It was an emotional day for many farmers who came from the Liverpool Plains and the Hunter Valley to demonstrate their support for a bill to preserve high-quality farmland and water sources from mining.

The bill was introduced by the Greens and supported by the Opposition after the state National Party and the NSW Farmers Association threw their weight behind it.

But the bill was defeated after the Reverend Fred Nile joined forces with the Government in the upper house to oppose it. Angry farmers shouted "Shame! shame!" and walked out of the public gallery during Mr Nile's speech.

"It is very sad for the people of NSW that blind political prejudice will prevent the protection of the state's food production," said one farmer, Tim Duddy, last night after the defeat.

Mr Duddy blockaded his family farm south of Gunnedah against BHP-Billiton last year after the company attempted to search for coal there.

The Minister for Mining, Ian Macdonald, who granted the exploration licence, approved a second exploration lease in the area last year to the Chinese company Shenhua, which also covered part of Mr Duddy's farm.

"We will continue our fight, this is not over," Mr Duddy vowed last night.

The Coalition joined forces with the Greens in the first significant attempt to change the law to limit mining operations on prime agricultural land.

"The NSW Nationals have always supported the principal of protecting the state's iconic farmland," the party's leader, Andrew Stoner, said.

"The agriculture versus mining debate has long been a contentious issue and it's imperative that we strike a sensible balance between the two."

After the defeat of the bill, the Greens leader, Lee Rhiannon, said windfalls from the mining industry had "blinded the Government to the big-pictures issues of food security and climate change".