New Zealand agricultural policy reform and impacts on the farm sector : detailed historical analysis addressing the issue of the specificity of the farm sector

Abstract

This research analyses the effects on the farm sector of the reform of New Zealand agricultural policy undertaken in 1985. This analysis is placed within a discussion of the larger issue of the specificity of the farm sector and whether this specificity requires special support from the state in most of the developed countries. This study describes the crisis of the New Zealand economy at the beginning of the deregulation process and explains why the farm sector was at the centre of the reform. The removal of state support to agriculture and the transition measures set in place are documented. The research also analyses the effects of the reform on farms both at the structural level and in terms of farm incomes. The sheep and the dairy sectors are analysed in detail. The analysis concludes that the farm sector has maintained its level of economic activity despite important reductions in state support. Finally, this study discusses some lessons that can be obtained from the New Zealand experience, notably in relation with the specificity of the farm sector.