Millions of dollars of taxpayer money is being poured into a dairy industry programme the Government says will raise productivity without increasing its environmental footprint.
A confidential business case filed as part of the Primary Growth Partnership programme had a dairy industry goal of increasing the amount of land in dairy farming by 16 percent by buying up sheep and beef farms and possibly converting land from forestry.
If the industry were to grow by 16 percent, it would be close to 250,000 hectares more of farmland which would be converted to dairying.
The figure from the business case was included in a new report by the New Zealand Institute of Economic Research.
Green Party environment spokesperson Eugenie Sage said it showed the Government's true strategy was simply more production.
"Well it's an embarrassment for the Government because it does confirm that its strategy continues to be to maximise milk supply to allow the dairy industry to continue to expand rather than adding value to the milk we do produce," she said.
"And getting more dollar for every litre - we cannot cope with any more cows because of the impact water supply and the major pollution problems we already have in our lowland rivers and lakes."
The Ministry for Primary Industries refused to make the dairy industry's business case public, saying it was confidential.
But Brad Young, a senior public relations official from the ministry, said the dairy industry's growth forecast should not be considered a forecast at all.
He said the 16 percent figure came from a third party but refused to identify them.
Dairy New Zealand said the figure did not come from it but thought it may have come from Fonterra - while Fonterra said it thought the figure could have come from Dairy NZ.