The LNP, Labor and Greens parties have voted against the Katter's Australian Party's Environmental and Other Legislation (Reversal of Great Barrier Reef Protection Measures) Amendment Bill 2021.
The decision came as state parliamentary debate on the issue resumed this week.
KAP deputy leader and Hinchinbrook MP Nick Dametto said it was a dark day for agriculture and feared for the future of the cane industry.
"There is a widespread fear throughout our cane communities that history will show the reef regulations to be the catalyst that will slowly shut down the industry," he said.
"With a review of the regulations coming up in two years' time, don't think the Labor party won't tighten the screws on nutrient management right before the election."
AgForce Reef Taskforce chair Alex Stubbs said he was disappointed by the outcome.
"The current reef regulations are based on outdated science," he said.
"The latest research from the Great Barrier Reef Marine Park Authority (GBRMPA) confirms the biggest impacts to reef health are rising ocean temperatures due to climate change, damaging tropical cyclones, and crown-of-thorns starfish outbreaks - not agriculture runoff."
AgForce is calling for a national Office of Science Quality Assurance in a bid to save the reef.
"The only way forward is to establish an independent office to ensure the science that underpins regulations is up to date," Mr Stubbs said.
"Government policy needs to reflect this rather than old science, so that 12,500 farmers are not subjected to unnecessary red tape and record-keeping, which does nothing to help our reef."
Mr Stubbs said if the repeal bill had been successful it would have exonerated farmers blamed for reef health, put an end to restrictions and reduced breach penalty fines.
"This would most certainly have been a step in the right direction for reef regulations," he said.
"Why regulate pesticide usage across reef catchments, when water quality monitoring shows detected levels in river deltas are not above water quality trigger values.
"Why impose cane farm budgets for fertiliser use when the latest science has shown many factors cause crowns-of-thorns outbreaks and that there is no proof that fertiliser runoff is linked to this."
LNP Shadow Minister for Environment and the Great Barrier Reef Sam O'Connor said the KAP bill was not the right way to better recognise primary producers and to incentivise best practice.
"It was deeply flawed and would have made things worse for both farmers and our environment," he said.
"Farmers are rightly frustrated at being solely blamed for the water quality of the Great Barrier Reef.
"They are our partners in environmental protection."
Mr O'Connor said the LNP would continue to advocate for amendments to Labor's reef regulations to remove the state government's power to penalise farmers who are accredited under best practice programs and complying with those programs.
"If you are doing the right thing, the state government should not be able to penalise you with massive fines under the reef regulations," he said.
"Removing this and substantially increasing the funding provided to help run best management practice programs would incentivise the take up of these industry-led, evidence-based initiatives.
"It would also show farmers they are genuine partners in protecting our Great Barrier Reef."
PHON Mirani MP Steve Andrew continued to back the KAP repeal bill.
However, LNP Member of Callide Colin Boyce, who previously indicated his support for the KAP amendment bill, resigned from his role at the start of the sitting week to run for the federal seat of Flynn.
Mr Boyce said Commonwealth Constitution determines a state MP must resign before an election is called.
"It was just a case of unfortunate timing and circumstances," he said.
"It is a requirement for me to stand down from my current role to run for the federal seat."
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