The ministry said it had put 1000 people into job vacancies but needed 1200 more people to pack an extra 20 million trays of kiwifruit.
Social Development Minister Carmel Sepuloni said in a pre-Budget announcement that government was committed to lifting the abatement rates for kiwifruit-picking workers within the next three years.
Abatement rates are the amounts cut from a person's benefit because of income that they receive.
"We stated clearly we will be looking at lifting abatement rates. It will happen," she said.
However, New Zealand Kiwi Growers Incorporated chief executive Nikki Johnson told Morning Report the biggest obstacle to fruit-picking employment was the seasonal nature of the work and not the financial aspect.
"What we're asking people to do is come in for a short period of time and work really intensively and then to go back to whatever they were doing before and that makes it difficult to attract people who want full-time jobs," Ms Johnson said.
"The pay rates we are paying this season, for picking in particular, is actually sitting at around $21 an hour and that is a reflection of both the need for us to attract workers and to a certain extent the inconsistency that can appear in the work when it's raining."
"We recognise that it's difficult for people who are looking for full-time work" - chief executive of New Zealand Kiwi Growers Incorporated Nikki Johnson
While covering the cost of a second accommodation or mortgage could be a difficult prospect, Ms Johnson said this again was an issue to do with the short-term harvesting period when work was at its peak.
"Our ultimate aim is to have New Zealanders working as much as possible in 12 months' work, where we can pull together seasonal work and activity across, say, 48 weeks of the year, that's the ideal situation for locals."
But Manawatu grower Russell Bowen, who harvests pumpkins and garlic near Bulls, said wages were an issue as he struggled to find labourers and paid at least $20 an hour to get more fruit-pickers.
Growers who were paying the minimum wage only sought to maximise their margin while the industry suffered, despite the fact they could afford to pay more, Mr Bowen said.
He said growers should value employees more and pay them a sensible wage to make it worth their while.
Kiwifruit company Apata's managing director Stuart Weston also agreed that raising the pay rate would not likely attract more local labour.
"We think that we've really reached the very limits of what's available ready and willing to work, irrespective of the money," Mr Weston said.
"And that's evidenced by the fact that already [Work and Income New Zealand] have a system of stand down if people choose not to work in our sheds and inexplicably people will choose to go hungry rather than work in a packhouse."
With hopes for the industry to double in size, Ms Johnson said the government should work with industry figures to find a long-term strategy to suit pickers and growers, and address the seasonal labour issue.
Minister of Employment Willie Jackson told Morning Report yesterday there were other barriers to locals taking up the fruit-picking jobs including the distance to travel to work, and family responsibilities.
"What we're trying to do is we are trying to understand where a lot of our people are at. Why we have inter-generational unemployment, why we've got people so disillusioned," Mr Jackson said.
"It's not so simplistic that we just boot them off the couch."