Council votes on huge water compensation payout to save hundreds of Baiada poultry jobs

On Tuesday, they'll have to decide if the council should willingly breach its contract to provide recycled water to a local farmer, and fork out a large compensation package for doing so, to potentially save hundreds of poultry jobs.

On November 31, the Peel River's flow will be cut off at the Dungowan weir, leaving all those downstream without access to water - including five chicken farms that produce the vast majority of poultry for Baiada's Tamworth abattoir.

Concerned it would have to drastically scale back or shut down its operation, the company sought help from the council.

Water director Bruce Logan recommended the council redirect the effluent from its Westdale plant into the Peel for the farms.

Despite creating up to 10 megalitres of effluent a day, there is no guarantee it will be enough to meet demand.

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"We don't know how far that water is going to go," Mr Logan said.

"You'll have in-stream losses like any other water that's put into the river. Water NSW are very worried [the 10 megalitres] won't be able to get down to the last person.

"They're the experts on this and they seem to think you'll need all 10 megalitres, and even then it might not get as far as you think.

"It's a terrible thing to say, but it's a case of try it and see."

Three of the farms, owned by ProTen, use a combined total of a megalitre a day. It's not known how much the two other farms, owned by Baiada, use.

Mr Logan said there was also a beef producer and 11 landholders with stock and domestic licences without access to water that had to be considered in the plan.

"We're looking to see whether we can provide a dam storage that would allow us to simulated a block release," he said.

"That might be away to reduce loss. If you release large amounts of water, the losses are relatively lower."

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Councillors will also consider trucking the water in, however given the amount needed by the farms, it isn't seen as the desired outcome.

Councillors will vote on the proposal at Tuesday night's meeting.

Mr Logan said it was a "difficult decision", given the compensation would "cost us a lot of money". However, he couldn't reveal the figure due to commercial confidence.

"We would technically be in breach of the contract," he said. "We have to compensate for taking that water away. We've had discussions with the farmer about it."

At the moment, the effluent water is used to grow lucerne at a property out past the airport. If councillors vote in favour of the plan, the council will look to the state government for support.

"There is a lot of money being thrown around for drought and water emergency situations," Mr Logan said.

"It wouldn't be too hard argue this is a serious issue the state government should be concerned about."