New Zealand government's involvement in agriculture : the road to non-sustainability

Abstract

Why did a small urban based population think it could subsidise it's dominantly export agriculture? What pre 1984 policies, created a non sustainable, subsidised New Zealand agriculture where increased output was worth less than the cost? The election of a Labour Government by an urban based population, World War II, introduction of modern agricultural technology and a commodity boom lead to policies aimed at increasing agricultural exports to fund the imports required by an expanding, protected manufacturing sector. These resulted in a burgeoning bureaucracy and an increasingly uncompetitive economy. Specific problems were fixed on an ad hoc basis but the watershed was the UK joining the EEC and NZ’s loss of a guaranteed market. The policy response was to encourage farm production with a complex suite of measures, without regard to international competitiveness. This paper outlines the economic and agricultural policy context that lead to the radical surgery of 1984.