Farmers are sceptical of a plan from the federal Nationals Party to give landowners some of the royalties from gas extracted from their properties.

Key points: MP Andrew Broad says the royalties proposal would encourage farmers to consider hosting gas wells on their land

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The National Farmers Federation is worried about the potential impact extraction would have on land and water The Federal Opposition supports the plan, but doubts the Government will make the solution happen

Deputy Prime Minister Barnaby Joyce yesterday announced his support for the South Australian Labor Government's plan to give farmers 10 per cent of the royalties, saying he would like farmers in other parts of the country to get the benefit too.

The Nationals say it would encourage farmers to open up land to gas exploration.

"Essentially a farmer who has a well sunk on their farm has to do a level of adjustment within their own business to make space for that new development," federal Nationals MP Andrew Broad said.

"Now it seems right and fair that a farmer should get a share of the profits of that well."

Mr Broad, who was formerly the head of the Victorian Farmers Federation, said the royalties proposal would encourage reluctant farmers to consider hosting gas wells on their land.

"It will probably create a bit more political pressure from landholders to want to progress development of gas," he said.

Under Australian law, a landowner does not have rights over minerals below the soil — the state does. But Mr Broad said giving royalties to landowners was not a major shift in the understanding of property law.

"Ultimately the Government still collects a royalty," he said.

"The farmer doesn't own the royalties, or own the minerals, this is not The Beverly Hillbillies where they take 100 per cent of the royalties.

"This is about a share and due recognition of the farmer having to put up with the adjustment from having a well. They should receive a benefit."

Farmers criticise 'premature plan'

The National Farmers Federation supports the idea of compensating farmers, but the farm lobby group is worried about the potential damage from gas extraction on the land and water.

Tim Duddy, the NSW Farmers Associations' mining spokesman, said the plan was premature.

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"There are probably people that think that money is the answer to this issue," he said.

"That does not take away from the fact that science has not been done in this space.

"It will end in tears when one farmer is against another because his water resources are being harmed by a project that's going on on the neighbour's land."

But Mr Duddy said governments would be keen to pursue it.

"I suspect that this policy probably does have some potential in flying because the governments, both state and federal and otherwise, are getting so desperate to get the gas industry underway that they will do anything they can to progress it," he said.

The Victorian Farmers Federation's president, David Jochinke, said while he welcomed a share in royalties, there was risk involved.

"Ten per cent of a royalty may not even compensate the whole district for an aquifer that's been damaged," he said.

"The bigger picture has to be looked at than just this one part of the solution."

'Joyce needs to man up': Fitzgibbon

The Federal Opposition's agriculture spokesperson, Joel Fitzgibbon, likes the idea, but does not think the Deputy Prime Minister will be capable of making it happen.

"I would stand with Barnaby Joyce if he was consistent, but he's the Deputy Prime Minister within a Government that has provided no policy guidance nationally for four years now, and that's why we have an investment crisis and therefore an energy crisis," he said.

"Barnaby Joyce needs to man up and show some consistency, rather than the hypocrisy that he is talking now, talking out of one side of his mouth on one issue and out the other side of his mouth on the other."

Mr Fitzgibbon said the states could cede some of their authority over mining resources to the Commonwealth, so that there could be a nationwide energy policy.

"We need a national energy policy, and it would be inviting investment into the energy sector if we didn't have this mismatch in terms of the jurisdiction, and we had a one-stop shop for all projects looking for approval," he said.

The Government is under pressure to find more sources of energy for a network that is in crisis, but Mr Broad admitted he did not know if and how the proposal would become actual policy.

"The how-to from here is ultimately a decision that the Deputy Prime Minister will progress through the executive of the Government," he said.

"It's not something that me as a backbencher will be able to give you a clear clarification on."