Stock & Land has learned the 4340 hectare beef, sheep and cropping property, established during the 1820s river settlement and once owned by failed ricegrower John Elliott, has been bought by Federal and State Government sponsored company Water for Rivers.

It is expected it will take some of the large 9943ML Victorian water entitlement towards its target of restoring 212GL of water a year to the Snowy and Murray rivers by the middle of next year, before putting the property back on the market.

The deal will not deliver one single drop for rivers in the short term as allocations across the region remain on zero.

Irrigators say the purchase of such a highly-productive agricultural holding primarily for its water value confirms their fears that deep-pocketed Government agencies committed to arguably unrealistic environmental flow targets will outbid them for the dwindling resource.

Victorian Farmers Federation water spokesman, Richard Anderson, said a clear, simple strategy for sourcing environmental water was needed.

"We don't support taking any water out of agriculture, we never have," he said.

"We need to work out how to strike the balance between agriculture and the environment."

But he said reconfiguring farms to improve efficiency before on-selling them was preferable to seeing the water disappear into the Federal Government's water buyback.

Madowla Park was bought by John Elliott for $4m and has been owned by a consortium and run by former Elliott manager Laurie Fitzsimmons since late 2002 when it was sold for $7.65m by receivers of Elliott’s failed Australian Rice Holdings.

It has been for sale by tender through Elders and expected to bring around $25m, reflecting the $2500 plus a megalitre value of its water.

The property has 5025ML Goulburn high reliability water entitlement, 1991ML Murray high reliability water entitlement and a further 2927ML Victorian low reliability water.

* Extract from a full report to appear in Stock & Land, Vic, July 31 issue.