Jacinda Ardern is promising farmers that a Labour Party proposal to charge for freshwater will be fair and allow them to keep making a profit.
Claims by the National-led Government that a water levy would cost farmers $600 billion was "ludicrous" and "scare-mongering", Ms Ardern said today.
Despite Ms Ardern's assurances, Federated Farmers said it remained "terrified" by the potential impact of water pricing on rural communities.
Speaking at the Environmental Defence Society Conference in Auckland, Ms Ardern revealed that Labour would charge an unspecified royalty for commercial water and use the money to clean up rivers, lakes and streams.
The revenue it gathers through the royalty would be used to help clean up New Zealand's waterways "within a generation", leader Jacinda Ardern announced today.
The party did not say how much industries such as farmers or water bottling companies would pay, but said the royalty would vary depending on water scarcity and quality.
Ms Ardern said she would hold a roundtable meeting on freshwater within her first 100 days to help set the royalty.
"I will not set a rate until I have met with those who will be affected. This is an issue that we must tackle together."
The newly-released water policy also sets a five-year deadline for farmers to fence off all intensively stocked land near waterways.
To achieve Labour's freshwater quality goals, farmers would have to move away from high stocking levels and focus more on adding value, the party said.
To assist farmers, Labour would get people on the dole to help out with fencing, riparian planting and other measures to improve water quality.
Ms Ardern also promised a "truly swimmable standard" for New Zealand rivers, streams and lakes.
Opposition parties and environment groups say the Government's definition of a river that is safe for swimming is too weak.
"Clean water is the birth-right of all of us," Ms Ardern said today.
"I want future generations to be able to swim in the local river, just like I did.
All our children deserve to inherit swimmable lakes and rivers - and they can, if we commit ourselves as a country to cleaning up our water."
In February, the Government set of goal of making all rivers safe to swim in by 2040.
That means all waterways deeper than 40cm will have to meet the safe standard for E.coli contamination 80% of the time.
The Government denied that it weakened the definition of a "swimmable" river in the new policy, though an independent assessment by Niwa recently confirmed that the standard was "less stringent" than the one it replaced.
