Analysts will debate for years the ultimate importance of the internet during the revolution of the “Arab Spring”. In neighbouring Israel, a parallel and separate social change has taken place. Following yet another rise in the price of cottage cheese, a staple for many Israelis at the breakfast table, a facebook campaign led to a consumer boycott and a collapse of the product’s retail price by up to 50%.

Suddenly, everyone is trying to be a hero. Politicians have set up a parliamentary committee…on the price of cottage cheese. Some of the main manufacturers have asked for forgiveness from the public. And what started with the white cheese has spread to other milk products, the price of popcorn in cinemas, and even bus routes.

Zap, a website which allows consumers to compare the price of electrical items, is considering adding food products to its service.

All change……or not?

Let’s start with the politicians, and even add in experienced civil servants. Many of the relevant ministers and advisers are heavily associated with farming groups, who have a vested interest in keeping base prices high. Are you trying to tell me that the decision makers  only woke up to the problem when they read the newspapers one morning? And all they can now do is discuss the price of what their wives buy to put their kids’ sandwiches?

Anyway, the price of the cheese has already began to creep back up. In order to prevent this, the government is seriously considering a plan to support milk farmers. Smell a rat?

As for the consumers themselves, they have always known that in Israel’s small economy is replete of examples of competition and pricing work in opposite directions. Here’s a simple case study: Every beginning of May, the populace is bewildered by reports that owing to the weather having been too hot, too rainy, too windy or not hot – rainy – windy enough, the price of local summer fruits will go through the roof.  And thus it happened again this year.

Import you cry out! Back to the vested interests. And there we go again.

Even facebook revolutions can only last for a limited period of time – never mind whether you live in downtown Bahrain or Tel Aviv. You cannot protest about everything all the time.

What am I saying? 25 years ago, the government finally stopped supporting the textile industry with subsidies and import tariffs. Thousands were laid off in the short-term; prices in the shops plummeted, as overseas items entered the country; room was made for the high-tech sector. The economy rumbles ahead very comfortably.

The food industry has a strategic importance, which cannot be attributable to clothing. However, that does not mean the consumer has to suffer. That does mean that the milking industry should live a false life based on subsidies, proposed by a public sector socially tied to those farmers. 

So far, the facebook campaign has been directed against manufacturers. Perhaps the real anger should be directed towards politicians, who appear to be protecting friends.

1 comments

  1. The cow farmers have received alot of “presents” from the government. Most of the solar energy subsidies went to the cow farmers who could cover a cow shed with 50 KW of PV panels and expect a guarantueed >20% return on their investments for the next 20 years. Consumers who typically would install a 4 to 8 KWatt system would get only 10% – 14% return on their investments has the installation cost is a fixed fee and takes a large share of the initial investment. So what does the government do – it decided only to focus on 50 kW systems favoring the farmers over the average Israeli citizen.

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