NSW water minister opposes water buybacks in Murray-Darling Basin

Inquiries by the Senate, and Productivity Commission into the MDBP found it was significantly off track, and unlikely to achieve its goals without significant changes.

The total shortfall is predicted to be around 750GL at the end of 2024 - nearly a third of the total that was to be recovered before that time.

In August, an agreement was made between the federal, NSW, South Australia, Queensland and ACT governments to deliver the Murray-Darling Basin Plan in full.

People in Griffith, Deniliquin and Leeton took to the streets on Tuesday to protest water buybacks, saying they were a "lazy solution", and would hurt communities in the Murrumbidgee Irrigation Area (MIA).

Griffith Business Chamber president John Nikolic said the community didn't trust federal water minister Tanya Plibersek's claims buybacks would be used as a last resort.

He said the community was experiencing "trauma" from buybacks under the previous Labor government in 2012.

"This issue is really an existential one for a place like Griffith, which would not exist without irrigation," he said.

"There are grave concerns that instead of investing in water saving projects, the Commonwealth will take the easy way out and simply purchase back the water.

"This happened before in 2012. Large amounts of water was purchased from irrigation areas, and it really dented the economy at the time."

NSW water minister Rose Jackson said she does not support buybacks.

"The NSW government does not support water buybacks. We want to see the Australian government prioritise investment in recovering water in other ways and have been proactive in scoping options and putting them forward for consideration," she said.

"We will not take a backwards step in advocating for the interests of NSW communities. If the Australian government chooses to pursue buybacks, we believe they have a responsibility to address any negative social and economic impacts on affected communities.

"We have communicated this clearly with the Australian government and advised that they must incorporate safeguards in any future strategic water recovery program to protect our communities and address adverse impacts to water markets."

Ms Jackson expressed her opposition to water buybacks in a meeting with Member for Murray Helen Dalton in August.

While the biggest objection to water buybacks in MIA are the direct losses to farmers and farm workers, downstream affects of a less productive agricultural sector may cause wider issues.

Less productive farms are less profitable to the owners, and result in higher food prices for consumers because of a reduction in supply.

Mr Nikolic said the affect of more higher farm gate prices for food would ripple through the community.

"People often say 'isn't this the free market at work?', or 'farmers sometimes want to sell their water'," he said.

"The truth is no farmer ever wants to sell their water ... farmers will only sell their water as a result of fluctuating and temporary economic conditions.

"The free market is actually an inappropriate mechanism by which to allocate the finite resource of fresh water in the basin. Instead, water allocation in the basin should be based on long term considerations about the most efficient ways to allocate."