There are calls for the Government to act urgently in the face of urban sprawl and protect productive food-producing land before it disappears.
According to a report released by the Ministry for the Environment on Thursday, 54 percent of highly productive land was lost to housing between 2002 and 2019.
Urban areas increased by 31 percent on land that was potentially available for agriculture, while the area of residential land outside city boundaries more than doubled during that period, the report found.
It also found highly productive land became more fragmented in that time, resulting in more land moving out of commercial production.
With only 15 percent of New Zealand's land being particularly suitable for food production, the report - titled Our Land 2021 - emphasised the importance of protecting it.
"Our exports and domestic food production currently rely on the small amount of highly productive land we have. Using land that is not highly productive for food-growing, especially horticulture, results in lower yields unless more intensive land management approaches are used," the authors wrote.
Mike Chapman, chief executive of Horticulture New Zealand, says the figures show more needs to be done to protect against urban sprawl.
"This situation simply isn't good enough, considering that the primary production sector is the backbone of the New Zealand economy and only 15 percent of land is suitable for food production,' he said.
"The Government must act now to retain remaining highly productive land. Once houses have been built on it, that soil is lost forever."
Chapman said despite the Government launching its draft National Policy Statement on Highly Productive Land almost two years ago, "there has been no progress" on the issue.
He noted that the COVID-19 pandemic had highlighted how fragile global supply chains are and how important it was to be able to produce locally grown food.
"Locally grown produce is under threat. If New Zealand is not careful, buying healthy, locally grown fruit and vegetables will become even harder. That will have a detrimental effect on many New Zealanders' health and wellbeing, at a time when a lot of New Zealanders are worried about the future, in a post-COVID world."
Lincoln University's associate professor Amanda Black said the country was "at the crossroads of business as usual to a more intergenerational approach to managing our lands".
"Once land is in housing it is gone for good," Dr Black said.
"The loss of good productive soil is bad enough but the additional spillover impacts of creating urban areas means that we would be limited in how we manage weeds and pests, potentially creating weed and disease havens. We need to protect our best land and to do that we need strong policy."