Agricultural Policy Monitoring and Evaluation 2026

21. New Zealand

Main findings

Support to agriculture

Support to agricultural producers in New Zealand consistently ranks among the lowest in the OECD. During 2023-25, the Producer Support Estimate (PSE) averaged 0.8% of gross farm receipts, slightly higher than the 0.5% reported for 2000-02 but far below the OECD average.

Almost all prices align with world market prices. The only exception in recent years has been table eggs. Table eggs, as well as other products such as fresh poultry and certain bee products, cannot be imported in New Zealand due to biosecurity regulations. As a consequence, market price support (MPS, the only form of support to individual commodities in New Zealand), reached 43% for eggs in 2023-25. Additional minor producer support is provided through on-farm services, mainly related to animal health and disaster relief.

Thanks to structurally low producer support, around 70% of all support to the sector for most of the past two decades was for general services. However, such support (General Service Support Estimate, GSSE) is estimated at just 1.5% of the value of agricultural production during 2023-25, well below the OECD average. It mainly focuses on animal disease control and on investments in the agricultural knowledge and innovation system.

Total support to the sector represented 0.21% of Gross Domestic Product (GDP) during 2023‑25. This level is similar to that observed two decades earlier but remains less than half of the OECD average.

Key policy changes in 2025-26

A new farm-level emissions calculation platform was launched, including a free web-based tool to support on-farm emissions measurement. In October 2025, the first standardised online calculator for estimating on-farm biogenic emissions was made available, based on the standardised farm-level methodology launched by the government in December 2024. The framework and the online tool help monitor progress, support supply-chain reporting and assist exporters’ emissions-related claims in international markets. The basis of the calculation will be updated as additional mitigation options emerge. Collaboration with Germany under the AgriDENZ climate partnership has strengthened comparability of the estimation methods.

The government revised the second emissions reduction plan (ERP2) approach to reducing agricultural emissions, deciding not to introduce on-farm emissions pricing by 2030. The updated ERP2 reflects this shift, maintaining a focus on technology to support farmers in lowering emissions.

Launched in 2025, the Primary Sector Growth Fund (PSGF) supports high-growth initiatives across New Zealand’s food and fibre sector by co-funding up to 40% of project costs for initiatives demonstrating direct economic benefit to the sector. The fund also includes dedicated support for Māori agribusiness projects.

The Dairy Industry Restructuring (Export Licences Allocation) Amendment Act 2025 reforms how New Zealand allocates dairy export quotas for markets. Under this act, quotas are now based on export volume history rather than milk solids collected, and up to 10% of quota can be reserved for smaller or previously ineligible producers.

Assessment and recommendations

• Enhance market openness while preserving biosecurity by developing Import Health Standards (IHS) for currently restricted livestock products (e.g. eggs, fresh poultry, honey) in partnership with trusted trading partners, enabling controlled imports – especially during domestic supply shortages – while maintaining strict biosecurity safeguards. This would improve consumer access and reduce price pressures without undermining New Zealand’s strong biosecurity frameworks. It would also better align biosecurity needs with the country’s strong trade orientation which is underlined by an absence of formal trade barriers and facilitated by New Zealand’s extensive and increasing number of FTAs.

• Strengthen the policy mix for agricultural emissions reduction by complementing the technology‑led approach with stronger adoption incentives and farm‑level signals. While innovation will play a central role, reliance on future technological breakthroughs alone may be insufficient; additional measures are needed to encourage uptake and to ensure emissions reductions materialise at scale. Given the significance of agriculture in the country’s overall GHG emissions, the sector’s contributions will be important for meeting New Zealand’s overall targets.

• Increase competition and efficiency in the kiwifruit sector by easing restrictions related to regulatory authorisation requirements for entities other than Zespri (the main company). This would allow other firms greater access to export markets while maintaining oversight, thereby improving market functioning, producer opportunities, and overall sector performance.

• Accelerate targeted investment in agricultural R&D and knowledge transfer systems towards sustainable productivity growth. Reversing low or negative productivity growth and high nutrient pressures from the large livestock sector will require scaling up applied innovation systems. Current spending in this area, although a major component of public spending for agriculture, remains below the OECD average relative to the size of the sector.

