Cameron, who has directed blockbuster hits including Titanic and Avatar, made the comments during an interview with TVZN in which he spoke about New Zealand's agriculture industry.
He said the country 'isn't living up to its own image of itself' because of the environmental damage caused by meat and dairy farming.
"What we see is that the rivers and the lakes are extremely polluted here," he said. "New Zealand isn't living up to its own image of itself right now, and the image that it projects to the world as the clean, green place.
"So there's a lot of work to do here to steward the land properly."
Cameron said there are 'a lot of problems with meat' - citing the amount of land and other resources required for its production. "What we need is a nice transition to a meatless or relatively meatless world in 20 or 30 years," he added.
Cameron talks about animal agriculture and the planet
This is not the first time Cameron has spoken out about the link between farming and the planet.
Speaking during an interview with CNN, following the release of the UN's landmark report saying we have just 12 years to stave off a climate crisis last year, Cameron described how animal agriculture is harmful to the environment - and what people can do to reduce their own impact.
"The handwriting is on the wall," said Cameron, who was accompanied by wife Suzy Amis Cameron. "The daunting thing is the average person just shuts down, they go into denial, thinking 'well, what can I do about it as an individual'?"
Vegan and plant-based diet
"[Animal agriculture] is the second largest sector for greenhouse gas emissions next to electrical generation. And it puts it in front of all of transportation combined - so all ships, all planes, all automobiles.
"So while it's wonderful to buy an electric car, you're only attacking a smaller part of the problem. Changing our diet and nutrition is something we can do instantaneously if we choose to do it.
"So it's the quickest way we have for grabbing the thermostat of the planet and turning it down. All it takes is the will, the desire, to do it."