The federal government has announced the controversial Water Efficiency Program is to be dumped.
Federal Water minister Keith Pitt said it would be replaced by a program that did not have an impact on farmers' water entitlements.
The Victorian Farmers Federation has previously raised concerns about the WEP, saying the minister continued to release projects, despite having said he wasn't going to do so.
The program funded projects, such as lining irrigation channels, with the resulting water savings shared between irrigators and the environment.
"The WEP has not worked as it was expected to - not for returning water to a healthy river and certainly not for communities who deserve as much water as possible to remain economically and socially productive, and to underpin local jobs," Mr Pitt said.
"The WEP has recovered just 0.2 gigalitres since 2019 - that's 0.04 per cent of the 450GL target of additional water for river health outcomes that out government is committed to recovering.
"We are closing the program and replacing it with a new approach that will focus the more than $1.5 billion available in the Water for the Environment Special Account on securing water by improving the efficiency of off-farm irrigation infrastructure.
"Off-farm water recovery means we can actually progress our river health targets and, unlike on-farm programs we do not reduce water availability in the consumptive pool."
Nicholls Nationals MP Damian Drum, said the new approach was a big win for local irrigators.
"This is a great result, and one that people in the local water industry have been calling for and it's fantastic to see our government the focus back on local communities and irrigators," Mr Drum said.
"This is a common sense change that will keep water in the consumptive pool and provide farmers with the certainty they need to plan for the future.
Minister Pitt said the new program could help meet Basin Plan targets.
"Through the new Off-farm Efficiency Program we will make $1.33 billion available for state-led off-farm projects as well as $150 million in direct grants. $60 million will enable those states who wish to pursue limited on-farm water efficiency to continue to do so, providing the strict social and economic neutrality test set by the Murray-Darling Basin Ministerial Council is met," Mr Pitt said..
"We've been doing the legwork so we can get on with the job, identifying about 50 off-farm projects that can form the core of our work program. Ten of these projects could start within 3 to 12 months, fast-tracking works that can benefit local economies and save water."
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The Victorian Farmers Federation has welcomed the steps to stop on-farm water recovery.
Water Council chair Richard Anderson welcomed the Commonwealth's commitment to invest in off-farm water-saving infrastructure.
"The VFF is pleased to see this renewed effort to assist farming communities with the minister's announcement for upgrades to off-farm infrastructure, including a $177 million investment in the Goulburn Murray Irrigation District," Mr Anderson said.
"The VFF has led the discussion on the need to stop on-farm water projects that require farmers to give up water savings to the environment, thereby reducing the overall amount of water available to agriculture.
"The Productivity Commission only last week warned climate change will have major impacts on irrigators."
Mr Anderson said farmers needed to be keeping their water savings to ensure they had a buffer in dryer times ahead and not be forced to give them up to the environment.
"The Government has listened to these concerns and has taken action to wind up its Water Efficiency Program which will help give farming communities greater confidence," Mr Anderson said.
The VFF was seeking further detail from the government on the $60 million still being allocated to on-farm projects.
"Our understanding is that no-on farm project can pass the socio-economic tests agreed to by the 2018 Ministerial Council as it ultimately reduces the total amount of water available to irrigators.
"We cannot afford to see these projects go ahead."
"We have also sought clarification on how the $150 million direct grants to farmers announced by the Minister will work."
The VFF took the opportunity to advocate on a number of important issues on behalf of Northern Victorian irrigators, when meeting with the Minister this week.
"We have made it clear to the minister that we need legislative change to end water buybacks, greater flexibility in the Sustainable Diversion Limit (SDL) Projects, greater focus on deliverability issues and the need to measure environmental health in more ways than just through increased flows," Mr Anderson said.
"We made it clear to the minister that if the Government wants to continue to help rural communities, then they need to provide real certainty that buybacks cannot occur by enshrining it in legislation."
