Every Jewish purchase of land in the Galilee is helping to strengthen Jewish sovereignty in Northern Israel by making less land available to those who wish to take it from the Jewish People.
Our management uses Jewish labor (Avoda Ivrit) exclusively. This has many benefits including creating jobs in the region and getting Jewish youths to go back to our roots and develop a real appreciation for the Land of Israel. Also, by working the land we are discouraging Arab thieves and bullies from illegally occupying these lands.
More young Jews working in the fields will encourage more young Jews to live in the Galilee which is sorely needed to stem the demographic takeover by the so-called Arab Israelis.
While it is true that the initial rate of return on investment is very low, once the trees are mature, they can produce large annual amounts of top quality olives. Olive oil has been proven beyond a doubt to have many health benefits and each year consumption grows steadily. Over time, it is safe to say that this type of investment will be a steady income producing asset even though the returns may not be the most impressive.
The property is being bought without any loans, liens, or any debt whatsoever. Olives are among the sturdiest trees and can withstand severe water shortages (although yields would suffer).
It is not the objective to purchase these types of lands for speculative purposes. However, there is always the long shot that a road may need to be built or a neighborhood of housing or industry expanded whereby compensation far and above the much cheaper agricultural rates have been paid in past similar situations.
Another higher return possibility of olive growth:
Currently all estimates are based on domestic Israeli sales only. In general, our highest quality made in Israel Suri Olive Oil would easily sell for good money if exported to the right markets.
In most cases, lands which we are taking over to manage are not olive orchards and need to be developed. Due to the religious restrictions of not being able to harvest the fruit for up to 4 years, the buyer of a property will not see any income at all during this period. After Orlah (4th year), there is some income from olive oil sales but generally a few more additional years are required to see greater amounts of oil from more mature trees.
The current properties available are without productive orchards and need to be developed. There are some other types of fruit trees on the properties that need to be removed because they are not productive.
The purchaser pays for the land and the taxes connected to its purchase. Charges are a one time fixed price for Set up and four (4) years of management. The start up and management agreement page lists all of the services and supplies that are used by Management to setup and develop the Olive orchard for the first four (4) years.
In most cases the purchaser is receiving 25% of the sale price. Management is receiving 75% of sales. The following is what Management is responsible for after the initial four (4) year period:
-Water management: Watering as necessary. Repairing and/or replacing all piping and irrigation material as needed. Management pays for water use.
-Regular spraying against infestations.
-Clearing the orchard of weeds, etc.
-Annual pruning of trees after harvest.
-Clearing the land after harvest.
-Insuring the trees.
-Picking the olives during harvest season using Jewish only labor.
-Transporting the olives to the Jewish owned press to make oil.
-Storing large jugs of oil for a few months until all the unnecessary sediments settle.
-Bottling of oil in more consumer friendly sizes.
-Labeling each bottle.
-Selling and marketing of bottled oils.
There are many variables that determine how much oil and what quality of oil will be produced from an olive orchard. We will use examples using a dunam (1,000 meters of land):
-More rain in the rainy season means less water is to be used in the non-rainy season.
-Less rain and hotter than usual summer weather means more water will be used.
-Olives that are picked at the end of the season are fatter and juicier with more oil.
-Olives that are given too much water produce lower quality oil.
-Properly managed trees will produce much more olives after 8, 9 years than after 4 or 5 years.
-In Israel, there is a pattern of one very good year for olives followed by one weaker year for olives.
-Better care and proper nourishment will yield bigger, more numerous, olives.
Following the first four (4) years, it is religiously acceptable to harvest the fruit from the trees. However as mentioned above, because the trees are still young at that age, the volume of olives will not be that high. For example, a full grown tree can produce anywhere from 30 to 100 kilos of olives in a year, while a four (4) year old tree will produce a fraction of that.
A) 40 kg per tree yielding 20% oil:
40 x 36 trees per dunam = 1440 kilos x 20% = 288 liters of oil. Today’s high quality boutique Suri olive oil sells for NIS 50 per liter. 288 x 50 = NIS 14,400 and now divide it by 3.55 (dollars) and you have $4,056 x .25 (buyer’s percentage) = $1,014 to the buyer(s) for a dunam.
If the buyer paid for all included $27,000 all included for a dunam this would be an apx. 3.75% return for the year.
B) 70kg per tree yielding 22% oil:
70kg x 36 trees per dunam = 2,520 kilos x 22% =554 liters of oil x NIS 50 per kilo = NIS 27,700 divided by 3.55 = $7,802 x .25 = $1,950 to the buyer of a dunam.
Same purchase price as A means an annual yield of: 7.2%
Over the first few years, this certainly isn’t an attractive investment. However, if you take the benefits of what the work is doing for Israel and the Jewish People and combine it to when the trees are more mature, you should have an important income producing asset.