No Farm Subsidies in New Zealand

Summary

In this discussion, Rob McClendon explores the potential implications of the U.S. Farm Bill, particularly the shift away from federal subsidies, with insights from New Zealand's successful agricultural model. Following the removal of subsidies in the mid-1980s, New Zealand farmers adapted by focusing on consumer demand, leading to increased productivity and market-oriented practices. Agribusiness professor Jacqueline Rowarth emphasizes that while subsidies can lower food prices, they ultimately increase costs through taxation. Other countries, including Australia, are now considering similar reforms, suggesting a global trend towards more sustainable agricultural policies.

Takeaways

• 🌾 A federal farm bill is unlikely to be written this year due to election year politics.
• 🇳🇿 New Zealand's agriculture industry thrives without farm subsidies, serving as a model for other countries.
• 🚜 The removal of subsidies in New Zealand in the mid-80s forced farmers to rethink their practices.
• 📈 Farmers in New Zealand became more consumer-oriented after the removal of subsidies, focusing on market demands.
• 🐄 New Zealand is a leading global exporter of dairy products, with 95% of its dairy production exported.
• 🎓 Agricultural producers in New Zealand adapted their practices to be more efficient without government support.
• 💰 Jacqueline Rowarth, an agribusiness professor, argues that subsidies can make food more expensive in the long run.
• 📉 Traditional industries in New Zealand, like wool production, have shrunk, while other agricultural sectors have grown.
• 🌍 New Zealand's experience with removing subsidies has become a learning opportunity for other countries.
• 🇦🇺 Australia has begun to remove some of its farm subsidies, following New Zealand's example.

Q & A

What is the main topic of the discussion between Rob McClendon and Kela Kelln?

The main topic is the potential changes to farm subsidies in the United States and how New Zealand's experience with eliminating subsidies in the 1980s could serve as a model.

Why do some believe a new federal farm bill may not be written this year?

Many believe that election-year politics will hinder the writing of a new federal farm bill.

What significant policy change occurred in New Zealand in the mid-1980s?

New Zealand removed all agricultural subsidies, forcing farmers to adapt to market demands without government support.

How did the removal of subsidies affect New Zealand farmers?

Farmers became more consumer-oriented and learned to produce higher volumes of agricultural products efficiently.

What percentage of its dairy products does New Zealand export?

New Zealand exports close to 95% of all its dairy products.

What is the opinion of Jacqueline Rowarth regarding subsidies?

Jacqueline Rowarth believes subsidies skew behavior and that removing them can lead to more efficient agricultural practices.

What impact did the removal of subsidies have on agricultural productivity in New Zealand?

The removal of subsidies increased productivity and encouraged farmers to make decisions based on economics rather than protected financial aid.

What concerns did agricultural colleges in New Zealand have after the removal of subsidies?

There was a dramatic drop in enrollment due to fears that the agricultural industry would no longer be profitable without subsidies.

Have other countries followed New Zealand's example regarding farm subsidies?

Yes, countries like Australia have started to remove some of their subsidies, and there is ongoing debate in the U.S. about the future of farm subsidies.

How does Jacqueline Rowarth compare the costs of subsidized food in the U.S. and Canada to those in New Zealand?

Rowarth argues that while subsidized food may appear less expensive in stores, it ultimately leads to higher overall food costs through taxation, unlike New Zealand's subsidy-free market.