Key indicators on agricultural support

Table 21.1. New Zealand: Estimates of support to agriculture

Million USD

	1986-88	2000-02	2023-25	2023	2024	2025p
Total value of production (at farm gate)	4 070	6 378	22 903	20 447	24 326	23 936
of which: share of MPS commodities (%)	72.09	73.07	72.54	73.27	72.12	72.23
Total value of consumption (at farm gate)	1 625	2 592	11 557	9 807	12 899	11 966
Producer Support Estimate (PSE)	424	33	181	249	178	117
Support based on commodity output	54	15	131	156	138	101
Market price support¹	53	15	131	156	138	101
Positive market price support	53	15	131	156	138	101
Negative market price support	0	0	0	0	0	0
Payments based on output	1	0	0	0	0	0
Payments based on input use	179	17	21	33	16	16
Based on variable input use	2	0	0	0	0	0
with input constraints	0	0	0	0	0	0
Based on fixed capital formation	154	-0	-0	0	0	0
with input constraints	0	0	0	0	0	0
Based on on-farm services	24	17	21	33	16	16
with input constraints	0	0	0	0	0	0
Payments based on current A/An/R/I, production required	26	1	29	61	25	0
Based on Receipts / Income	26	1	29	61	25	0
Based on Area planted / Animal numbers	0	0	0	0	0	0
With input constraints	0	0	0	0	0	0
Payments based on non-current A/An/R/I, production required	165	0	0	0	0	0
Payments based on non-current A/An/R/I, production not required	0	0	0	0	0	0
With variable payment rates	0	0	0	0	0	0
with commodity exceptions	0	0	0	0	0	0
With fixed payment rates	0	0	0	0	0	0
with commodity exceptions	0	0	0	0	0	0
Payments based on non-commodity criteria	0	0	0	0	0	0
Based on long-term resource retirement	0	0	0	0	0	0
Based on a specific non-commodity output	0	0	0	0	0	0
Based on other non-commodity criteria	0	0	0	0	0	0
Miscellaneous payments	0	0	0	0	0	0
Percentage PSE (%)	10.16	0.52	0.78	1.21	0.73	0.49
Producer NPC (coeff.)	1.01	1.00	1.01	1.01	1.01	1.00
Producer NAC (coeff.)	1.11	1.01	1.01	1.01	1.01	1.00
General Services Support Estimate (GSSE)	119	85	350	368	345	336
Agricultural knowledge and innovation system	60	46	138	144	140	131
Inspection and control	31	28	200	211	195	194
Development and maintenance of infrastructure	27	11	12	13	11	11
Marketing and promotion	0	0	0	0	0	0
Cost of public stockholding	0	0	0	0	0	0
Miscellaneous	0	0	0	0	0	0
Percentage GSSE (% of TSE)	20.97	71.96	65.10	57.60	65.84	74.27
Consumer Support Estimate (CSE)	-53	-14	-119	-113	-139	-103
Transfers to producers from consumers	-51	-14	-124	-135	-138	-101
Other transfers from consumers	-2	0	-2	0	-2	-3
Transfers to consumers from taxpayers	0	0	7	22	1	0
Excess feed cost	0	0	0	0	0	0
Percentage CSE (%)	-3.37	-0.53	-1.02	-1.16	-1.08	-0.86
Consumer NPC (coeff.)	1.03	1.01	1.01	1.01	1.01	1.01
Consumer NAC (coeff.)	1.03	1.01	1.01	1.01	1.01	1.01
Total Support Estimate (TSE)	542	118	539	639	524	453
Transfers from consumers	53	14	126	135	140	103
Transfers from taxpayers	492	105	414	504	387	352
Budget revenues	-2	0	-2	0	-2	-3
Percentage TSE (% of GDP)	1.51	0.21	0.21	0.25	0.20	0.17
Total Budgetary Support Estimate (TBSE)	490	103	407	483	387	352
Percentage TBSE (% of GDP)	1.36	0.18	0.16	0.19	0.15	0.14
GDP deflator (1986-88 = 100)	100	136	249	239	249	258
Exchange rate (national currency per USD)	1.71	2.25	1.67	1.63	1.65	1.72

Note: p: provisional. NPC: Nominal Protection Coefficient. NAC: Nominal Assistance Coefficient.

A/An/R/I: Area planted/Animal numbers/Receipts/Income.

1. Market Price Support (MPS) is net of producer levies and excess feed cost. MPS commodities for New Zealand are: wheat, maize, oats, barley, milk, beef and veal, sheep meat, wool, pig meat, poultry and eggs.

