Mr Kay says councils and industry leaders appear to be ignoring important findings, despite farmers struggling to meet rules designed to protect waterways.
Another report commissioned by Hawke's Bay Regional Council shows farms that rely on irrigation are exposed to greater risks and have a reduced return on investment.
"[The] report plainly shows Hawke's Bay farmers who work within environmental limits are making a better investment than those who don't," Mr Kay said.
"They now need to recognise that more production is not the key to success and reconsider the prevailing, polluting model of agricultural intensification."
Mr Kay said the two councils needed to work with industry leaders, banks, and farm advisors to deliver the message that producing less was both environmentally and economically profitable.
"This research shows we can build economic, risk-averse farming systems and sustain the health of our rivers and wildlife. We now need councils and industry leaders to listen to their own experts."