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Abstract

New Zealand started to increase agricultural subsidies to promote agricultural export in the 1970s. Subsidy programs inevitably entailed increased tax payer burden and financial deficit. In the early 1980s, the government acknowledged that the level of agricultural support was unsustainable. Most income support programs were abolished with the economic reform and the Ministry of Agriculture and Fisheries(MAF) was restructured by reducing number of staff members from about 5,600 to 1,000 in 2000. New Zealand could achieve the agricultural reform without severe adverse effects because the government introduced some transition programs for the farmers to adjust to the new economic environment. The government participated to share people's agony of the reform. Reform budgets are classified into contestable and non-contestable and managed on the basis of recovering cost.

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