Federated Farmers says the environmental toll farming is taking on waterways is being blown out of proportion.
Federated Farmers president Katie Milne says misinformation has led many Kiwis to believe a tax would save the environment.
Irrigation and effluent and poor water quality don't go hand in hand, necessarily, at all," she told The Nation.
While Ms Milne accepts farmers are still learning and addressing systems "from a lot of different angles", she says it's "not as big an issue as it has been made out to be".
Those waterways in that area are actually not, as it's been reported, anywhere near the [pollution] levels that some people have said."
Election data shows rural areas in the South Island swung more towards Labour than northern, urban areas. Ms Milne says this may be because "the full story [was] not necessarily fully understood".
"Everyone was talking about the degradation and so on - people firmly believing that, basically, they're all buggered. And that's not true. We have areas where there has been decline. And in the towns as well, we do have issues, and we know that, and we're all trying to work towards making that better and doing our part where we can.
"That's just my opinion of what the swing was about, and I think that that was more of an urban-rural disconnect a little bit,,, people cling on to parts of it and the full story is not necessarily fully understood."
While farmers may not face a water tax, Ms Milne fears funding for irrigation schemes could be cut, potentially knocking New Zealand out as a player on the world stage.
"It's going to be really sad, actually, if they do, and I know they're talking about that pretty heavily looking at unbundling it, unwinding it. But it sets you up for infrastructure and ability to do things in the future.
"Things are going to change in agriculture going forward, and I say to people, 'I don't know what I'll be growing in five or 10 years. I may have less cows'. So the rest of the world will pick it up and will be able to be ahead of the game on us on that one."
The National Government put in about $400 million from asset sales for irrigation schemes, including $90 million in the last Budget.