Milk and dairy factories in Gaza have steadily defied the Israeli siege imposed since 2007, maintaining capacity and productivity in the face of imported milk and dairy products from more modern and more productive factories in Israel and the West Bank. Despite their technological and financial vulnerabilities, the Gaza factories have become a critical part of the livestock sector, which has declined due to the various wars with Israel.
In the Zaytoun neighborhood, east of Gaza City, lies the Dalloul cheese factory, in operation since 1998. The enterprise had to move three times between 2008 and 2014, after being shelled by Israel for allegedly sheltering rockets. The factory’s owner, Mamoun Dalloul, 40, rebuilt it every time.
“This factory is my source of livelihood and the only work that I know. It was bombed during Operation Cast Lead in 2008, and also in 2010 when Israel was carrying out series of night strikes, and it was bombed in the war of 2012. The storage facilities were also bombed in the last war, in 2014, under the same false security pretenses.”
Before the 2012 conflict, Dalloul had written a letter to European Union headquarters in Gaza City, ultimately in vain, in an attempt to get international protection for his facility. The factory ended up being bombed, and Dalloul could not receive compensation from the United Nations because it was targeted for supposed security reasons.
The Dalloul cheese factory has grown over the years, but it is still a small operation compared with plants in the West Bank and Israel. It returned to production less than a year after the 51-day 2014 war.
Dalloul told Al-Monitor, “Our products, from baladiya cheese, to feta cheese, to yogurt, etc., are sold throughout the Gaza Strip. But we could not restore production of yellow cheese after the damage of the last war, because the machinery we need is barred from entering through the Karam Abu Salem crossing.”
Like other Gaza-made products, Dalloul’s face stiff competition from imported goods. He explained, “We can now produce high-quality Egyptian feta cheese. It has a good market. But we are facing competition on yogurt and other products that have alternatives, which are imported from the West Bank and Israel. They are offered throughout the year at lower prices, and they are of high quality, which attracts consumers who are looking for cheaper products.”
According to the Ministry of National Economy’s latest report, which Al-Monitor obtained, from January through November 2015 Gaza businesses produced 5,058 tons of milk, 10,624 tons of yogurt and 3,432 tons of assorted cheeses. The ministry counted a total of 11 dairy factories, which produce some 23% of Gaza’s total annual dairy needs.
About 50% of the milk that the Dalloul factory uses is in liquid form, while the other 50% is powder imported from Israel. The factory would like to use more natural milk, but production at cattle farms is insufficient, according to Dalloul.
One of Dalloul’s milk suppliers, Ibrahim Abu Shaar, owner of Ibrahim Abu Shaar Farms, told Al-Monitor, “Cattle farmers’ productivity is lower than before. The factories pay 1.8 shekels [$0.45] per liter of milk, which costs the farms 1.6 shekels [$0.40] [to produce]. This forced many farmers to sell their cows or slaughter them during the last Eid al-Adha.”
Taher Hamad, director of the Ministry of Agriculture’s Animal Production Department in Gaza, told Al-Monitor, “Dairy cows produce annually about 17,000 tons of milk in the Gaza Strip, covering 15% of the Strip’s needs.” Hamad said the livestock sector began to shrink in 2008 for a number of reasons, noting, “Israeli authorities put many restrictions on the export of high-quality dairy cattle from Israel to the Gaza Strip,” and further explained, “Demand for cows in Israel is high, which is why it [Israel] does not export cattle except those that are old, have low production, or birth defects.”
Citing other factors, Hamad asserted, “The high price of imported feed and the lack of natural pastures have increased costs for farms. That is in addition to the deaths of cows during the 2014 and previous wars, which led some farmers to stop breeding dairy cattle.”
According to Ministry of Agriculture statistics obtained by Al-Monitor, about 142 out of 150 cow breeding operations in Gaza were damaged in the 2014 war. This heavy loss reduced the number of dairy cows to 2,600 head, whereas in previous years more than 5,000 had been recorded.
In the Nuseirat refugee camp, in the central Gaza Strip, Mustafa Eid, 34, owner of the Khalij factory, complained of the lack of raw material needed for dairy production, such as salt and powdered milk, which is used as a substitute given the shortage of natural milk.
Despite the high production costs, Eid has decided to stay in business. He told Al-Monitor, “We are trying to satisfy consumers who are looking for the cheaper product. But some consumers do not buy national products made in the West Bank or the Gaza Strip and choose to buy Israeli products, because they view them as of higher quality since they are subject to consumer protection controls.”
The owners of the Dalloul and Khalij factories both said they follow quality standards even though they have not received quality standard certificates from the Palestine Standards Institution (PSI). Their factories are technically subject to routine monitoring by the Ministries of Health and the National Economy.
Hani Matar, director of the Export Promotion Department in the Ministry of National Economy in Gaza, told Al-Monitor, however, “Factories operating in the Gaza Strip do not receive certificates for health and quality standards because the entities authorized to do so, including the PSI, have stopped operating in Gaza since 2009 because of the internal Palestinian division. Because of our weak capabilities, all we [the ministry] can do are periodic follow-ups and lab tests to ensure consumer protection. But there is a significant deficiency in our capabilities and screening tools.”
Matar further stated, “The Ministry of Economy is facing difficulty supporting domestic production because imports [are not being restricted] to supply tax revenues that alleviate the worsening fiscal deficit of the Gaza Ministry of Economy.”
– Al Monitor