Source: OECD (2026), “Producer and Consumer Support Estimates”, OECD Agricultural policy monitoring (database), https://data-explorer.oecd.org/.

Policy landscape

Agricultural policies in New Zealand predominantly focus on biosecurity controls, measures supportive of the indigenous people Māori, and agricultural research and development.

Market and trade regulations

Export rights of some dairy products to certain markets with import quotas have been allocated to dairy companies based on export volume history. Export regulations are also in place for kiwifruit: the New Zealand company Zespri has the default right, although not an exclusive right, to export kiwifruit to all markets other than Australia.1 No other agricultural commodities face trade restrictions.

New Zealand currently has 17 Free Trade Agreements (FTAs) in force. Approximately 72% of New Zealand’s agro-food exports went to FTA partner countries during 2023-25. In the same period, 80% of its agro-food imports came from FTA partner countries. These shares are similar to New Zealand’s non-agro trade with FTA partners (70% of exports and 83% of imports).

National resources management

The Resource Management Act 1991 (RMA), constitutes New Zealand’s primary environmental framework, regulating the use and management of land, water, and air resources In the agricultural sector, the act establishes the requirements related to water allocation and quality, land-use changes, and environmental effects of farming activities, including soil erosion, and nutrient management. Farmers require resource consents for irrigation, stock access to waterways, building farm infrastructure, or converting land uses. National direction under the RMA, such as the National Policy Statement for Freshwater Management, further shape farm-level practices by setting parameters for water abstraction and discharge management to safeguard freshwater ecosystems. The RMA is undergoing a reform process through two replacement bills aimed at streamlining farm plan requirements and adjusting freshwater management. In addition, the five major National Direction instruments are being revised to establish further rules.2

Biosecurity and food safety

The Food Act 2014 applies a risk-based approach focused on safe and suitable food to all agro-food businesses. It aligns the domestic food system with the risk-based approach of other New Zealand food statutes that have more of an export focus and with international trends in food regulation.

The Biosecurity Act 1993, together with the Animal Products Act 1999, the Agricultural Compounds and Veterinary Medicines Act 1997, and the Food Act 2014, defines the legal obligations of food importers. Import Health Standards (IHS) issued under the Biosecurity Act set the requirements for importing risk goods into New Zealand.3 Risk goods, including animal and plant products, can be imported only with an IHS in place for the product, and with the product meeting all relevant IHS measures. For some products (e.g. table eggs, uncooked chicken meat, honey), no IHS is in place. These products therefore cannot be imported, leading to some market price support as their domestic prices are above the world market level.

The Government Industry Agreement for Biosecurity Readiness and Response (GIA) established an integrated approach through voluntary partnerships between the government and primary industry sector groups to manage pests and diseases that could damage New Zealand’s primary industries, economy, and the environment. Signatories share decision-making responsibilities and costs in preparing for and responding to biosecurity incursions. In total, the number of industry groups partnering with the Ministry for Primary Industries under GIA now stands at 24.4

Farm assistance services

Under the Commodity Levies Act 1990, “industry good” activities (such as research and development, forming and developing marketing strategies, and providing technical advice) are managed by industry organisations and funded by levies collected from producers.5 Levies can only be imposed when approved by producers, who also decide how to spend them.

Policies for Indigenous peoples

Māori are able to retain and manage collectively owned land under the Te Ture Whenua Māori Act 1993 and a Māori Land Court. New Zealand has also returned land and other resources to Māori tribal entities through a process of negotiated settlements as compensation for breaches of the 1840 Treaty of Waitangi, with most Māori tribes having completed their settlements.

In addition, five specific Māori Agribusiness investment programmes have been developed by the government to help Māori develop their land and agricultural assets. These programmes are administered by a team of regional Māori Agribusiness advisers and provide funding for measures such as land-use assessments and business feasibility studies along with support to reduce agricultural GHG emissions.

Sustainability policies

The Sustainable Land Management Hill Country Erosion Programme (HCEP) aims to protect 1.4 million ha of pastoral hill country classified as erosion prone. It co-funds regional councils to develop and deliver four-year erosion control programmes, co-funded by councils and landowners. Funded activities within the current period 2023-27 include:

• developing farm-scale erosion control plans in collaboration with landowners

• wide-spaced planting of poplars and willows as agroforestry

• land retirement from production to revert to native vegetation

• small-scale forest-based activities

• regional training and resourcing for delivering targeted erosion control programmes.

