The Australian Government's plan for a 15% backpacker tax rate has been defeated by the Senate against expectations, prompting strong criticism from major horticultural groups.

Local media ABC News reported an amendment by the Labor party to drop to the rate to 10.5% was supported by the Greens and some crossbenchers.

The bills will now be sent back to the House of Representatives, and Finance Minister Mathias Cormann reportedly said the government would reject the amended bill.

"The people that got stuffed today by the Labor party, the Greens, Senator Hinch, Senator Culleton are the farmers of Australia," he was quoted as saying.

The long process of getting the bill passed has caused fury among many Australian farmers.

Earlier this week the government struck a deal to pass the controversial backpacker tax at with a rate of 15%, after it was initially proposed at 32.5% and later lowered to 19%.

Three of the largest organizations representing Australian horticulture and its growers have called on all political players to come to an immediate compromise on the tax debacle.

National vegetable industry body, AUSVEG, peak body for the horticultural industry, Voice of Horticulture (VoH), and citrus grower body, Citrus Australia, have all demanded the ongoing saga over the taxation status of working holiday makers be brought to an end.

"Australian growers are sick and tired of their industry being treated as a political football while they struggle in their search for any kind of certainty about the backpacker tax," AUSVEG CEO Simon Bolles said.

"AUSVEG welcomed the spirit of bipartisanship in which the Government offered its compromise deal of 15 per cent.

"While we are unhappy about the changes to the taxation of superannuation which have already been passed and which would increase the effective rate of that compromise deal to well over 20 per cent, we hoped to see this debate finish with an internationally competitive rate."

He added he was 'extremely disappointed' this had not happened.

Meanwhile, VoH and Citrus Australia chair Tania Chapman strongly criticized the political process.

"The Australian horticulture industry is being held to ransom for the sake of political games and brinkmanship, and this cannot go on," she said.

"The damaging and dangerous 32.5 per cent rate cannot be allowed to come into effect, or Australian horticulture will suffer and the blame will be placed squarely at the feet of every politician who placed political expediency above the livelihoods of our growers."

"This must end now."

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