Agricultural support policies in a small open economy: New Zealand in the 1920s

This article examines the usefulness of New Zealand marketing boards and state finance schemes in providing agricultural support during the 1920s. Two objective functions are used to evaluate policy initiatives: maximizing per caput net farm income, and minimizing income fluctuations. It is argued that marketing boards and concessional finance were not successful organizational structures by which net farm income could be maximized. New Zealand farmers did not gain in terms of reduced costs or higher income relative to their international competitors. Minimizing income fluctuations was a more achievable objective, although evidence suggests that the oppurtunities to smooth farm income flows were not taken.