Water remains the major limiting factor for the Australian agricultural industry, so growing 'more crop per drop' is vital for the industry's continued success, the Cotton CRC says.

It says the aim of the project is to measure and monitor the evaporation and seepage losses from 135 on-farm storages across the Australian cotton industry.

Cotton CRC chief executive, Philip Armytage, says the new project provides an opportunity to raise industry awareness of the scale of water losses, the causes of the problems and ways to measure and reduce losses from on-farm water storages.

"Our objective is to firstly measure what is happening and then develop cost-effective strategies to reduce losses," Mr Armytage said.

"The Cotton CRC, its partners and growers along with National Water Commission are spending millions of dollars to improve on-farm water management."

Commercial consultants will be tendered to undertake storage measurements using the latest measurement equipment now available in Australia, identifying the characteristics of efficient and inefficient storages and the extent of losses occurring.

This will increase the capacity within the industry to measure and ameliorate losses from storages.

"Water savings could be substantial," Mr Armytage said.

"A 10pc reduction in water loss from on the 1000 cotton farms in NSW and Queensland could save the industry up to $21.4 million per year.

"This project adds to the Cotton CRC's existing $17m investment in collaborative water research.

"We are starting to develop water knowledge and solutions at a field level right through to whole of catchment."