The Murray-Darling Basin Authority's chief executive believes water trading could be leading to changes more serious than when environmental water was recovered.
Phillip Glyde said many factors are driving change in agriculture including interest rates, changing demand and commodity prices.
And the water market may be a benefit to "some industries, individuals and communities" but not everyone.
"These changes may well be more profound than those that have occurred through the Basin Plan and its recovery of water for the environment," Mr Glyde said.
"The Basin Plan sets the limit on how much water can be used by farmers - the water market works to ensure that this lower level of water goes to its highest value purpose.
"The question for governments is whether the market rules are well-framed, are fair and that all players in the market have a good understanding of how the market works."
Last week, Mr Gylde was quoted in The Sydney Morning Herald saying water trading had led to farmers finding more efficiencies leading to regional communities being "hollowed out" as jobs disappeared.
Meanwhile the MBDA's submission into the ACCC's inquiry into water markets, says that water trading is an "important tool" which had helped reduced the impact of drought on regional gross domestic product in the southern basin.
"The ACCC review currently underway will inform future directions on this important aspect of water management," Mr Glyde said.
"The MDBA supports greater transparency in the water market in order to build public confidence, which is essential."
Ricegrower John Bonnetti questioned what the alternative to water trading was, and said the only alternative he could see was more water for general security irrigators.
"If high security gets priority all the time, and general security gets four or five per cent, then what's the alternative unless they start allocating more general security water?," he asked.
Mr Bonnetti said WaterNSW should be a little less conservative and release more water for consumptive use. He said extra water would mean ricegrowers could grow summer crop, and a winter cereal crop.
There was an imperative need to grow more rice as several rice exporting countries had paused their exports because of COVID-19.
"We've got to grow 350,000 tonnes just for domestic consumption," he said.
"Rice prices are twice the price they were last year, plus we are securing a food supply for Australia
"It's time for state water to chance their arm a little bit, and give us more water, people will come back to rice," Mr Bonnetti said.
Member for Murray Helen Dalton said she has "grave concerns" about water trading.
"No market in Australia is as unregulated as water," Mrs Dalton said.
"If our labour market was an unregulated as water, we'd all be unemployed and replaced by foreign workers.
"We need regulations in place to protect food production, limit inter-valley trading and to restrict water purchases by foreign entities and investors who don't own land."
Murrami irrigator Tanya Ginns said irrigators felt they had been "hung out to dry".
"As soon as you've put speculators into the market, you've ruined the market, they'll just keep pumping the price higher," Mrs Ginns said.
"Water needs to be considered a critical need, for food, drinking, for washing and cleaning.
"Water trading should never have been done between valleys or involved speculators."