A Government-backed $170 million research programme will help drive change in the dairy industry, say DairyNZ and Fonterra.

The Government will contribute $85 million toward the seven-year programme through the Primary Growth Partnership (PGP), with $47 million from Fonterra, $29 million from DairyNZ and $9 million from a group of other PGP industry partners.

DairyNZ chief executive Tim Mackle said: "This major investment will create the biggest change in decades in research, training, and knowledge transfer to increase the rate of innovation on both sides of the farm gate, all of which can be leveraged to benefit New Zealand's wider primary industry."

Fonterra chief technology officer Jeremy Hill said more innovation would place the dairy industry and Fonterra in a strong position to meet the evolving needs of customers.

"Today, consumers are always seeking foods that are safer, tastier, more convenient, natural, healthy, good value and produced in more sustainable ways."