''The cost [of meeting the regulations] will exceed the current value of their farm,'' he said at last week's council meeting in Dunedin.
The council considered and adopted its implementation strategy for its water plan change 6A (water quality) at the meeting.
Cr Kelliher, a Central Otago farmer and Dunstan constituency representative, said the council needed to be aware the impact of meeting 6A would vary throughout the region.
''Some might just have to change how much phosphate they put on.''
However, others, such as Central Otago flood irrigators, might be forced to make major changes.
''The cost of complying with 6A could be the nail in the coffin ... it's a big change.''
Council stakeholder engagement director Jane Leahy said the plan allowed for extensions if farmers could provide evidence they were making changes but would not meet the 2020 deadline.
Chief executive Peter Bodeker said apart from intensive farmers in areas where there were sensitive aquifers, he had not heard that 6A could have such extreme impacts.
''If it's going to be that catastrophic, we did not see that coming through the [hearing] panel.''
Mrs Leahy said the strategy set out clear directions for how the council would carry out its effects-based approach to improving water quality.
A ''carrot and stick'' approach would be taken to ensure effective implementation occurred as the council aimed for social change in the long term, she said.
The aim was to ensure that all owners of more than 20ha, industry groups and private consultants were informed of the rules, that farmers were encouraged to measure the run-off from their farms as soon as possible and that when milestones were reached, they were celebrated.
A social marketing approach, similar to the concept of the drink-driving advertisements that targeted a shift in social attitudes, would be used to achieve those goals, she said.
''It's expensive to do this stuff, so we want to target the right group, with the right message, at the right time. We don't want to overload people or have them tune out.''
Cr Gerry Eckhoff said the council needed to address the elephant in the room of discharges from urban centres, and the view many in the rural sector had that what was good for it should be good for urban ''folk'' too.
He believed the council would have more success changing people's behaviour and views if the same rules applied in urban and rural environments.
Cr Trevor Kempton said discharges from pipes, such as sewerage or stormwater, were covered by resource consents and were entirely different from run-off from farms dealt with by plan change 6A.
The council approved the implementation of the strategy.
