The country's main agricultural research provider AgResearch is proposing to cut more than 40 jobs, mainly in meat and wool research.
AgResearch has trimmed its corporate staffing and costs in the past two years, but chief executive Andrew West says it has been forced to consider cuts in science and technical staff.
He says this is due to declining funding and falling demand for research in some areas, including wool research - after farmers rejected the wool levy - and long-term meat research and development.
"Lets be honest about this, if farmers thought that R&D was important in wool, they'd have funded it," he says.
"If the members of that industry choose not to invest in science then there is a knock-on consequence.
"Frankly, why should the taxpayer be expected to pick up the slack."
Dr West says AgResearch has put a proposal to staff for the job reductions which is now up for discussion.
The aim is to make a decision by about the middle of next month.