A Cambridge University study says the New Zealand Government should pay incentives to farmers to be environmentally responsible.
The researchers said New Zealand farmers received one of the lowest levels of government support in the developed world for either production or conservation and this laid-back approach was not helping the environment.
They said paying farmers to reduce their impact on the environment was working overseas.
However they conceded such schemes were often undercut by government subsidies to boost agricultural production.
But Federated Farmers said farmers were already environmentally responsible and did not need subsidies from the Government.
Federated Farmers environment spokesperson Chris Allen said farmers were already aware of their obligations.
"Let's look at what farmers are doing on their lands now, they don't need subsidies to do it. They are protecting their waterways, they are protecting wetlands."
However, Mr Allen said grants to improve public waterways would help farmers.