Israel’s food industry is in its deepest crisis in a decade, according to Gezy Kaplan, Chairman of the Food Division of the Manufacturers Association of Israel. During the first five months of 2001, “productivity of the country’s food sector fell by 1.9%, compared with the same period last year.” He added that from January to July 2001, processed food exports fell by 8.3%, to US$248m in value, while imports rose 2.8% to US$503m.

Kaplan noted that net profits of food companies traded on the stock exchange fell by 40.6% during the first quarter of 2001, during which time nearly 1,900 employees lost their jobs in the country’s food industries. In addition, sales of food to the Palestinian Authority fell by 50% from the beginning of the year, compared with the corresponding period in 2000, registering losses estimated at NIS200m (US$46.5m).

Kaplan protested against what he termed “absurd and discriminatory clauses” related to multilateral food trade agreements, by which Israeli exported food items are heavily taxed compared with marginal or no customs imposed on imported food items. He cited a scenario where imported food items are tax-exempt whereas imported raw materials for the very same products are heavily taxed, “which results in higher prices for locally made products. “

Kaplan also urged the government to establish an independent food authority which will combine the tasks of inspection on production, import and marketing of food products in Israel, “to replace the current situation where 14 different agencies are engaged, very often uncoordinated, in inspection in production and marketing of food products in Israel.”

By Aaron Priel, correspondent