Because the transition was brutal. Yeah, they recuperated from it but Argentina recuperated from Pinochet, too. A 66% reduction in profits is the kind of thing your average industry doesn't accept with a smile. briandmyers said that New Zealand is getting by without subsidies. Why assume there will be disastrous booms and busts?
I also believe that the reason profits (not revenues) dropped so much, was at least partially because of increased investment by farmers.
It's not so bad making less profit, if you are actively investing in your future profitability.
Brutal is a harsh term; maybe accurate, but I'm not so sure.
NZ farmers not only recuperated, they have gone on to positively thrive.
Here's a Libertarian take on the whole thing (which I am no expert on, by the way) :
I dunno, man. France is extremely protectionist in regards to its agricultural segment; its stuff remains luxury in the rest of the world. NZ lamb used to be a delicacy, now it's commodity. Kiwis around here mostly come from Equador. I'm allergic to libertarians so I'm not going to go toe-to-toe with the Cato institute any more than I'd debate the divinity of Christ with a Pentecostal, but I can't imagine NZ had 66% profits to give up any more than the US does. The United States has remained the agricultural capital of the world only through brutal consolidation and the elimination of small farms. The subsidies do a lot more to shape the type of agriculture than anything else. What have you seen happen to the diversity of product in NZ over the past 20 years?
I don't know anything about product diversity, sorry. I don't know what the answer is for the USA, but removing the subsidies was a big positive for the farming industry here. No one ever talks about going back to the old ways. Farmers have powerful collectives, and make good money. Before removal of subsidies, productivity improvements were below 1% per year; it's reported at nearly 4% per year since. That shit adds up fast.