New Zealand's agricultural industries will be hit hard by the global financial crisis and some farms with existing debt could go under, according to a ministerial briefing paper to the in-coming government, reports The New Zealand Herald.

The paper from the Ministry of Agriculture and Forestry (MAF) warns that with debt increasing and commodity prices falling, the agricultural sector could find it hard to refinance debt and that could result in businesses going under or being bought-out, The Herald said.

Demand for agricultural products will fall from oil-producing countries and emerging Asian economies, the MAF paper said. Within the horticulture sector, kiwifruit in particular will see a drop in demand.

The new Minister for Agriculture, David Carter, said the government could do nothing to increase the demand of New Zealand products overseas, but that it would continue to press for free trade opportunities.

'The other thing that we are working on is a stimulatory package to the whole economy which will be significant and part of that will be the tax cut package,' Mr Carter is quoted as saying.

MAF said some 564,000 people, 14 per cent of the population, live in rural areas.

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