A $12-billion assistance package to American farmers sounds like a great deal, at least for the recipients: a one-time payment that is intended to soften suffering caused by trade wars and low commodity prices, from a White House that sincerely wants to help.

I have a different perspective. As a farmer in New Zealand who once received government subsidies and then lost them, I speak from experience when I say that agriculture is much better off when governments stay out of our business and let us grow our food without interference.

The federal assistance package is in fact a devils bargain: It would deliver short-term benefits but also create long-term problems for American farmers.

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 didnt know it, but while we were pulling weeds from fields and cleaning out pig stys, we had become New Zealands landed gentry.

So the government took away our subsidies. It didnt just reduce them. It didnt phase them out over a stretch of time. It wiped them out all at once. It cut us off cold turkey.

I wont pretend that it was easy. In fact, the elimination of these supports put our farm in jeopardy.

Farmers protested in cities and towns. On the South Island, where our farms are located, some of them actually slaughtered sheep in the streets. They made a dramatic political point, but they were also acting out of economic self-interest. With the loss of subsidies, many animals were more valuable dead than alive. When farmers sent them for processing, they didnt earn payments in return. Instead, they received bills.

It sounds perverseand indeed it was. But thats what happens when governments pay subsidies. They mutilate markets and build bad incentives into economic systems.

I didnt participate in those protests. I was too busy trying to save our farm. For several years, we spent as little as possible. We made almost no capital improvements. Weve always kept a vegetable garden, but back then it became a lifeline. The garden wasnt a hobby, but a source of food. This was about survival.

The government that removed our subsidies had acted out of spite. It didnt mind watching farmers failand many did fail, due to the loss of financial supports combined with high interest rates, low land prices, and other factors. When the government offered to pay some farmers to exit agriculture, lots agreed to go and felt relief when they did.


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.

As a country, New Zealand obtained an advantage in the global economy. When we make trade agreements or take cases to the World Trade Organization, were always in a strong position because our negotiators and diplomats dont have to explain away market-distorting policies. Today, we export more than ever before.

So should American farmers accept the $12 billion handout? Thats for them to decide. But if my government in New Zealand were to make a similar proposal, Id feel a flicker of temptation and then reflect upon what Ive learned from a lifetime in agriculture and come to my senses. My answer would be simple: No thanks.