JOURNAL OF RURAL COOPERATION Centre international de recherches sur les communaub~s cooperatives ruraIes International Research Centre on Rural Cooperative Communities nl'£lln'~ nl"£I' nl~'1'1p ,pn~ ''-3U-C~l'!l.1'1 t,,'-31'1 CIRCOM VOLUME 27 No.2 1999 CIRCOM, International Research Centre on Rural Cooperative Communities was established in September 1965 in Paris. The purpose of the Centre is to provide a framework for investigati.ons and research on problems concerning rural cooperative communities and publication of the results, to coordinate the exchange of information on current research projects and published works, and to encourage the organization of symposia on the problems of cooperative rural communities, as well as the exchange of experts between different countries. Editorial Advisory Board BARRACLOUGH, Prof. Solon, UNRISD, PARIKH, Prof. Gokul 0., Sardar Patel Geneva, Switzerland. Institute of Economic and Social Research, BIRCHALL, Dr. Johnston, Brunei Ahmedabad, India. University, UK. PLANCK, Prof. Ulrich, Universitat CERNEA, Prof. Michael, The World Bank, Hohenheim, Stuttgart, Germany. Washington, DC, USA. POCHET, Dr. Carlos A., Universidad CRAIG, Prof. Jack, York University, Nacional, Heredia, Costa Rica. Ontario, Canada. SCHIMMERLING, Prof. Hanus, DON, Prof. Yehuda, Bar Han University, Agricultural University, Prague, Czech Ramat Gan, Israel. Republic. FALS BORDA, Prof. Orlando, Punta de SCHVARTZER, Prof. Louis, Universidad Lanza Foundation, Bogota, Colombia. de Buenos Aires, Argentina. KLATZMANN, Prof. Joseph, Institut SMITH, Prof. Louis, University College, National Agronomique, Paris, France. Dublin, Ireland. KRESSEL, Prof. G.M., Ben Gurion STAVENHAGEN, Dr. Rodolfo, EI Colegio University of the Negev, Be' er Sheva, de Mexico, Mexico. Israel. STROPPA, Prof. Claudio, Universita di MARON, Stanley, Kibbutz Maayan Zvi Pavia, Italy. and Yad Tabenkin, Ramat Bfal, Israel. Editor: Dr. Yair Levi Editorial Assistant: Daphna Bar-Nes CIRCOM Information for Subscribers: The Journal of Rural Cooperation is a semi-annual periodical, aimed at the pursuit of research in the field of rural cooperation. Editorial enquiries and other correspondence should be addressed to CIRCOM, Yad Tabenkin, Ramat Efal 52960, Israel (Fax: +972-3-5346376). SUbscription rate: $27 per annum (plus $3.00 sea mail; $6.00 airmail). ISSN 0377-7480 Copyright © 1999 by Circom. Israel JOURNAL OF RURAL COOPERATION Vol. 27 No.2 1999 CONTENTS I. ARTICLES De Vries, D. Dependence on the State and the Crisis of the Kibbutz: The and Shalem, E. System of Concentrated Credit in the 1960s and 1970s ..... 87 Lundborg, G. Completing the Chain: Research-Extension-Farmer- Cooperatives - A Nigerian Experience .................... 107 Rosolio, D. The Transformation of the Kibbutz: From a Classless to a Class Society ........................................... 117 Schwartz, M. The Rise and Decline of the Israeli Moshav Cooperative: A Historical Overview ..................................... 129 2. BOOK REVIEWS Birchall, J. The International Cooperative Movement· Y. Don............. .......... ....... .. .. 167 Esteva, G. and Grassroots Post-Modernism: Remaking the Soil of Prakash, M.S. Cultures Y. Levi. .. .. 169 Utting, P. and Jaubert, Discours et Realites des Politiques Participatives de R. (eds.) Gestion de l'Environment - Le Cas du Senegal I. Guershon ...................................... 171 3. CURRENT INFORMATION Dissertation Abstracts. 173 In Memorian: S.K. Saxena. 177 Call for Papers: World Congress of Rural Sociology. .. 179 The Rise and Decline of the Israeli Moshav Cooperative: A Historical Overview by Moshe Schwartz J. Blaustein Institute for Desert Research Ben Gurion University of the Negev, Israel Abstract The moshav (village smallholder cooperative) emerged in the early 1920s. In the next three decades, its cooperative structure and rules underwent some changes, in response to developments in its environment. During Israel's first statehood decade, the moshav became the country's most prevalent form of agricultural settlement. Then, for almost thirty years, structure and rules were "frozen", despite the transformations which swept Israel's social, political and economic landscape. This "freezing", it is claimed, was allowed by insulation: the Zionist Movement and the State of Israel set up barriers, partly separating the moshav from the economy of the country in each of the four markets of classical economics (commodities, labor, capital, and land). Stabilization also occurred through recurrent government bail-outs, often channeled through powerful regional organizations which were linked to the moshavim through unlimited mutual financial guarantees. These bail­ (Juts softened the "budget constraints" of the moshavim. In \985-86, almost all