It takes six megalitres of water to grow just 1ha of cotton and 15 megalitres for a hectare of rice.
Experts claim water is the fastest appreciating asset in the bush, with water entitlements now offering some farmers rivers of gold.
Another sale of water near Moree saw $352,000 paid for 207 megalitres, a megalitre being one million litres.
Both sales were for water entitlements, giving the buyer the right to use that amount of water each year.
They may not even get to use their full entitlement if water levels are low and the allocation is restricted by authorities.
A trading platform is now also operating where farmers can buy or sell single-use parcels of water.
One-off prices are now at around $160 a megalitre in the most drought prone areas. A year ago they hovered between $25 and $50 a megalitre.
This scheme usually involves farmers trading small amounts to augment their supplies.
Moree water broker Bruce Gunning said the drought had pushed water to its highest ever levels. "Irrigators cannot afford to pay that sort of price for every megalitre," he said. "It is the highest ever paid on the border river system. The drought is pushing the prices up, the scarcity of water is pushing them up.
"It is the fastest appreciating asset in rural NSW but if it rains the price will come down."
Some farmers are now buying water entitlements and reselling them at higher prices, much like investors on the stock market.
Gunning said it would have been more profitable 10 years ago to buy an irrigation licence than to buy the farm itself. He claimed that an irrigation entitlement for 972 megalitres worth $150,000 in 1980 was worth more than $1.5 million today.
"There are a lot of rich people around but there are also a lot of poor people," Gunning said. "There are very high rewards for good operators."
The Water Management Act 2000 due to come into effect soon will mean irrigation licences will be detached from the land on which they were first issued. This means these licences will also be available to be traded.
Source: The Daily Telegraph