Week 10 text

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Officials predicted at the time that the complete and sudden cutoff of government aid-without much of a support system to ease the transition- would cause a mass exodus of farmers walking off their land. 

In response to emailed questions from The Daily Signal, Clark says the government provided a “exit grant” to farmers who wanted to leave their jobs, amounting to about two-thirds of their previous annual income. In addition, he says, low-income farmers were entitled to social welfare support.

"It's easy to look back at it  and say this was a good decision and farming benefited, but to actually live through it was a very difficult experience," McTigue, the New Zealand politician says.

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Still, the sudden removal of government support had less impact than expected. Only about 800 farms, or about 1 percent of total farms at that time, took the exit grant, he says.

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Farm bills are an inside game. Politicians never give the public a good reason why U.S. agriculture needs to be coddled by the government. Members of Congress focus on grabbing more subsidies for home-state farmers, and they rarely discuss or debate whether all this federal aid is really needed.

It isn’t needed. New Zealand’s farm reforms of the 1980s dramatically illustrate the point. Faced with a budget crisis, New Zealand’s government decided to eliminate nearly all farm subsidies. That was a dramatic reform because New Zealand farmers had enjoyed high levels of aid and the country’s economy is more dependent on agriculture than is the U.S. economy.

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Before the reforms were launched, New Zealand’s horticultural industry was small and largely domestically focused.

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Innovation of farming-sheep to dairy

Productivity in agriculture has grown faster than the New Zealand economy as a whole.

New Zealand’s dairy farmers today produce 2,200 products from milk, compared to about 35 before the reforms, McTigue says, including antibody milk and chocolate cheese.

The country also has a thriving wine industry that barely existed prior to the reforms. Despite these successes, New Zealand’s dairy industry has experienced tough times in the last three years, as farmers face persistently low milk prices.

Improvement/Productivity of farming

Improvements on the farm have affected sheep farming. Lambing percentages have increased and lambs have become bigger, meaning that fewer ewes are now needed to produce the same volume of meat. This has contributed to a rise in the volume of sheepmeat exports, despite falls in sheep and lamb numbers.

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Since the reforms, New Zealand farmers have cut costs, diversified their land use, and developed new products, Clark says.

In particular, the removal of subsidies for the development of marginal land into pasture for sheep grazing has meant that farmers have had less incentive to convert indigenous bush and other marginal land to other uses.