Deregulation and the New Zealand Agricultural Sector: A Review

Since July 1984 the New Zealand Government has been following a policy of disengagement and deregulation throughout the New Zealand economy. The impacts of the new policy have been felt at both the macro and the micro level. For the agricultural sector, a closer relationship to international prices and costs has been sought, with less industry assistance and direct support from the Government. With the removal of special privileges formerly enjoyed, the agricultural sector has also become more closely aligned with and vulnerable to changes in major macro parameters in the economy such as exchange rates, interest rates, inflation control and budget economies. The alignment of the agricultural economy with international prices and costs is likely to bring about a smaller and more competitive sector than was previously the case