Mushrooming levies irk industry

Mushroom growers are seething after government levies on the fleshy produce spread like fungus.

But an anti-tax cross bench senator, who's threatening a reversal of the hike in the upper house, could be their saviour.

Growers are now paying almost double in marketing, research and development levies since a budget measure came into effect on July 1.

Australia's largest mushroom grower Mushroom Exchange is now forced to pay $1.6 million - up from $800,000 - in annual levies to go to the industry body.

Labor backbencher Rob Mitchell says that's putting almost 800 jobs at the company's Victorian operation at risk.

"They're trying everything they can to keep them, but it could mean a shutdown of the (Mernda) site," he told AAP.

Liberal Democratic senator David Leyonhjelm is set to introduce a disallowance motion to reverse the hikes of mushroom, onion and mango levies when parliament resumes in August.

Senator Leyonhjelm said the levies could not be justified because they would go towards marketing.

"I just don't think the case has been made for them," he told AAP, calling for a government review.

The senator has some support from coalition ranks, but said it's clear the government won't give in.

Agriculture Minister Barnaby Joyce said the hiked levies were determined through a democratic vote by the industry.

"People should not forget that levies are put in place at the request of industry," he told AAP in a statement.

"They're paid to the appropriate industry body in full to undertake work to ensure a strong and expanding market for their produce."

Labor is urging the government to sit down with the warring parties and work out a solution to avoid a Senate showdown.

Opposition agriculture spokesman Joel Fitzgibbon said disallowance would set a bad precedent and threaten a strong co-funding system.