New Zealand's largest farmer, Landcorp, is eyeing up moving into hemp, kiwifruit and avocados.
The state-owned enterprise has announced it will pay back $5 million to the taxpayer following its latest annual results. This is the first dividend since the 2014 financial year when it returned $7m to the Government.
Its after-tax profit for the year has fallen by 34 per cent to $34.2 million because of lower returns from forestry and livestock, and a higher tax bill.
Over the past five years Landcorp has diversified into sheep and deer milk, and halted a forestry to dairy farm conversion in a move to become more environmentally sustainable.
"It's an exciting time to be in agriculture. There are pressures but there's also a lot of diversification happening across the sector which we want to be part of," chief executive Steven Carden said.
Over the last four years Landcorp had been reducing its debt levels which were now at $209m, down by about $25m.
"Given the strong operating performance of the business, the board is happy to pay a dividend back to the Government and get that dividend programme back again."
Late last year Agriculture Minister Damien O'Connor said he was "comfortable" with the state-owned enterprise's intention to pay off debt and invest in its value-add programme rather than return a dividend.
Pre-election last year, Landcorp was facing the prospect of being sold off if National was returned to power.
Former Primary Industries Minister Nathan Guy announced a policy of breaking up Landcorp's farms into 100 parcels to make way for young farmers in a lease-to-buy deal.
"There is no clear public good coming from Crown ownership and little financial return to taxpayers," Guy said.
Despite the drop in profit by $17.7m, total revenue rose by 7 per cent to $247m, including a 15 per cent increase in livestock revenues and income of $8.1m from carbon forestry investments. The higher tax bill resulted from the increase in revenue.
Carden said he was pleased by the rise in revenue for livestock to $125m from $108m last year. However the overall results had been dragged down by livestock valuations.
Milk revenue was $95m, down from $101m the year before, and reflected the dropping of the Shanghai Pengxin sharemilking contract and poor weather.
Carden said it was particularly pleasing to see core premiums from milk increase by over $1m on last year, due in part from its focus on organic, grass-fed and winter-milk dairy programs.
Landcorp launched Pāmu deer milk at the Fieldays, which won a Grass Roots innovation award.
"Our investment in forestry, a key part of our strategy over the last five years, continues to provide positive returns for the company, and the environment," Carden said.
There has been a 25 per cent reduction in significant harm-related incidents over the year. Landcorp had made a significant investment in a staff training programme for the agriculture sector and wider business community, launching the Pāmu Academy.
Landcorp owns 125 farms, and its 661 permanent employees run 579,871 sheep, 62,526 dairy cows, 82,078 beef cattle, and 105,054 deer.
Of the land it has responsibility for, it owns 158,394ha and leases 219,692ha.