Data centres have the potential to consume large amounts of water, raising concerns for farmers.
A single data centre could consume as much water as a town of 15,000 people, and for inland farming regions already drawing on fully allocated water systems, the Victorian Farmers Federation says that is cause for alarm.
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The VFF's Shared Ground report, released this week, found more than 30 data centres are currently proposed across Victoria, collectively requiring about nine gigawatts of electricity, the equivalent of four Loy Yang A power stations.
Applications lodged with one Melbourne water authority alone seek enough water for 330,000 people, though the VFF notes those are applications, not confirmed use.
For regions like northern Victoria, the risks are sharpest.
Unlike Melbourne, which can draw on the Wonthaggi desalination plant, systems like the Goulburn-Murray operate on closed and fully allocated water supplies with no large-scale fallback.
The report calculates that a single mid-sized 150-megawatt facility, cooled evaporatively as most large data centres are, could consume about 1.5 gigalitres of water a year.
The energy price dimension adds a pressure on farm businesses.
Modelling commissioned by the Clean Energy Finance Corporation found Victorian wholesale electricity prices could be up to 23 per cent higher by 2035 if data centre demand growth goes unmatched by new generation, a cost that dairy and irrigation operations would have limited ability to absorb.
Victorian Farmers Federation president Ryan Milgate said the impacts of data centres would flow into regional Victoria.
VFF President Ryan Milgate said the debate was not about blocking the industry, but about ensuring farming communities had a genuine seat at the table.
"This is not a debate about whether data centres should exist," Mr Milgate said.
"It's about ensuring we properly understand the consequences of going all-in without a plan for these incredibly resource-intensive facilities."
"This issue doesn't just exist inside the farm gate. We're seeing huge data centres rising up in the suburbs and their needs impact all the way to farmers and regional communities hundreds of kilometres away."
The report also warns that Victoria's newly declared renewable energy zones, including those running through regional farming country, were increasingly attractive to developers because data centres follow transmission infrastructure.
That creates a dual exposure for farmers: competing for water if facilities move inland, and hosting the generation and transmission lines needed to power them if they stay near Melbourne.
The VFF is calling for clearer frameworks governing water allocation during drought, cumulative impact assessment across the pipeline of projects, and protections for neighbouring landholders.
