Green Business: From the West Bank, Fair-Trade Olives

A Palestinian entrepreneur boosted the price paid for organic olives and has grown to become the West Banks biggest exporter of olive oil

Nasser Abufarha was sipping coffee at a Madison (Wis.) café called Michelangelo's a few years back when it dawned on him how he might help struggling olive growers in his native Palestine. If the crowd could derive virtuous pleasure from mugs of "fair trade" organic coffee, they might be convinced of the superiority of organic oil pressed from West Bank olives.

Abufarha, a graduate student in anthropology at the University of Wisconsin in Madison, wrapped up his dissertation on suicide bombers and headed home to the West Bank. The olive farming industry there was in a shambles. Yields were low due to poor soil treatment, and farmers were barely breaking even—leading many to abandon their fields and migrate to Palestinian cities, where unemployment hovered around 40 percent.

Tapping into savings from running a Middle Eastern restaurant in Madison, Abufarha in 2004 invested some $100,000 to start a company he called Canaan Fair Trade. The son of a watermelon farmer, he offered growers nearly twice the going rate during the olive harvest that year and soon started shipping oil to the U.S. and Europe. "It clicked to me—if we can take [the fair trade] concept to Palestine, we can bring wider market access to Palestinian farmers," Abufarha says in lightly accented English while piloting his mud-splattered Land Rover along the potholed road to his olive press in the village of Burqin.

Canaan supplies organic olive oil to retailers in more than half a dozen countries, including Whole Foods Market in the U.S. and J Sainsbury in Britain. The company also provides the raw material for an olive oil line of Dr. Bronner's Magic Soaps and has added sun-dried tomatoes and other products that follow the fair trade movement's principles of sustainability and improved incomes for marginalized farmers.

The company works with more than 1,500 farmers in 43 villages. Canaan accounts for more than half of all West Bank olive oil exports, and sales are expected to be as high as $5 million next year with profits exceeding $600,000, says Abufarha. Its products come in folksy packaging, and on a winter day about two dozen employees deliberately apply off-kilter labels to bottles to make the olive oil seem more artisanal.

Abufarha, 46, successfully turned the Palestinian olive oil industry's system for production and payments on its head. Before he arrived, exports were rare and most olive pickers brought their produce to local presses during the harvest, receiving a small amount of cash and a portion of the oil to sell on their own. In 2008, Canaan opened a $500,000 pressing facility with equipment imported from Sweden. The company started offering growers guaranteed prices, allowing them to make investments in their fields and increase production.

In 2003 Mahmoud Samara was earning about $2.80 per kilo of olives and worried that he would have to abandon the 14 acres his great-grandfather once tilled. Then Canaan started paying $4.45 per kilo, giving him extra cash needed to improve his trees and buy more land. "I used to have to bargain with local pressers and make pocket change each time, which made my business very unstable and meant I had to store the olive oil at home," Samara says in an unheated conference room at Canaan's headquarters, a stone building surrounded by olive groves. Samara was already using sheep manure to fertilize his land, so he followed many of the organic techniques Abufarha required, he says. He now makes about $22,000 yearly, up from $8,000 before he started working with Canaan.

Abufarha hopes to double sales, to $10 million, in the next three years and build more olive presses to accommodate a growing list of farmers. He sees his initiative as a model for other Palestinian businesses that might similarly build bridges between Palestinian villagers and liberal and affluent communities in Europe and the U.S., where he still spends several months a year. "I could have been an academic back in the U.S., but with Canaan I make a much better living while helping out my people," he says as a thunderstorm outside the door lashes olive trees believed to date back to the Roman empire. "We have these olives that have been feeding us for over 1,500 years," he says. "Now they're finally being sold in the West."

The bottom line: A Palestinian entrepreneur boosted the price paid for organic produce and has become the West Bank's biggest exporter of olive oil.

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