An increase in the number of farmers failing to meet effluent rules is unacceptable, says dairy giant Fonterra.

The update for the Dairying and Clean Streams Accord showed significant non-compliance increased by 1 per cent to 16 per cent for the 2009/10 season.

Overall the result for dairy effluent being appropriately treated and discharged increased 5 per cent to 65 per cent, reclaiming the lost ground from the 64 per cent result in 2007/08.

Fonterra Group Director Supplier and External Relations, Kelvin Wickham, said an "every farm every year" inspection regime was a concerted effort to address non-compliance by identifying farms at risk and ensuring remedial plans were put in place.

"The programme got under way nationally in August so it was never going to change last season's results," Wickham said.

"What is encouraging is that the compliance message is getting through and farmers are taking it seriously."

By the end of this season Fonterra expected to have 1000 remedial plans in place.

"Since August, 252 farms have already completed their plans and a further 582 are under way," he said.

"There are no quick fixes but farmers are working hard to get it right and in many cases a significant investment is needed to ensure systems are compliant 365 days a year."

Good progress was being made, Wickham said. "There is a lot of good work going on unnoticed and while we know there's more work to be done, it's appropriate to acknowledge the real efforts being made."

The Fonterra Shareholders' Council chairman Simon Couper said farmers understood that achieving an acceptable level of compliance needed continuous improvement.

"It is understood that the focus on sustainability will impact on our right to farm and trade, and this will continue to be of greater importance over time," Couper said.

MAF Deputy Director-General Paul Stocks said farm effluent management was a critical part of a successful farming business.

The update reflected that a consistent effort was needed to improve farmer behaviour and farm system performance, Stocks said.

"All the easy wins have been achieved," he said. "The sector is at now at the stage of incrementally improving farming practices and upgrading equipment."

Clean streams
* Dairy cattle excluded from streams, rivers and lakes
Target: 90 per cent by 2012 (50 per cent by 2007)
Result: 85 per cent, up 5 per cent.

* Regular crossing points have bridges or culverts
Target: 90 per cent by 2012 (50 per cent by 2007)
Result: 99 per cent, up 1 per cent.

* Systems to manage nutrient inputs and outputs
Target: All farms by 2007
Result: 99 per cent, no change.

* Effluent discharge to comply with resource consents and regional plans
Target: All farms immediately
Result: 65 per cent, up 5 per cent.