Conflict has emerged over Government-owned companies being able to influence Government-led inquiries.
State-owned Landcorp New Zealand, which owns and operates a large number of farms, is facing criticism for welcoming environmental taxes on the sector.
Andrew Hoggard of Federated Farmers says he feels Landcorp are "trying to push themselves out to be a bit holier than thou" and are "throwing other farmers under the bus quite frankly".
Pāmu is Landcorp's brand name and it has made a submission to the Government's Tax Working Group saying it's not opposed in principle to a well-designed capital gains tax, a levy on fertiliser products containing nitrogen and a price on water usage.
Federated Farmers says many reject these new taxes.
"There's already a lot of regulations from regional councils focusing around a lot of these issues, managing it that way. Coming in with taxes is sort of like just doubling up," Mr Hoggard said.
National's Agriculture spokesman Nathan Guy says rural communities will oppose new taxes on farmers.
"This will go down like a cup of cold sick in rural communities that the Government's farmer is out there proposing more taxes on hardworking farmers of New Zealand," he said.
In a statement, Landcorp says, "agriculture needs to take a strong lead on helping New Zealand reduce our environmental footprint" and "finding solutions to nitrogen emissions is a key part of that".
Landcorp added: "We recognise with our size and Crown ownership that we have an obligation to be actively involved in the discussion."
State Owned Enterprises Minister Winston Peters agrees, saying, "We have SOEs that essentially are businesses, entitled to make submissions to the Tax Working Group."
But Mr Peters' wasn't told about it and New Zealand First MP Shane Jones said he thinks "if entities like that are going to do it they need to check with the Minister's office".
Landcorp says it regrets not informing the Minister.
But Mr Guy said Landcorp "have lost touch with New Zealand farmers and they are out there doing the dirty work of the New Zealand Government saying there should be more taxes imposed".
Mr Peters, asked if there concern about a possible conflict of interest, said: "Well we're a freedom government. We don't conflict people's right to make commonsense suggestions. Sometimes they're right, sometimes they're wrong."
It's a question many in the agriculture sector will now be debating.