Expanding irrigated cropping areas is one of Brazil’s strategies to increase agricultural production. This expansion is constrained by water policy goals to restrict water scarcity to acceptable levels. We therefore analysed the trade-off between levels of acceptable water scarcity, and feasible expansion of irrigation. The appropriateness of water use in agricultural production was assessed in categories ranging from excellent to very critical based on the river flow that is equalled or exceeded for 95% of the time (Q95) as indicator for physical water availability. The crop water balance components were determined for 166,842 sub-catchments covering all of Brazil. The crops considered were cotton, rice, sugarcane, beans, cassava, corn, soybean and wheat, together accounting for 96% of the harvested area of irrigated and rainfed agriculture. On currently irrigated land irrigation must be discontinued on 53.6% (2.30 Mha) for an excellent water scarcity level, on 44.5% (1.91 Mha) for a comfortable water scarcity level and on 35.2% (1.51 Mha) for a worrying water scarcity level, in order to avoid critical water scarcity. An expansion of irrigated areas by irrigating all 45.56 Mha of rainfed area would strongly impact surface water resources, resulting in 26.02 Mha experiencing critical and very critical water scarcity. The results show in a spatially differentiated manner that potential future decisions regarding expanding irrigated cropping areas in Brazil must, while pursuing to intensify production practices, consider the likely regional effects on water scarcity levels, in order to reach sustainable agricultural production.