Finance Minister Bill English says Landcorp may have to consider selling off land to reduce its debt levels, but a partial share float is not on the table.
Landcorp is in close discussions with its shareholding ministers to monitor how much it owes.
Under a plan, that has been running for a decade, the state-owned enterprise is converting about 26,000 hectares of forestry land to dairy.
Prime Minister John Key said his ministers have told Landcorp to keep an eye on its books, to avoid taking on too much debt.
He said that could end up becoming a noose around its neck, as the Government learned from Solid Energy.
Mr English said the drop in dairy prices has had an impact on Landcorp, and different options were being explored.
"Yeah I think they've looked at ways of raising capital related to selling their land but not floats or big sell-offs or anything like that."
"They'll be in the process as with any other farmer re-doing a new forecast based on that pay-out and as they get through that process they'll be, as part of the ongoing monitoring, passing that information on to the Government."
But he has played down any increased ministerial scrutiny of Landcorp, saying ministers were having "pretty intensive, ongoing discussions" with most of the larger state owned enterprises (SOEs).
"There's been a strategic review of Landcorp as there has been of other entities like the Public Trust for instance - there is a pretty high level exchange of information."
Labour leader Andrew Little said the Government should not force Landcorp's hand.
"Are they being asked to or is the Government going to instruct them to do something that's outside their normal business process, so yeah they do buy and sell land.
"If they're being told, they're so heavily indebted, we now have to embark on some kind of rescue campaign because we failed to provide adequate ministerial oversight."
He said if Landcorp does start selling off land, that could mean large swathes of productive farmland ending up in the hands of foreign investors, sending returns offshore.
"Landcorp entered into a highly ambitious dairy conversion programme as the Government stood on the sidelines cheering the industry's high prices.
Mr Little said if Landcorp was in trouble, the blame should be laid squarely at the feet of the Government.
"Solid Energy was one of the biggest collapses of a state asset ever.
"Running one asset into the ground is bad enough, but getting another one into financial trouble is disgraceful.
"National promised not to sell any more state assets ahead of the election. This is yet another broken promise - it had better not be another broken state asset."
Mr English said the Government has no intention of putting any capital into Landcorp to help it reduce its debt.
He said there were other SOEs facing challenges, such as New Zealand Post, TVNZ and Kordia, but they all know better than to ask the Government for extra capital.