ROB MCCLENDON: WELL FEW IN THE KNOW BELIEVE A FEDERAL FARM BILL WILL GET WRITTEN
THIS YEAR, DUE IN GREAT PART TO ELECTION YEAR POLITICS.
BUT ONCE CONGRESS DOES GET DOWN TO THE BUSINESS OF WRITING THE LEGISLATION
THAT GOVERNS OUR NATION'S FOOD POLICY, FARM SUBSIDIES, SUCH AS DIRECT
PAYMENTS, COULD WELL BECOME A THING OF THE PAST; A MOVE THAT WILL
UNDOUBTEDLY BE GREETED WITH TRUE TREPIDATION ACROSS FARM COUNTRY.
BUT FARMERS HERE IN THE UNITED STATES MAY BE ABLE TO TAKE SOLACE FROM AN
ISLAND NATION LITERALLY HALF A WORLD AWAY.
JOINING ME NOW IS OUR KELA KELLN.
KELA KELLN: WELL ROB, NEW ZEALAND IS KNOWN FOR ITS ROLLING GREEN HILLS AND
NATURAL BEAUTY; BUT WHAT MOST PEOPLE DON'T REALIZE IS THE IMPORTANCE OF THIS
NATION'S AGRICULTURE INDUSTRY.
FROM THE SHEEP GRAZING THESE ROLLING HILLS TO THE KIWIS HANGING ON THE VINE,
AGRICULTURE IS BIG BUSINESS IN NEW ZEALAND ALL WITHOUT THE HELP OF
FARM SUBSIDIES.
GRAEME CROSSMAN: IN THE MID-80S, OF COURSE, WHEN WE UH, WHEN WE WENT
THROUGH THE PAIN OF TAKING SUBSIDIES OFF ANY OF OUR AGRICULTURAL PRODUCTION IT
FORCED FARMERS TO RETHINK HOW THEY WERE DOING THINGS WITHOUT ANY AIDE
WHATSOEVER BY WAY OF SUBSIDIES.
SO OUR WHOLE PAST AGRICULTURAL INDUSTRY WENT COLD TURKEY ON SUBSIDIES
AND NOW THERE IS NOWHERE IN NEW ZEALAND WHERE ANYBODY GETS SUBSIDIES AND
NO ONE THINKS TWICE ABOUT IT ANYMORE.
KELA: GRAEME CROSSMAN GROWS KIWI IN NEW ZEALAND AND SAYS WHEN SUBSIDIES
WERE REMOVED IN 1985, IT FORCED FARMERS TO BECOME MORE CONSUMER ORIENTED.
GRAEME: THEY'VE LEARNED TO PRODUCE HIGH VOLUMES OF GIVEN ACRES FOR DAIRY
PRODUCTS OR WOOL CLIPS OR MEAT PRODUCTION AND THEY HAVE DONE IT WITHOUT
SUBSIDIES.
KELA: NEW ZEALAND IS ALMOST COMPLETELY EXPORT ORIENTED; AND IS THE
WORLD'S LEADING DAIRY PRODUCER, EXPORTING CLOSE TO 95% OF ALL THEIR DAIRY
PRODUCTS.
A BOOMING INDUSTRY DESPITE THE LACK OF GOVERNMENT SUPPORT.
JACQUELINE ROWARTH: SUBSIDIES SKEW BEHAVIOR.
KELA: JACQUELINE ROWARTH IS AN AGRIBUSINESS PROFESSOR IN NEW ZEALAND
AND SAYS AG PRODUCERS HAD TO LEARN TO FARM TO THE MARKETPLACE RATHER THAN TO
THE SUBSIDIES.
JACQUELINE: AND OUR EFFICIENCY IS ACTUALLY AN EDUCATION FOR THE REST OF
THE WORLD.
SOME OF OUR LEADING FARMERS, FEDERATION FARMERS FOR INSTANCE, GO
OVERSEAS, THEY WERE INVITED TO GO AND TALK AT OTHER PLACES ABOUT WHAT IT
MEANT TO TAKE SUBSIDIES AWAY AND HOW IT WAS ACTUALLY HANDLED
POLITICALLY, BECAUSE IT WAS A HUGE SHOCK.
KELA: ROWARTH BELIEVES THAT WHILE SUBSIDIZED FOOD CAN BE LESS EXPENSIVE ON
STORE SHELVES, CONSUMERS ARE STILL HAVING TO PAY, JUST IN ANOTHER WAY.
JACQUELINE: IN CANADA AND AMERICA YOU DO HAVE A SUBSIDIES SYSTEM.
AND OVERALL THAT MAKES FOOD MORE EXPENSIVE, BUT PEOPLE DON'T REALIZE IT
BECAUSE IT IS NOT DIRECTLY IN THE SUPERMARKET, IT'S COMING THROUGH THE
TAXATION SYSTEM.
KELA: AND WHILE TRADITIONAL INDUSTRIES SUCH AS NEW ZEALAND WOOL
PRODUCTIONS HAVE SHRUNK OVER THE PAST QUARTER OF A CENTURY, OTHER AG SECTORS
HAVE GROWN AND PROSPERED.
JACQUELINE: REMOVING SUBSIDIES IN 1985 INCREASED PRODUCTIVITY
THAT HAS OUTPUT PER PERSON HUGELY, BECAUSE THEY WERE MAKING DECISIONS BASED
PURELY ON ECONOMICS IN TERMS OF FARM INCOME, NOT ON PROTECTED USE OF MONEY.
KELA: MAKING THIS LITTLE PACIFIC ISLAND NATION A LEARNING EXPERIENCE FOR
THE ENTIRE THE WORLD.
AND WITH THE BOLD MOVE THE COUNTRY MADE MORE THAN 25 YEARS AGO TO REMOVE FARM
SUBSIDIES, AG COLLEGES SAW A DRAMATIC DROP IN ENROLLMENT OVER FEARS THAT
THE INDUSTRY WOULD NO LONGER BE PROFITABLE.
ROB: SO IT SEEMS AS IF THOSE FEARS WERE LARGELY UNFOUNDED; HAVE ANY OTHER
COUNTRIES, HAVE THEY FOLLOWED NEW ZEALAND'S LEAD?
KELA: YES ROB, ACTUALLY OTHER COUNTRIES HAVE SEEN WHAT NEW ZEALAND HAS DONE
AND HAVE STARTED TO REMOVE FARM SUBSIDIES AS WELL.
IN FACT, NEW ZEALAND'S NEIGHBORING COUNTRY, AUSTRALIA, HAS STARTED TO
REMOVE SOME OF THEIR SUBSIDIES; AND, HERE IN THE U.
S. WE ARE STARTING TO SEE DEBATE AS TO WHAT WE SHOULD DO AS WELL.
ROB: WILL CERTAINLY BE AN INTERESTING DISCUSSION.
THANK YOU SO MUCH KELA.
NOW IF YOU'D LIKE TO LEARN MORE ABOUT THE PROS AND CONS OF FARM SUBSIDIES,
JUST HEAD TO OUR WEBSITE AT OKHORIZON DOT COM AND CLICK ON THIS WEEK'S VALUE
ADDED.