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The West Bank's gold
A Palestinian cooperative looks to trade olive oil for foreign cash

By Howard Schneider
Tuesday, October 20, 2009

For centuries, olive harvesting here has been a mostly local industry.

Farmers, their relatives and neighbors beat the trees with sticks or strip the olives from branches by hand, then cart them to a local press and sell or trade the oil in nearby markets. Harvest workers keep a share of the crop for their labor, and olive press owners keep a share of the oil -- a testament to the small-scale, bartered nature of the undertaking.

That model can help sustain a household, but in a new factory on the outskirts of this northern West Bank village, an effort is underway to reshape the olive industry so it can help sustain a wider Palestinian economy.

With savvy marketing in the United States and Europe, and fair-trade and organic certifications that attract top dollar from Western consumers, a six-year-old farmers cooperative is breaking some of the traditional bounds of the olive industry and beginning to pull in hard currency from abroad.

The Palestine Fair Trade Association now has 1,200 farmers and 20 olive press owners who take advantage of a guaranteed "fair trade" price from Canaan Fair Trade, an affiliated company set up to market Palestinian-made products abroad. The arrangement means higher prices for the farmers and, perhaps as important, a way to turn the year's crop into a lump sum of cash, rather than the trickle of money many received by selling oil or olives through the year.

Developed by a U.S.-trained anthropologist, the venture sent 350 tons of olive oil to the United States and Europe in 2008, about $4 million worth, with projections that the amount could triple in a couple of years. Canaan Fair Trade has become the chief olive oil supplier to the Dr. Bronner's Magic Soap company and is breaking into boutique food stores with its own gourmet olive oil brand. There are smaller sales to major grocers like Whole Foods and Sainsbury's.

"The value is in exports and long-term relationships" with overseas buyers, said Nasser Abufarha, who returned to the region of his childhood with a doctorate from the University of Wisconsin and an aim to "give a space in modern society" for olive-harvesting families.

An ancient undertaking

Olive trees are an economic and cultural staple of Palestinian society. Ancient stone presses still dot a landscape where some 10 million trees fill terraced hillside groves and rise in impromptu nooks. The harvest season in October and November is a community affair, marked by family gatherings and festivals.

Olives are also the largest Palestinian crop, accounting for more than 40 percent of the land used for agriculture, according to U.N. figures. But earnings from olive trees are disproportionately low -- roughly $120 million in 2008, or 18 percent of all agricultural production.

International trade officials say that despite the industry's historic roots, it remains underdeveloped and beset by informal practices that limit crop yields.

The domestic focus of the industry has put another clamp on earnings. The same olives whose oil sells for a few dollars a quart locally can be run through the half-million dollar Swedish press at Canaan Fair Trade's new plant, put in a bottle with an organic and fair-trade certified label, and sold for upwards of $50 a quart at retail stores in the United States.

Projects like that are considered critical to boosting the $6 billion Palestinian economy and trying to lessen its current dependence on international aid.

Israeli Prime Minister Binyamin Netanyahu, who says he wants to improve the West Bank economy and cultivate an "economic peace" regardless of whether talks toward creation of a Palestinian state are progressing, has relaxed some movement restrictions throughout the area to boost economic activity.

But the effort has been spotty. About 590 checkpoints and barriers remained in and around the West Bank as of late September, according to U.N. monitors. Checkpoints within the West Bank are still in place to control movement between Palestinian cities: Travelers leaving places like Nablus through the Huwwara checkpoint can't be certain whether they will pass quickly through a loosely patrolled post or meet a heavier concentration of troops with a rigorous check.

Palestinian Authority Prime Minister Salam Fayyad said that removing checkpoints and barriers is helpful but does not relieve what he calls the "functional restrictions" on the Palestinian economy -- the permit requirements to get capital, labor and goods into and out of Palestinian areas, and, in the case of the olive industry, limits on access to land and water.

There are areas put under special army watch during the olive harvest season to prevent violence between Israeli settlers and Palestinian farmers. Access to water can be a major issue in long-term planning: a well-organized, well-maintained and irrigated olive field can produce perhaps 15 times as much fruit as the less formal groves typical in the West Bank.

The area around Berqin and the nearby city of Jenin boasts one of the chief concentrations of olive trees in the Palestinian territories. Abufarha, 45, said that one hope of the cooperative is that, by generating more cash, it will encourage farmers to invest more in their fields and farming practices.

Weather complications

This is a tough year for the idea. With a multiyear drought underway, a windy May stripped the trees of most of their blossoms, leaving them nearly barren of fruit. The olive harvest runs in two-year cycles, with bumper years followed by scarcity. But the yield in this off-season is down even more than expected, by an estimated 80 percent -- so much that the area may need to import some oil to meet domestic needs, according to international development officials.

That has pushed the co-op's offering price to more than 25 shekels, or nearly $7, for a liter of olive oil -- more than triple the existing market rate the year the co-op started in 2003, Abufarha said.

It has been enough to prompt farmers such as Mahmoud Mansour, a co-op member for three years, to begin planning with his brothers to acquire new plots of land, knowing that, after each harvest, they will get a check from the co-op to support new investment and help maintain the fields.

He traipsed a hillside near Berqin on a recent afternoon, with a black tarp spread beneath a tree to catch the falling fruit as his son, Amjad, 25, beat the branches with a long, thin pole.

But the difference now is that instead of bottling the oil himself, it will go into a designer package and off to a market halfway around the world.

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