After about 40 years of enacting a law to encourage capital investment in agriculture, the Minister of Agriculture and Rural Development, Oded Forer, submitted for approval to the Ministerial Committee on Legislation the amendment to the law. Through the law, farmers will receive a more appropriate grant, which will encourage and promote the export of agricultural produce in the world through tax benefits, which will help exporting farmers compete on the world stage.
The Ministry of Agriculture states that these tools will establish local agriculture and maintain food security in Israel and are part of the broad reform in agriculture promoted by the Minister of Agriculture, Oded Forer, and the Ministry’s CEO, Naama Kaufman-Pess, who provides tools to strengthen local agriculture and farmers. The law was approved by the committee, and will now be brought to the Knesset for approval.
The main changes in the bill to encourage capital investment in agriculture concern two issues: First, comparing the terms of the tax benefits applied to agricultural exports similar to those applied to industrial exports. These benefits will apply to an agricultural business that exports at least 25% of its agricultural production, in a manner similar to the Capital Investment Encouragement Act in Industry.
Second, increasing the historical grant rates that were fixed by law in National Priority Area A from 20% to 25%, and in National Priority Area B from 10% to 20%, in accordance with the Ministry of Agriculture’s National Priority Areas Map.
The Law for the Encouragement of Capital Investments in Agriculture, enacted in 1980, is intended to improve the balance of payments of the state, increase efficiency in the agricultural sector and encourage the agricultural sector as a pioneering, security and social factor. While many updates have been made to the mechanisms set forth in the said law over the years, the Law for the Encouragement of Capital Investments in Agriculture has hardly been amended in these respects. In view of this, difficulties have arisen in recent years as to how the law is to be applied. The proposed change within the framework of this law has the effect of encouraging the transformation of agriculture in Israel into sustainable agriculture, whose public and environmental values have been preserved for years.
The Minister of Agriculture and Rural Development, Oded Forer: “For the first time in about 40 years, Israeli farmers will receive increased grants and tax benefits that will help them expand agricultural exports. We will continue to work for farmers for the establishment of Israeli agriculture, and the promotion of local food security. “
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