Farmers should be paid up front for the value of their water and be given three years to adjust to slimmer water sharing rules rather than have the government buying allocations over 10 years, according to Wentworth Group economist, Professor Mike Young.
Professor Young told the ABC this week he has major reservations about the Government's plan to spend more than $3 billion buying back licences from farmers for the environment.
He said it would only see rural communities "collapse, and collapse slowly over a decade".
He said many farmers would sell their water and move out without and reinvestment in irrigation systems in country areas.
Rather than investing in the water market, Professor Young said the Federal Government must drive change themselves by paying farmers the value of their water entitlements and give them three years to adjust to a new water sharing regime.
He said while some may put that money into superannuation or retire, he predicts many farmers will reinvest it into their farms and irrigation systems.
"The alternative is to have a government gorilla in the market grabbing at every piece of water that comes on the market," Professor Young said.
"If that happens farmers will have a market that is dysfunctional."
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