Insiders claim some are taking water from Tasmanian river systems that they have not paid for, as local farmers face an impending drought.

Melbourne-based investor David Williams has purchased $15 million worth of water for irrigation, but he says it is going missing on a larger scale than evaporation alone would take.

He wants authorities to monitor the state’s catchments more closely.

It comes as problems mount for Tasmanian farmers, who say early drought conditions are already making hay dangerously scarce.

“If there's no policing there's going to be anarchy,” Mr Williams told ABC reporters this week.

“We have to have some policing, it's not acceptable to let people take some water out of those river systems and irrigation systems for free when farmers have paid good money — including myself — have paid good money to get access to that water.”

Mr Williams purchased his water from state-owned company Tasmanian Irrigation's Midlands and Lower South Esk schemes, and is concerned that other farmers and businesspeople who have helped fund the irrigation schemes are being ripped off.

“It needs to be policed, otherwise the Government's good work in building the system — the Federal and State Government — and people like me and hundreds of other farmers which have paid for that system to be built, we're just losing value in our water licences,” he said.

“If we've got 100 mega-litres of water I might only be able to take 70, even though I've paid for 100 because other people are taking water out of the system without paying for it.

“My evidence is from talking to farmers down there, from talking to all sorts of officials.

“I think if you talk to farmers in those areas you'll find that it's common knowledge.”

Julian Von Bibra, who invested in Tasmanian Irrigation Midland scheme and is also chairman the separate Elizabeth-Macquarie Irrigation Trust, denies the claims.

He says the reported loss would be due to evaporation.

Water theft is a concern for all water users, and Tasmania’s Primary Industries Minister Jeremy Rockliff says his department is taking the issue seriously.

“We'll investigate any matters when it comes to farmers not complying with statutory requirements, we take those matters very seriously,” he said.

The department plans to deploy more staff to monitor water use as drought conditions worsen this summer.