National president Don Nicolson said farmers were concerned about a comment in the discussion document on the scheme referring to the database as having "alternative uses", and the lobby group had delayed making its submission until it receives clarification.
He said in an interview the comment created concerns the database could be linked to the Government's emissions trading scheme (ETS) or environmental management - uses farmers were not initially consulted over.
Mr Nicolson said his organisation wanted assurances over who owned and controlled the database and that it would only be used in response to a disease incursion.
The National Animal Identification and Tracing committee (NAIT) was established in July 2006 to develop a universal livestock identification system to satisfy food safety requirements and to help track stock and farm owners during disease outbreaks.
Electronic radio frequency identification devices would initially be attached to every cattle beast and deer from birth to slaughter.
The the scheme is expected to be compulsory by mid-2011.
While not criticising the NAIT committee, Mr Nicolson said farmers would want an assurance the data would only be used for its intended purposes.
Along with concerns the information could have uses such as enforcing ETS liabilities, Mr Nicolson said it could also be used for monitoring land use and stocking-rate densities.
NAIT chairman Ian Corney said when approached that uses other than for disease incursion management had never been discussed.
"It's certainly never, ever been discussed. It's come out of left field."
The final governance structure of the NAIT database was still being finalised and he said the body's final shape and rules and regulations around that structure should alleviate concerns.
"NAIT is a repository for the collection of data on the movement and location of animals."
He accepted farmers were nervous about the the Government's ETS policy, fuelled by rumours and predictions about its cost.
A believer in common sense, Mr Corney said each year farmers completed livestock reconciliations.
If the ETS became a imposition on individual farms, it was his personal view that farmers should think whether they wanted a new structure with associated charges to verify those annual stock numbers.
The ETS was difficult to comprehend, Mr Corney said, but he doubted any government would threaten such an important industry as farming.
"Common sense would tell me that a government would have to be pretty arrogant to go down the line of putting something in place that would put such a huge industry at risk.
"If the ETS comes in as farmers fear and it is going to be such a huge impost, there would be huge concern for those governing NAIT."