Many of New Zealand’s waterways are now degraded. A major and growing source of this degradation is the leaching of nutrients – nitrogen and phosphorous – from intensive dairy farming. The government has issued a discussion document – Action for healthy waterways – that contains a range of proposals to address the quality of water in New Zealand. Some of these proposals will have effects on the current users of water and the New Zealand farming sector. This report explores some of the costs and benefits of changing how human activity, particularly farming, affects the quality of water in New Zealand.