18.7%

of households in Israel are food insecure
NIS 3.9 Billion: The value of food required to close the food security gap in Israel

How Much Food is Required to Close the Food Security Gap in Israel?

The Covid-19 crisis exacerbated the problem of food insecurity in Israel and around the world. The damage was twofold: on the one hand, households had less available income due to layoffs, workers being forced to take unpaid leave, and the self-employed having to stop their activity or completely go out of business. On the other hand, feeding programs in educational institutions were impacted by the lockdowns and fewer school hours, in addition to soup kitchens having to reduce their activity due to health restrictions.

Economic and Health Status of Population Groups Following Covid-19 Crisis

*Israel’s rank in the OECD
Source: USDA and Global Food Security Index

The Covid-19 crisis is an inequitable pandemic from both a health and an economic perspective. The populations whose health has been most impacted in Israel are the elderly, ultra-orthodox Jews, and Arabs, also the populations characterized by the highest rates of poverty and food insecurity.

In addition, certain industries were impacted more than others, such as food and hospitality services, tourism, art and culture, retail, and construction. These industries are characterized by low-wage service workers, whereas the industries that were not impacted as much and even grew as a result of the crisis (such as hi-tech, information and communications, and financial and insurance sectors) are characterized by high-salaried employees. This impact tends to aggravate the problems of food insecurity and inequality in the Israeli economy.

According to analyses of estimates based on the National Insurance Institute’s report published in January 2021, the rate of food-insecure households in 2020 stood at 18.7%. Furthermore, according to this report, the Gini inequality index in Israel went up by about 8% before the financial support was given by the government, and went down by about 0.1% compared to 2019 after the financial support was received. Income inequality is one of the central challenges facing the Israeli economy and food insecurity is one of its byproducts.

The effect of the Covid-19 crisis on the problem of food insecurity is not unique to Israel. The pandemic increased food insecurity in almost every country around the world due to the impact on household incomes and the disruption of food supply chain. Covid-19 had a devastating impact on global hunger and poverty, especially on the poorest and most vulnerable populations.

Food insecurity is highly correlated with financial crises. Since 2014 and until the pandemic erupted, the rate of food insecurity in the United States was declining, with 10.5% of Americans being classified as living with food insecurity in 2019. Based on surveys conducted by the United States Census Bureau (30), 2020 saw a significant rise of over 30% in the rate of food-insecure households due to the effects of Covid-19.

According to the definitions of the World Health Organization, which the National Insurance Institute in Israel also relies on, food security is based on three key pillars:
1. Food Availability having a consistent supply of food in sufficient quantities.
2. Food Access having enough resources to obtain sufficient amounts of foods.
3. Food Use having adequate water and sanitation conditions and knowing how to use food properly.
A comparison of data regarding inequality and poverty reveals that in the United States, where similarly to Israel, inequality and poverty levels are among the highest in the developed world, the level of food security, paradoxically, is also among the highest. This seems to be the result of a public awareness that has been cultivated over many years regarding the problem of food insecurity, as is expressed in programs such as SNAP (Supplemental Nutrition Assistance Program, aka food stamps), which ensure that populations in need get adequate food. Likewise, the United States is a pioneer of the food bank system for rescuing food surpluses and distributing them to population in need, and is a world leader in establishing policies that remove obstacles to the donation of wasted food.
Source: Economist 2018 Global Food Security Index

Despite similar inequality and poverty rates in Israel, in a routine year the rate of food expenditure for personal consumption is among the highest in the OECD and stands at approximately 17%, 2.5 higher compared to the United States. Therefore, a policy for rescuing food and distributing it to underprivileged populations would be a particularly effective welfare policy in Israel, where food is a major part of a household’s expenditure.

The definition of food security is subjective. To examine whether food rescue would be an effective policy for increasing food security in Israel, the report used Chernichovsky and Regev’s methodology (31), which defines normative food expenditure as the level of a household’s food expenditure that remains constant even when the household’s income increases.

31. Patterns of Expenditure on Food in Israel, Taub Center, 2014.

Per Capita Food Expenditure in Israel to Normative Expenditure Percentile Distribution

Household Percentile (By Consumption)
Source: CBS data for 2018 processed by BDO.

To examine normative food expenditure, food expenditure (32) in the lowest percentiles was compared to the normative levels. The analysis in this chapter shows that for the two lowest percentiles (in terms of standard consumption per capita), food expenditure was roughly half that of the normative level.

The volume of food required to bridge the gap between the actual consumption levels of food insecure populations and the normative consumption level (i.e. the average consumption of the second to fifth percentiles), is valued at approximately NIS 3.9 billion. The cost of eliminating this food expenditure gap for populations that are highly food insecure (about 9% of Israeli households) is estimated at approximately NIS 2.7 billion, and about another NIS 1.2 billion are required to close the gap for moderately food insecure populations.

32. Excluding dining out, alcoholic beverages and carbonated beverages.

Food Expenditure Gap Relative to Normative Consumption Expenditure for Nutritionally Insecure Populations (in NIS millions)

Source: BDO estimates
The rescue of approximately 600 thousand tons of wasted food each year, which constitute about 25% of overall food waste in Israel, would enable the food expenditure gap in Israel to be closed. According to the estimates presented in this report, it would cost about NIS 1.1 billion to rescue food valued at about NIS 3.9 billion, which is the total gap between the food expenditure of insecure populations and the normative food expenditure level. At the same time, it would save about 95 million cubic meters of water, 300 million kWh of electricity, thousands of tons of fuel, about NIS 320 million as a result of reducing greenhouse gas and air pollutant emissions, and another NIS 200 million as a result of reducing waste treatment costs.