THE OECD’S ANNUAL REPORT: Israel has maintained agricultural stability despite the challenges of the war

The Minister of Agriculture and Food Security, MK Avi Dichter: “The findings of the OECD Report that was published last week indicate that we are moving in the right direction.  During wartime and under fire, we knew how to look forward and upward as a ministry and as a nation”

“The fact is that during a war on many fronts, the Ministry of Agriculture knew how to lead a national food security plan, by increasing local agricultural production, in part thanks to the government decision initiated by the Ministry to increase the quota of foreign workers in Israel from 30,000 to 70,000 employees.  According to the OECD, all this contributed to the ability of the Israeli agriculture to persevere in a period of a difficult security crisis”
“We will continue our efforts to reduce water prices for agriculture with an emphasis on treated wastewater and increasing agricultural lands, in order to meet the target of an increase of one third in agricultural produce of vegetables and fruit produced in Israel in the coming decade. I congratulate the farmers and employees of the Ministry for their considerable efforts. The OECD has made its determination, we will take care of all the rest, together with the farmers.”

After a prolonged period of war, the report praised the ministry’s efforts in rehabilitating the Gaza Envelope region in cooperation with the Tekuma Administration, investing more than NIS 480 million in various projects, the most central of which was rehabilitation of agricultural infrastructure, establishing model farms and encouraging young people to take part in Israeli agriculture .In this context, the authors of the report favorably mentioned the National Plan for Food Security promoted by the Ministry, in order to ensure the regular supply of healthy food for all of Israel’s citizens, in routine times and states of emergency.  They described the steps taken to strengthen the resilience of the national food supply, with a focus on increasing local agricultural produce and an investment in research and development. In this context, the report also mentioned that research and development constitutes more than 20% of the annual agricultural budget, which positions Israel as a leader in agricultural technology.  The report also refers to the increase in the quota of foreign workers led by the Ministry, from 30,000 to 70,000 foreign workers, due to a shortage of manpower created due to the war. 

The report’s findings indicate that Israeli farmers benefit from budgetary support similar to that of the OECD countries, and less in comparison to farmers of the European Union and the UK.  However, the report emphasizes that 91% of the rate of support from sources of support considered to be trade distorters (primarily support from market prices, output dependent subsidies).  This figure remains twice as high as the average for OECD countries, and  has increased by 2% in relation to last year.  This is due to the continued support of local market prices and the protective tariffs for a number of meat and dairy products.  According to the report’s data, the protective tariffs and the support of market prices are less effective.  The report also emphasizes that when examining the supports in Israeli agriculture, including the general services that the government offers farmers, Israel is on a level that is significantly lower than the average of the OECD countries, only 0.31% of the GDP.  In other words, half of the average in those countries.  These subjects reinforce the policy of the Ministry of Agriculture and Food Security that is interested in moving over to a mechanism of direct supports to encourage the farmers and strengthen the food security of the country’s citizens.

The authors of the report also refer to the drought that struck Israel, during which time the Ministry took steps to reduce the water tariffs for farmers by a rate of 25-57% of the exception rates set last year, while supporting areas that are cut off from water in Northern Israel, which sustained a decrease of 30% in the water quantity as compared to last year.   

The report emphasizes additional achievements of the ministry, including legislation of the Honey Law, which regulates the beekeeping industry and the pollination services and balances the needs of the beekeepers and the protection of agricultural lands, as well as direct supports promoted by the Ministry from industries that were hit by opening import or low yield, such as the direct support of NIS 12 million for tomato growers and NIS 40 million for olive growers for oil.  Causal investments of tens of millions of NIS were also favorably mentioned for handling agricultural waste and encouraging sustainable agriculture.  In the chapter that deals with trade policy, the report mentions the expansion of Israel’s international collaborations in the field of agriculture, including the new free trade agreements with Guatemala and Vietnam, which went into effect in 2024, and the advanced negotiations regarding additional agreements with India, China, Costa Rica and Bahrain.

For the chapter that deals with Israel in the OECD’s full report click here