Key Points:

New Zealand farmers not only have a $1.2 billion taxpayer subsidy of their Kyoto "debt" to look forward to as the climate changes - many of them will get better farming conditions.

A report released today by the Ministry of Agriculture and Forestry (MAF) shows that in some regions, agricultural production will potentially increase.

The EcoClimate report, Costs and Benefits of Climate Change and Adaptation to Climate Change in New Zealand makes projections on future temperatures, rainfall and droughts.

"The primary production sector is the engine room of our economy and it will be affected by climate change driven by global warming," said MAF's director of natural resources policy Mike Jebson.

"For an average year in the future, the predicted changes are small when averaged across the country, but different parts of the country are affected differently, with the west becoming wetter, the east drier and all of the country becoming warmer," he said.

"Production will increase in Southland and on the West Coast of the South Island but decrease in some North Island east coast areas and Northland.

"The warmer climate may lead to an earlier start for pasture growth in late winter or spring, enabling farmers to bring forward lambing or sow earlier crops."

Mr Jebson said there would still be some challenges for farmers, with a projected national decline in production for the driest years in the future, which will be worse than the worst droughts of the past three decades.

"This puts more emphasis on the need to drought-proof farms," he said.

The EcoClimate report was produced by a consortium of researchers from Niwa, AgResearch, Motu, Landcare, Infometrics and GNS.