That's the way it is here. Water rights are complicated and a major deal. Farmers get first priority though. Up until a couple of years ago it was illegal for us to collect rain water, because the state owned those water rights.Water rights are very complicated in California!
Some have historic water rights from 100 years ago that guarantees a certain amount of water. Farmers are allocated a percentage of what they get in a normal year based on the lake level.
Then there are differences between Federal and State lakes!