A convoy of about 40 tractors and up to 100 utes drove on a loop of the one-way system for the demonstration.
Vehicles, representing farmers and other rural industries, carried signs and beeped their horns as part of the We're Not Going to Take It protest.
Urban supporters have also joined the action, one sign reading 'Farming tax affects us all'.The atmosphere was relaxed with pedestrians waving back at the convoy.
"The new emissions tax is going to ruin us," Lisa said.
They were concerned that both farming and food production could be destroyed.
They had brought the little ones because farming was their future.
"We don’t want them eating bugs," Lisa said.
Southern district road policing manager Inspector James Ure said the traffic around Dunedin was being monitored, but it seemed to be flowing fine and no issues had arisen.
"People need to realise New Zealand produces less than a quarter of a percent of global emissions but our primary sector is being crippled to lower that when other countries will just take over from us," Owaka farmer Andrew Jackson said.
In Invercargill, about 200 protesters gathered at the racecourse and Lorneville before converging on the centre city.
About 20 tractors led the protest with the rest in utes and cars.
Groundswell New Zealand co-founder Laurie Paterson, of Waikaka, and co-founder Bryce McKenzie, of West Otago, are among those driving their tractors to Dunedin, where the protest will converge on the one-way system.
The action is in response to what the group describes as the Government’s "assault on food production and rural communities" through a proposed tax on livestock emissions,
A statement from posted on the Southern District Police Facebook page said officers were aware of potential protest activity occurring across parts of the country today.
"We have been in communication with organisers to discuss potential routes and plans," the statement said.
"Officers would be be monitoring the roading network and will respond to any issues as they arise.
"Police recognise the lawful right to protest and we also recognise the public has a right to go about their lawful business.
"Our focus is to ensure the safety of all parties while ensuring any disruption to the public is kept to a minimum."