The irrigation scheme was at the centre of a hearing held in Launceston by the Joint Standing Subordinate Legislation Committee on Wednesday, chaired by temporary chair John Tucker.

The hearing heard from Winnaleah Irrigation Scheme corporation chair Alan Davenport and treasurer Lester Rainbow, who spoke about the way the by-law regarding excess water charges included a fixed price, which was not required under legislation.

RELATED STORY: Set price for excess water use questioned

The Winnaleah Irrigation Scheme has been managed by the corporation since the 90s but has since been entangled in a partnership of sorts with Tasmanian Irrigation since 2011.

Mr Davenport said the corporation handed over temporary ownership to TI in 2011, when it received federal funding to expand the scheme.

"It was required under the legislation that the schemes be owned by a government body," he said outside the hearing on Wednesday.

"But we handed it over under the provision that it would be handed back once the augmentation was complete."

However, complete hand back did not happen, and ownership under the scheme became a joint custody situation, with Winnaleah corporation dealing with the day-to-day running of the scheme and TI managing the governance and legislation part.

Mr Davenport said the arrangement was not a bad one but it was not one they had envisioned when they handed over ownership to Tasmanian Irrigation.

The committee, which included Legislative Councillor Meg Webb, and MPs Alison Standen and Nic Street, were examining the by-laws, for the scheme, which have not been updated since 2012.

A previous hearing on June 5 heard from Tasmanian Irrigation chief executive Andrew Kneebone, who said every irrigation scheme was governed by independent by-laws related to that scheme.

Changes to the Winnaleah scheme by-laws include updating them with contemporary language and requiring all irrigators to complete a Farm Water Access Plan.

The scheme is used by 33 irrigators in Winnaleah, Derby and Herrick, supporting the production of agricultural products such as poppies, potatoes and dairy.

At the previous hearing, Mr Kneebone said he did not understand the logic of having a set price.

"Having set a firm price in a by-law means we have no ability to move that price over time so it's set for 10 years and becomes relatively cheaper every year," Mr Kneebone said.

The scheme is used by 33 irrigators in Winnaleah, Derby and Herrick, supporting the production of agricultural products such as poppies, potatoes and dairy. Mr Davenport said the Winnaleah corporation hoped the inquiry would result in an amendment to the by-law to remove the excess water fixed price and replace it with a formula that was more suited.

He said the inquiry had exposed why the review of the Tasmanian Water Use Strategy, which has now been released for public comment, was important, and that water use management was a complex topic.