The Government is considering a forced sell-down of some of Landcorp's farms because of concerns about debt levels and the low forecast dairy prices.
Finance Minister Bill English said the state-owned enterprise is currently revising its outlook in the face of the latest forecast for dairy prices.
He couldn't rule in or out a partial privatisation of the company, however there had been no mention of selling shares.
"[Landcorp's] probably looked at ways of looking at raising capital related to selling land, but not floats or big sell-offs or anything like that.
"If there is a need, one of the options would be to sell down farms to reduce debt," Mr English says.
However, he said talks of a sell-down were "getting way ahead of decision-making" because Landcorp was still revising its budgets.
The company already has an ongoing process of selling land which has been driven by getting rid of farms which aren't core to the business as well as sales related to Treaty settlements, Mr English says.
State-owned Enterprises Minister Todd McClay has had ongoing discussions with Landcorp, which has $1.6 billion in assets, but isn't "significantly worried about" its debt levels.
"They do have debt on their books. I want to make sure that with changes with some of the pricing around dairy that it doesn't become a problem for them.
"It's a sustainable business, but we just want to make sure the debt doesn't get ahead of them."
Some of the debt has come from a "significant number" of farms bought recently and over the past few years not returning a dividend the taxpayer "would think is reasonable", Mr McClay says.
There have also been discussions in the past about a number of other state-owned enterprises including New Zealand Post, TVNZ, Kordia and Public Trust in the past, Mr English says.
Labour says the Government can't let productive farmland end up in the hands of foreign investors.
"Any sales of Landcorp farms are likely to go into the hands of foreign investors which will see more of our productive economy sending its returns offshore," leader Andrew Little says.
"Landcorp entered into a highly ambitious dairy conversion programme as the Government stood on the sidelines cheering the industry’s high prices. If it is now in difficulty, the blame can be laid squarely at the Government’s feet."
Any privatisation of Landcorp would be a broken promise by the Government which said it wouldn't sell any more state-owned assets, Mr Little says.