The Jewish National Fund’s board voted late on Wednesday not to renew a half-century old agreement governing its relations with the Israeli government, a move that means the organization will begin gradually taking back control of vast amounts of land now managed by the state.
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The land involved amounts to some 2.5 million dunams (625,000) acres, equal to 12% of territorial Israel and 20% of all the land not counting the thinly populated Negev region.
The decision comes weeks after the Finance Ministry informed the JNF it was planning legislation that would require the organization to turn over 65% of all income it derives from the land to the government. The funds would be used by Israel for infrastructure projects aimed at increasing the supply of housing.
The JNF, which bitterly opposed the plan, said in a statement released after the board meeting that forcing it to hand over so much of its income “constitutes fundamental breach of the  agreement” and will hurt “every citizen of Israel and the Jewish nation.”
“We won’t allow the destruction of the Zionist enterprise and projects the JNF undertakes from its own funds for the public good – forests, parks, bicycle trails, improving land, reservoirs, project in peripheral areas and others – in order to cover budget deficits created by treasury officials,” the JNF said.
The land today is controlled by the JNF – famous among Diaspora Jews for its iconic blue-and-white charity boxes – but has been managed by the government’s Israel Land Authority since the two sides signed an agreement in 1961.
Neither the Finance Ministry nor the ILA was available for comment. The treasury is seeking to get a hold of JNF income as it struggles to tap new revenue sources for the 2015 budget while at the same time trying to reverse a sharp rise in Israeli housing prices in the last several years.
The JNF said the board’s decision came after all attempts at negotiations with the treasury failed to stop what it called the “nationalization” of its assets. It emphasized that its 37-member board represents a wide range of political views but nevertheless approved the decision to hand over the land unanimously.
Refusing to renew the 1961 agreement, means that the JNF will now manage its own lands and will freeze much of the work it now does, including planting and tending forests on state land at an estimated cost of 350 million shekels ($93 million) annually.
It will also cease to contribute the one third of the budget of the ILA. Moreover, the JNF said it would begin selling off some of its land in a way that will “lead to increased competition and lower prices for housing in the country.”