New Minister of Agriculture Damien O'Connor wants farmers to focus on being the best in the world to ensure the sector survives in the long term.

In an interview with the Herald, O'Connor said agriculture faced a number of issues, from water quality to the advent of synthetic protein.

"What I would like to see is a shift in thinking from industry leaders through to every farmer, that appreciates that we are producers of food for consumers and that we must be the best in the world to survive in the long term," O'Connor said.

"New Zealand farmers are some of the best in the world in terms innovation and adaptation, but what has been missing in my view is a clear vision as to what we are doing as a nation, as food producers," he said.


"Farmers need to understand why they need to change, and just what they will need to change," he said.

"I believe that with the right leadership, and the right message, and clear explanation, they will enthusiastically embrace the challenge of being the world's best at protein production."

O'Connor said there would be more diversification across the agricultural spectrum. He used the example of horticulture, where new crops were emerging.

"That sector is showing the way because the growers are directly linked to their consumers,'" he said.

"There has been some outstanding leadership from organisations like [kiwifruit marketer] Zespri, who are in the marketplace looking at trends and judging the consumers feedback all the time," he said. "That's what has to happen in every other sector," he said.

Labour's policy was about setting nationwide freshwater quality standards with the aim of stopping water quality getting worse. Within a generation, the aim is to reverse the damage that has been done to New Zealand's rivers and lakes.

"As an incoming government, we have laid down some clear bottom lines as regards to water quality, and I think that the industry understands the need for that. The question of how quickly we move those new standards will be the immediate challenge," he said.

"There is now more awareness and a huge amount of mitigation already taking place, but the reality that we have far too many waterways that are polluted is the immediate challenge that we must address."


O'Connor said farmers had been "pushing the boundaries" as to where dairy cows could be located and some of that land would be better used for dry stock production.

"You can't blame the farmers - they have responded to market signals, to enthusiastic bank lenders and to international markets that indicated long-term demand, but farmers, as they have done in the 70s and 80s, have forgotten about return on equity and many of them have ended up with a focus on capital gain," he said.

"There is huge demand for quality sheepmeat and demand for pasture-fed beef, and a number of other alternatives. There is no reason why we should not be using those regimes on land that is appropriate - and not pushing beyond the boundaries for dairy," he said.

O'Connor said New Zealand had in the past benefited from pursuing a bulk, commoditised, agricultural model.

"Farmers and the processors have been incentivised around the bulk growth model and it has delivered a dairy industry that is of world scale.

"That's a huge benefit for the country, but we need to turn that volume into better value and not just focusing on running harder, faster for more. The environment will not stand it and we have to be smarter with everything we do with agribusiness."

On irrigation, O'Connor said: "We are not opposed to irrigation and the wise use of water but we don't believe there needs to be a huge tax payer funding of those schemes and so we will honour those commitments of Crown Irrigation Investments, but we will not proceed with any large scale support for future irrigation projects."

One of the first things the Labour-led Government is doing is breaking up the Ministry for Primary Industries (MPI) into three parts - agriculture, fisheries and forestry.

O'Connor said forestry had languished as an industry because there was not the focus within MPI on its potential.