A bill to deliver electronic national identification and tracing of livestock has passed its third and final reading in Parliament.

Primary Industries Minister David Carter says the National Animal Identification and Tracing (NAIT) Bill is a significant step in protecting farmers in the international marketplace and strengthening New Zealand's biosecurity system.

"NAIT is a partnership between industry and the Crown which started in 2004 in recognition of the growing need for better animal identification and tracing systems."

The NAIT Bill sets out the legal framework for the collection of information on livestock, their location and movement history throughout their lifetime. It also outlines the governance arrangement and powers for the NAIT organisation.

"NAIT needs to be mandatory to be effective. It will begin with cattle on 1 July this year, and deer by 1 March 2013," says Mr Carter.

"With most other agricultural producing nations already having computerised tracing of individual animals, New Zealand simply cannot afford to lag behind.

"NAIT is effectively an insurance policy to support our high livestock health status and biosecurity infrastructure, but can be used to further improve productivity and on-farm management."

Mr Carter acknowledged the work of the previous government in developing NAIT and the ongoing commitment of the livestock and animal products industries to the scheme.