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In the period under review the New Zealand agricultural sector has continued to be sensitive to changes in macroeconomic policies in the economy as a whole. This has not altered with the change of Government in October 1990. The combined forces of low commodity prices, increased costs, and government policy changes brought about a period of readjustment through 1985-86 and 1986-87 which now appears to be completed. Recovery was assisted by favourable terms of trade through 1988-89 and 1989-90. Output from the agricultural sector appears to have stabilised rather than decreased; the downturn in the terms of trade in the 1990-91 season has brought about a further reduction in investment and incomes.


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