AGRICULTURAL REFORMS IN CHILE AND NEW-ZEALAND - A REVIEW

Chile and New Zealand are both small countries for which agricultural exports are important: both undertook comprehensive economic reforms d uring the 1970s and 1980s respectively. Comparison of the experiences shows that macroeconomic policy above all the resulting movements in t he real exchange rate and in interest rates, has a critical impact on agriculture. In both cases, rolling back the state has encouraged priv ate responses. In Chile the challenges ahead lie in continuing product ivity improvements, and in raising the welfare of smallholders in marg inal areas. Six years after the initiation of reforms, New Zealand agr iculture shows a health recovery. Once committed to economy-wide refor ms - stabilisation, adjustment, and trade liberalisation - and compani on reforms of institutions, how do governments best proceed? With what reforms and in what mix, sequence, strength, and speed? For agricultu re, specifically, this paper takes a close look at which reforms, or a spects of their implementation, can accelerate or slow down private in vestment and aggregate supply response.