For the first time in six years, River Murray irrigators are unlikely to receive their full entitlements in 2016-17.
The Department of Environment, Water and Natural Resources suggested as much in its weekly River Murray flow update on Friday.
It blamed dry conditions across the Murray-Darling Basin and forecasts of low water storage levels.
"The recent El Nino weather event resulted in hotter, drier conditions across much of Australia, and while the event has peaked, it is uncertain if there will be significant rainfall or inflows in the Basin by the start of the 2016-17 water year," it said.
"River Murray system inflows over the past six months have declined and storage volumes are well below average, reducing water resources' availability across the Basin."
South Australia is usually entitled to 1850GL per year.
As of February 1, the state had 142.4GL saved up in storage, ready for a year of reduced allocation: 82.4GL for household use and 60GL for private carryover.
But much of the Mallee and upper South East recorded rainfall well below average in 2014-15, while parts of Victoria had their driest year on record.
Swanport Harvest managing director Don Ruggiero said the resulting increase in water prices would impact his business.
“There’s no way we could sustain what we did six years ago,” he said.
“We’d look at it differently this time: grow a third less, employ a third less people.
“But we could end up losing market share, which takes years to get – if I ring my suppliers and say ‘we’re sending a third less’, someone else will take it.”
He said he was hamstrung by the fact his competitors at Werribee, Victoria and on the Mornington Peninsula did not rely on Murray water.
But governments only seemed to intervene to help high-value, high-water usage crops such as almonds, he said.
Murray-Darling Basin Authority chief executive Phillip Glyde mentioned the coming crunch in the second annual report on the Basin Plan, released on Thursday.
"Dry conditions in some areas have contributed to the pressure on some communities and industries," he said.
"The lack of significant inflows into many of the basin's catchments during the year means we've also seen a rise in temporary water prices, and we'll continue to monitor the operations of the water market to ensure it remains fair and transparent.
"But no matter whether times are dry or water is abundant, the Basin Plan is our best insurance policy for the river system into the future."
By June 30, 1951 of the target 2750GL of water to be recovered for the environment across the Basin had been secured.
In time, he said, water extraction across the Basin could be reduced by another 500 gigalitres via further rounds of funding for projects which improved on-farm efficiency.
As a result, improvements in fish, waterbird and plant life had already been measured, including in the Coorong and Lower Lakes.
The remaining environmental water is scheduled for recovery by 2019, but other aspects of the Basin Plan will not be complete until 2024.
Irrigator entitlements were last cut during 2010-11, when South Australia's allocation was initially forecast to be just 21 per cent but increased throughout the year.