Home' Straight Furrow 70th Anniversary : Dec 19 2011 Contents Straight Furrow • December 19, 2011 21
1941 -- 2011
New Zealand's own shock and awe
THE increase in farms costs in
the years between 1973 and
1984 ranged between 300 and
400 per cent and in the case of
diesel 1377 per cent.
The dramatic fall in purchasing
power simply compounded all the
other woes the agricultural com-
munity suffered in the 1980s.
Diesel had gone from under 4c a
litre to 58.5 cents making it the
biggest single rise by far and to a
vital part of the farmer's input
By contrast, prices for meat and
wool over the 10 years rose in the
vicinity of 150 per cent, milkfat by
200 per cent [from $1.11per/kg/ms
to $3.30] and wheat 296 per cent
[from $57.30 per tonne to $227.
The increases in no way matched
In 1973, you could buy a six cylin-
der station wagon of $4510. Ten
years later, that vehicle cost
$24,700 or 447 per cent more.
To purchase that car in terms of
exchange required 571 lambs in
1973 and that jumped to over 1200
10 years later.
An 80hp tractor went from $567
to $30,050 or from 28 bales of wool
A bale of wool would buy 200
fence posts in 1973 and as early as
1980 it would buy as few as 95 and
that stayed the same for the next
three years because of the govern-
ment imposed price freeze.
To buy a header in 1973 the
farmer had to sell 288 tonnes of
wheat [$16,494] but 10 years later
it took 462 tonnes to buy the
Straight Furrow at the time com-
mented that it showed how fast a
farmer had to run to simply stay
The footnote to the article said:
Straight Furrow can only suggest
that Federated Farmers start using
comparisons like these which are
very effective at making the whole
situation understood by anybody
and that the results be tattooed on
to every MP's brain.
THE first Agriculture Minister of the
decade had the pedigree of an
established and substantial
Canterbury farming family which had a
tribal attachment to its land.
Straight Furrow political writer at the
time, Colin James, described Jonathan
Elworthy as quietest spoken politician
he knew, unfailingly pleasant, evoking a
quality of gentlemanliness.
That was in April 1982 after Elworthy
had been in Parliament since 1975.
He had got stirred up into active poli-
tics by the National Government's News
Media Ownership Act of all things.
The Act was designed to prevent for-
eign owners into our newspaper scene
and "it really made me quite angry", he
told Straight Furrow. "I sent telegrams
and rang people and got very angry."
To use James' prose: "He came into
Parliament in the 1975 National land-
slide. Years under the cooling
had lowered the firebrand's flame."
His ambition was not to eliminate the
state in favour of the private sector but
to get more rational decisions being
That ambition too has been moderat-
ed by experience.
"I guess I started off with some visions
of rapid action and the waving of magic
wands to make people behave in a more
"That's changed. I have become a bit
more philosophical and realised that it
is very hard to change things."
Elworthy had an unspectacular but
sound career on the back benches and
it was predicted he was unlikely to be
one of the "brighter lights" of Cabinet.
He served only one term at National
was ousted in 1984.
On June 17, 2005, the Hon Jonathan
Herbert Elworthy, who represented the
electorate of Oamaru from 1975 to 1978
and that of Waitaki from 1978 to 1984,
died in Wanaka.
He was Minister of Lands, Minister of
Forests, and Minister in charge of the
Valuation Department from 1981 to
Agriculture's gentlemanly minister
FARM leaders in New Zealand were
among the first in the world to
advocate an end to the subsidies
that they received from the
Britain had joined the European
Economic Community [now the EU ] and
this meant New Zealand had to realign
its global trading relationships. We
could no longer count on special treat-
ment as a Commonwealth country and
get special consideration for farm prod-
In 1984, nearly 40 per cent of the aver-
age sheep and beef farmers gross
income came from government subsi-
dies. Farmers were being offered subsi-
dies to purchase fertiliser, there was the
notorious SMPs, tax breaks for increas-
ing herd sizes and the increasing pro-
duction depressed commodity prices
There was disaster relief, low interest
loans and so on, all too much for the
size of our economy.
Federated Farmers was to the fore and
while stopping short of asking for total
elimination of subsidies, it told
Government to control inflation rather
than compensating farmers for inflation.
It submitted that a key cause of infla-
tion was the budget deficit required to
fund subsidies to farmers and thus
made the problem worse. Prime
Minister Rob Muldoon rejected the
ideas but as one commentator at the
time said "the cat was out of the bag".
The debate had begun and when
Labour came to power in the 1984 land-
slide the country was ready for reform.
Import tariffs were trimmed, GST came
into being, the dollar was floated all of
which created shock and awe.
It was not achieved without some
pain. It is estimated that some 800 farm-
ers [or one per cent] were forced to
leave the land [far short of the predic-
tions of many thousands being made at
the time]. Sheep farmers were the most
heavily subsidised so they were the
The transition lasted for about six
years and there was little regret at hav-
ing got off the gravy train.
It is interesting that it was a Labour
government that undertook the reforms
but not too hard to see why they chose
the people who never voted for them to
begin their great experiment. It has to
be said it has proved one of the more
As a result today New Zealand has one
of the most open and unregulated
economies in the world.
Links Archive Navigation Previous Page Next Page