NSW Nationals MP Sarah Mitchell told a budget estimates hearing farmers were concerned about the scheme, the first phase of which is set to begin on November 1.
It will see those with excess guns paid up to $1,000 per weapon for surrendering them, with a second phase for more valuable firearms set to rollout in 2027.
Ms Mitchell said she met a farmer who paid $2,900 for his gun late last year, but would only get $850 for surrendering it.
NSW Premier Chris Minns was forced to defend the scheme, saying the government was paying above recommended retail value for many other types.
"We had to nominate a figure because we're looking at hundreds of thousands of guns being returned and surrendered to the state," he said.
Tough national gun control laws were proposed after the 2025 Bondi massacre where a father-and-son duo killed 15 people.
Mr Minns is the first - and potentially only - state leader to sign up to the federal government's beleaguered national buyback, the largest such scheme since a Howard-era program that followed the 1996 Port Arthur massacre.
Ms Mitchell also criticised restrictions on farmers being unable to keep more than 10 guns. She said some farmers required more than 10 firearms to "do their job properly".
Mr Minns said there would be no discretion for licence holders in extenuating circumstances.
"If the number was so high, it would render the whole purpose of the policy change meaningless," he said.
"And the purpose of the policy change is to reduce the net number of firearms in the community."
The scheme is set to cost taxpayers hundreds of millions of dollars, with the Commonwealth set to cover the full cost of destroying the weapons.
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