A characteristic of our rural policies is that we seem to treat farm policy and other rural policy as if agriculture and the rest of the rural economy and society are separate. Literature from each perspective tends to ignore the existence and context of the other. There has been enough change in the rural context, however, to require a different approach to rural policy analysis and formulation. We must start from a comprehensive view of the rural economy, including both the agricultural and nonagricultural rural economies. The paper discusses issues that have changed the rural policy context: the changed rural economic structure, macro forces, farm-nonfarm interdependence, and the political arena. These changing contexts create new opportunities for rural policy formulation. The paper concludes by suggesting that agricultural economists will contribute more to systematic knowledge and policy formulation if they base analysis on the changed objective conditions in rural areas, and utilize more theoretically-based analysis.