One of Australia's largest food exporters will lose more jobs in the new year after failing to entice growers to plant rice crops.

Key points: SunRice will cut 100 jobs at its Leeton and Deniliquin mills and Australian Grain Storage sites

SunRice will cut 100 jobs at its Leeton and Deniliquin mills and Australian Grain Storage sites Since last November, 230 jobs have been cut at the food manufacturer

Since last November, 230 jobs have been cut at the food manufacturer SunRice's CEO says the Murray Darling Basin Plan is partly to blame for the rice industry's woes

SunRice will shed 100 more jobs at its mills and grain-storage sites in southern New South Wales.

Since last November, 230 jobs have been cut at the food manufacturer.

The 2019 rice harvest was the second-lowest on record, with low allocations and high prices for water making rice production an impossible undertaking for many growers.

SunRice had hoped to counter these challenges by offering record prices for 2020 crops to entice growers to plant and buy water.

Fixed-price contracts of $750 per tonne — up from $411 last year — were announced, but SunRice CEO Rob Gordon said they had not been enough to ensure a substantial crop for next year.

"The cost of water is just so high that we didn't get a tremendous response," Mr Gordon said.

"What we have been able to do is secure enough rice, together with the crop from this year carried in to next year, that we'll have a milling program on one shift at Deniliquin and Leeton through until early 2021.

"What we hope is that there'll be an improvement in seasonal conditions between now and then and we keep a core of our skills until that point in time" he said.

Mr Gordon confirmed there would be 55 jobs axed at Leeton from next April, with 25 to go in Deniliquin and 20 to go from Australian Grain Storage sites.

Basin plan part of the problem

SunRice CEO Rob Gordon says record-low water in-flows have been exacerbated by the way the basin plan has been rolled out. ( Laurissa Smith )

SunRice said ongoing drought was partly to blame for the low rice crop and job losses, but Mr Gordon said the Murray Darling Basin Plan was failing the rice industry.

The food manufacturer commissioned an external report in to the plan which concluded there had been unintended consequences that had had a detrimental impact on New South Wales irrigators.

Mr Gordon said the report found up to 1,000 gigalitres of water were flowing to South Australia on top of the levels originally committed to in the National Water Initiative, half of which would be enough to sustain a healthy rice industry for a year.

"Water in-flows are at record lows, so that's always going to be a tough time for farmers in the Riverina," Mr Gordon said.

"What the report that we've commissioned highlights is that there are further issues exacerbated by the way the plan has been rolled out and also the way that New South Wales has allocated water.

"That means that these impacts are felt even more so than they might be in a normal drought." he said.

Deniliquin is the largest town in the Edward River local government area, and Mayor Norm Brennan said the job losses would be a blow for the region.

"It makes it very hard, when you lose another 20 jobs on top of the 50-odd that we lost 12 months ago, and normally when we are gearing up for a rice harvest," he said.

"They can employ up to 400 people in the rice industry. That's not happening at the moment and unfortunately that means it's going to be a very tight and hard time for Deniliquin and the region."

The local Mayor fears for the future of the rice industry in Deniliquin. ( ABC Rural: Cara Jeffery )

Mr Brennan agreed blame for the job losses and the diminishing rice industry partly fell on the Murray Darling Basin Plan and those implementing it.

"Instead of the people who can make these decisions keeping their head in the sand, let them stand up and have a look around at exactly what's happening," the Mayor said.

"No-one wants to admit that the [Murray Darling Basin] Plan is not working properly. We never thought we'd have consequences like we are today.

"To use the excuse that we've got to implement the plan by 2024 as it is … without showing consequences and being adaptive and having a balanced outcome, you'll find that a lot of these communities won't be there as we know them today."