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A Lebanese syndicate purporting to be growing vegetables on the upper reaches of the Hastings River has had their crop of illegal tobacco cut down by officers from the Australian Tax Office after raids on a property Thursday morning.

The ATO seized and destroyed over 26 tonnes of illicit tobacco, which would not pay tax and that had a potential value of approximately $35.5 million. Two illegal immigrants were interviewed as part of the operation. No charges have been laid. Angus breeder Ralph Clissold, Mount Seaview, said he was hoodwinked by the growers who approached him last September with an offer to lease five blocks totaling 20 hectares on river flats to grow cabbages.

"I wasn't planning to sow a summer or even a winter crop because of the drought. It made sense to lease," Mr Clissold said this morning, while selling calves at the annual Wauchope steer and bullock sale. The illegal crop along with the rest was cut at the base of each stem by machine, not bulldozed.

On the fertile river flats, in a part of the valley that receives the most rain - by far according to the bureau's own data - were rows of seedlings. They appeared to be the Asian favourite bak choy and in between there were illegal tobacco plants, watered with a drip line sourced from pumps accessing the upper Hastings River.

The sound of machinery working in the night during the worst of the drought before Christmas alerted neighbours who raised their concerns with authortities about water theft, not illicit crops. Assistant Commissioner Ian Read said this was a successful outcome for the ATO, the NSW Police and the Australian community.

"The trade in illicit tobacco products in Australia has widespread negative consequences across the community. Tobacco growing operations are not run by small producers or farmers. They are run by organised criminal syndicates who deliberately engage in illegal activities," Mr Read said.

"Involvement in illicit tobacco production is a serious offence. This type of activity takes vital money away from the community and places it directly into the hands of organised crime syndicates. "It was also observed that water was being taken directly from the Hastings River to irrigate the crops. Growing tobacco uses a significant amount of water, which is a drain on precious resources in a time of drought."

On its own website the ATO said a number of organised crime syndicates were targeting unsuspecting landowners, attempting to lease country to grow illicit tobacco. Signs include intense labour production between September and June, unexplained use of water resources and large leafed plants that may resemble kale or cabbage.

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