According to a new report for one of the world’s leading trade organizations, Israel ought to keep up its increased investment in agriculture that started after October 7. The report also noted that Israel’s public investment in water infrastructure and agricultural production is low and encouraged the state to increase its support.
The report was published earlier this month by the Organisation for Economic Co-operation and Development (OECD), an intergovernmental organization that promotes free trade and encourages economic growth through policy recommendations. It reviews the state of agriculture in developed countries based on professional recommendations and decisions by the organization's institutions for efficient, innovative, and sustainable agricultural policy.
The OECD report noted that Israel’s public investment in water infrastructure for agriculture and public support for agricultural production remain low compared to the average. Between 2021 and 2023, total support in those fields amounted to 0.3% of Israel’s gross domestic product, about half of the average among OECD countries.
Additional recommendations relate to the continued adaptation of agriculture to climate change through innovation, research, and knowledge dissemination. This includes programs to support technical changes, training activities, and the development of a “smart agriculture” toolkit for producers. The report’s authors highlight the importance of coordinating these efforts with local farmers.
Between 2021 and 2023, government support for Israeli farms averaged 12.3% of farm income—only around half the OECD average. This marks a significant decline from 19% public support in 2000–2002.
The OECD report highlighted that in 2021–2023, support for general agricultural services, including innovation and water transport infrastructure, was lower than both the OECD average and the investment level of 2000–2002, amounting to 2.5% of the agricultural production value. Overall support was estimated at 0.3% of GDP in 2021–2023, approximately half of the OECD average support level.
The report reviewed the impacts of climate and geopolitical trends on local and international agricultural markets, addressing short-term and long-term consequences of the Russia-Ukraine war and the conflict in the Middle East. It also considered the impact of export restrictions from certain countries on agricultural product markets, which added additional pressure on international trade systems. One example noted is President Erdogan of Turkey’s decision to stop exports from Turkey to Israel.
The climate crisis, which threatens food security in various countries worldwide, receives particular attention in the report. OECD researchers praised the Israeli agricultural sector’s preparedness for climate change, especially for the increased frequency and intensity of extreme weather events. The report reviewed Israel’s dependence on global and local food systems and the predicted impacts of climate change on food availability in the region and food security. The authors encouraged the Ministry of Agriculture to continue assisting the agricultural sector in adapting to climate change.
A special section in the report addressed the impact of the October 7 attacks and Israel’s attempt to limit the war’s effects on agricultural activity and food security. The authors commended the Ministry of Agriculture’s emergency response measure, which included compensating farmers whose livelihoods were affected, offering special incentives for relocating land and replanting, addressing the shortage of field workers.
The report mentioned the suspension of tariff reductions on agricultural products in January 2024 due to the lack of a support plan for farmers, as promised at the beginning of the process. Tariff rates remained at 2023 levels following two reductions, with no further reductions currently planned.
The OECD urged the Israeli government to shift from indirect agricultural support, which they argue distorts markets, to more direct support. Market price support and tariffs in Israel remain twice as high as the OECD average, comprising about 89% of current agricultural support, particularly for meat, eggs, and dairy products. Poultry prices receive the most support, constituting approximately 46% of producer support in 2021–2023. The report also notes that tariffs and price support increased producer prices by an average of 12% compared to international prices in 2021–2023.
The report also commended Israel's agricultural water management, which has significantly reduced dependence on fresh water resources. The report predicted that water management will continue to play a central role in adapting agriculture, given the extreme risk of water scarcity in a changing climate. According to the report, reducing the cost of both reclaimed and fresh water for agriculture is essential.
It also recommended establishing sustainable growth policies focusing on long-term productivity and called for enhancing climate adaptation in agriculture through innovation, research, and knowledge dissemination.
This article was translated from Hebrew by Marina Levy.
