Athikhom Rungruanglert suffered a wound to his chest when a man fired a .38 pistol at him and three other friends at 1am.
The four men were camping out in a paddy keeping watch on drilling equipment they were using to dig a groundwater well, Pol Lt Col Chusak Poonsawad, an investigator from Song police station, said.
The shooting occurred one day after the group got into a verbal clash with local farmer Winai Kaenrenu, who accused them of trying to divert water flowing into his rice farm for use with their drilling equipment.
Water is needed to prevent the drilling equipment from overheating.
Mr Athikhom told the investigator that the gunman disappeared into the dark after pulling the trigger.
He was sent to Phrae General Hospital for treatment, where a doctor confirmed his injuries were serious but not life-threatening.
Mr Wanai, who was summoned for questioning later on Tuesday, denied the allegation, Pol Lt Col Chusak said, but Mr Athikhom and his three friends told police that they have no conflict with anyone else.
Farmers in the northern province desperately need water to feed their rice fields. Phrae is one of the 20 provinces in the country currently suffering severe droughts and has been declared a disaster area by the Disaster Prevention and Mitigation Department.