South Island iwi Ngai Tahu has begun developing the first of three trial dairy farms on forestry land in North Canterbury.
Ngai Tahu bought the Balmoral and Eyrewell forests in 1999 to provide a farming base for the iwi.
In the long term there is potential to convert 1600 hectares to dairying.
As a starting point, three trial farms of 1000 cows each will be established on 1200 hectares at Eyrewell, near Oxford.
Te Runanga o Ngai Tahu chair Mark Solomon says it has consulted with iwi members who have been sceptical about the dairy conversion proposal and won't allow it to continue unless it is shown to be sustainable and environmentally sound.
He says the first trial farm won't be operating until late next year or into 2013, so a decision on full-scale conversion is some years away.
