Free Societies

Israel's butter tariffs repealed after COVID-induced shortages

Man waves Israel flag

Since March, the COVID-19 pandemic has rattled the world economy. Millions have gone back into poverty as the virus, and the lockdowns that go with it, have ripped through every corner of the world. In Israel, strict import restrictions on food have added to the chaos, causing shortages of staple and necessary food items.

Directly following the COVID-19 outbreak, Israel experienced a massive shortage of butter and other dairy goods. The Jerusalem Institute for Market Studies (JIMS), along with the Israel Freedom Movement (IFM), both Atlas Network partners, noticed that the government was exacerbating the economic fallout and ensuing food shortages by maintaining excessively high import restrictions. While the public anger over butter shortages became a national issue, the team saw an opportunity. “The public outcry was generated by a shortage of butter,” explained director of JIMS Corinne Parenti, “and JIMS was able to ride this wave and explain to the public that the shortages were due to the lack of free trade.”

Frequent media appearances and interviews helped keep the issue in the forefront, including a 2-hour radio program on Tel Aviv FM 102 (one of the most popular in Israel). “The program allowed us to reach Israelis outside of the ‘liberal bubble’, continued Parenti. “The guests we invited included, Knesset member Sharen Heskel, Professor Omer Moav, and independent farmers that are fighting for the right to produce milk, butter, and eggs.” The program was a huge success, garnering over 25,000 live listeners and thousands more listened to the recording.

Israel’s Freedom Conference in April also provided JIMS an opportunity to highlight the need for liberalized trade. “The timing of the freedom conference helped us greatly,” said Parenti. “It was the first Zoom conference held in Israel during our first lockdown, and the fact that everyone was home in search of answers was very beneficial to our virtual attendance.” An estimated 60,000 listeners tuned into the conference on radio and Zoom.

In May, the Knesset passed a law allowing for the free import of butter and lifting all price controls on the product. Now, once empty refrigerator isles are stocked with different brands of reasonably priced butter from all over the world. Finance Minister Israel Katz promised to remove import restrictions on all dairy products within one year. JIMS hopes that the positive effects of lifting price controls on butter will encourage a more liberalized outlook on trading overall.

Atlas Network supported this project with a grant.