The ministry's regional commissioner, Mike Bryant, said the declaration made it easier for overseas people on visitors visas to come and work in the Bay of Plenty.
It followed similar declarations in Hawke's Bay and Tasman this year.
The last labour shortage declaration in the Bay of Plenty was in 2004.
Bryant said the ministry found kiwifruit jobs for 1000 people between January and April, and estimated a further 80 to 100 would come through Work and Income, but that was not enough to fill the 1200 vacancies.
He pointed to a strong kiwifruit season, decrease in international students, the industry bouncing back from the PSA disease and a relatively low unemployment rate as factors that led to the shortage.
Supporting the declaration, New Zealand Kiwifruit Growers Incorporated chief executive Nikki Johnson said the shortage came from "a perfect storm" of a 20 per cent larger harvest and too few backpackers and international students.
She said half of this season's kiwifruit crop had yet to be harvested.
Stuart Weston, managing director of Apata, which would harvest, pack and store about 10 per cent of the Bay's kiwifruit this year, said the solution was not as simple as paying people more.
"This is not about pay rates. This is about finite labour supply. They are just not there."
Backpackers were especially hard to find this year.
"I've got a $70 million facility tied up, and every morning I wake up uncertain whether I will have the people to man those facilities and process the fruit I have committed to processing. That is scary."
He said ongoing labour supply issues were holding the industry back from investing in growth and creating more full-time jobs for locals.
Seeka chief executive Michael Franks said some night shifts had been cancelled and one machine was down because there were too few staff.
The company had upped its pay rates and done everything it could to make itself attractive to visiting workers, but he said it was still short about 300 staff.
Harvest delays meant less fruit was arriving at packhouses in optimum condition, and the later in the season it was harvested, the bigger that issue would become.
"We want to get as much fruit into the coolhouses as possible."
Both Franks and Weston said there was not enough local labour to meet demand even though they had been sending minivans to nearby towns - Rotorua, Whakatane, Tokoroa and Murupara - to pick up workers.
Edgecumbe kiwifruit grower Mark Hudson said this was the first year he had struggled to find a picking crew, which had meant his gold crop, in particular, had been harvested "later than was desirable".
That had resulted in increased wastage with more soft fruit left on the ground and increased risk of juice from split kiwifruit making other fruit less presentable.
Kiwifruit in the Bay of Plenty
- 85 per cent of New Zealand's kiwifruit grown in region
- Contributes $867m to the region's GDP
- Represented 10800 FTE jobs in 2015/16
- Crop expected to increase 20 per cent to 142 million trays in 2018
- 1200 workers needed
- Labour shortage declaration from May 7 to June 8.
