Agricultural relations between Jordan and the West Bank have undergone significant transformations during the past four decades. Trade between the two sides was completely free until 1967, and surplus produce from both of them was further transported to other neighboring Arab countries without important obstacles.
Following the onset of Israeli occupation in June 1967, trade across the bridges was restructured in accordance with Jordanian and Israeli policies. On the Jordanian side, it was demanded that each consignment carry a certificate of origin and a permit from the Ministry of Agriculture. Permits are issued in accordance with local needs, and dates of entry are adjusted so that they do not compete with Jordan's local produce. The number of lorries permitted entry into Jordan was restricted to that which was in operation prior to June 1967.
On the Israeli side, the bottom line of their policies in regard to agricultural trade across the bridges is that imports from Jordan are practically banned, while exports are free, and often actively promoted. But traffic across the bridges has been burdened by a complex set of regulations which impede normal and efficient flow of produce. The fees levied on lorries are so high and "security" checks are so elaborate and clumsy that transportation costs have soared to abnormal levels (around $70 per ton). Besides, empty boxes are not permitted re-entry into the West Bank, presumably on security grounds, thereby entailing a significant rise in marketing costs.

Exports - Rise and Fall

Despite numerous regulatory obstacles, agricultural exports to and via Jordan rose to high levels during the earlier half of the occupation era, mainly because Palestinian produce was still in high demand. Such export markets as Jordan, Iraq and Iran absorbed enormous quantities of Palestinian produce up until the early eighties. But things have started to change rapidly since the mid-eighties, mainly in response to a sharp rise in production in Jordan. Furthermore, the volume of exports, especially of citrus, has severely declined as a consequence of the Iran-Iraq war.
More importantly still, Palestinian farm produce has been steadily losing its competitiveness in the Jordanian markets. This has been ultimately an outcome of a wide range of superior natural attributes and positive developments in Jordanian agriculture, as opposed to severe restrictions and constraints confronting the Palestinian agricultural sector. For instance, Jordan enjoys a much superior land topography and a relatively more abundant and cheaper supply of irrigation water, and Jordanian farmers enjoy the benefits of a much more vigorous system of supportive services. All these comparative advantages have led to a substantial growth in Jordanian agriculture, as well as to a pronounced rise in its productivity (see Appendix for comparative indicators on agriculture in Jordan and Palestine).
The relative competitiveness of Jordanian farmers is further bolstered, vis-a-vis those in Palestine, by a lower price structure of production inputs. For instance, wages and the price levels of irrigation water in Jordan are less than one-third their levels in Palestine. Furthermore, the level of supportive marketing services accorded to Palestinian farm produce (e.g. grading, packing, storage, transportation) is noticeably lower than in Jordan, and it has failed to catch up with rising market standards. In addition, Jordanian agriculture is supported by a modern system of physical and institutional services which is far more developed than those in Palestine, such as roads, communication, water projects, planning, research, credit extension and cooperatives.
The aforesaid transformations in the production and marketing system have resulted in a sharp decline in the volume of fruits and vegetables shipped across the bridges which has dropped from 224,000 tons in 1984 to an average of 44,000 tons during 1990 -1993.
Possibly, some of the factors which bring about a decline in the competitiveness of Palestinian produce in Jordanian markets can be ameliorated in the future, such as easier traffic, lower cost of transportation across the bridges and improved marketing services. Yet, because of numerous attributes, production costs in Palestine will stay considerably higher than in Jordan. This will severely weaken the competitiveness of Palestinians in Jordanian and Arab markets. Indeed, should trade with Jordan be freed in both directions, considerable amounts of produce might start flowing from Jordan into Palestine.

Prospects

This study concludes that Palestinian producers have a long way to go in order to improve their competitiveness in neighboring Arab markets. Specifically, they should attempt to reduce the cost of inputs, raise their productivity, improve marketing services, and diversify their production patterns. But even then, they cannot hope for more than modest exports to Jordan and other Arab markets. In contrast, Palestinians can possibly enjoy ample opportunities in the Israeli market, should restrictions on entry to that market be lifted and subsidy policies in Israel be abolished.
In addition to maintaining a limited yet important level of exports to neighboring Arab markets, cooperative relations between Palestine and Jordan can be initiated and vigorously promoted in the following areas:

1. Procurement of production inputs, such as fertilizer, fuel, pesticides, and nylon sheets. This will help correct the trade deficit with Jordan, and stimulate Jordanians to have a more cooperative attitude in relation to imports from Palestine. Furthermore, this will help reduce production costs on the Palestinian side.
2. Establishment of stronger coordination with the Jordanians in all institutional areas relating to agriculture. In particular, cooperation is imperative in relation to planning of production patterns, so that surpluses are minimized.
3. Promotion of active cooperation in the areas of research and technology transfer. Both sides can learn a lot from each other, especially in view of the tangible differences in growth patterns of their agricultural sectors during the past two decades.
4. Lastly, and probably most importantly, by embarking on cooperative water policies, Jordan and Palestine can reap substantial benefits. This is a high priority which has to be explored at length and before more time is wasted.

This is a summary of a study recently published by the Center for Palestine Research and Studies in Nablus. The original is in Arabic.

References
Al-Qadi, Abdel Fattah. A Study of the Ghor in the East Bank of Jordan (Arabic). Amman: Department of Agricultural Economics, 1983.
Awartani, Hisham. Artesian Wells in the Occupied Palestinian Territories (Arabic). Jerusalem: The Palestinian Hydrology Group, 1992.
Israel. Israel Central Bureau of Statistics. Judea, Samaria a/ld Gaza Statistics. Jerusalem: 1993. Jordan. Department of Statistics. Annashra al-Ihsa'iah al Sanawiyyah (Statistical Yearbook).
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---. The Central Bank of Jordan. Annual Report. Amman: 1992.
---. Department of Agricultural Economics. Annual Report. Amman: 1992.
The United Nations. Conference on Trade and Development. Palestinian External Trade under Israeli Occupation. Geneva: 1989.