Terry Tout, 57, is worried he could be forced off the land if the Australian Competition and Consumer Commission (ACCC) approves massive rises in water charges.

Locals already pay up to 17 times more for their water than users in some other NSW valleys, but State Water seems intent on widening the gap even further.

The ACCC is all that stands in the way of a 30 per cent price hike which Peel Valley producers say will make it unquestionably harder for local farmers to compete.

Mr Tout said the discrepancy between what Peel Valley users paid and what those in other areas, such as the Murrumbidgee, paid could only be described as “perverse”.

He and his wife, Valda, milk 210 cows at their Hallsville farm just outside of Tamworth and say they cannot afford to spend a cent more on water charges.

They use about 30,000 litres of water a day just to keep the dairy sterile and hundreds of megalitres more a year to grow food for the cows.

“You can’t dairy-farm in areas west of the range without a good irrigation source and if they make it that unfairly expensive ... it takes our competitiveness away,” Mr Tout said.

The ACCC released its draft pricing proposal, which scaled back some of the rises State Water requested, last month and invited feedback before making its final decision before July 1.

Tamworth Regional Council, Tamworth MP Kevin Anderson, the Peel Valley Water Users Association and New England MP Barnaby Joyce have all expressed their concerns.

Mr Joyce said he had discussed the pricing disparity with both ACCC chairman Rod Sims and parliamentary secretary for the environment Simon Birmingham.

“There will be a review into this issue – it’s imminent – and in that there will be the discussion about what is perverse in charging,” he said.