farmers revenues and not marketing chains are the reason we pay much more for fruits and vegetables

wwwww

by Ifi Reporter Category:Government Mar 14, 2022

The government committee that examined the brokerage gaps concluded that the reason the Israeli consumer pays much more for fruits and vegetables is the fault of the farmers and not the marketing chains. As of 2020, the total consumption market for fruits and vegetables in Israel was NIS 29.1 billion per year. Of this amount, the volume of consumption of fresh fruits and vegetables was about NIS 24.7 billion.
According to the results of the joint government committee for the director general of the Ministry of Economy and Industry, Dr. Ron Malka, the director general of the Ministry of Agriculture and Rural Development, Adv. Naama Kaufman-Pess, the competition supervisor Adv. Michal Cohen When a retailer like Shufersal, the Yohannoff chain or another chain buys agricultural produce in Israel - most of the money goes to farmers, but in recent months everyone has actually attacked the marketing chains, even though they do not have the problem.
The committee members find that when the retailer, which is the marketing chain, buys the goods directly from a farmer, the farmer's share is on average 64%, with the remaining 36% going to the retailer, ie to the marketing chain, and it is redemption and not net profit. When there is a wholesale route that mediates between the farmer and the marketing network, the farmer's share stands at 57% of the consumer price. The wholesaler gets 18% and the marketing network gets only 25%.
The committee also examined the profitability of wholesalers and retailers in the field of fruits and vegetables: according to the committee's analysis, the average gross profit (profit after offsetting the purchase cost) in 2020 for wholesalers was about 25% and the operating profit (after offsetting additional expenses) was about -5%.

The average gross profit margin in 2020 of retailers who have Marlog (i.e. without a wholesale intermediary) was about 33% and about 26% for retailers who do not have Marlog. The average operating profit of retailers - with and without Merlog - was about 6% in 2020. Gross profit is slightly higher than the average in the comparison countries and operating profit is slightly lower than the average in the comparison countries.

The report also shows that the international comparison conducted with public retail companies in foreign countries shows that the gross and operating profitability of retailers in Israel is overall similar to the profitability of their counterparts in the world. By comparison, the agricultural share in countries such as Spain and the United States of the consumer price stands at 20-30%, in countries such as France and Germany, the EU average and Australia average compared to 40-55%, while in Israel it is 50-60%, ie the high bar. Of the OECD.


Another problem according to the committee is that although in the State of Israel thousands of farms are engaged in growing fruits and vegetables, in 2020 they produced about 3.2 million tons of fruits and vegetables, a volume similar to what it was in 2000, while the state population grew by about 50% during this period. Too little supply for much greater demand - and in any case this is also a recipe for rising prices.
The only argument that can work for the benefit of farmers is that the three largest marketing chains control about 54% of the fruit and vegetable market and the four large chains control 62%. But it still does not show who is manipulating whom: according to the committee, it has been exposed to farmers' claims about forceful trading practices by retailers. But on the other hand - wholesalers and retailers have made similar claims against large farmers who claim to have excess power.
In Israel, customs duties of 560% are paid on apples and 270% on tomatoes. Why actually?
The data should be prepared: the Israeli public pays far too much for basic food products. For example: according to OECD data, in Israel butter is more expensive than 60%, yogurt is more than 200% and eggs are 20% more expensive than in the organization (in many countries the price is 40% lower than in Israel). Additional data indicate that egg prices in Israel are higher than in 150 other countries in the world (yes, one hundred and fifty countries). Not enough? So you should know that the customs duty on garlic in Israel is 160%, on customs duties it is about 270% and on apples? Not less than 560%.
The Ministry of Finance already approved the BizPortal inspection several months ago and also stated that the reason for the cost of living is not the marketing networks.
The OECD also believes: The structure of support for farmers in Israel is the most distorted in the West. The OECD summed it up in a simple but painful way and stated three years ago that agricultural production in Israel will be 16% higher than the world average, adding that "the support structure for farmers in Israel is the most distorted in the West and dissolves consumers."

341 Views

Comments

No comments have been left here yet. Be the first who will do it.
Safety

captchaPlease input letters you see on the image.
Click on image to redraw.

ABOUT IFI TODAY

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum

Testimonials

No testimonials. Click here to add your testimonials.