Under increasing water scarcity, collective groundwater management is a global concern. This article presents an interdisciplinary analysis of this challenge drawing on a survey including 50 large and small farms and gardens in a village in an agricultural land reclamation area on the edge of the Western Desert of Egypt. Findings revealed that smallholders rely on a practice of shallow groundwater use, through which drainage water from adjacent irrigation areas is effectively recycled within the surface aquifer. Expanding agroindustrial activities in the surrounding area are socio-economically important, but by mining non-renewable water in the surrounding area, they set in motion a degradation process with social and ecological consequences for all users in the multi-layered aquifer system. Based on the findings of our investigation, we identify opportunities for local authorities to more systematically connect available environmental information sources and common pool resource management precedents, to counterbalance the degradation threat.