ABSTRACT

In 1986, strong measures were taken by the Israeli Government to suppress the hyperinflation. The success of these measures sent the Israeli rural sector into a spiral of crises, which resulted in a real revolution. The main trigger was the high interest rate whose impact was especially hard on the farmers and on their co-operatives. It led to the dissolution of many farm co-operatives and eventually to the relaxation of many rules and regulations associated with the two major rural settlement forms: the moshav and the kibbutz. Co-operation in these settlements became optional rather than compulsory, as before. The strict communally managed mutual guarantee system was also abandoned in most moshavim.