Although the main purpose of the HCEP is to reduce erosion and to build on-farm resilience, it also aims to reduce sediment loss to waterways, increase on-farm biodiversity, enhance climate change adaptation, and contribute to carbon sequestration.

As part of the One Billion Trees programme, aiming to double previous tree planting rates over the decade 2018-28, the One Billion Trees Fund was launched in November 2018. The fund provides tree planting grants to landowners, including farmers, and supports partnership initiatives to help overcome the barriers to tree planting. While the One Billion Trees programme will continue until 2028 for grants that have already been approved, the fund is closed for new applications.

The Primary Sector Growth Fund (PSGF), launched in May 2025, replaces the Sustainable Food and Fibre Futures Fund. It is a public co-investment programme that finances projects to create value and improve sustainability in the food and fibre industries. With a minimum industry investment of NZD 375 000 (USD 218 000) but no cap on government investment per project, the fund supports multimillion-dollar, multi-year programmes to enable farmers, growers, harvesters, and industry to generate economic, environmental and social benefits. All projects require co-funding from the partner organisation of at least 60% of costs.

Climate change mitigation and adaptation

Due to the prevalence of livestock-based agriculture and the large share of renewable sources in the electricity mix, primary agriculture is responsible for about half of New Zealand’s gross greenhouse gas (GHG) emissions, mostly in the form of methane from dairy, sheep, and beef cattle.

New Zealand’s second Nationally Determined Contribution (NDC) under the Paris Agreement, submitted in January 2025, covers the period 2031-35. Building on the first updated NDC that committed to halve New Zealand’s national net GHG emissions by 2030 relative to gross 2005 levels, the new NDC sets to reduce net GHG emissions by 51–55 % below gross 2005 levels by 2035. Both NDCs set economy-wide targets, including agriculture and other land use sectors.

The Zero Carbon Amendment Act 2019 (Zero Carbon Act) made changes to the Climate Change Response Act 2002 (Climate Change Response Act), which sets separate emissions reductions targets for long-lived and short-lived GHG emissions, including a target for biogenic methane. The emissions reduction targets set out in the Climate Change Response Act aim to reduce all GHG emissions, except biogenic methane, to net zero by 2050 and biogenic methane by 10% by 2030 and 14-24% by 2050.The Climate Change Response Act requires the government to set legally binding carbon budgets, which define the maximum amount of GHG emissions the country, including the agricultural sector, can produce over five-year consecutive periods. Emissions Reduction Plans (ERPs), including specific sections for agriculture, set out New Zealand’s plans for meeting the emissions budgets (see section on policies for trade and sustainability below). While the first emissions reduction plan set sub-sector targets, including for agriculture (New Zealand Government, 2022[1]), this was not replicated in the second emissions reduction plan (New Zealand Government, 2024[2]).

New Zealand published two ERPs to support the achievement of its emissions reduction targets over specific budget periods. The first plan (ERP1) sets out the policies and strategies to meet the first emissions budget for the period 2022-25, while the second plan (ERP2), first published in December 2024 and amended in January 2026, sets out the approach for meeting the second emissions budget for 2026‑30. The agriculture chapter in ERP2 focuses on reducing agricultural emissions while maintaining the competitiveness of New Zealand’s agricultural sector. Key actions include:

• conducting the independent methane science and 2050 target review

• accelerating the development and commercialisation of mitigation tools and technologies to reduce on-farm emissions

• developing the measurement of on-farm emissions for use by 2025.

In December 2024, the government launched a standardised farm-level methodology for estimating biogenic emissions, aimed at ensuring that estimates are transparent, consistent, up to date and scientifically robust.

The New Zealand Emissions Trading Scheme (NZ ETS) is an emissions pricing tool for the New Zealand economy and a key component of New Zealand’s climate change response. Eligible forests can be recognised for their carbon sequestration in the NZ ETS. However, other than non-farm activities such as transport, or the energy used to process, agricultural activities are not part of the NZ ETS.6

Research and innovation

The government invests in emission-related tools and technologies to reduce agricultural emissions through three main components: AgriZero^NZ, the Ag Emissions Centre (formerly New Zealand Agricultural Greenhouse Gas Research Centre) and the Global Research Alliance (GRA).

