The Ministry for Primary Industries (MPI) has approved co-funding of $1.75 million for the three-year Whai Hua PGP programme, which is worth $3.5m in total.
The Whai Hua programme will develop natural probiotic dairy milk products targeting health-conscious consumers in Asian and New Zealand markets.
Its partners are leading agribusiness Wairarapa Moana Incorporation, which runs 10,000ha of dairy and forestry operations in central North Island, and Miraka, the first Maori-owned dairy processing company, based in Taupo.
It will operate in collaboration with in-market partners to ensure a connection with consumers.
"This programme exemplifies what the PGP is all about – innovation to the fore and increasing profitability – in this case of dairy farming and processing," MPI deputy director-general Scott Gallacher said.
Whai Hua chairman Kingi Smiler said he was extremely pleased with the announcement and the significant benefits the programme will bring to both organisations and the country.
The Whai Hua programme expects to generate $8.6m a year in economic benefits to NZ by 2021.