State-owned farmer Landcorp's decision to embrace less polluting types of farming at Wairakei Estate near Taupo is being welcomed by Labour and the Greens.

Labour's Primary Industries spokesperson Damien O'Connor says Landcorp had no choice but to dump its plan to convert forestry land for 30,000 cows because of the poor short and medium term outlook for the dairy price.

Wairakei Estate near Taupo. Photo: Mike Scott/Fairfax NZ

'The decision not to convert 14500ha of former forestry land north of Taupo is a no brainer. With the global milk glut, New Zealand doesn't need a significant increase in the supply of diary.

'The question now is what Landcorp does with the land at Wairakei Estate. The Government is out of ideas. It has failed to diversify the economy and put all its milk in one bucket.

'National has refused to take action over dry stock issues or undertaken the reform of the red meat sector which is so desperately needed. This Government has provided no leadership for farming.

'The only light at the end of this tunnel is today's sensible decision by Landcorp,” says Damien O'Connor.

Green Party water spokesperson Catherine Delahunty says Landcorp's brave decision to scale back its dairy intensification programme in the North Island is a victory for the environment and those who have fought to protect the Waikato Rive.

'Landcorp's decision to not proceed with its intensification programme, in part because of environmental concerns, is a huge victory for the farmers, iwi, fisher people and all those worried about the impact of increasing dairying on the Waikato River.”

The Green Party presented a petition to Parliament last year with more than 8000 signatures calling on Landcorp to abandon its plans to convert thousands of hectares of the Waikato to dairying.

'We congratulate Landcorp for listening, and the next step is for the Government to listen to those who want our rivers protected. Stop pushing for more cows over the environment, and commit to swimmable rivers, rather than merely water that you can dip your toe in.

'More than two thirds of our rivers aren't clean enough to swim in, and a big part of the problem is large scale dairy farming. By scaling back its plans to put more cows on Waikato land, Landcorp has given our precious waterways a better chance of survival.

'The next step would be to abandon all plans to increase dairying on the Wairakei estate.

'We're sure that the price of dairy solids slumping also contributed to Landcorp's decision. But the Crown entity's decision does point to the ability of Government owned organisations to put the environment first, a decision that would be more difficult if Landcorp had been privatised.

'It is to Landcorp's credit that they have woken up to what we really need in this country, which is sensible land use management that protects waterways. It can be done, but massive conversions in the volcanic country was never going to be an environmentally sustainable solution,” she says.