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OECD Review of Agricultural Policies: Israel 2010

image of OECD Review of Agricultural Policies: Israel 2010

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. Israel is a world leader in agricultural technology, particularly in farming in arid conditions. 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. 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.

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Policy Trends and Evaluation

Israel has implemented substantial economic policy reforms since the mid-1980s. Major reforms in the agricultural sector began in the early 1990s and continued into the 2000s. Trends in agricultural and related policies during 1990-2008 are discussed in this chapter, followed by an evaluation of the support provided to agricultural producers. Section 2.1 describes the framework of Israeli agricultural policy. The framework is examined with regard to key policy objectives, legal and institutional arrangements for administering agricultural policy, and the major instruments employed to implement policy. Section 2.2 provides an overview of domestic agriculture-related policies. The section comprises the following sub-sections: price support measures, income support measures, reduction of input costs, insurance systems, environmental measures, rural infrastructure, rural development programmes and overall budgetary outlays. Trade policies relating to the agro-food sector are examined in Section 2.3. The section outlines the overall reforms of the trade system, the objectives of Israeli trade policy in the agro-food sector, agro-food export and import policy measures applied by Israel, and trade relations. Finally, Section 2.4 quantifies the extent of support provided to agriculture and the cost that this imposes on Israeli consumers and taxpayers.

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