regional moshav organizations became insolvent, in the wake of stringent anti­ inflationary measures enacted by the government. An unprecedented financial crisis befell the moshavim, whose "budget constraints" were hardened as the government no longer provided them with unlimited (albeit unwritten) financial guarantees. The moshav "unfroze". Slow processes - decooperativization, the decline of agriculture, occupational change, suburbanization, loss of municipal autonomy and legal change - were considerably speeded up. We suggest that the acceleration of these processes was due to the hardening of the budget constraints of the moshavim as well as to the lowering of the barriers which had insulated them from other sectors of the country's society and economy. Beginnings: The Pre-Statehood Period Originally, the moshav was a reaction within the Zionist socialist movement to the intense collectivism and egalitarianism of the kibbutz (collective settlement). The moshav emerged as a compromise between those values and the preferences of its founders (Weintraub et aI., 1969; Nevo, 1978). Their individualism found expression JOLIRNAL OF RURAL COOPERATION. 27(2), 1999: 129-166 ISSN 0377-7480 © DO M. SchwariZ in the role they assigned to the nuclear family as the basic unit of production and consumption. The moshav affiliation with the Zionist socialist movement explains: I. the selection of its site by national decision-making bodies, such as the Jewish Agency; 2. its location on nationally owned land; 3. the planning of its physical and economic framework by a national organization, the Jewish Agency's Settlement Department, which has been in charge since the early 1920s of establishing new rural settlements and assisting them until they achieved self-reliance; 4. its dependence on land and capital allocated by the Jewish National Fund and the Settlement Department; and 5. its adoption of the principle of self-labor, whereby the farmer and his family were to cultivate the land by themselves, without recourse to salaried labor. The egalitarian principle was manifested in the equal distribution of land and capital among the smallholder units of the moshav. The collectivist spirit of the period found expression in: 1. the adoption of the principle of mutual assistance; 2. cooperative arrangements for activities such as marketing and the provision of water and agricultural supplies; 3. the authority held by the collective decision-making bodies of the Moshav Association (Members' Assembly and Village Management Committee) over the economic decisions of the family units. Many would-be settlers found the moshav attractive. It would allow them to be pioneers, while leading a conventional family life. Also, the family units could accumulate some property, and the children would sleep at home rather than in children's houses as was customary in kibbutzim (pI. of kibbutz). Besides, every moshav family earned according to what it produced, and the early moshav members believed this arrangement to be more equitable as well as more efficient than the extreme egalitarianism of the kibbutz. Above all, for those lacking the means to purchase land and unwilling to live in a kibbutz, joining a moshav was the only way to become farmers. Indeed, nuclei of would-be moshav members waited patiently for as long as 5-! 0 years to receive a piece of land, to be able to set up a moshav of their own (Weintraub et aI., 1969). The moshavim (pI. of moshav) established in the 1920s were economically successful. An official inquiry conducted by the Zionist Movement showed that most of them achieved better results than the kibbutzim (Campbell, 1928). Times were harder for the moshavim established in the 1930s, which lacked means of production Rise and Decline or the Israeli Mos/lllv Cooperative 131 (the Zionist movement, impoverished by the World Economic Crisis, being unable to provide them), and whose members had to work outside their moshav in order to make a living. However, the situation of the moshavim improved during the Second World War, which brought in a large British military contingent, while making it difficult for food imports to reach Palestine. The soldiers required fresh vegetables and the British Army was willing to pay. Moshav incomes increased rapidly, in real terms. Meanwhile, war inflation eroded the debts accumulated in the 1930s, improving the financial standing of the moshav members. For the first time, they attained modest affluence. Additional moshavim were set up during the Second World War while a few others were established between it and the foundation of Israel and settled by demobilized veterans of the British Armed Forces. The establishment of those newer moshavim, as well as the absorption of immigrants by older moshavim,