.. New Zealand's farm reforms of the 1980s dramatically illustrate the point. Faced with a budget crisis, New Zealand's government decided to eliminate nearly all farm subsidies. That was a dramatic reform because New Zealand farmers had enjoyed high levels of aid and the country's economy is more dependent on agriculture than is the U.S. economy.
The vast majority of New Zealand farmers proved to be skilled entrepreneurs — they restructured their operations, explored new markets, and returned to profitability. Today, New Zealand's farming sector is more dynamic than ever, and the nation's farmers are proud to be prospering without government hand-outs.Despite initial protests, farm subsidies were repealed in 1984. Almost 30 different production subsidies and export incentives were ended. Did that cause a mass exodus from agriculture and an end to family farms? Not at all. It did create a tough transition period for some farmers, but large numbers of them did not walk off their land as had been predicted. Just one percent of the country's farmers could not adjust and were forced out.
Official data supports on-the-ground evidence that New Zealand greatly improved its farming efficiency after the reforms. Measured agricultural productivity had been stagnant in the years prior to the reforms, but since the reforms productivity has grown substantially faster in agriculture than in the New Zealand economy as a whole.
The removal of farm subsidies in New Zealand gave birth to a vibrant, diversified, and growing rural economy, and it debunked the myth that farming cannot prosper without subsidies. Thus rather than passing another big government farm bill that taxpayers can't afford, the U.S. Congress should step back and explore the proven alternative of free market farming.