A report on tenure review warns that the practice could lead to pollution in lakes and calls for a high-country commission to be established.
Tenure review allows high-country farmers to freehold some of their leasehold land in return for other parts being returned to Crown ownership.
Parliamentary Commissioner for the Environment Jan Wright says there are about 6 million hectares of high-country land - roughly a quarter of New Zealand.
Ms Wright says tenure review has caused changes over a huge area with little thought for how it has affected the environment and issues such as water quality.
Lower land usually goes to the farmer, but if stock are run close to a lake there is the potential for an irreversible decline in water quality, she says.
Other concerns include the spread of weeds and the flow-on implications for New Zealand's ability to generate electricity should trees enter the cachments areas of hydro dams.
Ms Wright recommends setting up a high-country comission to deal with these matters and provide a strategic overview.
She is also questioning an existing plan to develop 22 high-country parks, a move she believes could leave less money for other conservation priorities.
She would also like to see a wider range of land ownership models - including environmental land management being carried out by farmers.
The report was sparked by complaints from the Royal Forest and Bird Protection Society and the High Country Accord - a group of pastoral lease holders.
The accord's Donald Aubrey welcomes the report, saying it acknowledges that land values can be protected without the Crown having to own it.
But Kevin Hackwell of environmental group Forest and Bird is less impressed, saying the report is out of touch and a high-country commission would be a waste of taxpayer money.
However, Agriculture Minister David Carter believes the idea of a commission is worth investigating.
Mr Carter says the report's overall tone fits with National's policy to continue tenure review negotiations in good faith.