Wednesday, April 13, 2005

Hard cheese on the way? 

Haaretz reports on the furtive beginnings of deregulation of the Israeli dairy industry:

The chairman of the public committee examining dairy price regulation recently wrote to Finance Minister Benjamin Netanyahu and Agriculture Minister Yisrael Katz, that "deregulating milk prices will lead to substantial streamlining in the dairy sector, prevent double-dipping in subsidy tills and encourage new producers."

Ran Karol, a former treasury budget director, said the committee's primary conclusion is that the dairy market is competitive enough to support deregulation of milk and dairy product prices. Karol said the extensive government intervention in the dairy sector depresses its functioning.

Karol added that streamlining the sector is contingent on easing import restrictions.
Dairy sources believe certain prices could rise with wide deregulation. However, increased competition will drive prices down in the long run and create a new balance of power in the sector.

The committee suggested 3 percent milk sold in bags and Emek cheese should remain under regulation, as the antitrust commissioner has declared foodstuffs giant Tnuva a monopoly in those two areas. It also recommended that hard cheese and butter prices be deregulated in the future, after import restrictions on those products are lifted.

In notes on the report, the committee comments that price regulation in its current configuration mandates low return on capital for dairies producing certain milk products, which encourages cross-subsidies. The committee determines that over time, this situation damages efficiency in the sector and curbs competition.
Why do I care? Well first of all, as a member in good standing of the "Capitalists 'R Great" club, I'm required to care. It was part of the oath. Surely your remember the oath? Every good capitalist is responsible for following three simple rules:

Forgetting the poor and the workers for a moment, opening up the market so it reaches a rational price will, in the long run, benefit the consumer--and the economy as a whole. Throwing perfectly good money at failing industries is just bad poker. And if an industry isn't failing, it doesn't need money thrown at it.

Please feel free to immediately deluge my comments section with great, steaming gobs of "Socialist Wisdom" about ... about... well, whatever it is, post it all there and I'll figure out what to do with it later. I'll have to check the BlogSpot FAQ to see if it comes with a blog-shovel.

Meanwhile, back in the real world, I'm licking my chops at the possiblity they may finally deregulate hard cheeses, and maybe I can get some good old US cheddar here. And please, not the yellow, plastic bricks, just the good stuff (and yes, it's kosher).

I may even have to blog my cheese dip recipe.
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