Federated Farmers in Southland says future-proofing against a shortage of fertiliser is one of the benefits of lignite mining.
About 100 people spent the weekend in Mataura to protest at Solid Energy's plans to mine Southland lignite, which is a source of urea - a popular fertiliser used to boost grass growth.
Currently, New Zealand imports most of its urea.
Solid Energy has begun construction of a $25 million briquetting plant and wants to expand that into a $2 billion diesel and urea facility.
Federated Farmers says a local supply of the nitrogen-rich fertiliser would benefit farmers.
Southland president Hugh Gardyne says that, along with lignite's use for briquettes and as a source of diesel fuels, are positives from mining that must stack up against the environmental and other concerns some in the community have.