Palestinian-Israeli agriculture exchange hits a snag

The normal exchange of agriculture and animal goods between Israel and Palestine has hit a snag, causing economic and social interruptions and possibly pushing Palestinians to become less dependent on Israel.

al-monitor A produce market is seen in Nablus in the Israeli occupied West Bank on Feb. 2, 2020, following the announcement by Israeli Defense Minister Naftali Bennett of a halt in imports of all agricultural goods from the West Bank into Israel. Photo by JAAFAR ASHTIYEH/AFP via Getty Images.

Feb 20, 2020

Mohammad Nabil, a 28-year-old manager of his Ramallah family's agricultural products store, was able to sleep in on this early February morning. Instead of having to wake up at 3 a.m. to go to the West Jerusalem products market to sample and buy various fruits and vegetables and load them up on trucks that have official import permits from the Palestinian government, he had to do something else this morning.

He woke up at 6 a.m. and instead of going by truck, he and his nephew took their private car and drove to a designated location near the Palestinian town of al-Ram where they met with the driver of a truck carrying Israeli produce.

Some 12 cases of mushrooms, six cases of lettuce, and four cases of asparagus were quickly transferred from the Israeli truck to the two private cars. The exchange took five minutes and soon Nabil and his nephew were on their way to Um al Sharit, which is a Palestinian town that technically belongs to the Jerusalem municipality, that is, outside the reach of the Palestinian authorities but beyond the security wall and the Israeli Qalandia checkpoint.

Nabil unloaded the products at a private garage waiting for nighttime to transfer them to the family store. “The Palestinian customs’ officials are all deployed now at the entrance of Ramallah. But after dark, they will be gone and we can bring the products to the store,” Nabil told Al-Monitor.

The cloak-and-dagger operation carried out this early February day came after the decision of the Palestinian government to ban the import of Israeli agricultural products in retaliation for Israel’s decision a day earlier banning the export to Israel of Palestinian products. That decision was taken by the Palestinian government in its Feb. 3 meeting, which was also attended by President Mahmoud Abbas.

The government communique published by the official Wafa news agency said the decision to ban the import of “agriculture products, juices, and bottled water” was taken in response to Israel banning the export of Palestinian products to Israel and to the outside world via Jordan.

The trade war between both sides had begun in September when Palestinians stopped importing calves from Israel. Palestinians argue that the 120,000 calves they import from Israel annually are already imported by Israel from other countries and therefore it would be cheaper for the Palestinian government to import them directly.

While the move was part of a general policy to wean Palestinians from economic dependence on Israel, Israeli cattle industry owners were angered and put pressure on Israeli Defense Minister Naftali Bennett, who ordered the ban on Palestinian exports. Israel says its exports of beef to Palestinians is a $200 million annual business.

Nabil doesn’t expect the ban to last a long time. “We don’t have the capacity to grow some of the specialized products, especially fruits, that Israel produces, and therefore I am sure this ban will not last too long.”

Palestinian Minister of Agriculture Riyad Attari was quoted as saying Feb. 3 that the decision will “support local agricultural producers and strengthen Palestinian steadfastness.” Palestinian agricultural exports to Israel are estimated at $88 million annually, which makes up 68% of all agricultural exports by the Palestinians.

The Observatory of Economic Complexity says that in 2017, Palestine’s trade balance was negative $840 million. The organization said Palestine exported $94.8 million and imported $935 million. The observatory said that in the same year, Palestine's gross domestic product was $14.5 billion and its GDP per capita was $4,890.

The report says the top exports of Palestine are tropical fruits ($14.2 million), scrap iron ($13.4 million), packaged medicines ($8.7 million), building stone ($8.5 million) and pure olive oil ($7.5 million). Its top imports are cars ($163 million), cement ($40.1 million), baked goods ($39.8 million), chocolate ($29.6 million) and frozen bovine meat ($27 million). The top export destinations of Palestine are Jordan ($49.2 million), Belarus ($6.5 million), Kuwait ($5.3 million), the United States ($5 million) and Turkey ($4.9 million). The top import origins are Jordan ($148 million), Egypt ($135 million), South Korea ($102 million), Germany ($97.7 million) and Turkey ($87.4 million).

Despite the strict security border controls between Israel and the occupied territories, neither Israelis nor Palestinians can stop small transfers of products between West Jerusalem and Ramallah, especially when there are plenty of Palestinians who have Israeli-licensed vehicles making the daily crossing without much observation.

While small stores such as Nabil's can get away with transferring small amounts of agriculture products to satisfy his local customers, this is not a long-term solution to the bigger problem of Palestinian economic dependence on Israel. 

Still, if Palestinians are serious about delinking from Israel, moves to restrict Israeli imports should eventually kickstart and empower the Palestinian agriculture economy, which is more independent than it has been for the many years of the Israeli occupation.

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