While Rio Grande Valley farmers say crops are being devastated, Mexican President Vicente Fox has postponed a trip to Texas over a massive water debt Mexico owes the US. Officials said President Fox wanted to give his government more time to work out a plan to pay off the debt first.
The president had promised to find a solution to the crisis by the end of June, but the government has so far failed to come up with any proposals - in part, due to internal pressures from its border states.
Under a 1944 treaty, the Mexican authorities are obliged to allow water to flow into the Rio Grande from tributaries inside Mexico. But this has not always happened.
Mexico receives 850 million cubic meters of water from the US each year, and is supposed to give its neighbor 431 million cubic meters. However, due to drought this has not always happened, and Mexico has now run up a water debt with the US of 82,000 cubic meters.
Texan farmers in the Rio Grande Valley argue that their crops are being devastated as a result of insufficient water flowing into the Rio Grande.
Mexico's northern states are calling on the government not to pay back the water debt by cutting their supplies.
President Fox was due to visit Texas at the end of the month. His officials say he will not travel until a special commission that is studying the water crisis completes its report.