Financial efficiency is blamed for the government rethinking its plan to renovate Dunedin Hospital, which could leave rural areas of the Southern region at risk.
The government said in September it could cost up to $3 billion, which was unaffordable.
Federated Farmers Southland President Jason Herrick told Checkpoint he thinks financial inefficiency is one problem the government is facing with the project, however they need to prioritise health.
"For many years now money has been put before human health, both physically and mentally," he said
Health minister Shane Reti declined to attend a rally at the Dunedin town hall on Monday to protest cuts to the hospital rebuild project.
"We're going to need all these health services going forward and we can't afford to have a a brand new hospital with less beds than the current one, Herrick said.
"We need the best outcome for for the people of the Southern region, and that's having more capacity and better services," he said.
The Southern region was quite isolated, which meant Dunedin Hospital needed to have the best possible facilities to prevent people in the area from having to travel to Invercargill in an emergency, Herrick said.
The rescue helicopter at Dunedin Hospital was key fore the rural sector, he said.
"Without those services the rural sector is on its knees really."
A petition from the New Zealand Nurses Organisation has been submitted with 34,406 signatures, asking the government fully fund the renovations.
Herrick said he was concerned the community would end up having to fundraise for the hospital.
Southland is already home to the Southern Charity Hospital, which was founded by Blair Vining and does not receive any government funding.