It may be interesting to look at the history and current perceptions of farm
subsidies in New Zealand too.

Revolution in a Small Country
by R. W. Bradford
http://www.libertysoft.com/liberty/features/58bradford1.html

"Not surprisingly, with a guaranteed profit on every sheep they produced and
subsidies to increase production, farmers added to their herds. New
Zealand's sheep population increased from 55 million in 1975 to 70 million
in the early 1980s, despite the declining demand. The government purchased
the surplus sheep, killed them and froze them, and ultimately processed the
carcasses into fertilizer, which it sold back to the farmers at subsidized
rates. The economics of the whole process were appalling: in one instance,
sheep that cost the taxpayer $330 million in subsidies were converted into
fertilizer and sold for $6.5 million."

...

"Farmers, traditionally the backbone of National Party support, were the
first special-interest group to find itself in Douglas's crosshairs.
Supplementary minimum prices were abolished and loans brought up to market
rate. (To help farmers who had borrowed against subsidy-inflated land
values, capital amounts of loans were reduced, so very few farmers were
forced off their land.) Farmers marched on Wellington, but the Labour
government was firm. Within a few years, farmers had adjusted to the new
rules, become entrepreneurial, and were strong supporters of the Revolution.

This pattern repeated itself in other sectors of the economy. "Before you
remove the privileges of a protected sector," Douglas wrote in 1989, "it
will tend to see change as a threat which has to be opposed at all costs.
After you remove its privileges and make plain that the clock cannot be
turned back, the group starts to focus on removing the privileges of other
groups that still hold up its own costs."

...

"The farmers, hit hard in the Revolution's early days, quickly learned about
free markets and seemed much better businessmen than the subsidized and
regulated American farmers I've met. They routinely discussed the world
market prices for various farm products, and about shifting production based
on market conditions. Right now, many are getting out of sheep and
especially beef, where prices are low, and moving into deer, because venison
prices are high. I spoke to only one farmer who wasn't making a profit. He
was a wealthy American who two decades ago had bought land that he farms
more as a hobby than as a business."



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