The National Irrigators Council has rejected claims the South Australian investment firm, Duxton Water, is influencing it.
Duxton Water buys entitlements and leases water to irrigators.
Deniliquin, NSW-based lobby group Speak Up and Independent Shepparton MP Suzanna Sheed raised concerns about what they said was Duxton's influence over the terms of reference in the Australian Competition and Consumer Commission (ACCC) review into water market transparency.
Shelley Scoullar, Speak Up, said it appeared the NIC had included Duxton Water on its advisory panel to help formulate the terms of reference for the review.
"Why would these organisations want a non-irrigator company on a water trading review, and why wouldn't it be rejected out of hand by the Minister?" Ms Scoullar said.
And Ms Sheed said she had written to Federal Water Minister David Littleproud asking him to clarify Duxton's role.
"I'm concerned that water speculators are given a place at the table, when throughout our regional communities we hear there are serious issues around transparency and the way water trading is conducted," she said.
"These funds such as Duxton Water seem to be in the market purely to speculate and make as much money as possible out of the trade of water, rather than its productive use.
"With up to 7 per cent of water in Victoria alone in the hands of those who are not landowners, we have to ask why a $170 million company such as Duxton would receive a voice at the table?"
But NIC chief executive Steve Whan flatly rejected the claims.
"The government determines the terms of reference, and we have given a view to the Minister on the things we think should be included in the inquiry," Mr Whan said.
"There is not a single word in that that came from Duxton."
Mr Whan said Duxton had recently been appointed as an observer member.
"We have had a reference group looking at water markets policy, which any member could nominate to be a part of," he said.
"That group does not make NIC policy, only the full council meeting can do that."
Mr Whan said Duxton was a participant in the reference group, along with a number of other members, who discussed policy at a recent full meeting.
"When we do write a submission to the ACCC, it will be drafted by me, and all 34 members will be able to make a comment or have input," he said.
"It is important to have all voices of irrigators at the table when we discuss policy, but no one member will dictate the outcome to the other 33."
He said Duxton could give facts on their operation, but wouldn't be members of the NIC if they didn't also grow crops.
"I'm aware they have substantial horticultural and dairy interests," he said.
All council members had the opportunity on exactly the same basis to contribute to policy processes and also to comment on proposed submissions.
"It would be a pretty poor policy process if we were to say that we were not willing to listen to a view of a participant in the industry," Mr Whan said.
"It would then be quite insulting to all the other members to suggest that they are then not capable of balancing those views against the broad interests of the whole irrigation sector."
Duxton Water Limited was incorporated in April 2016 and bought entitlements, before leasing water to irrigators, primarily across the southern Murray-Darling Basin.
The leases are similar to commercial leases, where the asset title is held by the lessor, and fixed annual rent is paid.
At the end of May, Duxton held more than 71,696 megalitres of entitlement across 19 different asset types and classes.
But Mr Whan, Ms Scoullar and Ms Sheed agreed there needed to be greater transparency in the water market.
Ms Scoullar said Speak Up feared an ideal opportunity for change would be lost.
The review needed to tell producers whether the volumes of water being traded downstream could be delivered without the massive waste, which had been seen in recent months.
"What is the market doing to the ability of family farmers to grow crops that support their operation, our regional communities and our nation's food production and export potential?" Ms Scoullar said.
Mr Whan said the issues around the operation of the market and delivery constraints were very serious and needed real, sensible long-term action.
He said issues around operation of the market and delivery constraints were very serious, and needed real, sensible and long-term action.
"The problem with the market is that it's so huge, who would know what is actually going on," he said.
"There is effort needed to bring some more transparency, but I don't see evidence of manipulation of the market.
"But, by the same token, you can't rule it out."
He said he was waiting for more information on the terms of reference for the ACCC inquiry and believed it would need a reasonable amount of time to be completed.
It was also important to separate out delivery constraints, an issue for which governments were responsible.
"I do think the market is very confusing," Mr Whan said.
"There are areas where some people have great expertise, but for others, it's difficult to get a handle on what's going on.
"When you have that opaqueness, you can't sort out and separate the impacts well enough, and I think it will be a difficult job for the ACCC.
"As a first step, they need to look very carefully at the information available on the market.
"The second step is to work out what it is that constitutes a share of the market and the capacity to influence outcomes and how to deal with that."
Ms Sheed said there had been a shocking lack of transparency in the market.
"I welcome Water Minister [Lisa] Neville's comments that she is in favour of transparency and wants feedback on what that should look like," she said.
Ms Neville said she supported more transparency in the market, but that would have to be done with caution.
"Speculators are only 7pc of the market," she said.
"What does that mean, do we have large investment companies coming in, and buying our water?
"If the only way people can get confidence is when we can provide 100pc transparency on who is buying and selling, then that's what we should do."
But that could mean opening up all trades to scrutiny.
Ms Neville said there would be full consultation, to ensure such disclosure did not cause friction in small communities.
"That will potentially mean their neighbours can see what they are doing, and they can see what their neighbours are doing," she said.
Duxton has been contacted for comment.
The story National irrigator body rejects claims of investor influence first appeared on Stock & Land.