Agricultural subsidy reform and its implications for sustainable development: the New Zealand experience

Abstract

Abstract The elimination of agricultural subsidies in New Zealand in the mid 1980s has had a range of sustainable development-related effects. Drawing on a ‘three pillar’ (economic, environment and social) paradigm of sustainable development, this article assesses some of the impacts of this subsidy reform 20 years after it was launched. The economic and environmental effects are judged to have been broadly positive and the short-term negative social effects were relatively muted. The analysis suggests that linking the negative environmental effects of subsidies with their distortive economic effects may help provide further momentum for meaningful global subsidy reform. Finally, the key political economy lessons of the reform process are identified.