Water buybacks prompt concern over irrigation competition

The Victorian Farmers Federation says Federal water buybacks are distorting the irrigation market, with family irrigators unable to compete against government and corporate buyers.

VFF Water Council Chair Andrew Leahy says the market has become increasingly uneven, with stronger buyers driving up prices for key water entitlements.

He says the Commonwealth purchased 276 million dollars in water entitlements during May, including holdings from corporate-backed investors.

Mr Leahy says some companies plan to sell lower reliability water to the Government before reinvesting in higher security entitlements.

He says this is increasing pressure on high-reliability water used by dairy, horticulture and food producers.

The VFF says rising prices are increasing production costs and placing pressure on regional communities.