At the organisation's annual meeting in Dunedin yesterday, Mr Lord told Local Government Minister Rodney Hide that the capital value rating system had a serious effect on farmers.
He questioned whether there should be greater use of uniform annual charges for services such as libraries and stadiums.
Mr Hide, who spoke about what local government reform would deliver, said that farmers were always going to be "hugely disadvantaged" because they relied on the very thing being taxed.
That was one of the reasons he had sought a review of the funding, structure and functions of local government, as well as its relationship with central government.
Businesses and retailers could relocate, but farmers' business was tied to the land and land was what was taxed.
"You can't roll your farm up and shift it, so you're stuffed." Mr Hide told those farmers attending they were the backbone of New Zealand and they should "stand and be tall". The core of the country's economy was farming and would be for his lifetime.
It was a concern when he heard citizens say they did not like the things councils were doing, that communication between councils and communities was poor and that communities felt powerless.
That led him to review aspects of the Local Government Act. He wanted to enable ratepayers and residents to have a greater say in what councils did and how their activities were funded.
Where there was government, he believed in keeping the decisions as close to the people as possible.
He believed local communities needed to debate their own priorities and communities should be allowed to "get on and do it".
Mr Hide, who was upbeat and made a few quips about recent events in his political career, also acknowledged the magnificent response by the rural sector to helping people in Canterbury after the earthquakes.