Citrus Australia is one of several horticultural industry bodies calling on the government to make immediate changes to the water market.
Citrus Australia CEO, Nathan Hancock said they had asked Federal Minister for Water Resources, David Littleproud to put limits on water trading and better regulate brokers to protect growers from what he sees as inflated prices.
"With the drought you do expect to see an increase in price but we think the increase in price is more to do with manipulation in the water market," Mr Hancock said.
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Mr Hancock said most citrus growers hold some permanent water entitlements but were having to also rely on the temporary market to maintain their permanent plantings.
An Australian Competition and Consumer Commission (ACCC) report into the water market is currently underway but Mr Hancock said they were asking the minister not to wait for the findings before taking action.
"We can see that there are manipulations of the market that the minister should be able to do something to stop that from happening," Mr Hancock said.
He said they understood there were some people in the market, possibly retired farmers, who would be using water trading as part of their superannuation.
But, he said they took issue with giving businesses opportunities to manipulate the market so they could sell water at higher prices.
"There's opportunity for a business to develop such a large amount of temporary water allocation that they can short the market and then sell when the price has gone up," Mr Hancock said.
"We don't think that's what the intention of the water policy was when it was first formed.
"That's the sort of behaviour that we think the minister can come in and interrupt by creating thresholds or some sort of limits for what amount of water can be traded by who."
He said they had also asked the minister to better regulate water brokers.
"We think the minister should straight away stop allowing brokers to own water and have their own water account," Mr Hancock said.
"They should be there to facilitate sales between a seller and a buyer, not be there to buy and sell their own water when they wish to.
"We think that's too loose and allows unconscionable behaviour to occur but at the moment it's legal."
In response Minister Littleproud said the ACCC report will give the government the evidence it needs to intervene, should it reveal the market is being distorted.
"I've asked the ACCC to step in and use its powers of prosecution if it finds evidence Commonwealth laws have been breached," Mr Littleproud said.
"If the ACCC finds any relevant breaches of the Corporations Act, they will refer matters to the ASIC.
"I do not want to see traders, brokers or any major market players pushing up water prices as water is a critical resource."
Mr Hancock said they had also had discussions with the minister on the Barham Choke and the river's capacity to deliver to plantings below the Choke.
"We're not saying we want a moratorium but we do want a review into whether the river actually deliver the water that's going to be called for in the future based on the plantings that are there," Mr Hancock said.
Citrus Australia's comments follow the Ricegrowers Association of Australia's calls to stop new irrigation development below the Choke and the Almond Board of Australia request a moratorium on new water use licences will a review is undertaken.
Meanwhile, Victorian Water Minister, Lisa Neville has placed strict conditions on new Victorian irrigation extraction licences below the Choke.
