The Government needs to offer relief to struggling farmers to avoid widespread foreclosures by banks, opposition leaders say.
The call follows an announcement by Reserve Bank Governor Graeme Wheeler to a select committee on Thursday that dairy debt stood at $38 billion, up from about $10b in 2002.
He unexpectedly cut the official cash rate to a record low 2.25 percent because of low inflation, a deteriorating global growth outlook and low dairy prices.
Opposition leaders told The Nation today that the government's assertion dairy farmers were resilient and would survive the low prices was wrong.
Labour leader Andrew Little and Green Party co-leader James Shaw said, based on projections, about 25 percent of farmers could "hit the wall".
New Zealand First leader Winston Peters said the number of out-of-luck farmers would depend on whether the National-led government was prepared to back them as it did banks during the global financial crisis.
He called for a government-led relief package.
However, Mr Little said while the government could provide some relief, it needed to "stiff-arm" the banks so farmers were not pushed off the land.
"The government needs to step in and marshall the forces and put the pressure on those banks."
All leaders agreed there was a high risk of farms being sold to offshore buyers if desperate farmers were forced to sell cheap.
Mr Peters said a "perfect storm" had been created for overseas buyers, with a long-range view of ownership.
"We've got a short-term government and economic plan run by Treasury who can't see past yesterday."