The water allocation period from July 1, 2019-June 30, 2020 saw irrigators, holding general security licences, in the the Hunter River's regulated system (below Glendbawn Dam near Scone) enjoy 95 per cent allocation.

But three years of drought combined with high levels of evaporation means Water NSW, in a series of meetings with water users, advised that unless heavy rain is recorded in the catchments of Glendbawn and Glennies Creek dams then general security licence holders face the prospect of zero allocation next financial year.

This will have a severe if not devastating impact on the region's agricultural production and its because of this impact Water NSW is talking as often as it can to licence holders. The Hunter's regulated system was fortunate during the height of the drought to be able to provide a near 100 per cent allocation to irrigators whereas other regions particularly in the north and western districts of the state were already dealing will zero or very low water allocations.

At a meeting held in Singleton last month irrigators were told the catchment areas of the dams had recorded their lowest rainfall and highest temperatures last year which resulted in the lowest soil moisture content. Although 200mm fell in the areas this year the soil was so dry there was no runoff into the dams.

Presently the two dams hold just 400 gigalitres and Water NSW has to ensure there is two years supply of water for town water supplies and high security licences. More than 80 per cent of the high security licences are now held by mining companies with power stations Liddell and Bayswater two other significant high security users.

Water NSW, executive manager system operations, Adrian Langdon said the intensity and length of the drought was causing the present situation. "Inflows during the previous worst drought were 129 gigs - last three years inflows 49 gig, " he said.

Lostock Dam on the Paterson River is full and the Hunter River below Singleton has been assisted thanks to 40gigs coming from the Goulburn River following rainfall this year, he said.

"But the modelling we are using on the Hunter River keeps getting worse - where we expected 70gigs inflow we got 29gigs," he said.

"So that means irrigators have to be prepared and start planning now for zero allocation next water period.

"At the same time if we look at Sydney it was facing severe water restrictions but a deluge of rain last month over a weekend turned that situation right around with many of their storage dams recording massive inflows.

"We have to consider this may happen in the Hunter and then we adjust our allocation accordingly."

Mr Langdon said Water NSW and the State Government were looking at ways to improve water security in the region and one proposal contained in a report was building a pipeline from Lostock to Glennies Creek dam.

How irrigators and other water users on the Paterson River will feel about that proposal given the fact they have enjoyed and even bought properties in that valley due to it high water security only time will tell.

Commeting on the option for irrigators to carry-over 25 per cent of their allocation Mr Langdon said given the critical water situation in the Hunter system there was no guarantee at this stage that irrigators would have access to any carry-over.

"In saying that if we get a lift in water inflows carry-over water would be given a priority when it came to allocations," he said.

Pokolbin and Broke grape growers will be affected by the water allocation cutback. Mr Langdon said Water NSW has been in discussions with the managers of the Pokolbin Irrigation District (PID).

The PID holds 600 megalitres of high security water but more than double that in general security water which means distribution of the latter will need to be undertaken should the zero allocation of general security eventuate. Growing grapes and operating golf and tourist businesses could become far more challenging.