017 average annual milk production per cow stands at 12,025 kilogrammes.

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