Established in February 2023, AgriZero^NZ is a public–private joint venture to drive development and commercialisation of emissions-reduction products for New Zealand farms. Industry and the Government have so far committed NZD 191 million (USD 116 million) over four years. AgriZero^NZ aims to make at least two new mitigation tools available by 2028, and to enable development and adoption of solutions to drive towards near-zero methane and nitrous oxide emissions by 2040. To date, investments include a slow-release, biodegradable, methane-inhibiting bolus, probiotics and natural enzymes, a methane vaccine and methane inhibitors.

The GRA, a network of 68 member countries and 29 partner organisations, was established in 2009. New Zealand hosts the Secretariat and GRA Special Representative, and co-chairs its Livestock Research Group. The GRA facilitates collaborative and evidence-based dialogue and knowledge sharing. GRA members collaborate on the research, development and extension of technologies and practices to deliver more climate-resilient food systems without growing GHG emissions. New Zealand builds future capability and capacity through running training programmes and supporting GRA scholarship programmes in developing countries.

Established in 2009, the Ag Emissions Centre funds pre-commercialisation research into ruminant methane, nitrous oxide and farm systems to reduce emissions. Investments, partly co-funded by industry, focus on indicators for breeding low-methane sheep and cattle, novel methane and nitrous oxide inhibitors, methane vaccines and possible combinations of new mitigation technologies.

The New Zealand Climate Smart Agriculture Programme supports measuring and monitoring agricultural emissions in South-East Asia, southern and eastern Africa, Latin America and the Caribbean. New Zealand also funds international collaborative efforts to accelerate global research on mitigating GHG emissions from agriculture, especially for pastoral livestock farming, and has co-funded and participated in international research projects to decrease agricultural emissions.

Recent policy developments

Domestic policy developments in 2025-26

Seven Crown Research Institutes were consolidated in July 2025 into three new Public Research Organisations (PRO): New Zealand Institute for Earth Science, focused on energy security and strengthening resilience to natural hazards and climate related risks; New Zealand Institute for Bioeconomy Science, driving innovation and growth in agriculture, forestry, aquaculture and biotechnology, while supporting environmental sustainability and biosecurity; and New Zealand Institute for Public Health and Forensic Science, formed by re-purposing the Institute of Environmental Science and Research (ESR). For agriculture, the reform is intended to strengthen innovation and technology transfer across the food and fibre sectors, supporting productivity growth, biosecurity and environmental sustainability.

The Primary Sector Growth Fund (PSGF), launched in May 2025, replaces the Sustainable Food and Fibre Futures Fund, which is closed to new applications but continues to support existing projects already underway. The PSGF provides co-investment funding of up to 40% of project costs to support high-growth initiatives across New Zealand’s food and fibre sector. Projects must demonstrate direct economic benefit to the food and fibres sector. A total of NZD 354 million (USD 205 million) is allocated over five years, including NZD 41 million (USD 23.84 million) for Māori agribusiness projects.

In 2025, the government revised the second emissions reduction plan (ERP2) approach to reducing agricultural emissions, deciding not to introduce on-farm emissions pricing by 2030. The updated ERP2 reflects this shift, maintaining a focus on technology to support farmers in lowering emissions.

In 2025, Operational Agreements were signed between the government and stakeholders from across the dairy and meat sectors7 to address high pathogenicity avian influenza and foot and mouth disease, considered as high priority diseases. These agreements aim to reinforce response capacity and ensure effective management of other potential diseases.

As of late 2025, New Zealand is in the final phase of its ten-year Mycoplasma bovis eradication programme, to eliminate a systemic animal health risk and strengthen the credibility of its livestock export assurances. Two consecutive spring seasons with no infections detected in bulk tank milk testing marks the start of the “confidence of absence” stage, during which ongoing surveillance will confirm elimination. With continued collaboration between industry and government agencies, the programme aims to achieve formal disease-free status by mid-2028. By pursuing eradication rather than long‑term control, the programme is intended to assure trading partners and minimise the risk of SPS‑related trade restrictions.

The Animal Welfare (Regulations for Management of Pigs) Amendment Act 2025 was passed in December 2025. This regulation aims to ensure locally produced pork products meet good animal welfare practices whilst providing the industry with certainty and maintaining productivity for the sector. The act was developed in a context of growing international scrutiny of production‑method standards and their interaction with trade rules, particularly under sanitary and technical barriers disciplines.

