A Costly Compromise: Why Bread and Fruit Prices in Israel May Soon Spike
A proposed agreement by Agriculture Minister Avi Dichter is sparking controversy and concern across Israel, as it could lead to an unprecedented rise in the prices of basic food items like bread and fruit. At the heart of the issue is a plan requiring Israel to shift from importing cheaper European wheat to significantly more expensive American wheat, a move critics warn will burden consumers and disproportionately hurt low-income families.
The backdrop to this controversy is ongoing tariff negotiations between Israel and the United States. President Donald Trump has demanded that Israel eliminate import duties on American fruits and vegetables. In exchange, Trump threatened to impose tariffs on Israeli products if his request is denied. Prime Minister Netanyahu and the Finance Ministry have reportedly signaled agreement, a shift that could have led to lower prices for staples like tomatoes, apples, almonds, and peaches through increased U.S. imports.
However, Agriculture Minister Dichter has taken a markedly different approach, engaging in separate negotiations with U.S. officials. Under Dichter’s plan, Israel would maintain tariffs on sensitive agricultural goods and, in return, commit to sourcing 30% of its wheat imports from the United States.
This plan could hit Israeli consumers with a double financial blow.
Currently, Israel imports mostly European wheat, which is more affordable. Switching to U.S. wheat, as Dichter proposes, would drive up the cost of all bread products—including those under price controls. While the Finance Ministry opposes the proposal on grounds that it will inflate wheat prices, the Agriculture Ministry estimates the increase at a mere 10%.
Beyond bread, the refusal to eliminate tariffs on fruits and vegetables means that prices for these items would remain high—or possibly rise further if the U.S. retaliates with tariffs on Israeli exports.
Critics also point to what they call the “myth of food security.” Despite rhetoric suggesting Israel must protect local wheat production for national resilience, the reality is that more than 90% of Israel’s wheat has always been imported. Locally grown wheat is expensive and inconsistent in quality, making it unsuitable for large-scale bread production.
Still, flour mills in Israel are legally required to purchase one kilogram of Israeli wheat for every ten kilograms of imported wheat, even when there is no practical need for it. This regulation raises bread prices and disproportionately affects the country’s most vulnerable citizens.
Dichter’s new proposal would go a step further by mandating that imported wheat come specifically from the U.S., eliminating the cheaper European option altogether. The result, critics argue, would be an even steeper increase in wheat prices—under the guise of promoting “food security,” which they claim is simply a cover for shielding certain domestic producers from free-market competition.
The final decision now rests with Prime Minister Netanyahu, who must make a ruling by July 9, when negotiations with the U.S. are set to conclude. Will he accept Trump’s original proposal, which would lower food prices, or will he side with Dichter on a deal that may leave Israelis paying more for their fruits and bread?
Whatever the outcome, the decision will have a direct impact on the cost of living for every household in Israel.
{Matzav.com Israel}