Fonterra is taking further steps to protect water quality in dairying regions by including a new clause in its terms and conditions of supply that will contribute to the quality of New Zealand's lakes, rivers and streams.

Fonterra's General Manager Milk Supply Steve Murphy says since signing the Clean Streams Accord eight years ago, the co-operative has made measurable progress on protecting New Zealand's waterways.

"In addition, our Every Farm Every Year programme introduced last year has achieved improvements in effluent compliance. We are heading in the right direction and are now taking the next step by introducing a clause that will mean the Co-operative's 10,500 suppliers will be required to fence all Accord waterways on their farms.

"Fonterra is committed to doing its bit to look after our environment. Ensuring stock stay out of lakes, rivers and streams is fundamental to maintaining water quality and this clause sets a clear Fonterra standard for all of our farmers."

Mr Murphy says a lot of good work has already been done with the Co-operative's farmers taking voluntary action to ensure all waterways on their properties are fenced.

"Farmers have made good progress. Now is the time to build on what's been achieved by setting a Co-operative wide standard that ensures those lagging behind do what's expected."

Mr Murphy says while many farmers already have 100 per cent stock exclusion, others will have more work to do to become fully compliant.

"The Co-op is going to work with those that need to catch-up by putting environmental improvement plans in place. These plans will include a programme of work to ensure all streams, rivers and lakes are fenced."

Farmers have 18 months from the beginning of next season to become compliant with Fonterra's new condition of supply.

"Our Sustainable Dairy Advisors will work with farmers to ensure they're doing the required fencing and provide help and advice where it's needed," says Mr Murphy.