In October 2025, the Bioeconomy Science Institute launched a new farm-level emissions calculation platform, including a free web-based tool to support on-farm emissions measurement. The Ministry for Primary Industries will update the underlying calculations as additional mitigation options become available. New Zealand is collaborating with Germany under the AgriDENZ climate partnership to verify the comparability of the on-farm estimation methods.

Trade policy developments in 2025-26

New Zealand and India announced conclusion of negotiations on a Free Trade Agreement (FTA) in December 2025. The FTA aims to reduce tariffs for 95% of New Zealand’s current exports over time, with more than 50% of current exports to India benefitting from full tariff elimination immediately on the day one and rising to more than 80% over time. Products receiving immediate tariff elimination include forestry products, wool, and sheep meat. In addition, tariffs are eliminated over time for most industrial cherries, avocadoes, and new quota access for products such as apples, manuka honey and kiwifruit. The FTA was signed in April 2026.

The Dairy Industry Restructuring (Export Licences Allocation) Amendment Act 2025, which took effect on 1 May 2025, reforms how New Zealand allocates dairy export quotas for markets including the United States, United Kingdom, European Union, Japan, and the Dominican Republic. Under the Act, quotas are now based on export volume history rather than milk solids collected, and up to 10% of quota can be reserved for smaller or previously ineligible producers. These changes aim to better reflect the diversity of the dairy sector, to ensure allocations are commercially viable, to support business growth, and to maximise the value of New Zealand’s dairy export.

On 28 August 2025, the New Zealand-United Arab Emirates Comprehensive Economic Partnership Agreement (CEPA) entered into force. The CEPA foresees the elimination of duties on 98.5% of New Zealand’s exports immediately on entry into force, rising to 99% by 2027. This includes all of New Zealand’s major agricultural exports. The CEPA also includes chapters on intellectual property, sustainable development, labour, sustainable agriculture, climate, and indigenous trade. The CEPA includes provisions that reflect opportunities for Māori, including a dedicated co-operation chapter.

Policy context

Key economic and agricultural statistics

New Zealand is a relatively small and sparsely populated country with a per capita GDP that is slightly above the OECD average. Its high degree of market openness is related to its dependency on international trade. Agriculture has a comparatively high, albeit slowly shrinking, importance to the economy, accounting for around 5% of both GDP and employment. Moreover, agro-food products account for more than two thirds of New Zealand’s total exports.

With little arable land, grass-fed livestock production represents the backbone of the agricultural sector, with livestock products accounting for around 75% of its total agricultural production value. New Zealand is among the world’s leading exporters of sheep meat and dairy products. Both sectors are highly export-oriented, with around 95% of dairy and sheep meat production exported. Beef, fruit and other horticultural products also contribute significantly to the country’s agro-food exports.

Table 21.2. New Zealand: Contextual indicators

	New Zealand		International comparison
	2000*	2024*	2000*	2024*
Economic context			Share in total of all countries
GDP (billion USD in PPPs)	83	294	0.2%	0.2%
Population (million)	4	5	0.1%	0.1%
Land area (thousand km2)	263	263	0.3%	0.3%
Agricultural area (AA) (thousand ha)	12 670	9 772	0.42%	0.33%
			All countries1
Population density (inhabitants/km2)	15	20	52	64
GDP per capita (USD in PPPs)	21 458	55 539	9 508	31 740
Trade as % of GDP	24.5	17.1	12.3	15.0
Agriculture in the economy			All countries1
Agriculture in GDP (%)	8.3	5.0	3.0	3.6
Agriculture share in employment (%)	8.5	5.5	-	-
Agro-food exports (% of total exports)	50.7	69.0	6.4	8.3
Agro-food imports (% of total imports)	7.9	12.5	6.1	7.5
Characteristics of the agricultural sector			All countries1
Crop in total agricultural production (%)	17.7	25.7	62.1	60.4
Livestock in total agricultural production (%)	82.3	74.3	37.9	39.6
Share of arable land in AA (%)	2.7	6.1	33.0	34.0

Note: *or closest available year.

1. Average of all countries covered in this report.

Sources: OECD statistical databases; International Labour Organisation (ILO); UN Comtrade; World Bank, WDI; FAO database and national data.

New Zealand has a stable economy having experienced growth and relatively low inflation for most of the 2010s. However, both the COVID-19 pandemic and Russia’s war of aggression against Ukraine have weighed on economic activity with weaker – negative in 2024 – output growth and higher inflation. Growth resumed in 2025 at a modest 0.7% while inflation has remained slightly above levels seen for most of the pre-pandemic period.

