This article argues that the failure of policies and programmes to achieve their desired effects is a constitutive part of projects of regulation, and is evident particularly in attempts to govern conduct ‘at a distance’. Drawing upon concepts from the Foucaultian-inspired literature on governmentality, a Federal programme in Australia - the Rural Adjustment Scheme (RAS) - is examined and attention given to how its administration at a sub-national (State) level called into question, or ‘problematized’, the effectiveness of the programme from the outset. Using public documents and interviews by the author with 16 public servants, the article explores the rationalities and technologies through which these problematizations of governing were assembled. It focuses particularly on how the administrative ‘freedom’ of State authorities assumed political prominence as both a problem andas a necessary part of responding effectively to the diverse needs of clients/farmers.