At its peak, the Coleambally mill employed more than 80 people but was forced to close down in 2005 due to dwindling harvests and the ongoing drought.

NSW Industry and Investment rice expert John Lacy said a wet winter and the prospect of solid water allocations meant 2010/11 was shaping as a bumper season for the once-lucrative crop.

"This is potentially the best season since 2005/06 when the industry grew over a million tonnes," Mr Lacy said.

"And sure, if the production's big enough, then they'd be silly not to look at reopening Coly. I'm sure they couldn't mill all the rice at Leeton.

"The sub-soil moisture is really good at the moment, the dams are filling up and many rice farmers have some carryover water from last season.

"It's been a great start - now we're just relying on further rain in September and in the main sowing month of October."

He said current prices were at a modest $300/tonne for medium grain rice - about double the cost of production.

SunRice management could not be reached to comment on the possible reopening of the Coly mill but Murrumbidgee Shire Council general manager Paul Goodsall said it would be a huge fillip for the drought-battered town.

"Coly has taken a lot of hits in recent times and we'd be overjoyed if the mill was to reopen," Mr Goodsall said.

"It could very well turn things around for that community."

Benerembah rice farmer and local Rice Growers' Association delegate Hayden Cudmore said many growers remained cautious about the season ahead.

"All indicators are that we're heading in the right direction but there's still a long way to go," Mr Cudmore said.

"There's huge potential but most farmers couldn't cop another failed season. We're spending money on fertilisers and chemicals at the moment and a bad season would just compound a dead situation.

"We've still got the threat of locusts and this water issue in the background and a hot, dry spring would be a disaster for us.

"It really is all dependent on water."