The NSW Government has decided to buy back the Caroona coal mine licence from BHP, but says the nearby Shenhua mine is going ahead.

Farmers have been celebrating the decision to buy back the Caroona licence at a cost of $220 million, a decade after it was sold to BHP Billiton for $100 million.

Many fought the proposals for over a decade, but say their work is not nearly finished.

Locals in the area near Tamworth now want to know about the $300 million Shenhua Watermark open-cut coal mine licence.

NSW Premier Mike Baird has indicated that the Government has been talking with Shenhua about removing some parts of the mining title that would encroach on strategic agricultural land.

NSW Deputy Premier Troy Grant visited the region on the weekend, warning that that the factors that led to the buy-back of the Caroona licence “aren't relevant to the Shenhua mine in total”, but said that “negotiations will take the factors and circumstances of that mine site into consideration”.

Tamworth MP Kevin Anderson explained differences between the two sites.

“Shenhua is in the ridge country, it's scrubby country that wouldn't feed a goat, it's been peer reviewed to the nth degree, and they are different projects, so you can't compare the two,” he said.

NSW Farmers spokesperson Mitchell Clapham told ABC reporters it is good to see the Government taking notice of agricultural land.

“Agriculture is a $12 billion industry and especially in the iconic area of the Liverpool Plains, which is some of our state's best food-producing country,” he said.

“We think it's a really positive decision.”