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The South West and agricultural zones are facing a water crisis as dry conditions grip the region, with some towns facing the prospect of running out of supplies.

The South West and agricultural zones are facing a water crisis as dry conditions grip the region, with some towns facing the prospect of running out of supplies.

After the driest July to hit much of WA's southern half, there are fears the conditions could be as bad as 2010 when Perth's dams plunged to record lows and towns were declared water deficient.

Water Minister Bill Marmion stepped in last week to ensure Manjimup, one of the South West's biggest centres, did not run out of scheme supplies after months of poor rain.

There are also concerns for Margaret River, where the main dam has dwindled to 33 per cent capacity and $48 million works to safeguard supplies are yet to be completed.

In other parts of the South West, small communities such as Balingup, Greenbushes and Kirup have been put on alert as the Water Corporation trucks in water to prop up local supplies.

And the Government is monitoring water quality in towns supplied by Harris Dam such as Collie and Lake Grace after storage dropped to its lowest level in more than a decade.

Further east, the Government said tough water restrictions would remain for Salmon Gums and could be extended if significant rains did not fall soon.

Mr Marmion said that the lack of rain was having a big effect on how much water flowed into the city's dams and those across the South West.

"In the South West, a number of the Water Corporation's independent water schemes are suffering due to the drying climate, which delivered unprecedented low rainfall in 2010, fairly ordinary inflows for 2011 and well below average rainfall again this winter," he said.

"Drinking water dams across the South West are 40 per cent full on average."

A Water Department spokesman said more than half of the 30 sites used for tracking rainfall across the South West recorded their lowest July totals.