"The taxpayer cleans up, and the polluters continue to pollute," said Ms Stewart, who lives at Westmere and writes a regular newspaper opinion column.
At the same time, the National-led Government was encouraging more irrigation and more dairying.
Tourism overtook dairy as the country's main income earner in November, and tourists came to New Zealand for its great outdoors and "100 per cent pure" reputation.
Government was attacking "the very thing that brings in the tourists - the environment".
It was encouraging "all-eggs-in-one-basket" dairying and cutting Department of Conservation spending.
Irrigated dairy farming made water, a public asset, available to increase private wealth, she said.
It was equivalent to a subsidy for dairy farmers and "the biggest transfer of public wealth into private hands".
Federated Farmers, banks and agricultural publications had been complicit in encouraging dairy farmers to keep borrowing.
"Is it that dairy farmers think being $5 million in debt is normal? That isn't normal."
She slated the Feds for denying waterways were degraded, and trying to blame sewage contamination from towns.
The "urban liberals" who "pretty much run the country" found that laughable.
Federated Farmers should hire public relations people rather than letting provincial presidents make statements urban people found "moronic", she said.
There was only one dairy farmer at the annual meeting, Brian Doughty.
Mr Doughty was voted dairy section chairman on Friday, and said he had not been a denier.
"All Federated Farmers need is to publicly acknowledge they have actually screwed a fair bit of water in New Zealand," Mr Doughty said.
"The next thing is to stand up and try and do something about fixing it."
He is allowed to leach 40kg of nitrogen and is doing 4kg at the moment.
Ms Stewart expected to be shot down over her speech, and pointed out a cross on the back of her shirt that would make a target.
She did get a reaction.
Tim Matthews said farmers had put in a lot of work, fencing and planting their streams.
Ms Stewart said that didn't capture nitrogen, which leached through soil into groundwater.
Lyn Neeson said food prices would rise if farmers had to up their environmental management.
Ms Stewart predicted there would be synthetic milk in five years, and people wouldn't be eating meat in 10 years.
"The dairy industry is in decline, and I'm sorry to say that we need some people to go under."