There's growing concerns about the future of small town New Zealand - with one expert warning 'tough conversations' are needed.

The closure of Winstone Pulp International's Ruapehu mills have cost the region 230 jobs, and the proposed shutdown of Alliance Group’s Smithfield meat processing plant in Timaru could cost over 600 more.

Regional Development Minister Shane Jones says the need to achieve certain climate goals is driving down key industries - and negatively impacting regional New Zealand.

"If we're not going to maintain access to gas and coal during a managed transition and we're going to continually make it more difficult for farmers to sustain production, we are going to see a contraction of the economy around some of our small towns."

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