The Ministry of Agriculture will allocate 160 million NIS to save the Volcanic Institute

Agriculture Minister Avi Dichter announced the transfer of NIS 160 million from his ministry’s budget to ensure the continued operation of the Volcanic Institute.

Dichter called for the intervention of the prime minister, the director general of his office and the people of his office in the dispute between the ministries of finance and agriculture, regarding the funds of the ministry of agriculture that are parked in the ministry of finance and have not been released. These funds are intended for carrying out agricultural operations and the support promised to farmers to face the challenges of the war.

Following the direction of Minister Dichter, the Director General of the Ministry of Agriculture has reserved a budget that will ensure the continuation of the activities of the Volcanic Institute. At this stage, as mentioned, it is an amount from the Ministry of Agriculture’s budget, but at the same time, the struggle to complete the missing budget of 160 million shekels continues. To this end, the Ministry of Agriculture demands to receive New privileges in exchange for the cancellation of privileges that have not yet been exercised.

The Volcanic Institute is the only research institute in Israel that is fully public. A cut in its budget harms both its current activities and its ability to recruit researchers and develop new studies. The consequences of the damage from both directions are devastating and the consequences are international: the state budget finances the operation of the laboratories and infrastructure with an investment of 250 million shekels per year, while the research and the research teams are financed by research grants and Israeli and international funds that the researchers raise, of approximately 150 million shekels per year. Damage to the institute’s infrastructure and its research capabilities will make it unattractive both to researchers and to foundations and funding sources for research.

“From the day I entered the Ministry of Agriculture, we led a reversal of the trend,” said Dichter, “from focusing on encouraging imports, to encouraging and strengthening the production of agricultural produce for the local market. We are working in this way to ensure that the food security of the State of Israel will be based on local produce, and reliance on importing agricultural produce will only be in certain seasons of the year or in produce that is not grown in Israel.

“Research and development are one of the four critical factors of production for agriculture, and the Vulcani Institute is an Israeli flagship for this purpose. Only investment in R&D, employees, agricultural land and water in quantity and at a fair and reasonable price for Israeli farmers will ensure the continued development and existence of Israeli agriculture.”

In the debate that took place this week in the Economic Committee on the subject, Dichter said: “There are funds that belong to the Ministry of Agriculture and are parked in the Ministry of Agriculture, but there is a treasury code on them that until you receive it, you cannot touch the money. These are very serious amounts that have already been allocated to the Ministry of Agriculture. On top of that, the Treasury holds He currently has sums of money of 117 million shekels in liabilities following the war, including 52 million shekels for bottled water that the Prime Minister promised in writing. The Volcanic Institute reached insolvency.”

Chairman of the Economic Committee David Bitan called on the Ministry of Finance to find within a week a way to return NIS 160 million from the cut budget to the Ministry of Agriculture.

The cut in the revised Ministry of Agriculture budget for 2024 amounts to NIS 300 million, which is 14% of the ministry’s operating budget, which currently stands at about NIS 2 billion. 140 million shekels that were supposed to be added in 2024 and an additional 160 million shekels were cut from the ministry’s budget, including support funds for farmers that were promised in the additional budget approved at the end of 2023 due to the war.

“The agricultural strategy will be determined by the Ministry of Agriculture, not any other ministry”

The Ministry of Agriculture suffered a fatal cut, but in other ministries the cut was much lower, and some even received a budget increase. “Ministries whose vitality is in doubt received an additional budget,” Oren Lavi, the director general of the ministry, said at the committee meeting. For comparison, the total state budget, excluding the budgets of the Ministry of Defense and National Insurance, which were greatly increased due to the war, increased by NIS 15 billion.

According to Sion Yankovic, the director of the budgets of the Ministry of Agriculture, in addition to the cash cut that included the support for the reduction of tariffs, the budget summaries for 2024 were also canceled, which included 22 million shekels earmarked for procurement, 50 million shekels earmarked for the Agricultural Research Administration – Volcani Institute, 20 million shekels earmarked For drainage, NIS 200 million for support for farmers and more. The cut in the ministry’s budget will harm, according to the ministry’s director general Lavi, research and development, support for farmers and procurement budgets. The danger of closing the Volcanic Institute following the massive cut in the ministry’s budget came up for discussion in the Knesset committees even before the budget was approved, but was not answered.

