Israeli Dairy Board
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Introduction
The Israel Dairy Board (I.D.B.) is the central institution which deals with the planning and regulation of the milk production / processing in Israel.

The I.D.B. is managed by a board of directors which comprises representatives of:

• The Ministries of Agriculture / Finance / Industry & Commerce and Health.
• The Israel Cattle Breeder’s Association.
• The milk processing dairies.
• The consumers.

It is this close & unique collaboration between all these entities, which makes it possible to regulate the dairy farming sector & dairy industry in Israel.
General
The Israel Dairy board was created to regulate Dairy Farming and the Dairy Industry in Israel. Its establishment is based on laws and official regulations (“Control on commodities & Services 1957”, app. # 1 and “Planning of the Dairy Market in Israel 1992”, app. # 2).

Regulation in this industry is required because sector is very different from all other agricultural sectors and agro-industries. Milk is supplied on a daily basis by the farmers as raw material at the dairy processing units. Also the dairy products are marketed almost daily and both the raw material and the products are sensitive products with a relatively short shelf life.

In most countries the milk production is correlated to the local demand and normally it is quite expensive to export any surplus production from Israel.
      
Objectives
The objectives of the Israel Dairy Board (I.D.B.) as defined in its statues are:

• To generate and organize the cooperation between all the entities in this sector.
• To implement the Government policy regarding the planning of milk production and marketing.
• To manage the emergency stock of milk powder in Israel.
• To deal with and dispose of surplus milk.
• To improve the professional standards of the dairy industry, to promote research studies and training programs, to assist in breeding programs for dairy cows, sheep and Goats, to provide assistance in maintaining animal health standards, to initiate extension services and other activities related to the quality of milk and milk contents, and in general to improve the overall performance of dairy farming and the dairy industry.
• To promote the consumption of milk and dairy products.
      
Members
The Israel Dairy board combines representatives from all different sectors involved in Dairy Farming and the Dairy Industry. The I.D.B. Board of directors includes:

• Dairy Farmers represented by the farmer’s organizations
• (30%) I.C.B.A. / Sheep and Goat breeders / etc.
• Representatives of the Dairy processors (30%).
• Government officials (30%),
• Ministry of Agriculture / Finance / Commerce / Health.
• Representatives of the general public / consumers.
      
Quotas
Dairy farming is regulated through a “quota” production limit on all existing dairy farm units.

Milk can be sold only to the dairies and farmers are not to allow selling their milk directly to any consumer. The amount of milk marketed by each farmer is controlled through the data received from each dairy.

The producer has a binding contract with his dairy for one year periods, where as he is allowed to choose the dairy with the renewal of the contract.

Whenever the market demand is projected to increase / decrease it is the I.D.B. which regulates / adjusts these quotas. Quotas can be change and or new quotas can be issued to new dairy farms. Following the Government policy of establishing new agriculture based settlements.

Today quotas are calculated on a half yearly basis, in order to balance some natural production fluctuations in each farm unit.

For over-productions farmers are fined with reduced payments for these liters of milk, which are above the quota of the farm.
      
Milk processing
Fluctuations in the milk supply are regulated by the I.D.B. through a budget for comparing the seasonal milk production.

Surplus winter milk is dehydrated and processed into powders, which are then reconstituted during the summer month, whilst there is a shortage between supply and demand.

The I.D.B. also promotes the export of the surplus of milk (seasonal / yearly) as finished dairy products on the international market within the guidelines of the GATT agreements.

Lack of milk is sometimes overcome through the issue of import licenses for milk powder and / or even dairy products such as butter / hard cheese / etc.
      
Milk pricing
The Israel Dairy Board is responsible for calculating the following prices:
• The target price paid by the dairy to the milk producer.
• Dairy’s cost price.
• Product price (of some basic products).
Target Price
The target price for milk to the producer is based on a calculation made every three months by the Ministry of Agriculture, the Ministry of Finance, the Dairy Board and the representatives of the farmers.

The price to be paid to the producers for each liter of milk is set on a standard level, based on a survey of production costs. Every expense that the dairy producer has, including his personal labor, goes into the calculation.

A breakdown of the target price is given in table # 1.

A sum is added or deducted to / from the above price according to the quality of the milk based on test results determining levels of fat, protein, somatic cell counts, bacteria, acidity, temperature of the raw milk received at the farm, etc..

Please note that this system of the target price paid per liter to the farmer, does not imply that all farmers have the same income correlated to the amount of milk they are allowed to market.

Through efficiency in his dairy farm, including acquisition of his inputs / etc., every farmers will be able to guarantee his optimal income.
Dairy’s Cost Price
The average cost of processing one liter of milk into various products is determined according to calculations made by the Ministry of Finance and the Ministry of Agriculture.
Product Price
The consumer price of a products determined by the dairy according to its own internal costing / calculation. However since some product prices are government controlled, there is a maximum price that the dairies can charge for these products.

The maximum price are calculated & determined according to the sum of the prices in para’s above (milk price to producer + dairy costs). The Ministry of Commerce controls prices.
      
Organization Structure
Following is the organizational structure of the Dairy Board, as also presented in a block diagram table # 2.
1. General meeting Made up of representatives of the Government, Producers, consumers and the Dairy Industry.
2. Board of Directors Made up of those bodies, which make up the general meeting. A balance is maintained among all the organization, while the producers form the majority. The Board of Directors elects the professional committees to assist it in the handling of issues, which it is assigned to promote.
3. Control Committee Elected by the general meeting and is obliged to report to the general meeting only. It submits a regular annual report.
4. Managing Director Elected by the Board of Directors. The M.D. sees to the on-going management of the Dairy Board. He implements the resolutions of the Board of Directors; initiates activities, which will further execute the objectives of the Dairy Board.
5. Ass. M.D. Subordinate to the M.D. and acts in accordance with the guidelines of the Board of Directors for promoting issues and according to the delegation of authorities between him and the Managing Director.
6. Personal committee Made up of rep. Of the Board of Directors, the M.D. and his Ass. M.D.. Its role is to hire employees according to the framework set forth by the Board of Directors.
7. Internal controller His function is to control and review the activity of the Dairy Board and its employees in accordance with the guidelines set forth by the Board of Directors. He is obligated to report to the Managing Director.
8. Finance Committee This committee is in charge of the management of the Dairy board’s funds, as well as for the preparation & review of its budget.
9. Exports and raw Materials department Handling the surplus milk produced beyond the set milk quotas, turning it into raw material, milk powder, butter or hard cheeses, and seeing to exporting them abroad.
10. Planning committee In charge of collecting data on milk production and the producers, data on the absorption of milk by the dairies, the dairies output figures, data on sales of dairy products, etc. Market forecasts, the allocation of milk quotas and national consumption of milk are based on these reports.
11. Economic Committee Reviews product prices, evaluation of milk production costs and of dairy product processing costs. It prepares any financial report as requested.
12. Accounting Dept. Sees to the ongoing accounting and preparation of the annual balance sheet / statements.
13. Advertising & Sales Promoting Dept. Carries out advertising of the dairy industry in general, parallel to the advertising of specific products by the different dairies. It initiates seminars, conventions and any other activity to increase the consumption of milk and other dairy products.
14. Secretariat Sees to the office administration of the Dairy Board, facilitating its daily activities.
15. Software and Computer Dev. Performs systems maintenance. All planning in the Israeli Dairy industry is based on a large database, which is completely computerized and designed to provide all required reports.
      


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