The Green Party says New Zealand should focus on true sustainability in farming rather than setting acceptable levels of chemical residues in milk and food.
But Fish and Game has taken a swipe at Fonterra, accusing the dairying giant of using the chemical residue scare as an excuse for more pollution to enter New Zealand waterways.
Green's agriculture spokesman Steffan Browning said finding chemical residues in milk was a risk to New Zealand's clean green brand and a wakeup call.
Yesterday the sales and use of the nitrification inhibitor dicyandiamide (DCD) were suspended after traces of the chemical were found in milk.
The Ministry for Primary Industries is now investigating the process to have a maximum allowable residue level set, if necessary, but this could take more than five years.
"We need farming practices that reinforce our reputation of producing clean, safe food," Mr Browning said.
"Our international markets don't want chemical residues in their food and neither do New Zealanders.
Mr Browning said focusing on chemical residues was a chemical silver bullet that would not help New Zealand's clean green marketing.
"On top of the chemical residues in our milk, nitrification inhibitors also leach into waterways and we don't even know what their long term impact on the soil is.
"Current government funding takes a desperate head in the sand approach to New Zealand's primary production by cutting funding to organic sector support."
Mr Browning said sustainable farming systems existed that ticked all the boxes; ensuring farmer profitability and clean safe food while reducing emissions, nitrate leaching and carbon use, and also improving animal welfare and biodiversity.
Fish & Game NZ said it was appalled the dairy sector was using the removal of nitrogen inhibiting products from the market as an excuse for more pollution to enter New Zealand's waterways.
"Fonterra Shareholders' Council has signalled as much," says Fish & Game chief executive Bryce Johnson, "practically demanding that regional councils lower nitrate pollution targets.
"It is utter arrogance for a sector which is already reaping significant environmental subsidies to use this as an excuse for affected farmers to maintain their artificially elevated stocking rates and further pollute the public's freshwater resources."
Mr Johnson said an environmentally and socially responsible industry would employ alternative measures to compensate, "not say, 'Oh well, it's back to business as usual boys'."
The withdrawn products were seen as a means of helping reduce dairying's impact on water by reducing the amount of diffuse nitrogen pollution leaching off farms and into waterways.
In their absence, regional councils must not lower pollution targets and instead should put the onus on farmers to adhere to environmental guidelines and reduce the impact by other means, Mr Johnson said.
"If that requires a reduction in production, then so be it.
"The individual farmers affected by this should meet the costs associated with ensuring that they aren't polluting the public's freshwater resource.
"That's what would be required of any other business - the dairy sector should not be treated as a special case and demands for yet more environmental subsidies should be flatly rejected by regional councils and the government."
Fonterra declined to comment.