Agriculture in Israel · Research, Economy and Strategy Division - Ministry of Agriculture and Rural Development 1. Create the conditions for increasing production, based on demand

Photos: Yoav Morag, Negev District, Ministry of Agriculture and Rural Development

Agriculture in Israel Seminar ENPARD 18-19.5.2016

1

Israel Agriculture in Figures

Source: Central Bureau of Statistics Israel

Research, Economy and Strategy Division - Ministry of Agriculture and Rural Development

Source: CBS 2015


Field Crops

8%

Vegetables, Potatoes and

Melons 19%

Citrus 5%

Plantations 19%

Flowers and Ornamentals

6%

Poultry 19%

Cattle (Milk) 10%

Cattle (Meat) 7%

Sheep and Goats 4%

Fish 2%

Miscellaneous 1%

Value of Agricultural Output 2015 (Total: 29 Billion NIS)

4

Moshav Nahalal

“The Village” by Nachum Gutman

Kibbutz Kfar Blum

Daburiyya- Arab Village Alonei Abba- Semi-Cooperative Moshav

Israeli Village

Area:

22,072 km2

Arable land 420K

Pasture 150K

Fisheries,3K

Protected 7K

Orchards 106K

Open field 304K

In Hectares

Area : 22,000 km2

Irrigated 53%

Rainfed 47%

Source: Ministry of Agriculture and Rural Development


Agricultural Land

Water for Agriculture

Source: Water Authority, Ministry of Agriculture and Rural Development

Israel is a Pioneer in Water Technology


468

469

215

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

200

400

600

800

1000

1200

1400W

ater

Use

(m

illio

ns

m3 )

Fresh Water Treated Waste Water Saline and Floods % Marginal Water Use

Employment in Agriculture

7 Research, Economy and Strategy Division - Ministry of Agriculture and Rural Development

Source: Central Bureau of Statistics Israel

13 12 10 12 12 11 12 9 12 10 11 10 12 12 12

9 7

7 6 6 4 3

3

4 3 2 2

3 5 4

17

15 17 16 21 24

20 23

22 22 23

18

23 26

24

5

1 3 3

2 2

3 4

7 8 8

9

10

11 13

21

22 23 24

22 23

23 24

26

23 22 24

23

22 22

66

58 61 62

63 66

61 63

72

66 66 64

72

76 75

0

10

20

30

40

50

60

70

80

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Nu

mb

er o

f em

plo

yed

per

son

s (1

00

0)

Farmers Unpaid family members Kibbutz members Israeli employees Palestinians Foreign workers

Apple Harvest Baram, Gil Pitusi, KANAT Competition

Support for Farmers A General Perspective

Yael Kachel, Seminar ENPARD 18-19.5.2016 8

Source: OECD 2015

Israel - Support for Agriculture (2014(

Remarks Billion NIS

30.0 Value of Production

10% of gross farm receipts 2.99 Producer Support Estimate (PSE)

about 80% of PSE 2.37 Market Price Support (MPS) *

0.62 Budgetary Support **

about 18% of TSE 0.60 General Services Support Estimate

(GSSE) ***

GSSE + PSE 3.59 Total Support Estimate (TSE)


* mainly milk, beef and veal, sheep, bananas ** mainly water, investment support, subsidies for insurance, Galilee law *** mainly R&D, infrastructure, inspection services, stockholding

Market price support: mainly in livestock sectors

Composition of Producer Support Estimate by Country, 2012-14

Source: OECD 2015

% of gross farm receipts


-10

0

10

20

30

40

50

60

70%

Support based on commodity output

Payments based on input use

Payments not requiring commodity production

Other payments


Support of Farmers in Israel • Declining support • Low budgetary support (2.3% of production value, EU 18%, USA 7%) • About 90% of support: trade and production distorting (mainly MPS)

Israel: Level and composition of Producer Support Estimate, 1995-2014

0.0

2.5

5.0

7.5

10.0

12.5

15.0

17.5

20.0

22.5

25.0

-500

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

% P

SE

NIS

Mill

ion

Market Price SupportBudgetary SupportPercentage PSE

Source: OECD 2015 11

Budgetary Subsidies in the EU (FADN data, 2013), for commercial farms with economic size of 50,000 to 500,000 Euro


Exchange rate NIS/Euro: 4.8

Economic size of an agricultural holding: measured as the total Standard Output (SO) of the holding (in euro).

