second time in the form of higher food prices.
. The encouragement of overproduction, which then drives down prices and requires more subsidization of farmers incomes.
. The related encouragement to farm marginal lands, with resulting environmental degradation.
. The fact that most subsidy money passes quickly from farmers to farm suppliers, processors, and other related sectors, again negating the intended effect of supporting farmers.
. Additional market distortions, such as the inflation of land values ​​based on production incentives or cheap loans. bureaucratic insanities, such as paying farmers to install conservation measures like hedgerows and wetlands-after having paid them to rip them out a generation ago, while those farmers who have maintained such landscape and wildlife features all along get nothing
Аrm leaders in New Zealand among the first to advocate an end to subsidies Interestingly, farming leaders were among the first to recognize the absurdity of the situation and to propose alterations, although they stopped short, at first, of advocating the total elimination of agricultural subsidies. In 1982, Federated Farmers of New Zealand <# "justify"> While most of the Federated Farmers specific recommendations were rejected by then-Prime Minister Rob Muldoon: economic analysts from across the political spectrum began to the debate the effects of subsidies and other forms of market intervention, and when the Labour Party won a landslide election in 1984 (defeating Muldoon and the National Party) the country was ready for reform. most NZ farmers were traditionally National Party members, the process of reform was to some extent bipartisan. Agricultural reform was also part of a larger package of economic restructuring that included the scaling back of import tariffs; deregulation (or partial deregulation) of public utilities and transport systems; implementation of New Zealand s first goods and services tax (or GST-similar to the US sales tax); and floating of the NZ dollar on the global currency exchange. Further reforms were implemented after the National Party was voted back into power in 1990. of this was not achieved without some controversy, and there were a few casualties, both political and economic. It is estimated that around 800 farmers-or 1% of the total number of commercial farmers in operation-were forced to leave the land. Sheep farmers, who as a group were the most heavily subsidized, were (not surprisingly) hardest hit by the elimination of subsidies. Those farmers who were heavily in debt at the start of the reform peri...
