The first shots were fired in the Senate yesterday over what is shaping up as the New War of the West -- a battle over millions of acres of federally irrigated farmland.

While the debate is over changes in the Reclamation Act of 1902, this battle involves far more: presidential politics, agricultural empires and the money they generate.

These ingredients have added an extra dimension to the argument over the long-neglected 1902 law, which will be enforced strictly next year unless Congress acts soon on proposed amendments.

The debate is enormously complicated, but one of the undercurrents is simply stated -- the fate of President Carter's 1980 reelection fortunes in the western irrigation states, particularly California and Arizona.

As Interior Secretary Cecil D. Andrus said yesterday at a Senate subcommittee hearing, the administration would like to settle the issue soon -- presumably before a volatile 1980, although he didn't say it that precisely.

Former representative Thomas M. Rees, a lawyer who now represents big growers in California's Imperial Valley, put it more bluntly: "If there's no bill, the chaos and disruption will be such in an election year that Carter wouldn't win one reclamation state."

The message was underscored by Sen. Orrin G. Hatch (R-Utah), who warned at a subcommittee hearing that the West is seething over the "current efforts by the Carter-Andrus administration to reduce the western states to a federally controlled private enclave."

Unspoken punctuation was added by the presence in the standing-room-only hearing room of James Lake, an erstwhile spokesman for farm interests who is now an aide in Ronald Reagan's campaign organization.

Sen. Frank Church (D-Idaho), the subcommittee chairman who faces his own reelection fight next year, stressed the urgency of revising the 1902 reclamation law as soon as possible. Under the law, a farmer is supposed to be limited to 160 acres of federally irrigated land no matter how large his holdings.

"Congress must this year address the issue. The ambiguities and the uncertainties must end," Church said.

Twenty-four witnesses, almost all of them forecasting agricultural doom unless the law is changed, and some suggesting political repercussions, trooped before the subcommittee to sound off yesterday.

Unless changes come, Andrus -- under a federal court order -- must enforce the 1902 law strictly next year. That means that most farms exceeding the law's 160-acre limitation would be deprived of the heavily subsidized federal irrigation water that now helps them thrive.

Interior's Bureau of Reclamation estimates the "typical" irrigated farm size in 16 states outside California at about 200 acres. In three selected California water districts, the bureau reported farm sizes ranging from a low average of 724 acres to a high of 2,889 acres.

The value of the federal water subsidy varies from district to district, but the Department of Agriculture reported last year that in California's Westlands district, the subsidy amounts to $76,000 a year for a 640-acre farm.

An administration bill, not yet introduced, would limit two adults -- a man and wife, for example -- to owning and leasing no more than 960 acres of federally irrigated land.

Church has proposed a limit of 1,280 acres per farm. Sen. Barry M. Goldwater (R-Ariz.) wants no limit on irrigated holdings.Gaylord Nelson (D-Wis.) has proposed a limit of 320 irrigated acres per family. James A. McClure (R-Idaho) has two approaches -- 320 acres per person and unlimited leasing rights, or a maximum of 1,600 acres for a farming unit. Other bills offer other formulas.

McClure's 320-acre bill actually is the product of Farm/Water, a coalition of farm. banking and agribusiness groups in the 17 western states with federal irrigation programs.

Farm/Water, directed by Gordon Nelson, onetime aide to former U.S. representative B. F. Sisk of California, has opened up shop in Washington to lobby for passage of its unlimited-lease approach, which would leave the large holdings intact.

The Westlands farmers, in the area around Fresno, also have signed on the influential Williams and Connolly law firm to help them in water contract matters at Interior.

But none of those acreage-limit approaches is acceptable to National Land for People (NLP), a group of small farmers from California whose suit in 1976 resulted in the court order for enforcement of the 1902 law.

NLP wants a 640-acre limit per farm and a lottery to distribute all the excess irrigation lands to potential farmers, with a strict rule requiring them to live on their farms.

George Ballis of Fresno, coordinator for NLP, was seething yesterday over the Church subcommittee's hearing and the procedures that put him 23rd on the list of 24 witnesses.

Until Tuesday, the subcommittee staff had barred him from testifying on the grounds that NLP's position was heard last year. Others who testified last year, however, were on yesterday's witness list.

Ballis called the hearing "a stacked deck," and urged Church to convene another session to give small family farm proponents a chance to speak.

"This is a pep rally for those western farmers spending millions to choke off any family farm protections in federal water law," Ballis said.

The term "family farm" was heard throughout yesterday's hearing, but there was wide disagreement about its meaning -- and whether small farms, as envisioned in the 1902 law, could make it economically today.

Andrus, however, said the administration will insist that any changes to the 1902 law retain its spirit of encouraging families to get into farming on the irrigated lands.

The Senate Energy and Natural Resources Committee, with its heavy western membership, is expected to be more sympathetic to the Farm/Water appeals than its counterpart on the House side.

The House Interior Committee includes two persuasive California Democrats, Phillip Burton and George Miller, frequent critics of the large water subsidies and the policies that have kept small farmers out of the game.