The role of agriculture in rural well-being: The case of Israel

Are households in rural communities that rely more heavily on agriculture able to achieve standards of living comparable to other rural households? This paper answers this question in the context of Israeli Moshav villages. We find that the relative importance of agriculture affects rural income negatively, so that households in communities that rely more heavily on agriculture are worse off. Provided that the global decline of agriculture will continue, the challenge of policy makers is to create alternative employment opportunities in rural areas that will smooth the occupational migration out of farming and prevent rural poverty.