Each year, MPI will target about 300 farmers to help them improve their farm systems and meet industry standards by getting more information to them.
MPI staff would contact the farmers who may not be involved in farm services or have farm advisers.
"That's so when we ask them for cleaner water and to reduce emissions, and when we want better animal welfare practice, we can get alongside them and show them how to do that, and not just expect them to comply," O'Connor said.
Many farmers see compliance and standards as a negative to their farming operations, he said.
"If we all lift our game, we can get more back."
The food and fibre industries are the backbone of New Zealand's economy, delivering more than $42 billion in export revenue last year.
Consumers expected their food and fibre to be produced by sustainable production systems that promoted good animal welfare, and this programme would help that.
O'Connor said the "traditional attitude" in agriculture was that the bottom 20 per cent of farms were forgotten about.
"We can no longer sustain that approach to farming because the 20 per cent that may need to lift their game determine our image in the international market place.
"I think we can offer one of the best stories in the world, but we are governed by the person who knows the least – that can tarnish our image."
O'Connor made the announcement on Nathan and Kate Williams' farm, Otahuao, east of Masterton.
The Williams won the Greater Wellington Region Ballance Farm Environment supreme award last year.
Nathan Williams said the programme was needed for the industry to succeed, so "it can only be good".
He was rapt to host the minister for the announcement.
"It's part of who we are with sustainable farming."
Federated Farmers national arable chairwoman, Gladstone farmer, Karen Williams, said it was great to see an initiative from the Government that would benefit rural communities.
Williams said she was "on board" but wanted more information on how MPI planned to identify the farmers that required more help.
"The key thing is that regulating using a big stick is not always effective," she said.
Federated Farmers Wairarapa president William Beetham said it was "positive" the Government was "embracing the importance of rural communities".
"By getting better information out there, we are increasing prosperity of the people in the regions – that's important to New Zealand," he said.