After 80 years of subsidies – paid primarily to the agro-giants – most ranchers and farmers accept as a matter of faith that farming and ranching is unprofitable and unsustainable as a business without government payments.
Here in the U.S., we should follow New Zealand’s lead and (1) break up the agricultural concentrations and keep them from re-forming by applying anti-trust laws, and, (2) stop the subsidies. Neither will work without the other.
NOTE: this article was initially published to GlobalFarmerNetwork.org and then quoted on WSJ.com on August 24, 2018. The article and subsequent quote are via Craige Mackenzie.
When I first became a farmer in the 1980s, New Zealand supported agriculture the way so many governments do. Rather than letting us operate in an unfettered free market, it paid us subsidies for our sheep, wool, dairy, and beef.
Then a new government came to power. It viewed farmers as a bunch of privileged, wealthy landowners. We didn’t know it, but while we were pulling weeds from fields and cleaning out pig stys, we had become New Zealand’s landed gentry.
So the government took away our subsidies. It didn’t just reduce them. It didn’t phase them out over a stretch of time. It wiped them out all at once. It cut us off cold turkey. . . .
The irony is that although the elimination of subsidies started out as a kind of political punishment, it wound up becoming a long-term blessing for farmers. We went through a difficult period of adjustment but emerged from it stronger than ever.
My family focused on our farm. When we faced a hard choice, we suddenly had the flexibility to make decisions based on nothing other than good agricultural and business practices. We became ruthlessly efficient, which is another way of saying that we became really good at what we do.
We also improved our ability to resist regulations that hurt agriculture. Subsidies empower politicians, who can threaten to cut off aid if farmers refuse to accept new forms of control. Without subsidies, we have more freedom to solve problems through creativity and innovation rather than the command-and-control impulses of government.