Work is already well under way to reduce pollution from farms going into waterways, farmers say.
The government is looking at restricting the amount of nutrients being lost from farms into water, with Environment Minister David Parker saying work was being done on restricting runoff from paddocks.
He said there would not be a direct cap on the number of cattle, but the restrictions might mean fewer cows in some areas.
National Party leader Simon Bridges criticised the move, saying analysis was needed before limits were set.
However, farmers themselves said they were already doing what the government was suggesting.
Canterbury dairy farmer Willy Leferink said most environmental measures did not affect a farmer's bottom line and could even improve it.
He and other farmers in the region had to comply with tougher regional council rules to reduce runoff - and the cost was manageable.
"There might be some [effects] but for instance the dairy payout would have a much bigger impact than these environmental measures."
Mr Leferink said he had built a large hangar-like barn on his land to house his cows at certain times during winter which would collect and treat their waste instead of it dropping straight onto paddocks.
While such sheds were expensive, he thought they would become more popular.
"I think for animal welfare ... the people don't want to see the cows standing in a muddy paddock anymore, in 10 years."
Regional councils like Environment Canterbury had already put in tougher rules for farmers, Federated Farmers' water and environment spokesperson Chris Allen said.
An example of what farmers doing what they could to reduce nutrient loss could be seen near Ashburton, at the Hinds catchment.
"The farmers appreciate the water quality in the aquifers, they wanted it to improve.
"They've come up with a whole suite of things, they're doing good management practices ... the whole farming community are right in behind that, because they all want the same outcomes."
The sector was worried because it didn't know what new rules the government might come up with, he said.
"And it depends how the minister responds to changes to a national policy statement that we've been working under for the last six years.
"Some districts have already been well under way implementing it - water quality in many areas is starting to improve."
Canterbury's Lincoln University had set up a demonstration dairy farm, run by South Island Dairying Development Centre, to show farmers how they could adopt research and technology to make money while being environmentally friendly.
The centre's executive director Ron Pellow said one way they had reduced nutrient loss was by using less nitrate fertiliser.
Doing so created a risk that there might not be the same pasture growth, so there was a cost effect and risk associated with that - but it was a risk farmers were willing to take.
Mr Pellow said that although the shed Mr Leferink used for his cows would stop their waste seeping into waterways it could increase greenhouse emissions.
"As soon as we are putting animals indoors we need to harvest all that feed, we need to store it, we need to feed it out again mechanically, and then we need to distribute the effluent out mechanically, whereas a grazing animal does that every day without mechanical intervention.
"So, it depends on what outcome we most need, and most desire."
He said he was sure there were no simple solutions to a very complex problem.
Mr Parker said plans to reduce water pollution needed to go hand in hand with settling Māori freshwater claims and lead negotiator for Te Aitanga-a-Māhaki Willie Te Aho backed these calls.
Mr Te Aho said iwi have asked the iwi chair forum for a clear pathway on the issue to be agreed on later this year in the South Island, otherwise they would resort to the Supreme Court.
"The position that we are working from is that the Waitangi tribunal clearly indicated in its report in 2012 that the hapu at the time of the treaty of Waitangi had control, which was akin to ownership, of the water," he said.
Mr Te Aho said there needed to be a range of solutions to suit each area and community on the reallocation of water rights to iwi.
"Areas like the Waikato where there is high land usage we've got to look at a range of solutions to allow allocations to iwi, and those include listing the amount of water that can be allocated, looking at the allocations already [in place] and looking at the actual water usage and whether or not some of those allocations can be ... reallocated to iwi," he said.
Prime Minister Jacinda Ardern acknowledged it was a complex issue and said Māori interests needed to be worked through, however she said nutrient runoff was a separate issue to ownership rights.
Ms Ardern said the problem with reducing runoff is that Maori disproportionally own land that is under-developed and applying the same rules could disadvantage them unfairly.
"We cannot allow further degradation, that's what we're trying to stop here. The mechanism for how, that's what we need to make sure is fair."
She said the government is waiting for feedback on ownership issues and hoped to have a resolution before the end of the year.