The Treasury says New Zealand should be open to debate about new biotechnologies, including genetic modification.
In a speech at Fieldays in Waikato yesterday, the Treasury Secretary said the country might miss out on opportunties by being so restrictive.
Gabriel Makhlouf said he did not want to get into a debate about genetic modification.
"What I will say is that when new technologies come along, both GM and non-GM, our current system denies us the choice over whether we want them. Meanwhile, our international competitiors do have this option," he said.
He said a new variety of high-yielding eucalyptus tree approved for cultivation in Brazil was one example.
He said by using that variety growers could get a 15 percent increase in wood for the same area.
Mr Makhlouf said the regime for regulating new organisms in New Zealand was "heighly restrictive" in practice.
However, the Soil & Health Association said New Zealand did not need to consider genetic modification.
Co-chair Marion Thomson said GM technology had failed to perform and created problems overseas.
"There is a lot of proof out there that it is not improving productivity, it's not improving the quality of the food and it's not improving yields in any way," she said.
She said offering more choice over bio-technology would affect organic farmers or farmers who were GM free globally.
She said she would rather see New Zealand look at other methods of farming rather than using "risky" technology.