Government announces $143m partnership to boost primary sector productivity

Wednesday, 10 June 2026

The Government has announced a $143 million partnership with primary industries to boost productivity and innovation across the rural sector by making land use more flexible.

Speaking to rural and primary industry leaders at Fieldays on Wednesday, Prime Minister Christopher Luxon announced the initiative alongside Agriculture Minister Todd McClay.

It will see the Government commit $59 million into commercial projects, with the primary sector contributing another $84 million.

The partnerships spans dairy, sheep and beef, horticulture, forestry, whenua Māori, and aquaculture.

Luxon told the audience the primary and rural industries were “without doubt the engine room of our economy”.

“But if we want our country's prosperity to continue, and if we want to find more gains for productivity, then we have to foster that very deliberately together.

“We must be prepared to think differently, to act differently. We need to go out in the world and back ourselves,” he said.

“At its heart, land use flexibility is a very simple proposition. It is the idea that farmers and growers and landowners should have more freedom to adapt, to grow, and to modify their businesses,” he said.

Minister Todd McClay said the country had made recent trade agreements in the United Kingdom, European Union, United Arab Emirates and India, with New Zealand having greater market access than what the country was currently producing.

“We cannot merely sell food to the world by producing more,” he said.

“We have to do it smarter, and we have to lean into innovation and technology. We have to meet our environment and climate change obligations. We need to find ways to improve, but we can't do that at the expense of the farmer.”

He said the partnership would prove it was possible to use “the latest technology to drive up productivity and production whilst reducing our climate and environment footprint”.

McClay cited research from Lincoln University and ASB suggesting a combination of land-use change, technology adoption and improved farming systems could add $10 billion to New Zealand's economy over the next five to seven years.

As part of the announced initiatives, the Government will fund $3.55m in a $8.47m five-year project to boost beef and sheep production and $18.34m in a $45.85m seven-year project to increase dairy output with improved environmental outcomes.

The Government would invest another $19.14m into increasing kiwifruit orchards yields by integrating on-orchard innovation, advanced decision-support tools, and new science.

Other projects would expand premium salmon production, and investigate new opportunities for value-added timber manufacturing.