A report to the environmental science committee yesterday suggested a target date be set for all dairy farms to adopt an agreed list of best management practices.
Other recommendations included increasing compliance visits to farms on mole and tile drains and ensuring all waterways on wintering blocks were fenced to exclude stock.
Land resources manager Susie McKeague said in her report about 30 farmers had contacted council in the past 18 months seeking advice on requirements for conversion and most were incorporating best practices.
However, there was a concerning level of non-compliance from existing farmers on mole and tile drain properties, with a number of practices not being adopted, she said.
There was also low compliance with the Fonterra-agreed environmental monitoring system.
The low level of fencing on wintering blocks was also of concern, she said.
Cr Butcher said the council did have to get tough, as the memorandum of understanding with Fonterra had been in place for some time, it had spent "heaps of dough" and done plenty of education, but it was not enough to achieve the environmental outcomes it and the community desired.
"We can't stand back any more."
Chairman Stephen Cairns said it was time for the council to stop "pussy-footing" around the issue and set a target date.
Cr Stephen Woodhead said the clean streams accord with Fonterra had been successful, but the memorandum of understanding, which had the best intentions behind it, was possibly almost past its time, due to competition in the sector.
"We need to focus on the landowner, as they are ultimately responsible."
Farmers needed to know very clearly the targets the council expected them to meet, he said.
There also needed to be an education focus on wintering blocks as many sheep farmers were now taking on dairy cows over winter.
Cr Sam Neill said he was concerned including wintering blocks in tougher rules would take the focus off milking platforms where the real work needed to be done.
Councillors yesterday agreed to forward the recommendations on to the policy committee, including directing it to consider potential rules for environmental best practice and consult with the industry.
Last season, the council decided to take a hard stance on dairy farm pollution and prosecute.
As a result, 24 dairy farmers were to be prosecuted.
Four cases had been heard, most resulting in fines, and the balance would be heard in coming weeks in Balclutha, Dunedin and Invercargill.