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Pilot: Guaranteed pricing for West Bank farmers

 

In the Jordan Valley, 30 Palestinian farmers are piloting a new concept: a Price Guarantee Fund (PGF), which will give a minimum price to participating suppliers of targeted export crops. First announced at the Palestinian Investment Conference in June, the PGF is the first in the West Bank to support agricultural export supply chain development.

EDIP’s AESCD representative (on left) visits a greenhouse farm in Jiftlik in the Middle Jordan Valley.

Administered—for now–by the Enterprise Development and Investment Promotion (EDIP) project and initially funded by USAID, the PGF works as insurance, in which Palestinian processor PalGardens pays a predetermined price based on historical data and costs of producing cherry tomatoes and bell peppers. If the market pays above that, the surplus goes back into the PGF, replenishing it for the next season.

The Jordan Valley’s unique climate makes it an ideal supplier of off-season produce to European and Russian markets. Yet Palestinian farmers have been reluctant to explore them in favor of established, but less profitable local markets. The PGF will mitigate price fluctuation risk, encouraging farmers to steer more production to overseas buyers who will pay more for higher-value crops.

EDIP will also deliver technical assistance, agricultural extension services and set up demonstration farms to improve participating farmers’ quality and production methods. If successful, the PGF will be extended to other farmers throughout the West Bank.

Published October 2010