Israeli Food Makers Seek Solution to EU Settlement Sanctions

Israeli manufacturers are preparing for increased limitations on imports to the European Union of products produced in the settlements. The European Union may ban outright foods grown or raised in Israeli settlements or manufactured foods using raw materials from settlements.

The EU bans the import of organic produce from settlements. From September 1, it will block the entry of all animal products, including eggs, poultry and dairy. Israeli industry figures fear the ban could be extended to conventionally grown produce and will force Israel’s food export industry from using produce grown in the settlements.

This would include not only West Bank settlements but also the Golan Heights and East Jerusalem.

The Agriculture Ministry, in partnership with the economy and foreign ministries, is trying to persuade the EU to reverse the decision, but it is also preparing Israeli producers for its implications.

The official EU reason behind the decision is public health. Since the European authorities do not recognize Agriculture Ministry activity beyond the Green Line, food from the area is considered unregulated.

According to the Israel Export Institute, in 2013 Israel exported some $87 million in processed fruit and vegetable products to the EU, out of the total food exports of $365 million. This includes goods from both sides of the Green Line.

One source said the EU’s approach suggested that it was likely to extend the ban to foods manufactured in Israel proper using produce grown in settlements. That would effectively bar Israel’s food industry from exporting to Europe. To counter the ban, companies would have to create two production lines, with goods designated for Europe using only ingredients sourced from within Israel’s pre-1967 borders.

“This is an illogical expense for the entire industry. The agriculture, foreign and economy ministries are trying to keep the EU from toughening its stance in conversations in Brussels. This is unquestionably a very significant tightening of restrictions in exports to Europe. We are cautiously optimistic, but if the move goes forward Israel must adapt to European regulations,” one source said.

In 2012, the EU stopped recognizing the area beyond the Green Line as Israeli. Exports from this area did not receive the import duty benefits of Israel’s free-trade agreement with the EU.

But different EU agencies interpreted this decision differently. In 2013 the EU stopped recognizing Agriculture Ministry supervision of organic agriculture in the West Bank and banned the import of this produce on the grounds that because it was unsupervised it posed a danger to public health.

A workaround was found for these goods, through July 2015: Companies registered in Palestinian towns would buy the produce and export it to Europe, under the supervision of a Swiss firm.

In February, the EU decided to stop recognizing Agriculture Ministry veterinary supervision beyond the Green Line, from September 1. That means Israel will have to stop exporting poultry and other animal products from the territories to EU markets.

Israel exported $36 million in processed meat products to Europe last year.

Off Tov, which exports chicken products to Europe, will set up different production lines for chickens raised in the settlements and those raised within the Green Line. A European delegation came to observe the setup last month.

Last week, the Agriculture Ministry’s veterinary services sent a letter to dairies, instructing them to separate raw milk from the settlements from that produced within Israel proper.

In opposing the planned sanctions, Israel argues that they will hurt Palestinian workers, for example at dairies in the Jordan Valley, and damage Israeli-Palestinian relations.

In the meantime, Israel plans to increase agricultural exports to Russia, in the wake of Moscow’s restrictions on European imports.