Intergenerational Succession A Key to the Survival of Family Farms in Moshavim

Intergenerational succession is essential for the long-term survival of family farms in Israeli moshavim (cooperative villages). This article provides a theoretical framework for the analysis of optimal farm succession decisions and reviews empirical results showing that the survival and growth of family farms depend crucially on having a successful succession plan. Empirical results show that both farm investments and farm growth increased sharply upon the transfer of the farm to a successor. On dairy farms, the existence of a designated successor was associated with a higher tendency to invest and expand production and a lower tendency to stop producing. The actual succession was also a trigger to invest in farm infrastructure and equipment, and increase the level of production, thereby increasing the prospects of economic resilience and long-term farm survival.