Crown research institute AgResearch is to ask for voluntary redundancies because of a $5 million shortfall.
AgResearch says it needs to shed at least 20 jobs.
Chief executive Andrew West says cuts to capital expenditure have not been sufficient. Cuts to date total more than $3 million, but savings of another $2.4 million are needed.
Dr West says the move is needed to maintain high-quality scientists. AgResearch scientists are paid 15% below the international benchmark and it is committed to raising pay rates.
This factor, says Dr West, is the main factor behind the funding shortfall.
Research Science and Technology Minister Pete Hodgson says the Government has provided transitional funding to help AgResearch, which have helped reduced the number of redundancies.