Experts suspect state policy is putting some farmers in artificial drought

Paul Cameron watches his herd graze on the roadside. His own property is now too dry for livestock. (ABC Central West: Micaela Hambrett)

Paul Cameron watches his mob of thirsty cattle sink their heads into the Goan waterhole on the outskirts of Trangie in western New South Wales.

Mr Cameron has driven his cattle to graze the scrubby patches of Crown land hugging the public billabong for more than a year.

"I've been walking the stock to town … because we haven't got any water in our own system," Mr Cameron said.

Paul Cameron's cattle rely on the public waterhole on the edge of town. (ABC Central West: Lani Oataway)

Mr Cameron says water that would normally flow onto his property when it rains is caught in dams on his neighbour's place under a flood plain harvest licence.

"All my natural flows are gone and gone forever due to artificial mechanics," Mr Cameron said.

Paul Cameron says the paddocks once funnelled water into the Trangie Cowal during rain or flooding. (ABC Central West: Lani Oataway)

His type of farming relies on rainfall and water moving through the wider river system.

Irrigators, like Mr Cameron's cotton-growing neighbour, are different.

They need higher volumes of water than rain-fed crops, so they store water in dams and channels.

Most of the water comes from government-built dams but some of it comes from capturing rain or floodwater, known as flood plain harvesting.

Flood plain harvest licences allow holders to capture and store water that would otherwise flow overland. (Supplied: NSW government)

It takes water moving overland, headed for natural water systems and has always been opportunistic, according to water policy expert Bill Johnson.

"Because it had been allowed to go on like that, it was easier to licence it than it was to enforce it."

From 2016, the NSW government began to issue flood plain harvest licences to irrigators who fitted certain criteria across five of the seven water management zones in the northern Murray-Darling Basin.

NSW Executive director of water planning and knowledge, Mitchell Isaacs now heads the team that oversaw the rollout.

"In order to be eligible, people had to have either a [dam] that was in place at the time or an approval for a [dam] that was to be able to take flood plain harvesting," Mr Isaacs said.

Dubbed the Healthy flood plain Project, some farmers were able to get very old or even unregistered dams rubber-stamped as part of their flood plain harvest licence.

Capturing water that would otherwise flow overland is the last type of water take to be regulated in NSW. (Supplied: NSW