Israeli Farmers Halt Milk Supply Over Smotrich’s Controversial Dairy Reform

Israel’s dairy shelves began to run dry this week after local farmers launched a dramatic protest against Finance Minister Bezalel Smotrich’s sweeping dairy industry reform, halting milk supplies to major producers across the country.

The strike, confirmed by the Israel Dairy Board, triggered nationwide shortages. Supermarkets posted signs limiting milk purchases, and lawmakers clashed over the proposed reform in the Knesset’s House Committee throughout the day.

At the heart of the protest is Smotrich’s plan to abolish protective tariffs on imported dairy products, a move aimed at reducing prices by ending what he called monopolistic control by three dominant Israeli firms Tnuva, Tara, and Strauss which he says account for 85% of the dairy market.

“If you stop producing milk, I will unilaterally remove all tariffs and open the market to competition,” Smotrich warned during a fiery Knesset address Monday night. “This is my authority as finance minister.”

Critics, however, say the reform could decimate Israel’s dairy sector. According to estimates cited by KAN News, approximately 400 farms or 70% of the country’s dairy producers could be forced to shut down under the proposed changes.

Farmers argue that while the reform may promise cheaper prices in theory, it ignores the reality of local food production, food security, and the survival of family-run dairy operations that have supplied the nation for generations.

The reform is currently embedded within Israel’s 2026 state budget package, specifically in the massive Amendments Bill, which spans over 400 pages. If the budget isn’t passed by March, the Knesset will dissolve automatically and new elections will be triggered.

But amid mounting pushback, including from within the Likud party, momentum is shifting. Agriculture Minister Avi Dichter strongly opposed the plan, declaring Monday: “The dairy reform being advanced by the Finance Ministry will not pass.” He and other Likud MKs demanded that the reform be removed from the broader budget and examined independently by relevant ministries.

In a rare moment of legislative unity, even the Knesset’s legal adviser, Attorney Sagit Afik, weighed in urging that the reform be separated from the main budget bill. “This makes the legislative process extremely cumbersome and harms the ability of MKs to participate in a meaningful way,” she said.

Tensions boiled over outside the House Committee as Prime Minister Netanyahu’s adviser Nevo Katz clashed with Likud MK David Bitan. “You won’t convince MKs against the reform,” Katz shouted. Bitan fired back: “I don’t work for you you are Smotrich’s slaves.”

By early Wednesday morning, lawmakers reached a compromise. The House Committee unanimously voted to advance the dairy reform as a separate item, assigning it to the Public Projects Committee, headed by MK Ohad Tal of Smotrich’s Religious Zionist Party.

While the move takes the reform out of the congested budget debate, the fight is far from over. Farmers remain on alert, and the fate of hundreds of dairy farms hangs in the balance.

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