Agricultural observers are keenly interested in tracking the response of New Zealand's agricultural sector to Government's "economic liberalisation" policies. These 1984 reforms removed direct and indirect Governmental assistance to agriculture· as part of a general industries policy relating to competition, taxation, marketing and risk bearing. The abrupt change in policy orientation has had severe repercussions, with differential sectoral abilities to respond. Adjustment processes have been frustrated by adverse climatic events (Cyclone Bola and drought), as well as slower than anticipated "desirable" changes in key macroeconomic variables - continuing high interest and exchange rates. Key reforms to further remove public sector involvement from agriculture include privatisation of The Rural Bank and sale of the Government's holdings in irrigation schemes. Total farm debt has increased by nearly two and a half fold since 1980 (from NZ$3.5 billion to NZ$8.5 billion). Over the same period gross agricultural production increased by only 70 percent from NX$4.4 billion to NZ$7.6 billion. Agriculture's contribution to Gross Domestic Product increased more slowly (from NZ$2.1 billion to NZ$3.3 billion) and its relative share of GDP has fallen from 10.8 to 5.9 percent. Land values, which had quadrupled in the 1970's, continued to rise through 1982 and have fallen substantially in the decapitalisation process in response to more market related prices in the pastoral sector. The speed of the adjustment process is dampened by excessive debt service requirements for many operating units, limited open recognition for significant structural adjustment and plodding financial sector progress towards needed debt restructuring.