New Zealand is a consistent and growing net exporter of agro-food products. After some drops in 2015 and 2016 due to, among others, lower dairy prices, its agri-food exports have picked up again since 2017 and reached new record levels in 2022. Most of New Zealand’s agro-food trade, and in particular of its exports, is processed food for final consumption. On the import side, however, intermediary products represent about two-fifths of the trade basket.

New Zealand’s growth in agricultural output over the 2014-23 decade has been below the global average, driven by a slight productivity decline: against an increase (albeit slow) at the global level, and in contrast to a 2% p.a. increase between 1991 and 2000, total factor productivity (TFP) in New Zealand fell by an average of 0.4% p.a.

Agriculture is responsible for half of New Zealand’s GHG emissions. This is due to the dominant role of dairy and ruminant meat production and to the large share (88%) of renewables in electricity generation, among other factors. Almost three-quarters of agricultural emissions are in the form of enteric methane from ruminant livestock. Nutrient surpluses are also well above OECD averages, although the phosphorous balance has declined from its levels in the 1990s. The sector is also the main user of freshwater as irrigated land has expanded, partly in response to climate related uncertainties. Nonetheless, its overall level of water stress, while higher than in the 1990s, is relatively low.

Table 21.3. New Zealand: Productivity and environmental indicators

	New Zealand		International comparison
	1991-2000	2014-23	1991-2000	2014-23
			World
TFP annual growth rate (%)	2.0%	-0.4%	1.8%	0.8%
			OECD average
Environmental indicators	2000*	2024*	2000*	2024*
Nitrogen balance, kg/ha	36.7	60.3	32.3	29.0
Phosphorus balance, kg/ha	13.2	4.9	3.3	2.3
Agriculture share of total energy use (%)	3.6	4.9	1.7	2.0
Agriculture share of GHG emissions (%)	52.5	53.1	8.7	10.3
Share of irrigated land in AA (%)	3.0	8.2	-	-
Share of agriculture in water abstractions (%)	57.5	..	46.1	47.7
Water stress indicator	1.0	3.0	..	..

Note: * or closest available year.

1. Data are not comparable between time periods due to change in methodology.

Sources: USDA Economic Research Service, Agricultural Productivity database; OECD statistical databases; FAO database and national data.

Historical trends in agricultural policies

Prior to the 1970s, New Zealand exported more than half its agricultural production to the United Kingdom and support for agricultural producers was largely non-existent except for some import-competing sectors such as eggs and poultry. At the same time, New Zealand’s Statutory Marketing Boards, operating since the end of World War I, enjoyed significant rights to regulate the supply and trade of several key export products. Overall, relative to the more protected manufacturing sectors, agriculture was implicitly taxed (Anderson et al., 2008[3]).

The accession of the United Kingdom to the European Economic Community in 1973 weakened New Zealand’s access to its most important market, and the oil shock of the mid-1970s generated significant foreign exchange shortfalls given the country’s dependence on oil imports. In response, the government introduced policy measures to support agricultural production (MPI, 2017[4]). These included input subsidies, minimum prices supported by import barriers and export incentives, tax concessions, low-interest loans and development grants (MPI, 2017[4]; Harris and Rae, 2004[5]).

In response to macroeconomic problems, including the substantial fiscal burden of these support measures, a new government implemented significant economic reforms during the second half of the 1980s. By the end of that decade, production and trade distorting policies supporting the farm sector practically disappeared (Table 21.4). In the context of these reforms, New Zealand’s Statutory Marketing Boards lost most of their authority or were dissolved (Nayga and Rae, 1993[6]).

Table 21.4. New Zealand: Agricultural policy trends

Period	Broader framework	Changes in agricultural policies
Prior to 1975	Export-oriented agriculture with little policy intervention. Implicit taxation notably of exporting agriculture relative to the manufacturing sector	Statutory Marketing Boards with significant authority to regulate production and trade of key export products Agricultural and manufacturing import tariffs Limited farm support, including some input subsidies
1975-1984	Incentivising agricultural production	Introduction of significant farm support measures: price support, input subsidies, tax concessions, low-interest loans, development grants
Late 1980s	Reforms to market and trade liberalisation	Dismantling of price support and most other forms of direct farm support, along with economy-wide reforms liberalising the manufacturing industry as well Restricted function or dismantling of the Statutory Marketing Boards Exit packages and debt restructuring programmes for farmers who had to stop operating
1990-present	Continuing trade liberalisation	Focus on general services and disaster aid

Since the policy reforms of the late 1980s, New Zealand’s level of support to agricultural producers has been the lowest among OECD countries (Figure 21.7). For the last almost 20 years, PSE has been consistently below 1% of gross farm receipts. While this low support has been dominated by SPS-related market price support, most of the budgetary producer support has consistently been provided for livestock disease control. Most of the support for the sector, however, has consistently been in the form of provision of general services to the sector, notably through the agricultural knowledge and innovation system and related to the country’s biosecurity controls for pests and diseases.

