It won't be wrong to say that the recession is being well dealt by the country's primary sector.

The Ministry of Agriculture and Forestry (MAF) Tuesday published its annual outlook, which says that forestry, meat and dairy producers will experience increasing returns over the next three to five years.

The report also says that a decrease in demand in established European markets will be seen, since consumers spend less and governments erect trade barriers.

A notable pick up will be seen in markets in developing countries, like Asia; and there is a dire need for the New Zealand's primary producers to be ready to respond.

The ministry, for the crucial dairy industry which accounts for 27% of exports, predicts the average payout to farmers to remain between $5 and $6 per kilogram of milk solids until 2013.

According to MAF director-general Murray Sherwin, lamb prices have been supported by a drop in availability, due to drought and dairy conversions.

An increase in the demand for lower value beef, which forms a large proportion of New Zealand's production, has been seen. However, the demand has fallen for prime cuts.

Mr. Sherwin said; "The dairy sector has shown the most visible effects of the recession. The ministry is predicting a lean 2010 season, followed by an increase in milk payouts and overall export value."