Agriculture Minister Barnaby Joyce has defended his decision enlist a National Party colleague to investigate co-operatives, even though the Rural Industries Research and Development Corporation (RIRDC) had already been asked - and paid - to do the job.

The Agricultural Competitiveness White Paper, released in October, included $13.8 million for a pilot program helping farmers to form co-operatives, to collectively bargain, and to engage other "innovative business models"

The White Paper stipulated that RIRDC would deliver the two-year pilot program, and it was allocated $200,000 for a scoping study to investigate how that might work.

But Mr Joyce also asked his National Party colleague, backbench MP Kevin Hogan from the NSW North Coast, to form a taskforce to look into expanding the role of agricultural co-operatives in his electorate.

Asked why, Mr Joyce said he wanted to "make sure we have strong input from all sectors and because Kevin Hogan is from an area which is probably one of the strongest areas for co-operatives in Australia."

"It just stands to logic: he's got Norco which is one of our most successful dairy co-operative, he's got the Casino meat works which is the most successful meat co-operative, he's got new co-operative such as Oz Berries with the Sikh community, which is one of the fastest growing co-operative. He's got the NSW Sugar Millers in the north which is the only sugar co-operative in NSW."

Asked why RIRDC couldn't include the north coast co-operatives in its study, Mr Joyce said it's "not that RIRDC can't be part of the process when it's all part of the process, and no decision has been made" about the final shape and location of the pilot.

'Pork-barrelling' for Page: Opposition scathing of Hogan taskforce

The Opposition accused the Mr Joyce of pork-barrelling in Mr Hogan's marginal NSW seat of Page in the north of the state.

The shadow agriculture minister Joel Fitzgibbon said the decision to appoint Mr Hogan was "bizarre", and questioned whether RIRDC would lose carriage of the pilot, which Labor suggested could go to Southern Cross University (SCU) at Lismore instead.

"I fear that we are onto something and this would be pork-barrelling writ large and a misallocation of taxpayer's money," Mr Fitzgibbon said.

The issue was raised in an Estimates hearing on Tuesday, with Labor Senator Doug Cameron grilling Agriculture Department officials and Assistant Agriculture Minister Anne Ruston.

Department secretary Daryl Quinlivan rejected the pork barrelling accusation, saying no decision has been made about which regions would share in the $13.8 million pilot project, and that was because "it's a national program, there's no proposal that the funds would be expended in a single location".

Assistant Minister Ruston said any change to the White Paper would also have to be approved by Cabinet.

Hogan defends involvement in co-operative study

Mr Hogan would not confirm if SCU, located in his electorate, will deliver the $13.8 million pilot project.

"There were quite a lot of submissions written to the White Paper about how best to use that money," he said.

"There was a lot of people I spoke to about they thought it should work. I spoke to Department officials and I spoke to lots of co-operatives around the country.

"I've certainly made some ideas to the Minister about models, about how I think we can best deliver and get a legacy from the program but I certainly haven't made any decisions about the funding or the process of it.

Mr Hogan wants the pilot project to be delivered using a bottom-up model.

"I think if this is going to work we need people on the ground to own it, we need people who are involved in co-ops to help this succeed rather than a bureaucratic top down approach," he said.

"But I'm sure whatever decision the Minister makes and what he does with this we'll see a legacy from this program."

A spokesperson for SCU said that it had worked closely with agricultural co-operatives for years and helped form the Northern Rivers Cooperatives Alliance.

"We are strong supporters of co-operative approaches to agriculture."

"We have also been closely involved with Regional Development Australia.

"SCU developed a proposal which was submitted through Kevin Hogan's office as part of the consultation process."