November 3, 2014

 

Israel spends US$20 million a year on 'ghost' poultry farmers

 

 

The Israeli government is allotting every year over US$20 million as special subsidies granted to some 600 Israeli poultry farmers, many of whom have abandoned farming as a way of life.

 

Under the so-called Galilee Law enacted in 1988, native farmers of Galilee were granting special subsidies that now amount to 100 million shekels ((US$26.6 million) a year. In 1996 the government scrapped the quota for chicken raised by each farmer but not for eggs.

 

Even without the quota, the subsidy remained based on the quota that existed in 1996. A recipient farmer continued to receive his subsidy even if he raised fewer chickens, sold his quota to someone else or even left the chicken-raising business. 

 

A July audit report by Finance Ministry Accountant General Michal Abadi-Boiangiu noted that almost half (40%) of the recipients of the Galilee Law subsidies were no longer poultry farmers. 

 

She also discovered that there was no provision on the right to a subsidy of farmers who have abandoned the business of raising chickens.

 

Abadi-Boiangiu also discovered that there was no written documentation for the joint decision by the finance and agriculture ministries to create the subsidy program.

 

"It was not possible to locate the minutes of the decision. It is not clear to the auditing team who approved it, on what authority and what the decision included," the audit report said. "As a result, there are no clear criteria or procedures, and the execution of the program is subject to the judgement of the various relevant people at the Agriculture Ministry."

 

Moreover, Abadi-Boiangiu and her audit team also found that the Agriculture Ministry didn't make sure that the subsidy money that was transferred to Israel's Egg and Poultry Board got to the farmers.

 

The report found out that the Agriculture Ministry pays the Egg and Poultry Board which, in turn, pays major marketing companies in the egg and poultry sector. These firms then transfer funds to the farmers, but not after offsetting the debts that they claim too.

 

The Egg and Poultry Board in a statement said that as the government's executive arm for transferring subsidy funds, eligible farmers got their subsidies "via the marketing firms with which they are associated." 

 

It added: "The accountant general's report has not been presented to us, but there is no basis for the contention that there is no oversight in the transfer of funds. The transfer of the subsidy funding does not create a concentration [of power] inasmuch as no marketer of eggs for consumption has a market share exceeding 20%."