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Less Regulation and a
Free Market Really Works

November 7, 2016

Over twenty years ago, New Zealand’s left-leaning government was facing a crisis.  It was running out of money!  In a surprising move, they decided to eliminate government subsidies for farmers.  It was a shock to the country’s agricultural system.  But the farmers in New Zealand had spunk and they reacted as anybody would have in a free market economy environment.  They reinvented themselves and coming out on the other side of this challenge they’re now a worldwide powerhouse when it comes to agricultural production.

Those who were part of New Zealand’s grand farming experiment suggest it might be a valuable case study for policymakers in other countries.  Each nation is different and it takes determination, innovation, and grit, but in New Zealand their people did what was needed and profited from their efforts.

In 1984 New Zealand eliminated some 30 different agricultural production subsidies and export incentives.  This was no small decision on their part.  It’s a country of about 4.6 million people with only a small domestic demand for products like milk, meat, and wool. However, it produces enough food for 40 million people and exports about 90% of its production. 

The naysayers predicted eliminating subsidies would cause a mass exodus from farming but such didn’t happen.  Only about 1% of the farmers took the “exit grant” being offered by the government.
 
Today, New Zealand has some of the world’s most productive and innovative farmers.  When the subsidies were removed, so were the governmental dictates and requirements (regulations/mandates).  This freed the farmers to produce what the people really wanted while doing so in a more efficient way, thereby allowing them to make a profit.  They cut cost, diversified the use of their land and developed new products. In the process they found a new sense of resourcefulness that has been encouraging.  Instead of relying upon the government for a helping hand, they discovered they didn’t need the government in order to be successful!

Today New Zealand farmers produce over 2,100 products from milk.  Compare that to the thirty-five they produced previously!  It also has a thriving wine industry that barely existed before the reforms.  And, they are exporting their agricultural products around the world and doing so at a profit!  Today most of New Zealand’s farmers would concur that they don’t want the government meddling in their affairs, nor do they want to depend on the government for their well being.

Here at home, many of us also want to restrict the government from being in our lives.  Many of us want to wean those who are feeding at the government trough off their dependency on government.  The New Zealand agricultural example proves that it can be done.  But, in order to accomplish this we need to step away from the worldview of those who are currently leading our government.  They want dependency on government while we prefer a dependency on the Lord and hard work and effort; all of which will succeed and pay dividends in the end.

Bill, Mark, and John

 



 


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