Support of the New Zealand agricultural sector : A dissertation submitted in partial fulfilment of the requirements for the degree of Bachelor of Agricultural Commerce with Honours in Economics in the University of Canterbury

Abstract

This dissertation addresses the government support of agriculture issue. The debate over the desirability of government intervention is far from resolved even though some evidence exists that it results in resource misallocation. It is likely that some form of government support or protectionist agricultural policy will continue in the future. This raises the need for the development of a theoretical framework of the policy instruments availability to meet agricultural objectives. Complementary to such a framework is an attempt to determine the ubiquitous effects of policy implementation on the structure of the agricultural sector. This dissertation addresses both of these needs: firstly developing a framework of available support mechanisms discussing the differences in their operation and effect, and secondly using a model of the New Zealand Pastoral Sector to simulate the effects of support policies on the sector's structure and output. By analysing the effects of various support mechanisms this dissertation provides a framework to facilitate the cost efficient and resource misallocation minimising selection of policy instruments targeted to meet agricultural policy objectives.