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Cablegate: Israeli Kibbutz and Palestinian Village Looking to Set Up

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Carol X Weakley 11/07/2006 02:12:11 PM From DB/Inbox: Carol X Weakley

Cable
Text:


UNCLAS TEL AVIV 04395

SIPDIS
CXTelA:
ACTION: ECON
INFO: IMO CONS RES POL DCM AMB AID ADM PD IPSC SCI
FCS

DISSEMINATION: ECON
CHARGE: PROG

APPROVED: ECON:WWEINSTEIN
DRAFTED: ESTH:RJTANSEY
CLEARED: ECON:WITOW/JEREOS, CONGEN:SCHEDLBAUER, USAID:MARTIN

VZCZCTVI147
PP RUEHC RUEHXK
DE RUEHTV #4395 3071534
ZNR UUUUU ZZH
P 031534Z NOV 06
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC PRIORITY 7402
INFO RUEHXK/ARAB ISRAELI COLLECTIVE

UNCLAS TEL AVIV 004395

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: EAID EAGR EINV PGOV PREL KPAL KWBG IS
SUBJECT: ISRAELI KIBBUTZ AND PALESTINIAN VILLAGE LOOKING TO SET UP
AGRIBUSINESS COOPERATIVE


SENSITIVE BUT UNCLASSIFIED - PROTECT ACCORDINGLY.

This message was cleared by Consulate General Jerusalem and USAID
WB/G Mission.

1. (SBU) Embassy ESTH and Econoffs and USAID representatives
attended a briefing October 31 at Kibbutz Metzer regarding a
proposed agribusiness project involving the kibbutz and the nearby
Palestinian village of Qafin. Metzer is east of Hadera and about
1.5 kilometers west of the Green Line. The presentation was led by
the Ahali Center for Community Development which works with small
farmers and other groups in Israel's Arab population. Others
attending and voicing support for the proposal included the Qafin
Mayor (Fatah) and head of the village's agricultural cooperative,
senior representatives of the PARC Palestinian Agricultural
Development Association, an agricultural extension specialist from
the Israeli Ministry of Agriculture, Israeli ag exporters and
Kibbutz Metzer leaders.

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2. (SBU) The kibbutz and the village have been trying to work
together for several years. During the second Intifada,
Palestinians looking to thwart such cooperation attacked the kibbutz
and killed five of its members, including a mother and her two young
sons. Not surprisingly, not all members of the kibbutz support the
present proposal. A "Jerusalem Post" reporter who is following the
story of Metzer and Qafin told ESTH Officer that the Palestinian
proponents were seeking a letter from President Abbas endorsing the
project in the hope that the letter and the support of PARC would
provide some sense of protection for those involved in the
cooperative effort. As noted by the kibbutz secretary, the main
benefit of the project would be to provide employment for Qafin
farmers whose land is on the west side of the separation barrier
near the kibbutz. The kibbutz has lobbied for the barrier to be
moved west to a ridge right on the Green Line, so that the
Palestinian farmers could have direct access to their land. The
Mayor stated that unemployment in Qafin is 80 percent. According to
Ahali, only about 30 out of 200 farmers are allowed to cross the
barrier each day to farm their fields.

3. (SBU) The project envisions construction of greenhouses to
produce a range of herbs for the U.S. and European markets, drawing
on Israeli agribusiness technology and access to export markets.
The organizers are seeking a USD 15,000 grant for a pre-feasibility
study and contributions towards the projected USD 1.8 million needed
to get the project up and operating for the first three years. The
political risks involved lower the expected rate of return and make
it difficult to raise private capital. In response to a question
during the presentation, USAID Officer explained that the project
would have been a good candidate for funding under an agribusiness
partnership program that was suspended shortly after the Hamas
electoral victory. Under current USG policies AID cannot provide
funding to new agribusiness enterprises for the purpose of producing
high-value crops that generate export revenue. USAID agricultural
programs have been confined to small-scale production systems that
supply domestic markets. Project organizers stated that they will
likely ask the U.S. Embassy for assistance in obtaining routine
access to the project area for Qafin participants.

4. (SBU) Comment: The project's proponents have put together a
strong team and made impressive technical and business preparations.
Clearly, the proposal faces both political and financial
challenges. Nonetheless, it represents a dramatic grassroots effort
to transcend the hostility that separates Israeli and Palestinian
neighbors. End comment.

JONES

2

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