The survey shows that while the finances of irrigation farmers in the basin have been hit hard by the drought and a lack of water availability, the Federal Government faces stiff competition in the water market as it spends billions of dollars buying back irrigation licences for the sake of the environment.

Asked their intentions for the next three years by the Australian Bureau of Agricultural and Resource Economics, 17pc of the Basin's irrigators said they planned to expand the area irrigated and 16pc planned to buy more water.

"These farms indicated they were planning to purchase more temporary water rather than buying permanent entitlements," ABARE said.

Some 11pc planned to reduce the area irrigated and 7pc planned to sell more water; 18pc said they planned to change their method of water application but 38pc planned to make no change.

Four per cent planned to sell all their permanent water entitlement and 8pc planned to sell some.

The Bureau said: "More than two-thirds of irrigators in the Murray-Darling Basin indicated the uncertainty of water allocations as a … constraint against expanding the area irrigated."

There have been widespread calls for irrigation farmers to adopt better science to improve the efficiency of water use, but the survey found irrigators relied on their observations when it came to measuring soil moisture.

Most did not use soil moisture probes or weather forecasts.

In 2006-07 23pc of irrigators traded in temporary irrigation water and 2pc in permanent entitlements.

Reasons given for not buying water were high prices (25pc), no irrigation water available (13pc) and water not needed (31pc).