Green Party co-leader James Shaw says farmers should not be distressed by the latest Productivity Commission report, as "no one is suggesting giving up huge swathes of farming."

Talking to The Country's Jamie Mackay about concerns around the report's recommendation that 20 per cent of sheep and beef land be given over to afforestation, Shaw said many farmers were already converting the "most inaccessible, least productive," land on their properties to forestry, a practice which is proving profitable.

Listen below:

"We're not advocating the entirety of Southland or wherever suddenly converting to Pinus Radiata and I think that that notion is scaremongering."

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DairyNZ's chief executive Dr Tim Mackle has expressed concern over the report's proposed emissions charges which he believes could potentially see dairy farmers paying $230,000 a year.

"The actual worst case scenario is that we continue to defer action into the future, not invest in upgrading our economy and then suffer massive and very expensive consequences and shocks further down the line," says Shaw.

Also in today's interview: James Shaw discusses emission targets in the United States and the Waimea Dam project.