VZCZCXRO1332
OO RUEHROV
DE RUEHJM #0493/01 0811033
ZNR UUUUU ZZH
O 211033Z MAR 08 ZDK PER MULTI SVC
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0930
INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 02 JERUSALEM 000493 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
NEA FOR FRONT OFFICE; NEA/IPA FOR 
GOLDBERGER/SHAMPAINE/STEINGER; 
PLEASE PASS TO USAID FOR ME/MEA:BORODIN/SEIFERT AND FOR 
DCHA:HESS/GOTTLIEB/NOVICK/BORNS 
 
E.O. 12958: N/A 
TAGS: ECON EAGR EAID KWBG PHUM IS
SUBJECT: PA REJECTS USAID WHEAT FLOUR DONATIONS 
 
 
JERUSALEM 00000493  001.2 OF 002 
 
 
¶1.  (SBU) Summary:  The PA Ministry of Health (MOH) informed 
the World Food Program (WFP) and USAID on March 17 that 
Palestinian law requires that wheat flour processed more than 
six months prior is not suitable for consumption, and 
therefore that USD 7.2 million of USAID-donated wheat flour 
in West Bank/Gaza warehouses could not be distributed and 
would need to be removed or destroyed.  WFP notified the MOH 
in writing that the wheat flour was fit for human consumption 
and that if the six-month rule is imposed, WFP will not be 
able to receive any in-kind donations and will have to stop a 
major part of its operation in the West Bank and Gaza (WB/G). 
 In response, Minister of Health Al Mughli notified WFP on 
March 19 that the six-month expiration was compulsory given 
"storage conditions within the territories" and therefore the 
"expired goods are not suitable for consumption."  The 
Minister instead requested that the WFP advocate on the PA's 
behalf with the donor community for cash donations in lieu of 
in-kind contributions.  The Consul General has spoken to PM 
Fayyad, who has intervened to block destruction of the wheat. 
 USAID, WFP and PA Ministry officials will meet on March 24 
to discuss a way forward.  End Summary. 
 
PA Rejects USAID-Supplied Flour 
------------------------------- 
 
¶2.  (U) On March 11, the Ministry of National Economy 
inspected a WFP warehouse in Nablus and found the wheat flour 
stored inside to have been processed more than six months 
prior.  The MOH on March 17 informed WFP that the PA policy 
stipulating that wheat flour must be distributed within six 
months of production would be applied to humanitarian 
shipments, including USAID in-kind food commodities.  As a 
result of this decision, an estimated 22,900 metric tons of 
USAID-donated wheat flour - worth approximately USD 7.2 
million - would have to be shipped out of WB/G or destroyed. 
 
¶3. (U) On March 17, WFP Country Director Christine van 
Nieuwenhuyse wrote to Minister of Health Al Mughli asserting 
that the wheat flour was "definitely fit for human 
consumption."  Nieuwenhuyse noted that USAID is by far the 
largest donor to WFP programs in WB/G and that it would be 
impossible for USAID, or any other donor, to make in-kind 
contributions that meet the six-month deadline for 
distribution.  If the six-month rule is enforced, 
Nieuwenhuyse wrote, WFP would have to stop "a major part" of 
its work in WB/G, and food fit for human consumption will be 
returned to the U.S., "while the most vulnerable people in 
(WB/G) will be going hungry."  (Note:  Since 2007, USAID has 
supported the PA with in-kind wheat flour commodity 
assistance worth USD 19.8 million and USD 7.9 million in cash 
for commodity purchases.  End note.) 
 
¶4. (U) On March 19, Al Mughli replied to WFP that the 
six-month expiration was compulsory given "storage conditions 
within the territories" and must be applied to humanitarian 
food shipments.  The Minister asserted that the wheat flour 
in question is "not suitable for consumption."  Noting that 
the ruling made in-kind wheat flour contributions impossible, 
the Minister requested that the WFP instead advocate on the 
PA's behalf with the donor community for cash donations in 
lieu of in-kind contributions.  Alternatively, Al Mughli 
suggested that WFP provide in-kind donations of wheat, 
instead of flour, so that "flour may be produced locally 
using the national formula of fortification."  According to 
WFP contacts, the Ministry of Health then ordered the wheat 
flour in question to be destroyed. 
 
PM Fayyad Blocks Destruction of Flour 
Ministries to Discuss with WFP on 3/24 
-------------------------------------- 
 
¶5. (SBU) According to UN contacts, on March 19, Prime 
Minister Fayyad blocked the destruction of the wheat flour. 
As of March 20, no USAID-supplied wheat flour supplies have 
been destroyed by the PA.  However, warehouses containing 
USAID wheat flour remain closed in Nablus, Jenin, Hebron, and 
Bethlehem. 
 
¶6. (SBU) The Consul General raised the issue with Fayyad on 
March 20 and noted that application of the six-month rule to 
humanitarian shipments would almost certainly rule out future 
food support from the U.S.  While the PM expressed concern 
that it would be difficult to treat U.S. wheat flour 
differently from other suppliers, he agreed to review the 
situation.  As a result of the PM's intervention, the 
Ministries of Health and Planning will meet with USAID and 
WFP officials on March 24 to further discuss the situation. 
 
JERUSALEM 00000493  002 OF 002 
 
 
 
¶7. (U) Copies of the WFP and MOH letters are available on 
ConGen Jerusalem's unclassified intelink site at: 
http://www.intelink.gov/communities/state/pal econ 
 
¶8. (U) This cable has been cleared by USAID WB/G. 
WALLES