New Zealand nuked farm subsidies in the 1980s and the sector got leaner, more productive, and more competitive. Farmers had to respond to real prices, real demand, and real comparative advantage. Inefficient operations exited, others diversified and went global. A clean case study in what happens when you remove distortionary subsidies and let the market do its job.
Posted by manitobot
11 Comments
!ping TACOTUBE&NZ
YES YES HAHA YES
Unfathomably based NZ W
Farmers are the real welfare queens.
https://preview.redd.it/xs18644fh5eg1.jpeg?width=144&format=pjpg&auto=webp&s=833816b52dcfaa2077a8b8d3eb40fd69d49e70f4
Lord I see what you have done for others…
Seriously, it seems like NZ agra punches above its weight. There are very competitively priced grass-fed steaks from NZ in my grocery store, and NZ sauv blanc is the go-to reasonably-priced crowd-pleasing white wine of basically everyone I know.
It turns out when you don’t guarantee the existence of a mostly-uncompetitive sector, the parts that remain are the ones with genuine comparative advantage and come to be dominant.
I haven’t had a chance to watch the video yet so maybe this is addressed, but I feel like the bigger question is *how* did NZ abolish farm subsidies.
This is one of those topics where economists are pretty unanimous in opposing the subsidies, but political reality makes it difficult to actually act on that.
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Not entirely accurate.
Farmers in NZ enjoy massive political clout at the central and local levels, and are exempt from many regulations that would capture any other industry. A lot of government-owned land is grazed for a pittance too. Schemes like that are effectively subsidies.
https://preview.redd.it/kohrq05mz5eg1.jpeg?width=640&format=pjpg&auto=webp&s=12623be32a3c70a796ff1649d40b96cfbdb2bbbd
Hating farmers seems to be left coded in western countries it seems. Back in India it’s the right which hates farmers.