One of Australia's largest food exporters, SunRice, has cut more than 30 regional staff after producing its second-lowest rice crop.

Key points: One of Australia's leading food exporters is cutting jobs in its rice mills and grain storage facilities

One of Australia's leading food exporters is cutting jobs in its rice mills and grain storage facilities 32 full-time-equivalent staff will be let go after the second lowest rice crop on record

32 full-time-equivalent staff will be let go after the second lowest rice crop on record The company's CEO says the water market is making it difficult to grow crops and is hurting the industry

Only 54,000 tonnes of rice has been produced in Australia this year, a fraction of the 800,000 tonnes grown in a regular season.

SunRice said the low figures meant it had no choice but to cut 32 positions at its mills and grain storage sites in the NSW Riverina region.

It follows 100 job losses between the same sites last November.

Chief executive Rob Gordon said the losses were regrettable but stressed SunRice was working to ensure growers were able to put in a crop for the 2020 season.

Rob Gordon says a low rice crop left the company with no choice but to cut jobs. ( Supplied: Laurissa Smith )

He said the company was offering record fixed-priced contracts of $750 per tonne, up from $411 last year, to entice growers to sow a crop next year.

"We will as a consequence of this be able to have a milling program run all next year as well at Deniliquin and Leeton, regardless of the outcome for the coming season," he said.

"So very regrettable job losses for this year, but we've done a lot to try and hold on to these really skilled people in our facility."

SunRice still employs 365 people at its Leeton and Deniliquin mills and across the grain storage network, down from a peak of 500.

Calls for changes to water trading

Rice growers say they have been increasingly pushed out of a competitive water market, in which traders, permanent plantings and low allocations have seen the temporary water market rise to more than $600 a megalitre.

Deniliquin falls under the Edward River Council local government area, and Mayor Norm Brennan said the SunRice job losses were expected given the downturn in the rice industry.

SunRice is trying to encourage growers with record fixed-price contracts for next year's crop. ( ABC Rural: Cara Jeffery )

Cr Brennan said it was a symptom of ongoing poor water management, including the implementation of the Murray-Darling Basin Plan, and that it was time governments at all levels acted to fix what he considered to be a broken system.

"It's sad for the town, but it's a fact of where we currently are in the water debate. There's no balance at the moment between social, economic and the environment.

"It's really a federal issue to take water management under its wing and direct what should be done; federal and state, they need to get to the table and stop pointing at each other and come up with a solution."

'System must work for everybody'

Mr Gordon said the job cuts did not signal the beginning of the end of rice production in the Riverina, despite the fall in crops and employment.

He agreed the water market and the trade of water was hurting the industry and that something must change to ensure primary production, not profit, was the focus of buying and selling water.

Rural news in your inbox? Subscribe for the national headlines of the day.

"We have a promising future with great markets, we sell a premium product. Unlike other commodities, we actually do the value adding and processing in the Riverina employing 500 people in a normal year.

"A good deal of effort needs to be done to make sure the system works for everybody — the environment, for communities and for businesses."

Federal Water Minister David Littleproud was unavailable for comment, but in a statement the Department of Agriculture said an independent expert panel was investigating the social and economic conditions affecting communities across the Murray-Darling Basin.

It said the panel would consult with communities across the basin, visiting nearly 30 towns this month, and report its preliminary findings to Mr Littleproud by December, with the final report due next April.