Barnaby Joyce plunged into controversy over $40,000 cheque from Gina Rinehart

 Barnaby Joyce has handed back a $40,000 award from billionaire supporter Gina Rinehart, after an embarrassing backlash from political opponents and the farming industry.

The mining and cattle baron bestowed the lucrative prize on Mr Joyce at a glitzy agriculture event put on by her company Hancock Prospecting at the Australian War Memorial last night.

With less than two weeks until the former agriculture minister faces a by-election in his seat of New England, Mr Joyce skipped a local candidates forum in the electorate and travelled to Canberra for the festivities.

Mrs Rinehart personally handed him the inaugural National Agricultural and Related Industries prize, calling him a "champion of farming."

Mr Joyce initially accepted the giant novelty cheque, saying he intended to spend the money on his property.

"All I'm thinking about now is things I'm going to do on my own farm to be quite frank," he told the audience.

But after being roundly criticised by his opponents, including Labor, who labelled the award "smelly", Mr Joyce's office has released a statement saying he would "politely decline" it.

A spokesman for Mrs Rinehart said she was "sorry that his well-deserved award has caused opportunity for negative political comment from some people".

The accolade polarised many in the room, with reactions among the hundreds of guests varying from approval to vehement opposition.

Mrs Rinehart has been building considerable influence in the farming sector. Last year, she partnered with a Chinese consortium to purchase the S. Kidman and Co cattle empire.

She has previously been a generous donor to Mr Joyce's career, famously attending his election night party in 2013 and contributing $50,000 to that campaign.

Photos and videos from last night, published by Fairfax Media, show Mr Joyce and Mrs Rinehart posing for photos in Akubra hats.

The night also featured an ABBA tribute band, and attendees could take home tambourines as a memento.

Other guests included federal Nationals senator Bridget McKenzie, and MP George Christensen.

Former Liberal MP Sophie Mirabella and former Northern Territory chief minister Adam Giles, who are both now staffers for Mrs Rinehart, were also at the event.

So many Farmers suffering "asset-stripping by Banks and conspiracy junkie Receivers right now....this must be a mega slap in the face.............