Imperfect competition, border protection and consumer boycott: The future of the dairy industry in Israel

Recent increases in prices of dairy products in Israel led to consumer unrest and boycotts against dairy producers during the summer of 2011. The Israeli dairy industry is highly distorted with production quotas and administered prices for raw milk, tariff rate quotas and an oligopoly in dairy processing. Since the issue of self-sufficiency and food security is at the top of Israel's national priorities, the future of the dairy industry is generating heated debate. Thus, we use a general equilibrium model to estimate the effects associated with particular alternative policies actually discussed to liberalize the Israeli dairy industry.