Agriculture Minister Barnaby Joyce says he remains "absolutely certain" Prime Minister Malcolm Turnbull will keep his promises to the Nationals, including transferring responsibility for water to them, amid reports of simmering tensions over the issue.
Mr Joyce told ABC Radio's Fran Kelly on Monday that the agreements made by Mr Turnbull after he deposed Tony Abbott as leader last month "will be honoured".
"This is absolutely crucial for how the Coalition works," he said, adding he was also certain "water returns to Agriculture". 
The comments follow a report by News Corp on Monday that said the Nationals were worried Mr Joyce's assistant minister Liberal senator Anne Ruston would get responsibility for water.
Environment Minister Greg Hunt's department, meanwhile, retains control of the Commonwealth Environmental Water Office which manages water purchased by the government for the benefit of the environment, his office confirmed on Monday.
Water is looming as an increasingly contested area as the regions with unusually dry and hot conditions continued to expand, with irrigators keen to maintain allowances while environmental scientists say rivers must maintain their health.
Farmers are starting to feel the bite, with Rabobank on Monday saying the country's wheat crop was threatened by the hot and dry conditions.
"We forecast production to reach 24 million to 25 million tonnes but if rains don't arrive later this month, we will have to reduce the estimate further," the bank said in its latest commodity review.
Dry times 
The Bureau of Meteorology last week released its updated drought and streamflow reports showing that rainfall deficiencies are expanding and the near-term outlook is for declining run-off reaching reservoirs for most of the country. 
The reports came as much of southern Australia broke early-season heat records at the start of   October and the bureau lifted its forecasts for above-average warmth and below-average rainfall for the   October to   December period. 
Record low rainfall has been recorded in parts of south-eastern South Australia and adjacent parts of Victoria.
Almost half of Victoria is now enduring severe rainfall deficiencies, the bureau said, noting that much of eastern Australia has been relatively dry over the past 36 months.
  September was the equal third driest on record with about two-thirds less rainfall than usual. Those dry conditions combined with the three-month outlook mean 98 of 118 stream or river locations are likely to have lower-than-usual flows over the period, the bureau said.
 Last month, the Senate passed the government's plan to cap water buybacks in the Murray Darling Basin to 1500 billion litres, prompting criticism from scientists who warned the move did not take proper account of the long-term threat from climate change.
Separately, the Australian Conservation Foundation has welcomed an ABC report that Mr Joyce is willing to consider reinstating the Sustainable Rivers Audit.
The audit, cancelled three years ago by state governments, had found all but two of the 23 river valleys in the Murray-Darling Basin were in a poor, very poor, or extremely poor state.
"Millions of Australians depend on a healthy Murray-Darling for their lives and livelihoods, so closely tracking its long-term health is vitally important to a large number of people," Jonathan La Nauze, ACF's healthy ecosystems program manager, said.
"Putting the river and irrigation industries on a sustainable footing is a difficult journey, making reliable scientific evidence all the more important," he said in a statement.
El Nino plus

 While this year's dry spell has been attributed to the widening impact from the El Nino in the Pacific, southern Australia has experienced a longer term drying out, particularly for winter rains. 
This shift was first detected in south-western Western Australia but has now extended to the country's south-eastern regions.
Storm tracks that typically bring winter rains have shifted southwards as circumpolar winds speed up.