The Coal4breakfast campaign revolves around Haystack Road on the Darling Downs, which was first threatened with mining when the government issued a Mineral Development Licence to Tarong energy to develop the Haystack Road coal mine.

The groups has been campaigning for the last two years, and has broadened community awareness of what mining can do to agricultural towns like Acland.

Group Secretary Janelle Cox said the State Government's policy shift showed "foresight and courage".

"It gives resilient communities like ours investment security and ensures future generations have security of food supply," she said.

"Given the massive impacts possible from the Coal Seam gas sector on the Great Artesian Basin aquifers, we believe there is ample opportunity for the Federal government through its water powers to ensure that development approvals ensure the viability of both these valuable sectors."

But Friends of the Earth campaigner Drew Hutton said the government's policy does not address some of the main questions being raised by environmentalists and rural landowners.

Mr Hutton said the "most crucial omission" from the paper was action on coal seam gas.

The discussion paper states that CSG mining will still be allowed on good cropping land, despite warnings that if CSG mining causes major draw-downs in the Great Artesian Basin much of this good agricultural land will suffer major productivity losses.

Mr Hutton predicted the publication of the discussion paper would not cause any great diminution of anger in the bush or opposition from action groups and environmentalists.

"Open cut coal mining might not occur on the very best land but mines will still be established on good agricultural land, it will still be situated near settlements like the town of Wandoan and companies will still apply for authority to mine ecologically important areas," Mr Hutton said.

"There is also the very real possibility of a patchwork quilt approach as mining is banned from some paddocks but can occur in neighbouring ones.

"Coal seam gas still threatens underground water systems and will affect the health of people living in rural settlements like the Tara residential estate and the town of Chinchilla.

"We will be resolutely opposing these developments."