On comparative advantages and export farming: Gaza

During the short period of precarious quiet in Gaza and the West Bank, farmers in these 2 regions of Palestine rode the market wave. They identified their comparative advantage and they produced export crops destined for foreign markets. Their main comparative advantages are similar to those of ex-colonies such as Egypt, Kenya and many other African countries, where export crops are being promoted as a road to growth. These consist essentially of: 1. cheap labor due to poverty, 2. non-existent labor regulations i.e. the ability to exploit the poorest; 3. the absence of control over ground water use i.e. unsustainable use of precious fresh water and 4. lacking environmental and public health regulations and of limits on the use of agrochemicals. Encouraged by international development organizations and by private capital, Gaza farmers produced strawberries and cut flowers destined for export to Israeli and from there probably re-export to European markets. Meanwhile, food and agricultural inputs were imported from Israel.

There is nothing intrinsically wrong with a certain level of trade in food and agricultural products. Not all countries can reach self sufficiency, and the world's economy is, whether we like it or not, still largely based on exchange. But the problem with a trade-based agricultural sector is that nations become totally dependent on the kindness of the market for imports as well as for exports. The market may be invisible, but it is not kind. In the Middle East and in countries in conflict in general, this is compounded by the power relations that can be exerted by the local bullies over those who are weaker. The Israeli blockade on Lebanon after the 2006 aggression (and everybody seem to have forgotten that there was an effective blockade), is an example. The closure of the Syrian borders, which is always a looming threat and which was used on Lebanon by Damascus during the Nahr el Bared crisis in May 2007 is another one.

So, while it makes sense to seek and obtain larger profits from specializing and exporting farm products, this process, once analyzed, shows its flaws: the "comparative advantage" is often unfair or unsustainable, and in any case unacceptable; and the process increases the vulnerability of the farm sector. The hardest hit are, as usual, the capital-poor and the wage laborers.

The Palestinian Centre for Human Rights has released in March 2008 a very informative (if sad) report about the impact of the Israeli border closure on the strawberry and cut flowers export from Gaza. (Thanks Marcy for forwarding)

"Another farmer, Nathir Rajab El-Attar, has been a strawberry farmer for 12 years. He owns a 15-dunum strawberry farm in Beit Lahia. His losses for last season only amount to about 150,000 NIS due to the closure of crossing and ban on exports. He informed PCHR’s fieldworker, “The Israeli government is waging war against the Palestinian economy. The aim of the siege is to destroy what remains of the Palestinian agricultural sector in order to increase the dependence of the Gaza Strip on Israeli products.” He added, “The permission to allow the export of limited quantities of strawberries was a smoke screen. At best, we exported less than 9% of our produce. And part of this allowed export expired at the Karm Abu Salem Crossing due to the prolonged wait of the produce directly under the sun … Our lives have been poisoned. We farm the land; then we destroy the crop or sell it dirt cheap. I do not know if I will farm my land again. I own 50 dunums of land planted with potatoes. Most probably, I won’t be able to spray it with insecticides that are not available. Insects and disease will, undoubtedly, destroy the crop.”

In the absence of planning and strategic thinking (and this is NOT expected from individuals, this is a state's duty) this is the situation that has developed: Gaza is hungry as it became dependent on Israeli food imports, now blocked. Cut flowers produced in Gaza cannot be eaten, and strawberries won't do either. Intensive farming has become the norm, which also allows control over agricultural inputs. Farmers and farm workers are desperate and joining the ranks of the unemployed.