Obama Administration Takes from American Farmers, Gives to Israel

Policy change slips in under the radar

Alison Weir
October 23, 2009

At a time of financial crisis in the United States in which thousands of Americans have lost their jobs and homes, an Israeli news service reports that President Obama has just signed a presidential memo eliminating a tariff on Israel that protected American dairy farmers and that raised money for the American economy.1

In addition, according to the Israeli report, US trade authorities have ordered the return of $17,000 to an Israeli export agent for a levy paid for butter produced by an Israeli company.

The move comes at a time when American dairy farmers have been facing what industry representatives call a “crisis.” According to the National Milk Producers Federation website, “U.S. dairy producers have been facing unprecedented losses over the past year due to low milk prices and high input costs. The dire economic straits have forced many dairy farmers to exit the industry, oftentimes having to sell their herds or farms.”2

According to the news report by Israeli wire service Ynet, the Obama memo, which was signed several days ago, removed the import subcharge on dairy products from Israel.

The report noted that such levies are important for protecting local production against competing imports, “which put the local production at risk.” The levy is required from most countries that export dairy products to the U.S.

According to Ynet, Israeli agricultural attaché Yaakov Poleg was able to convince the US that “the trade agreement between Israel and the US prohibits placing taxes on exports from Israel.”

However, this tax was required under previous American administrations.

The Ynet report quotes Israeli export agent Dudu Buch, whose company is to receive the $17,000, as taking credit for obtaining this change in US policy.

Buch states: “My American colleague was under a lot of pressure and almost gave up, saying that if the American system imposed a protection levy it would last forever.”

Buch goes on to say, “I told him that we Israelis can think differently. I turned to the Agriculture Ministry's representative at the Israeli Embassy in Washington, and the matter was dealt with quickly."

Israel’s attaché was particularly pleased that this change was made through a presidential memo, rather than through normal channels, stating “... in light of the fact that Israel was removed from the list through a presidential declaration, there is no fear that it will be placed on us again in the future."

According to Ynet, Israeli dairy exports to the US are “constantly on the rise,” a situation that could hurt US dairy farmers.

The Obama memo would seem to hinder what the Dairy Farmers of America (DFA) described in July as a broad effort, which included the US Department of Agriculture, “to reverse the current dairy crisis.”

The DFA emphasized: “Every initiative we can successfully implement to bolster milk prices makes a vital difference to the dairy farmers who are fighting hard to maintain their livelihoods.”3

Yesterday the organization mailed out a special cash payment to dairy farmers around the country to help “bridge the gap” to a full recovery, stating that it recognized “that our members have a long road ahead as they heal from this difficult year. Our intent is that this special cash payment will help these dedicated farmers hang on until recovery is in full swing and positive cash flows return.”4

No one at the US Department of Agriculture contacted for information about this policy change had been aware that it had been implemented. Some suggested that it might be related to a free trade agreement with Israel signed in 1985, but had no information as to why an ongoing US policy had been modified by presidential order.

Council for the National Interest President Eugene Bird objected to the change: “Once again we see Israel receiving special treatment, at the cost to Americans. Even American citizens who oppose protective tariffs want to see a fair and equitable policy. Instead we have a policy change -- implemented without public input or debate -- that benefits one of the richest nations on earth, and a nation that consistently flouts US laws and policies.”

Israel is generally rated as having the 17th wealthiest population in the world.5

Bird also noted that Israel, in violation of US trade agreements, has been blocking some American products entirely. “A serious look should be taken at how Israel has prevented certain American products from being imported into Israel,” Bird said, “for example orange juice.”

In addition, Bird pointed out that for decades Israeli policies have prevented Palestinian exports, creating extreme financial hardship that has escalated in recent years. Numerous Palestinian farmers have lost their livelihoods, and unemployment and malnutrition are being seen in Gaza at what the Red Cross has called “devastating” levels.6,7,8


  1. http://www.ynet.co.il/english/articles/0,7340,L-3792821,00.html
  2. http://www.nmpf.org/milk_pricing/NMPF_actions
  3. http://www.dfamilk.com/newsroom/pr/090731_support.htm
  4. http://www.dfamilk.com/newsroom/pr/091006_payment.htm
  5. http://www.worldsalaries.org/total-personal-income.shtml
  6. http://www.economist.com/world/middleeast-africa/displaystory.cfm?story_id=14660454
  7. http://www.counterpunch.org/roy10042006.html
  8. http://www.independent.co.uk/news/world/middle-east/chronic-malnutrition-in-gaza-blamed-on-israel-1019521.html

Important Background Info

Update on dairy crisis:
Low milk prices have dairy farmers killing cows

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