Israel Overhauls Sheep and Goat Farming Sector, Ending Tariffs for Cheaper Cheese

Israel's sheep and goat farming sector is set to undergo a significant reform, transitioning from a protected market to an open, competitive one. This shift, agreed upon by the Finance and Agriculture ministries, involves the cancellation of import tariffs on sheep and goat milk cheeses and the implementation of direct financial support for local farmers. Over the next four years, from 2027 to 2030, farmers will receive approximately 100 million shekels in direct subsidies as a safety net during the adjustment period. Starting in 2031, an annual ongoing subsidy exceeding 20 million shekels will be provided to ensure long-term economic stability for the industry.

The Ministry of Finance anticipates that these changes will lead to a substantial reduction in the price of sheep and goat milk cheeses, potentially saving consumers around 60 million shekels annually. This reform aims to bolster local production and enhance food security while moving away from protective tariffs and production quotas towards a more market-driven approach.

Direct support will amount to approximately one shekel per liter of sheep or goat milk. This is being implemented concurrently with the removal of the current 8.5 shekel per kilogram tariff on goat cheese. The Agriculture and Finance ministries estimate this support will enable farmers to lower the price of milk sold to dairies by 25%, with the expectation that this reduction will be passed on to consumers.

During a four-year transition period, existing farmers will receive compensation for past quotas, amounting to 3.6 shekels per liter, allowing those who choose to exit the industry to redeem their quotas fully. The agreement ensures that tariffs will only be abolished after direct financial support is disbursed to farmers, creating a crucial safety net. The sheep and goat sector, previously part of a broader dairy agreement based on cow's milk which ends in December 2025, has been particularly vulnerable to increased imports since 2022, following the removal of tariffs on certain premium cheeses.

Currently, Israel has 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. Most of these farms are small and located in peripheral areas. The new agreement includes provisions for an additional subsidy of up to 20% for farms in these peripheral regions to strengthen agriculture and maintain production diversity across the country. The reform also emphasizes investment in research and development to improve milk quality and farm efficiency.

Ilanit Dadush, CEO of "Aziza," the Goat Farmers' Association, stated that the goal is to offer consumers cheaper cheese while enabling local farmers to continue producing and earning a dignified living. She stressed the importance of solidarity across the dairy industry to ensure the price reduction reaches consumers and that the government upholds the agreement. She also expressed confidence in the quality of local produce and the Israeli consumer's choice, provided the price is competitive.