Backpacker numbers will be reduced and visa eligibility tightened under the federal government's immigration changes.
Working holiday-makers are crucial for staffing farming and tourism businesses across Australia.
Industry leaders say the changes are a "low blow" at a time.
Federal limits to backpacker numbers have preceded fears in regions reliant on holidaying workers for farming and tourism.
On Thursday Home Affairs Minister Tony Burke outlined an overhaul of the working holiday-maker visa system, introducing a ballot for backpackers seeking to extend their stay and reducing overall numbers.
A cap of 45,000 will be applied to those looking to stay a second year, down from the 57,000 who qualified this year.
Those seeking a third year will be capped at 5,000, down from 31,000 this year.
Mr Burke said the government would prioritise migrants that have skills Australia needs in areas such as construction and agriculture.
People who successfully secure an extension in the ballot will be required to undertake regional work.
Mr Burke said backpackers could not be exempt if the country was serious about lowering net overseas migration.
"Drastic cuts, wherever you make them, hurt the economy in every part, in every area," he said.
But the National Farmers’ Federation (NFF) has warned the government is putting Australia’s food security, regional economies and farm safety at risk if it pushes ahead with its plan without "urgent" consultation.
The lobby group's president, Hamish McIntyre, said farmers were furious that the time-frame for processing visas would now take up to three months, as opposed to days.
“This is a low blow for farmers and the businesses that produce Australia’s food and fibre,” he said in a statement.
"A three-month processing target leaves farmers completely stranded, with harvest already underway in parts of Queensland and the main season only weeks away."
Federation chief executive Mike Guerin also warned of rising food prices if the industry attempted to find workers for harvesting.
"We will see a lift in the price of food. We will see emptier supermarkets," he said.
Esperance farmer Mic Fels said the slowdown of backpacker visa applications, which began last month, meant some farmers were going without the seasonal workforce needed to bring crops in.
“I think 'reform' is probably a generous word. I think 'deform' is perhaps a better one," he said.
Mr Fels, who contested the WA seat of Swan at last year's federal election, said assurance the government would prioritise applications for skilled agricultural workers was welcomed.
But he said the situation was time-sensitive.
“If we saw hundreds of applicants coming through over the next week, I think that would give everybody some breathing space,” he said.
Mr Fels said there were concerns across the sector that a lack of workers could lead to practices that the industry had attempted to stamp out.
“After COVID, when we just had all these inexperienced workers on farms and the death rates on farms doubled, and it's not hyperbole, this is what we're dealing with,” he said.
“These are massive machines with thousands of moving parts. You wouldn't put inexperienced operators on a dump truck on a mine site and say, 'Go for your life', and that's what they're effectively saying."
WA's tourism lobby said the state stood to lose 4,500 backpackers working in peak seasons, costing at least $62 million in tourism spend and 425 local tourism jobs.
“The cuts will be most severe for Exmouth, Broome, Kununurra and northern WA, which currently attract backpackers to work in tourism to earn a third visa," Tourism Council WA chief executive Evan Hall said.
Queensland's Tourism Council said the government had effectively dismantled the system sending thousands of young travellers to regional Australia.
"Why would a young traveller leave the city and complete three months of regional work when there is no longer certainty of receiving a second visa?" chief executive Natassia Wheeler said.
"The workforce impact will begin during their first year, long before the ballot is held.
"Working holiday-makers are also visitors. When we lose that workforce, we also lose the money they would have spent on accommodation, transport, hospitality, tours and experiences."