Cavendish Farms is using the closure of its competition's plant to push for more high-capacity wells.
In a statement, Ron Clow, the vice president of the Irving-owned New Annan plant, said news that McCain Foods is closing is difficult for Islanders.
Clow's statement then goes on to say his 92 growers need a reliable source of water to grow potatoes.
He said P.E.I. fields are not yielding the same amount of spuds as other North American farms because of the lack of a steady water supply.
"This means less money for the farmer per acre, and less potatoes for Cavendish to process," said Clow in the release.
The P.E.I. Potato Board has backed up Cavendish Farms in the past, saying irrigation would ensure the viability of the potato industry for the province.
The board has been pushing the province to lift a moratorium on high-capacity agricultural wells in the province.
The release cites Industry Canada numbers that show frozen potato products are the largest export industry on P.E.I. In 2012 it generated $192 million.
"We need to ensure the industry is capable of sustaining and growing in P.E.I.," said Clow.
Cavendish Farms uses about 2.9 million cubic metres of water a year.