THE national body representing dairy farmers and milk processors has bluntly declared the draft plan sets the scene for a "permanent drought" for regional towns in northern Victoria and southern NSW.
"This is not just about dairy farmers. It's also about milk company infrastructure, milk tanker drivers, milk factory employees," said Australian Dairy Industry Council (AIDC) chairman, Chris Griffin.
If the Murray Darling Basin Authority (MDBA) agenda to save another 1500 billion litres of water from the Basin is pursued, the ADIC is tipping three dairy factories in northern Victoria are likely to shut as milk production dries up.
Mr Griffin said extensive drought in the past decade taught a lot of producers how to manage water more efficiently, but their financial reserves had been decimated by lost production and the expense of investing in water saving initiatives.
"They've gone into a lot of debt already. Imposing more hardship through a permanent reduction in water availability on this scale will lead to a severe and lasting decline in irrigation-dependent regions," he said.
"The MDBA recognises the dairy industry in northern Victoria will be among the hardest hit if the Commonwealth keeps buying water to meet the 2750 gigalitre target.
"We need any focus on buybacks to be strategically planned over a period of time - rather than rely on block buying sprees.
"That would at least allow everybody the chance to see what really works and how much water actually needs to be withdrawn from the market."
Northern Victorian farmer and ADIC water taskforce chairman, Daryl Hoey, said supported strategic water purchases for the environment if they were linked to water-saving infrastructure projects.
"Infrastructure efficiency savings are definitely the way to go, and I'd like more logical strategies developed to pump or divert water into environmental priority areas, rather than relying on over-the-bank flooding events which use excessive amounts to achieve a flood," Mr Hoey said.
He estimated that with average dairy farms currently producing near 1.5 million litres of milk, the sort of production declines likely in the Murray Valley in NSW and Victoria would force the closure of three of the region's nine dairy plants in the coming decade.
While farmers would embrace opportunities to lift water use efficiency, based on the production losses recorded during the recent drought as water allocations shrank, up to 300 farms could stop milking.
Mr Hoey, who milks 300 cows at Katunga, north of Shepparton, said the water recovery target in the Draft Plan represented about 40 per cent of the annual average water used by agriculture across the Basin each year.
"This means permanent drought for farmers and regional towns," he said.
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