| After nearly fifty years of stability and stagnation of dairy market regulations in Israel, a dramatic policy reform has been enacted in 1999. The reform enabled farm households, for the first time, to trade production quotas. In addition, the reform signaled to farmers that milk prices will gradually go down in real terms, and therefore only producers who expand and become more efficient will prevail. The reform allowed for generous financial support for investment in expansion, but also required the adoption of environmental regulations which could be costly to many farm families. This paper uses data from a census of small family-operated dairy enterprises that was conducted in 2001, in order to analyze the response of farm households to the reform. The... |
