Why New Zealand Abolished Farm Subsidies

Summary

The video examines global farm subsidies and contrasts the United States' continued support for agriculture with New Zealand's 1985 decision to abolish farm subsidies. New Zealand farmers endured a painful adjustment but ultimately achieved large productivity gains, especially in sheep and lamb. The report also explores the political staying power of US farm subsidies and the impact of US tariffs on soybean exports to China.

• Global farm subsidies total hundreds of billions of dollars annually.
• US agriculture relies heavily on government payments and is vulnerable to trade disruptions.
• New Zealand removed all agricultural subsidies in 1985 amid a fiscal crisis.
• New Zealand's sheep and lamb industry consolidated and improved productivity dramatically.
• New Zealand agriculture remains largely unsubsidized and represents a large share of exports.
• Iowa farmers prefer market demand over direct government payments.
• US farm subsidies are politically entrenched and likely to continue.
• US tariffs caused China to shift soybean purchases to Brazil and Argentina.