Overview

Israel's agriculture is unique amongst developed countries in that land and water resources are nearly all state-owned and that agricultural production is dominated by co-operative communities. Since the late 1980s, agriculture has benefited from: a stable macroeconomic climate; policy reforms; high levels of investment in R&D; a developed education system; high-performing extension services; and accumulated farm management expertise. Israel is a world leader in agricultural technology, particularly in farming in arid conditions. Israeli agriculture thus relies on an induced , rather than natural , comparative advantage, one built on knowledge and technological progress. This Review measures support provided to Israeli agriculture and evaluates the effectiveness of current agricultural policy measures. Israel has made progress in removing policies that distort trade and resource allocation, and support to agriculture is lower than the OECD average. However, the government still plays an important role in farming. This is reflected by its involvement in the allocation of key factors of production - land, water and foreign workers - and by high border protection, subsidisation of water and capital and measures securing profitability for milk and egg producers. The report suggests further agricultural policy reforms to reduce costs for consumers and taxpayers and to improve the efficiency of current policy measures. A special focus of the report is the environmental performance of Israeli agriculture. This is already an issue with scarce land and water resources, accentuated by the overarching issue of climate change. The Review examines agriculture's performance with respect to water resources and pollution, soils, biodiversity, air emissions and climate change. It concludes that strengthening policy coherence, especially in improving the management of water resources in agriculture, is important. The data used for the calculation of the level of agricultural support (PSE/CSE) in Israel and complete documentation of definitions and sources are available at: www.oecd.org/agr/support.

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