Finance Minister Bezalel Smotrich’s controversial dairy reform was removed on Tuesday from the 2026 Arrangements Law, which accompanies the 2026 state budget.

The reform generated significant opposition and protests from farmers, as well as industrial action, which left supermarkets without raw milk for a day. Farmers and the kibbutz and moshav movements argued that the reform would cause widespread job losses and harm national food security. There was opposition from within Prime Minister Benjamin Netanyahu’s Likud party, and particularly from Agriculture Minister Avi Dichter and Economy Minister Nir Barkat.

Following Hebrew media reports that Netanyahu had insisted on removing Smotrich’s reform from the law in order to pass the budget, a spokesperson for the finance minister’s office told The Times of Israel that “it was decided to split issues that are in dispute, such as the dairy reform, from the Arrangements Law,” and that the decision was made by the prime minister and Smotrich together.

“At the moment, the main task is to ensure the passage of a budget that addresses all security needs and provides stability for the economy,” the finance minister’s office said.

The office added that “in coordination with the prime minister, it was agreed that the reform will continue to advance in committee and, after the war ends, will be promoted as legislation under coalition discipline.”

As part of a broader plan to lower the........

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