Unforseen water market developments are eroding the environmental and farmer outcomes that form the underlying principles of Australia's decades-long reform agenda.
That's according to Laurie Arthur, current SunRice chairman and a former commissioner of the National Water Initiative (NWI).
He said the market principle of prioritising water access by the highest value use had "failed".
Mr Arthur wants an urgent review of national water policy.
"Relying on the water market to optimise outcomes from higher value water use is doomed to failure on the Australian continent," Mr Arthur will tell this week's Rice Growers Association's Corowa annual conference.
His concerns are highlighted by the impact of booming Lower Murray region permanent nut plantations, which exert such demand on volume, and river flow capacity, that a recent report to the Victorian government found the price of water may become unaffordable for other irrigators.
Mr Arthur said a key principle of the NWI, a seminal national reform blueprint signed in 2004 by state governments and the Commonwealth under Council of Australian Governments, had been ignored.
The NWI formed the objectives of the Basin Plan, including that the entitlements held by the Commonwealth for the environment, or an irrigator, would retain their yield and value over time.
"This has not been the case," said Mr Arthur, arguing NSW and Victorian general and low security entitlements, respectively, were most impacted.
River operators have been sending huge water volumes downstream to supply vast downstream permanent crop plantings.
That meant upstream, the lower security holdings of farmers and the Commonwealth Environmental Water Holder had gone without.
Mr Arthur said it was untenable for high value cropping and water entitlements favoured by permanent plantations to dominate the market in Australia's harsh boom-bust seasonal environment.
"A glaring omission from the objectives of the NWI has been the failure to recognise the inherent variability of water flows in the Murray Darling Basin," Mr Arthur said.
"Our rivers have the highest variability of flow in the world.
"The ratio of minimum to maximum annual flow in the Amazon River is a steady one to 1.3.
"The Murray's is an alarming one to 15. The Darling, a startling one to 4700.
"Yet, somehow the public envisages a healthy Australian river as ever flowing at a consistent height."
The NWI stipulated the interests of all water users were protected.
"The signatories can't say 'we don't care about Victoria or NSW low and general security," Mr Arthur said.
"If we say we don't care about them, and they wear the losses, the yield on those entitlements will diminish to the point where the value completely erodes, and that is anti-water initiatives.
"The conversion of annual plantings to permanent plantings continues unabated and will end in tears, particularly for investors, significant rural communities and profitable annual irrigation industries that may be casualties leading up to this event unless action is taken now."
The board of National Water Commissioners was disbanded in 2014 by then Water Minister Barnaby Joyce.
Responsibility for the triennial reviews of the NWI has switched to the Productivity Commission.
