The proposal was raised by the Otago Regional Council in talks on Wednesday about its long-term plan consultation document.
The council will spend about $2 million on water quality monitoring in 2015-16, of which $813,000 is assessed as directly benefiting some rural landholders.
The targeted rates will cover 75% of this cost and the remainder will be paid for through general rates.
Otago Federated Farmers chairman Stephen Korteweg said his organisation was ''not happy'' with the targeted rates.
''There are certainly concerns there. The whole community benefits from clean water and farmers are already paying their fair share. It's a bit heavy-handed.''
Federated Farmers has taken its concerns to ORC chief executive Peter Bodeker, who said the council would review the decision and get back to Federated Farmers in four weeks.
General rates are set to increase in the short term ''because the amount of work council needs to do is increasing'', for example, around water quality and quantity.
In the first year of the plan, the increase is about $360,000, paid for by 115,000 households.
General rates will vary from year to year, ranging from a 5.2% increase in the first year to a 2.9% decrease in later years.
Council chairman Stephen Woodhead said yesterday the extra work involved in water quality maintenance came under plan change 6A.
It was the determining factor for the new targeted rate for farmers, ''for example recalibrating the nitrogen leaching model''.
Information about the targeted rate was yet to reach the majority of farmers, he said.
Cr Bryan Scott said it was ''appropriate for the beneficiaries'' to pay a targeted rate for water quality checks by the regional council.
The dairy monitoring targeted rate is based on ''the potential risks'' to waterways. It could cost up to $825 a year if three or more inspection visits were required.
The long-term plan document said the council proposed that all monitoring costs, $192,000, be paid for through targeted rates in 2015-16.
''Every dairy farm in Otago will have at least one monitoring visit by ORC, to ensure that their activities are causing no adverse effects on our waterways,'' the document said.
''Some dairy farms may require two or more visits during a year.''
The Long Term Plan consultation document is on the council's website.
Submissions are due by May 4.
Targeted rates
Water quality
Capital value $250,000: $18.58
Capital value $600,000: $44.60
Capital value $4 million: $297.32
Dairy monitoring
One visit per year and low environment sensitivity: $275
Two visits per year and medium environment sensitivity: $550
Three or more visits per year and high sensitivity: $825