Utilized

agricultural

area, ha

Total output,

1000 NIS

Total

subsidies,

1000 NIS

% as percent

of gross farm

receipts

Subsidies in

NIS / divided

by ha

Specialist COP - גד"ש

(4) 50 000 - < 100 000 EUR 110 547 144 21% 1,316

(5) 100 000 - < 500 000 EUR 260 1,398 346 20% 1,329

Specialist horticulture - ירקות ופרחים

(4) 50 000 - < 100 000 EUR 6 489 16 3% 2,722

(5) 100 000 - < 500 000 EUR 14 1,306 31 2% 2,218

Specialist wine - יין

(4) 50 000 - < 100 000 EUR 16 335 24 7% 1,522

(5) 100 000 - < 500 000 EUR 30 999 48 5% 1,638

Specialist orchards - fruits - מטעים

(4) 50 000 - < 100 000 EUR 16 383 42 10% 2,660

(5) 100 000 - < 500 000 EUR 32 1,011 91 8% 2,841

Specialist olives - זיתים

(4) 50 000 - < 100 000 EUR 47 227 111 33% 2,356

(5) 100 000 - < 500 000 EUR 103 631 246 28% 2,389

Specialist milk - חלב

(4) 50 000 - < 100 000 EUR 38 447 87 16% 2,277

(5) 100 000 - < 500 000 EUR 78 1,331 165 11% 2,126

Policy Changes in Israel: Decreasing Protection from Competing Imports

• 2012: Increase of TRQ’s with lower custom duties for cheese imports (following Kedmi Committee recommendations)

• 2014: TRQ’s for additional milk products, duty-free TRQ for hard cheese

• 2014: Duty-free TRQ for fresh beef meat

• 2016: Duty-free TRQ for imports of 60,000 tons vegetables (without conditions for Passah and Succot, otherwise according to market conditions)

• 2016: Duty-free TRQ’s for 3 months for fish, olive oil and frozen vegetables


Policy Goals – Support for Agriculture


Challenges Policy objectives Reform objectives

Economic: Increase in input prices, Decrease in exports, Declining profitability

Environmental: Limited land for agriculture, Environmental requirements

Social: Employment in remote areas, Young farmers High food prices

1. Supply of fresh products mainly from local production, at reasonable prices

2. Provide positive /decrease negative external effects

3. Provide employment in peripheral areas

4. Strengthen family farms

5. High standards for food safety and animal welfare

• Create conditions for increasing production

• Ensure the viability of a profitable and diversified agricultural sector

• Promote sustainable agriculture

• Develop alternative support measures, parallel to a reduction of distortive support

Objectives of Reform


1. Create the conditions for increasing production, based on demand

and relative advantages.

2. Ensure the viability of a profitable agricultural sector in Israel, on

an overall agricultural area at least similar to the current area, and

preserve a diversified agricultural sector based on family farms

and collective farms.

3. Encourage farming practices that preserve the environment and

provide benefits to the public, promoting sustainable agriculture.

4. Develop alternative support instruments that will enable and

improve the achievements with regard to the national goals of

agriculture (including stable supply of fresh and healthy food,

strengthening agricultural settlements, promoting sustainable

agriculture, maintaining open spaces), parallel to a reduction of

distortive support measures (tariffs and quotas).

Concerns


• Budget constraints

• Ability of agricultural sector to adapt to changes (especially family farms)

• Non-competitive sectors

• Increasing concentration of production

• Peripheral areas without alternatives

• Risk – expected increase in price volatility

• Appropriated instruments of support and their effectiveness

Questions for Discussion


1. Rationale of support to agriculture – why support and whom?

2. What support instruments are suitable for Israeli agriculture? (with regard to characteristics of the agricultural sector and the objectives of support)

3. What is the efficiency of different support instruments in providing income support to farmers and decreasing income volatility?

Agriculture in Israel · Research, Economy and Strategy Division - Ministry of Agriculture and Rural Development 1. Create the conditions for increasing production, based on demand

Documents