Israel to Subsidize Sheep and Goat Milk Farmers as Tariffs Are Lifted

The Israeli government is set to provide direct financial support to sheep and goat milk farmers for the first time, as part of an agreement between the Ministry of Finance and the farmers' representatives. This initiative aims to lower the prices of sheep and goat cheeses to compete with increased imports, which are expected to rise following the removal of import tariffs.

The agreement will provide approximately 1 shekel per liter of milk directly to farmers, totaling around 24 million shekels annually. This support coincides with the elimination of an 8.5 shekel per kilogram tariff on goat cheeses. The farmers are expected to reduce the price of milk sold to dairies by 25%, with the hope that this will translate to lower prices for consumers.

A four-year adjustment period is included in the agreement. Farmers who cannot adapt or choose to exit the industry during this time will receive full support of 3.6 shekels per liter and be allowed to leave the sector. Previously, the sheep and goat milk sector was included under agreements for the larger cow's milk industry.

This move follows the collapse of a broader agricultural reform intended to open the market to imports. The Ministry of Finance's attempt to pass the reform in the Knesset failed, leaving the sheep and goat sector vulnerable to expanded imports through allocated quotas for cheese. The sector comprises about 46 sheep farms producing 9.8 million liters of raw sheep milk annually and 68 goat farms producing 12 million liters of raw goat milk, with most farms being small and located in peripheral areas.

Industry representatives had previously warned that the finance ministry's plan to abolish planning and open the market to imports would be devastating for local producers. The new agreement, spearheaded by the Chairman of the Milk Council, Itzik Schneider, was developed after the reform's shelving to find a formula that preserves local production while allowing for tariff reductions and import competition.