Identifier
Created
Classification
Origin
05TELAVIV4198
2005-07-06 08:22:00
CONFIDENTIAL
Embassy Tel Aviv
Cable title:  

GAZAN DISENGAGEMENT-RELATED AGRICULTURE

Tags:  KWBG PREL EAID IS GAZA DISENGAGEMENT 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 03 TEL AVIV 004198 

SIPDIS

E.O. 12958: DECL: 07/01/2015
TAGS: KWBG PREL EAID IS GAZA DISENGAGEMENT
SUBJECT: GAZAN DISENGAGEMENT-RELATED AGRICULTURE
COORDINATION: AT A CROSSROADS

Classified By: Ambassador Daniel C. Kurtzer for reasons 1.4 (b) and (d)

The cable was cleared with Consulate General Jerusalem.

C O N F I D E N T I A L SECTION 01 OF 03 TEL AVIV 004198

SIPDIS

E.O. 12958: DECL: 07/01/2015
TAGS: KWBG PREL EAID IS GAZA DISENGAGEMENT
SUBJECT: GAZAN DISENGAGEMENT-RELATED AGRICULTURE
COORDINATION: AT A CROSSROADS

Classified By: Ambassador Daniel C. Kurtzer for reasons 1.4 (b) and (d)

The cable was cleared with Consulate General Jerusalem.


1. (C) Summary and comment: A series of discussions with
GOI, PA, and Gazan private sector contacts June 27-29 has
underscored the pressing need for agreement between the two
sides on crossings and the transfer of settlement assets. On
crossings, GOI representatives said that Karni terminal will
remain the Strip,s only agriculture crossing for at least a
year following withdrawal, but asserted that a dedicated lane
will be sufficient to facilitate the export of 60-70 trucks
of Gazan agricultural produce daily. Gazan
agribusiness contacts countered that political will, not
technical fixes, is needed to improve the crossings regime.
On greenhouses, Israeli sources warned that only a formal PA
statement that Palestinians have use for them after
withdrawal will enable the donors to provide the GOI with
extra funding to induce settlers to maintain their assets as
going concerns. PA contacts reaffirmed, however, that the PA
cannot make decisions until the GOI provides a more complete
asset inventory and is not willing to approve any
"compensation" to the settlers for the assets. Einat Wilf,
advisor to Vice Premier Peres, said that this apparent
deadlock has convinced Peres that Quartet Special Envoy
Wolfensohn is stepping back from additional work on this
issue in favor of more promising avenues for coordination.
As evacuation draws closer, the lack of a clear transfer
mechanism for the assets is increasing the likelihood that
settlement farmers will dismantle or neglect their
greenhouses, seriously undermining their potential economic
value to the post-disengagement Gaza economy. End Summary.

-------------- -
Karni Controversial as an Agriculture Crossing
-------------- -


2. (C) Ministry of Defense (MoD) representatives Netzach
Mashiach and Maj. Gen (res) Baruch Spiegel told EconCouns and
USAID Country Director June 27 that Karni terminal will
remain the Gaza Strip,s only export point for agricultural
produce for one to one and a half years following
disengagement. Spiegel explained that a dedicated lane will

enable 60-70 trucks of produce to exit the Strip daily after
Israeli withdrawal, and the MoD is considering a "one-check"
system for containerized goods that will make back-to-back
shipping almost as rapid and cost-effective as the
door-to-door system he said the PA prefers. To actualize
this goal, he explained, some of the USD 50 million earmarked
for GOI improvements at the border crossings could be spent
on standardized secure containers and special trucks. In
parallel to these upgrades, Mashiach added, the GOI will
build a new agriculture-only crossing south of Erez, or
refurbish Sufa or Kissufim terminals for the same purpose,
within two to three years.


3. (C) Gazan agribusiness contacts and Israeli NGOs
expressed skepticism about the potential for improvements at
the crossings. Hashim al-Hussaini of PalTrade argued that
without real political will within the GOI, no amount of
technical fixes will help facilitate Gazan agricultural
exports. He pointed out that setting aside a lane at Karni
for produce exports is "an old idea that was never
implemented," and that there have already been several
discussions in the past on allocating an agricultural
crossing, including an abandoned 1996 attempt to refurbish
Sufa. Dr. Hani Shawa of the Bank of Palestine noted that
several lanes at Karni terminal have already sat idle for
months, rendering the idea of a dedicated produce lane
illogical and moot.


4. (C) Boaz Karni of the Economic Cooperation Foundation
(ECF) concurred that politics can overcome both security and
technical obstacles to smooth export, giving the example that
in 2002, when Israeli farmers were last required to leave
land fallow according to regulations based on biblical law,
Gazan growers supplied the majority of the Israeli market.
"Security delays were insignificant that season," Karni said.
"If you must get lettuce to the orthodox in Jerusalem, the
government will make it happen." According to Hussaini, the
Gazan agribusiness sector needs an agriculture-only crossing,
not just a dedicated lane, by November in order to meet
export goals for strawberries, carnations, and cherry
tomatoes.

