The Fish & Game Council says mandatory fencing of waterways on dairy farms won't stop animal effluent running off into rivers.
Fonterra is making it compulsory for farmers supplying it milk to fence off waterways, under the Clean Streams Accord.
The accord conditions have been voluntary until now.
The 10,500 dairy farmers have 18 months from the beginning of next season to fence their waterways.
Fish & Game Council chief executive Bryce Johnston, who is a critic of the environmental impact of intensive dairy farming, says that's not the best method to keep effluent out of waterways.
He says the Land and Water Forum, which Fonterra is a member of, has agreed to move to a situation where cows are fenced back from streams to create a buffer zone.
However, Fonterra's general manager of milk supply Steve Murphy says the condition builds on environmental work dairy farmers are already doing.
"It's a recognition that the environmental aspects are absolutely paramount to the wider stakeholder group," he says.
