The Reserve Bank's warning that falling dairy prices and rising farmer debt levels are posing a risk to the New Zealand economy must not be ignored, Labour's David Parker says.
The central bank's governor, Graeme Wheeler, said yesterday that dairy debt is about $33 billion and roughly half of it is owed by 10 percent of the farmers.
Mr Parker, the party's acting leader, said dairy prices have nearly halved since Februrary and a low dairy payout could increase the number of loan defaults in coming years.
He believed it was leaving New Zealand with an increasingly unbalanced economy based on milk powder and house sales.
"The old saying is: don't put all your eggs in one basket - maybe we should be talking about milk rather than eggs.
"In my opinion, the National Government's overseen the narrowing of the New Zealand export economy towards dairying and it puts at risk the wider economy.
"An unbalanced economy is no good for any of us. New Zealanders will never achieve the standard of living they deserve unless we refocus our economy towards a broader range of value-added exports," he said.