President Jock Laurie says the association is particularly concerned about the implications of the buybacks on the future of irrigation in NSW.

“The Commonwealth will purchase $1.9 billion of water from the Murray Darling Basin over the next four years,” Mr Laurie said.

"This includes the $500 million that was brought forward as a result of negotiations around the economic stimulus package

“Our concern is that these buybacks will not be spread equitably across the four states in the Murray Darling Basin.

"So NSW will be burdened with the majority of water purchases.

“Victoria has protected its irrigators from the buyback by installing a 10pc cap on the amount of water that can be traded out of the State.”

This barrier to trade was negotiated by Victoria under the inter-governmental agreement on Murray Darling Basin Reform.

“The 10pc cap restricts the trade of water from Victoria, which, as a result, is likely to see the majority of water purchases coming from NSW,” Mr Laurie said.

The association is calling for a stop to the water buyback process until a level playing field can be established between Victoria, South Australia, Queensland and NSW.

“The sale of water out of irrigation systems has flow on effects to the remaining farmers and agricultural communities,” Mr Laurie said.

“For example, consideration must be given to the long-term viability of shared infrastructure when irrigators sell their water and no longer contribute to maintenance costs.

“Similarly, small businesses, towns and indeed entire communities that depend on the flow-on from irrigation are potentially threatened by the buyback process.”

According to Mr Laurie, while removing trade barriers doesn’t remove the threat to irrigators and communities, it spreads the risk.

“The Federal Government needs to recognise that the buybacks have the potential to decimate rural communities,” Mr Laurie said.

"It is essential that a plan be in place to determine where water is going to be purchased, and how it is to be used, so that the impacts can be spread evenly across the states.

“The association has opposed the water buybacks under these conditions and the association will continue to work to ensure the NSW irrigation industry is treated in a fair manner."