Fearful farmers say river lifeline may sink agriculture

But farmers remain opposed to the plan, warning it will destroy regional communities and drive up food prices.

The bill sets out how water is shared in Australia's largest river system - with the federal government to explore voluntary water buybacks.

The idea is to return 450 gigalitres of water to the environment by June 2027, after the decade-old plan failed to deliver sufficient water to the river system.

Earlier this year, the Productivity Commission pinned the troubled plan on weak governance of water markets and costs blowouts.

Federal Environment Minister Tanya Plibersek said there was something for everyone in the Restoring our Rivers legislation.

"This is an amazing day for the Australian environment, for the million square kilometres of inland Australia that these rivers sustain," she said this week.

But the National Farmers Federation described it as a "kick in the guts" and warned more water buybacks would destroy regional communities.

Griffith rice grower Glen Andreazza witnessed the last lot of buybacks.

"We're still very confused and very worried," he said of the legislation.

Claire Miller from the NSW Irrigators Council said taking another 450 gigalitres from the southern basin would drive water prices higher and cost jobs.

She warned farmers should "be afraid".

"There are absolutely no restraints on the government to go ahead and keep taking more and more the water out of the farming pool and only pay lip service to communities afterwards," Ms Miller said.

"The government has abandoned all the socio-economic limits that were in the original plan."

Ms Miller also said the inclusion of an amendment to consider the social and economic impact of water buybacks wouldn't mean much.

"They haven't produced the criteria of what exactly they will be taking into account," she said.

"The impact of buybacks often don't become apparent for several years."

Massive water buybacks happened between 2008 and 2012 before the basin plan was legislated, as part of efforts to restore the river system.

Earlier this year, the NSW Irrigators Council released a report based on analysis of data from the Murray Darling Basin Authority.

The report concluded more than 3000 jobs were lost in 40 southern basin communities due to buybacks between 2001 and 2016.

Anne Webster, Nationals MP for the federal seat of Mallee, which produces a significant amount of the country's food and fibre, said her region was still suffering.

"Driving through the region you literally have dead paddocks, followed by irrigated growing crops, and the difference is stark," Dr Webster told AAP.

"The greater risk is that farmers will withdraw from productivity and that we will end up having to buy fruit and vegetables from overseas."

University of Adelaide research commissioned by the basin authority found negative buyback impacts were often overstated.

Researchers reviewed over 100 economic studies on water issues in the Murray-Darling basin, assessing whether the papers were low or high quality and if their results could be trusted.

"Overall, reducing consumptive water extraction does have a negative impact on irrigated agriculture," they found.

"However, the magnitude of the relationship between water extracted and farm economic outcomes can be substantially less than many studies have predicted."

Report author Sarah Wheeler said buybacks were by far the most effective tool government had to return rivers to a sustainable state.

"For irrigation communities in particular, by making buybacks voluntary, by introducing temporary trade, helps to alleviate localised impact," Professor Wheeler said.

Jamie Pittock from the Wentworth Group of Concerned Scientists said something drastic was needed given the plan was "a long way short" of water recovery targets and the states had failed to deliver offset projects.

"This is a critically important contribution to recovery of the rivers," Professor Pittock said.

"There's been a decade of spinning wheels essentially."

Prof Pittock said water buybacks could be a positive.

"When you buy back water, you're injecting a large amount of money in rural communities, and that can lead to positive outcomes as well as potentially negative ones."

The Murray-Darling Conservation Alliance said the strengthened bill delivered a lifeline for the river system.

"Giving rivers, wetlands and wildlife a fighting chance of survival ahead of looming drought," Jono La Nauze said.

Indigenous groups welcomed a $100 million package for First Nations people to buy water in the market under the Murray-Darling Basin Aboriginal Water Entitlements Program.

But large portions of basin communities remain opposed, with thousands of people rallying in four southern basin areas over the past few weeks.

Ms Plibersek will report annually to parliament on the social and economic impacts of water purchasing programs.

Australian Associated Press