--------------
Greenhouse Transfer Does Not Look Promising
--------------


5. (C) Boaz Karni described the GOI,s current plan for
transferring the settlement greenhouses to the PA intact,
stressing that the PA must first give the donor community a
written statement that it wants the greenhouses. This will
allow donors to provide Israeli agricultural marketing firm
Agrexco or another Israeli middleman with financial
assistance to additionally compensate settlement farmers,
ostensibly for maintaining their assets as going concerns.
Agrexco, which is the chief marketing agent for Gazan
exports to Israel and the EU, would only compensate the
farmers once the PA has taken possession of assets and has
confirmed that they are functional and complete. The ECF
hopes to complete the handover seven to fourteen days prior
to the start of withdrawal, he said, giving the PA the
incentive to properly secure the assets that will then belong
to it. (ConGen Note: PA senior officials have repeatedly
stated that they cannot approve compensation, specifically,
to settlers for their greenhouses. However, there may be a
way for supplemental funds to be paid to settlers in a manner
that does not appear as "compensation," for example, paying a
fair market price for used equipment that would otherwise
have to be procured on the open market. End Note.)


6. (C) Karni emphasized the potentially great value of the
greenhouses to Gaza,s post-disengagement economy, noting
that "their produce is worth USD 75 million at the gate, and
probably twice that in EU markets." According to him,
Agrexco is enthusiastic about continuing to market Gazan
produce after disengagement, and Ministry of Agriculture
officials expressed confidence that Gazan management of the
greenhouses could potentially increase the value of produce
exports to USD 100 million per year. Some Gazan private
sector contacts have expressed doubt over the economic
necessity for the settlement greenhouses, however (reftel).
Additionally, PA Negotiation Support Unit lawyer Lamia Matta
told EmbOffs and ConGenOffs June 28 that because the GOI has
still not handed over a sufficient inventory of the
settlement assets, the PA has no way of knowing whether the
greenhouses are appropriate or useful to Gazan agribusiness.
Until the PA has the information it needs to determine their
worth, she explained, it is disinclined to expend "political
energy" on ensuring their intact transfer. Moreover, without
a commitment from the GOI on ensuring the free flow of goods
through Gaza's border crossings, the value of any
agricultural asset is inherently questionable.


7. (C) Einat Wilf, senior advisor to Vice Premier Peres,
told EconCouns June 30 that in recent meetings with Peres,
Quartet Special Envoy Wolfensohn was pessimistic about the
potential for progress on the transfer of greenhouses.
According to Wilf, Wolfensohn emphasized strong donor
reluctance to contribute assistance that would be used to
compensate the settlers. Unless the PA expressed overt
interest in receiving the greenhouses and gave its blessing
to donor involvement in the transfer process, he reportedly
explained, he would discontinue his efforts to bring the two
sides to the negotiating table on this issue.

--------------
For Settlement Farmers, Compensation is Key
--------------


8. (C) GOI sources and Israeli media have provided
conflicting reports on settlement farmer activities in the
run-up to evacuation, ranging from plans to smash greenhouses
"out of spite" within two weeks, to
under-the-table deal-making with prospective Gazan buyers,
though the PA cabinet has declared any such deals null and
void. Settlers told USAID contractors during a June 28 site
visit to Gush Katif that work continues in a majority of
agribusiness enterprises, and contractor visits to
approximately half the greenhouses revealed very little
removal of any of their high-tech components. Farmers said
that most of them hope Gazan growers will be able to take
over the greenhouses after evacuation, but emphasized that
without compensation beyond the 67 percent the GOI
legislation allows, they will not agree to hand over their
assets intact to the PA. Boaz Karni affirmed that
compensation fears are creating an atmosphere of insecurity
in the settlements, making it difficult to plan for intact
transfer. He noted that he had received a phone call earlier
in the day from a "desperate" settlement farmer asking for
news of compensation, who told him that a group of farmers
had recently stopped a colleague from demolishing his
greenhouse to sell as scrap by reassuring him that he would
be economically better off waiting for additional
compensation.


9. (C) Comment: As evacuation draws near, both the GOI and
the PA remain reluctant to nail down a program that will
ensure intact transfer of the settlement greenhouses, though
USAID, through its Palestinian Agribusiness Partnership
Activity (PAPA),is pressing both sides. While donors are
amenable to additional compensation for settlement farmers,
GOI foot-dragging on the provision of settlement asset
inventory and its reluctance to discuss the details of
possible third-party involvement, as well as the PA's
reluctance to engage without inventory details of the
greenhouses, are holding up forward progress. Unless the two
sides reach political agreement on this issue very soon,
settlement farmers will likely begin dismantling their
assets, or will decide not to prepare them for the coming
growing season.

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