Notable & Quotable: Unsubsidized Farming Works in New Zealand

After 80 years of subsidies  –  paid primarily to the agro-giants  –  most ranchers and farmers accept as a matter of faith that farming and ranching is unprofitable and unsustainable as a business without government payments.

Here in the U.S., we should follow New Zealand’s lead and  (1) break up the agricultural concentrations and keep them from re-forming by applying anti-trust laws, and, (2) stop the subsidies. Neither will work without the other.

NOTE: this article was initially published to GlobalFarmerNetwork.org and then quoted on WSJ.com on August 24, 2018. The article and subsequent quote are via Craige Mackenzie.

When I first became a farmer in the 1980s, New Zealand supported agriculture the way so many governments do. Rather than letting us operate in an unfettered free market, it paid us subsidies for our sheep, wool, dairy, and beef.

Then a new government came to power. It viewed farmers as a bunch of privileged, wealthy landowners. We didn’t know it, but while we were pulling weeds from fields and cleaning out pig stys, we had become New Zealand’s landed gentry.

So the government took away our subsidies. It didn’t just reduce them. It didn’t phase them out over a stretch of time. It wiped them out all at once. It cut us off cold turkey. . . .

The irony is that although the elimination of subsidies started out as a kind of political punishment, it wound up becoming a long-term blessing for farmers. We went through a difficult period of adjustment but emerged from it stronger than ever.

My family focused on our farm. When we faced a hard choice, we suddenly had the flexibility to make decisions based on nothing other than good agricultural and business practices. We became ruthlessly efficient, which is another way of saying that we became really good at what we do.

We also improved our ability to resist regulations that hurt agriculture. Subsidies empower politicians, who can threaten to cut off aid if farmers refuse to accept new forms of control. Without subsidies, we have more freedom to solve problems through creativity and innovation rather than the command-and-control impulses of government.

Posted by Chris Gill

Ranching, wildlife management, finance, oil & gas, real estate development and management.

  1. Cesar A. Tijerina González December 26, 2018 at 8:32 pm

    Thank you for this post and your tremendous efforts in making a better world for all of us. We are about (cattle breeders) to start this journey in Mexico. The recently installed new (?) federal administration just brought to 0 the money for the program of Fomento Ganadero.

    It seems a bad momento to do so, esspecialy in the face of so many changes (needed before the necessary transformation that must take place), that need to be implemented in ranches and farms where people just do not seem to understand the problema and bassically continue with that “bussines as usual” attitude. But as the saying goes “there is no better momento that now, to start something”.

    Thanks again for sharing all the this information and results hope to visit with you son with Servando, Juan Manuel and the rest of folks from Chihuahua

    Reply

    1. Thank you for this comment and yes there is no better time than right now to apply improved practices to your ranches.

      “No te rajes”.

      Reply

  2. I wish articles like this were far more in depth. It starts talking about something “great” & then just stops, no….”to read more go here, no….for more information do….” It’s worse then a cliff hanger for the end of the season type shows that you have to wait all summer for fall to come back to learn more.

    So what did Craige Mackenzie or whose ever family & the other farmers do? what do they recommend to other farmers?

    US farmers would be so hosed if this happened to them, too many of them rely on their subsidies that they could very well end up out of business if our Government did that to them.

    Reply

    1. Here is the link to the entire article, and there are some very good comments added.

      https://globalfarmernetwork.org/2018/08/a-new-zealand-farmer-looks-at-subsidies-through-a-different-lens/#comments

      To do this in the US, we would need to go at the entire system, as they did in NZ.

      Thanks for your comment.

      Reply

  3. Thanks for the link. I don’t think that the US could handle losing any of their farm subsidies, dairy or others. Probably the majority of farmers in this country rely on them to function & we’d lose thousands of farmers by eliminating the farm subsides completely like NZ did. But maybe they’d become good farmers again & it “might” help improve the market some…

    Reply

    1. Most farmers – and for that matter Americans in general – now accept as a matter of faith that they could not survive without Big Government. They completely miss that Big Government only takes, it never gives.

      Reply

  4. That’s totally true Chris. But part of the problem with “they could not survive without Big Government” is that, most can’t. They rely on the subsides to help them operate….to pay/reimburse them for the migrant workers too. And some (I know of one personally) rely on the subsides & crop insurance as a way “not” to farm. Unfortunately, I think we have a lot more that would go out of business like NZ’s did, if they were cut off the government tit without a weaning process, even if they were weaned off I think we’d still lose a lot. And there’d be a LOT of whining & crying if either of those options happened.

    It’d be interesting to see how many nationwide can function w/o the handout.

    I know of someone who doesn’t farm or ranch that’s crying from the changes made by Trump because it will affect their ability to start up a farm/ranch. Despite the fact that they can get grants for being a woman, a minority mixed race & first time farmer. But they’re still not happy at possibly losing some of the subsides this go ’round. It’s ridiculous.

    Reply

    1. There is no tougher problem that the political/economic/social/physiological conundrum of ag policy, and, unless it were to be overhauled from the bottom up and in all its multiple aspects, you are correct.

      Reply

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