Israel Drops Controversial Dairy Reform From Budget

The Israeli government has removed a controversial dairy reform proposed by Finance Minister Bezalel Smotrich from the 2026 Arrangements Law, a key legislative package linked to the country’s state budget, following strong opposition from farmers and political leaders. The decision was taken jointly by Prime Minister Benjamin Netanyahu and Smotrich to separate disputed issues from the budget bill to ensure its passage.

The reform had sparked protests and industrial action by dairy farmers, at one point leaving supermarkets without raw milk for a day. The proposed plan aimed to reduce Israel’s milk production from about 1.5 billion litres to 1 billion litres, cut the price processors pay farmers by 15% per litre, and remove import tariffs of up to 40% to allow more foreign dairy products into the market. Farmer groups, along with the kibbutz and moshav movements, warned the measures could lead to job losses and threaten national food security.

Despite the government approving the reform in December 2025, it still requires authorization from the Knesset to become law. Officials said the reform will continue to be discussed in committees and may be reintroduced as legislation after the ongoing war situation ends.

Source: Dairynews7x7 12th March, 2026 Read full story here

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