New Zealand’s No-Policy Ag Policy Far From Perfect for Farmers

By Alan Guebert;Aguebert@worldnet.att.net

Assure as the rooster crows every morning, someone will crow every farm bill year on how New Zealand’s 1984 elimination of government farm programs has brought a never-ending dawn to Kiwi farmers.

This year’s rooster is Dean Kleckner, former president of the American Farm Bureau Federation and current chairman of Truth About Trade and Technology, an Iowa-based agbiz and trade booster club.

In an Oct. 15 New York Times op-ed piece titled “Today’s Harvest of Shame,” Kleckner endorses New Zealand’s “cold turkey” break with farm subsidies as the path we should follow so the world – really the World Trade Organization – doesn’t see America “reversing course on a half-century of steadily expanding trade opportunities.”

After admitting he cashed American farm program checks for years, Kleckner says he discovered this gospel during a 1990s visit to New Zealand.

“On that trip and several later ones,” he offers, “I never met a farmer who wanted to go back to subsidies.”

He never met one, explained two New Zealand researchers in a detailed 2003 report that examined their country’s break with farm programs because “only rarely are views sought of those farmers who were pushed off the land” despite the “considerable social distress generated” by the policy shift and today’s “lingering environmental costs.”

Moreover, what Kleckner et. al. always overlook when advocating the New Zealand model, say Willie Smith and Hayden Montgomery of the University of Auckland, is the geographic and economic backdrop that led to subsidy abandonment.

First, New Zealand possesses the world’s greatest grass-based agriculture. Hilly terrain, favorable climate and intensive management made it into a lamb, milk and beef exporter well before 1984. Its target market was its mother, Great Britain.

When England joined Europe’s Common Market in 1967, New Zealand’s milk and meat exports plummeted. It reacted with farm programs, subsidies, as it searched for ways to retool its ag.

The interlude was brief because, in 1984, a new Kiwi government pushed the entire nation – not just agriculture -into the global marketplace.

The move brought the sky down on farmers. By 1987, farmland prices had “collapsed by between 50 percent and 70 percent,” note the authors. Adverse weather, and the lack of government disaster programs after 1984 compounded the mess.

By the early 1990s, the washout was over. What was surprising, however, note the researchers, was who survived. “…(M)any inefficient’ or bad’ farmers who inherited their farm with no debt survived; other, often young, able farmers lost their farms due to either back luck or lack of access to family funds.”

The nation’s ag direction, and its exports, shifted, also. Beef and lamb took a back seat to big dairy. The number of farms, however, increased because Kiwi ag shifted from raw product (meat and milk) markets to more processed (fruits, wine, cheese) markets.

That shift brought big agbiz, and its big appetite for big profits, into the farming mix.

“Each individual production chain has evolved somewhat differently,” the clear-eyed authors explain, “and as in the dairy industry, farmer co-operative status may create the illusion of producer control. In practice … the co-operative concept is more accurately described as a front for a consolidation of corporate control and power.”

As such, “The exposure of farming … to the full forces of global competition has not allowed individual producers to capture any more of the rent (profit) from production than before while they now bear increased risk.”

In short, the truth about New Zealand’s no-policy ag policy is that it’s perfect for agbiz, far less so for farmers. That’s why agbiz roosters like Truth About Trade crow about it. Despite all evidence to the contrary, they’ll always believe they bring the dawn.

Alan Guebert is a syndicated columnist who writes weekly for The Pantagraph. He lives in Delavan. His e-mail address is Aguebert@worldnet.att.net.

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