References

[3] Anderson, K. et al. (2008), “Distortions to Agricultural Incentives in Australia and New Zealand”, Agricultural Distortions Working Paper, No. 09, World Bank, Washington, DC, https://openknowledge.worldbank.org/handle/10986/28184.

[5] Harris, D. and A. Rae (2004), “Agricultural Policy Reform and Industry Adjustment in Australia and New Zealand”, Conference paper for International Agricultural Trade Research Consortium, Philadelphia, 6-7 June 2004, https://doi.org/10.22004/ag.econ.15762.

[7] Ministry for Primary Industries (2012), An Evaluation of Compulsory Levy Frameworks for the Provision of Industry-good Goods and Services: A New Zealand Case Study, https://www.mpi.govt.nz/dmsdocument/3736/direct.

[4] MPI (2017), New Zealand Agriculture. A policy perspective, Ministry for Primary Industries, New Zealand, https://www.mpi.govt.nz/dmsdocument/27282/direct.

[6] Nayga, R. and A. Rae (1993), “New Zealand’s statutory marketing boards: Their history and some recent developments”, Journal of Food Distribution Research, Vol. 24, pp. 94-100, https://core.ac.uk/download/pdf/6988122.pdf.

[2] New Zealand Government (2024), “Out journey towards net zero. New Zealand’s second emissions reduction plan 2026-30”, https://environment.govt.nz/assets/publications/climate-change/ERP2/New-Zealands-second-emissions-reduction-plan-202630.pdf.

[1] New Zealand Government (2022), “Towards a productive, sustainable and inclusive economy. Aotearoa New Zealand’s First Emissions Reduction Plan”, https://environment.govt.nz/assets/publications/Aotearoa-New-Zealands-first-emissions-reduction-plan.pdf (accessed on 6 March 2025).

Notes

← 1.  Other traders can export kiwifruit to markets other than Australia in collaboration with Zespri, subject to approval by Kiwifruit New Zealand, the relevant regulatory body.

← 2.  In December 2025, the government introduced two replacement bills: The Planning Act and the Natural Environment Act to reform the RMA. Changes to the five major National Direction instruments are intended to redefine the rules for biodiversity, coastal areas, highly productive land, and water resource. Both acts are currently before parliament’s Environment Committee and are expected to take effect in late 2026.

← 3.  Risk goods are any items that may constitute, harbour, or contain an organism that may cause unwanted harm to natural or physical resources, or to human health in New Zealand (https://www.mpi.govt.nz/import/importing-into-nz-how-it-works/import-health-standards).

← 4.  Three more industry groups, which have not signed the deed, are represented by other signatories.

← 5.  Activities that are “non-rival and non-excludable (including where the cost of exclusion is prohibitively high), and where the benefits accrue to members of a particular industry”. Commercial and trading activities are not included, to avoid competition between private enterprise and industry organisations (Ministry for Primary Industries, 2012[7]).

← 6.  In particular, activities undertaken by agricultural processes (e.g. importing or manufacturing synthetic nitrogen fertilisers, slaughtering ruminate animals and dairy processing of milk or colostrum) and farmers (e.g. purchasing synthetic fertiliser containing nitrogen for application to land and farming ruminant animals for reward; or the purpose of trade), for which previously reporting and surrender obligations were going to be included in the NZ ETS, will no longer be subject to those obligations following the enactment of the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Act in November 2024.

← 7.  For foot and mouth disease stakeholders include Dairy NZ, Beef and lamb NZ, Dairy Companies Association of NZ, Deer Industry NZ, Meat Industry Association of NZ, and NZ Pork Industry Board (NZ Pork). For avian influenza stakeholders include the Poultry Industry Association of New Zealand (PIANZ) and the Egg Producers Federation of NZ (EPF).