This was once a favourite swimming spot, but locals fear it may never return

Henderson Lagoon has long been a popular swimming spot, but has diminished in recent years, with many pointing to low rainfall.

But some also believe intensifying water use is taking a toll and say a pending upstream water allocation application could be devastating.

An environmental group says the Tasmanian government needs to introduce more water management plans.

David Godfrey-Smith longs for the day when the ankle-deep puddle near his doorstep returns to the brilliant blue lagoon where he once learned to swim.

But he fears that day may never come if a recent application to extract millions of litres upstream is approved.

Henderson Lagoon, at Falmouth on Tasmania's east coast, was once a haven for paddling, kayaking and family holidays.

But the lagoon, which is fed by a series of inland streams and intermittently opens to the ocean, has become a trickle.

The region has experienced very low rainfall this year — with a nearby weather station at Fingal receiving just 10mm in September, 10.2mm in August and 18.2mm in July.

Another weather station at St Helens received 5mm in September, 25.2mm in August and 36.4mm in July, according to Bureau of Meteorology data.

But Mr Godfrey-Smith, along with other locals like Michael Di Giovanni, suspects poor water regulation is partly to blame and further extraction could be devastating.

"I think that the way the system is at the moment, there are a few that might say it may never recover," Mr Di Giovanni said.

The recent application to vary an existing water licence to take an additional 360 million litres from Ferntree Glen Creek, upstream of Henderson Lagoon, was lodged by Cooltrans Pty Ltd, which is directed by a nearby farmer.

Data on LISTMap shows Cooltrans has a number of current licences to draw irrigation water from two other creeks and another unnamed tributary, which feed the lagoon.

Mr Godfrey-Smith said many locals wrote submissions against the current application, which is currently being assessed by NRE.

He said he hoped that assessment was based on current data that accounted for recent climatic and land use changes, and considered impacts to environmental flows.

He said a group of concerned residents were even considering putting up around $50,000 of their own money to fund a water management plan for the area, despite that being a state government responsibility.

Henderson Lagoon is among many catchments in Tasmania without a formal water management plan.

These plans are legally binding documents that can set catchment-specific rules for allocating and managing water.

But NRE's website lists only 11 formally adopted plans in the state, some of which are due for review.

Environment Tasmania's freshwater campaigner Lucy Tremain said the plans provided targeted environmental protections, which she said were particularly important as demand for rural water intensified.

She believed this was partly driven by a Tasmanian Government commitment to increase the value of its agricultural sector to $10 billion by 2050.

"If we're looking to increase agriculture ... [water management plans] are a key piece of infrastructure that needs to be rolled out broadly across the state," Ms Tremain said.

Todd Dudley, president of the North East Bioregional Network, said the recent low rainfall and climate change should prompt the state to take a more precautionary approach to allocating water.

"But the government's going in the opposite direction," he said.

TasFarmers chief operating officer Neil Grose, however, said NRE had been "very active" in managing stressed catchments, particularly those on the east coast which had been dry for years.

"Certainly the discussions we have had with NRE, even in recent weeks, have been very precautionary," he said.

He also said the idea that water was being prioritised for agriculture, rather than the environment, was a "misconception".

"There wouldn't be many farmers who would say it's too easy to get extra water," he said.

"It is a rigorous process, as it should be."

State Water Minister Gavin Pearce was contacted for comment.

A Department of Natural Resources and Environment (NRE) Tasmania spokesperson said Tasmania’s irrigated agriculture sector has grown over recent decades, supported by private investment, irrigation scheme development and the state’s rural water strategy.

While they said water demand had generally grown as well, they said actual annual water use varies according to seasonal conditions, commodity markets and water availability.

It said all water licence applications were assessed under the Water Management Act 1999, with consideration given to water availability, environmental impacts, other water users and community submissions received as part of the assessment process.

Mr Godfrey-Smith said if the state did not produce a water management plan for the area, the community would do it.

He estimated it would cost community members around $50,000 and require commitments from all stakeholders.

"But if push comes to shove, we'll do the study ourselves."

The NRE spokesperson said it supports community involvement in water management planning.

David Cannon has lived in Falmouth for 47 years and worked for decades as a commercial fisherman, often leaving his six-metre dinghy in Henderson Lagoon overnight.

He said the lagoon used to flow through to the ocean much of the time, but for the last two years it has been virtually landlocked.

While machinery is at times used to open the lagoon to the ocean — which the ABC understands is often to prevent saltwater intrusion on private land — Mr Cannon worries this may also have a detrimental impact.

NRE said the practice was managed through an established protocol, which included specific water level triggers, and was designed to balance environmental health with public safety, infrastructure protection and the risk of inundation to surrounding properties.

But Mr Godfrey-Smith said this protocol should be reinvestigated and updated, as part of a new water management plan.

He worries that without stricter management, future generations will never experience the region at its best.

"I learned to swim here, my kids learned to swim here," he said.

"It'd be really nice if their kids, our grandchildren, could learn to swim here too.