During the discussion, the deputy in charge of budgets at the Ministry of Finance, Kafir Bett, admitted that the authorization clauses for the commitment were not budgeted as promised, but only in appearance. According to him, the amount of the cut was agreed upon with the Ministry of Agriculture, and he also had the decision on how to divide the budget and where to cut. Bett reminded the committee that the treasury presented proposals to reduce the expenses of the Ministry of Agriculture. However, according to the Minister of Agriculture, the agreement on the cut was based on the Treasury’s assurance that the cut would be broad and would also be required of the other government ministries, given the situation.

Dichter pointed out that the amendments proposed by the Treasury to the Budget Law for 2024 included many clauses the real meaning of which is the closing of the Ministry of Agriculture, including the transfer of the veterinary and plant protection services to the Ministry of Economy, the closing of the Ministry’s districts, the privatization of training and professional services and the transfer of the Chief Scientist of the Ministry of Agriculture to the Office of General Scientist. “The Treasury brought an amendment that has one meaning: the closure of the Ministry of Agriculture and its distribution among other ministries. I say this after we heard very harsh sentences in the Treasury.” Among other things, Dichter described a demand to drop the issue of the use of the settled water, to pour the purified water into the sea and to settle for compensation to the farmers, and a demand to reduce the activity of the Volcanic Institute by 50%.

Dichter attacked the claims of the representatives of the Treasury: “The agricultural strategy will be determined by the Ministry of Agriculture, not any other ministry. We think that the agricultural strategy of the Ministry of Finance will serve the Treasury and not agriculture. The problem at the moment is not budgetary, but how the Ministry of Finance allows the Ministry of Agriculture to carry out its tasks The basics after the cut budget.”

The Minister of Agriculture and the Director General of the Ministry proposed to solve the crisis without breaching the budget framework, by closing open authorizations for commitment from the years 2010-2019 that were not used, in the amount of 300 million shekels, and recycling them to 140 million shekels in a new authorization for commitment. “Our request is not to breach the framework The budget,” Dichter said, “the budget framework is a given, whether you like it or not. We propose to use funds that are supposed to be reserved for investment purposes and have not been fully utilized.” The proposal is based on a precedent from 2017, when the deputy commissioner of budgets at the time, Udi Adiri, approved the recycling of authorizations to commit NIS 100 million in exchange for new authorizations to commit the same amount. This is what the ministry is requesting Agriculture to add NIS 20 million that will be converted from a budget designated for the transfer of Malhi (the National Aquaculture Center) to the Volcanic Institute which was postponed until next year. “The difference between then and now,” Dichter said, “is the good will of the budget department.”

Economy and Industry Coordinator in the Budget Division at the Ministry of Finance, Gal Burns, replied that there is good will, but there is no real money. Burns revealed that every year the Ministry of Finance makes authorizations for commitment for investments that will be spread over several years. However, the money is not fully allocated or kept for the purpose of the commitment to the Treasury. Treasury officials calculate the potential utilization of the obligation according to statistical probability, which predicts how much of the amount will be used each year, assuming that each year the utilization percentage of the budget decreases. “There is no real money. It’s money that didn’t go out,” admitted Burns. “We are not asked to exchange money for money because it is gone. Every year we give money to farmers for investments. Experience shows that for every permission we give, about 70% goes out. The proposal here is to take the 30% that did not go out. But there is no money in the budget for the 300 million that did not go out They came out. They will not be budgeted. There is good will, if we had known that the money would not be used, we would not have put it up. We know from statistical forecasts how much money will be given. This is how a state budget works.”

Another budget source that the Treasury is keeping is a budget of 2.6 billion shekels for investment in agricultural research and development, which was promised in the agricultural reform led by the previous Minister of Agriculture, MK Oded Forer (Israel Beitno). The budget is intended to be spread over five years, at the same time as a far-reaching reduction in tariffs on fruit imports According to Dichter, Finance Minister Bezalel Smotrich makes sure to show off his investment in agricultural research, but the supports promised to farmers were never transferred and the research and development budget in question was never transferred, even though 40% of the tariff reductions have already been carried out.

“We want to reach a compromise together with the Treasury so that the ministry will function in 2024,” Dichter said. “We can’t even get an answer from the Treasury. We think the story is unsolvable and the committee should intervene in it.”

Bett replied: “We really want to sit down with the Ministry of Agriculture and sit down on a budget strategy, we want long-term certainty here. We are very much in favor of building an economic strategy that will give farmers certainty.”