Federated Farmers is backing research to produce allergen-free milk from genetically engineered cows because it could create new commercial opportunities for dairy farmers.
Crown Research Institute AgResearch, has used trans-genic techniques to bred the first cow in the world to produce high protein milk that may be hypo-allergenic.
Scientists are testing the milk, which contains no detectable levels of beta-lactoglobulin, a protein that triggers allergic reactions.
Anti-GE campaigners have condemned the project as inhumane and unnecessary, because processors already have the technology to remove the protein from milk.
But Federated Farmers' dairy chair Willy Leferink says New Zealand should be embracing new technology that produces medical and economic benefits, so long as its safe.
He says the debate over genetic modification is not over, but New Zealand does have stringent safety processes.