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

Cable 
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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. 
 
¶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 
 
 
 
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