Structural Reform: the Dairy Industry in New Zealand

Abstract

In the decade from 1983 to 1993 New Zealand farming moved from a relatively high income protected low-risk environment to a low income unprotected environment in which industry now carries the risks. Walker and Bell (1994) chapter 4.Creating a regulatory framework that enables open entry of farmers processors and marketers will foster the next stage in the development of the dairy industry in New Zealand .... Adrian Orr (Introduction to Watershed for New Zealand Dairy Industry2001)Significant structural change in the New Zealand dairy industry has taken place in two steps. Beginning in the early 1980s deregulation of the economy and agriculture in general materially affected the dairy industry. Then in 2001 a second major deregulatory step was taken that entailed the removal of the industry's (single-desk) exclusive right to export. This had happened to other agricultural and horticultural industries but for dairy it posed particular issues and affected a much larger industry. The dairy industry will continue to evolve but under present regulatory settings this will occur as a result of owner prerogatives in competitive national and international markets rather than on the basis of specific New Zealand regulatory intervention.