NIC's Chief Executive Officer Tom Chesson said farmers in the region are facing escalating electricity prices. Further costs from the carbon tax has worsened the situation.

MRFF chairman and farmer Mike Bennett said a 20 per cent hike in electricity prices has been met with an additional 10 per cent price cost from the carbon tax.

"The bill for my own farm increased by about $15,000 a year," he said.

The NIC said irrigators in the Macquarie Valley are among the most efficient but unsustainable electricity prices are forcing electric pumps to be switched off.

As a result Mr Bennett said farmers now face a trade off between continued efficiency or out of control electricity bills.

He said rather than having an incentive for farmers to be more water efficient there is a disincentive with rising energy costs, making Australian farmers less competitive on the world market.

"We're competing with others who don't have this tax... It's a conflict between two objectives," he said.

Residents will also see flow on effects of higher prices as the cost of energy is transferred to the market.

Mr Chesson said it is a "real conundrum of water efficiency verses energy efficiency and profitability coming to the fore".

"While it's not right to say all energy costs have been created by the carbon tax, it simply doesn't make sense when they are rising 20 per cent a year and be artificially increasing them further by whacking on a new tax," Mr Chesson said.

MRFF executive officer Susan Madden said a single producer who participated in a NSW Irrigators' trial showed an $80,000 increase in annual electricity bills.

"The costs for others will be highly variable but we are echoing the cause for the Senate to abolish the carbon tax," she said.