Hunter farmers can access additional drought support from July 1

A drought infrastructure package is the state government's answer to supporting drought-stricken communities across NSW.

The NSW government will spend $170 million through the package to keep town economies rolling, with $120 million of this allocated to fast-tracking major infrastructure projects. Many of these projects revolve around water infrastructure. Towns in the Hunter are yet to make the project list.

The government will spend $30 million on a new groundwater supply for Dubbo; $8.2 million to construct a second water storage west of Dubbo at Nyngan, $2.2 million to augment bore water supply at Coonabarabran; $2 million for critical maintenance to the Albert Priest Channel, which impacts Nyngan and Cobar; and $1.97 million towards the Coolamon Industrial Estate development.

Hunter farmers can access additional support, which will be on offer from July 1.

There is $185 million worth of on on-farm support, including $70 million for transport subsidies for stock, fodder and water; $50 million to waive Local Land Services rates; $30 million to waive fixed charges for NSW Water Licences; $15 million for emergency water carting; and $10 million to waive interest charges for Farm Innovation Fund loans.

The government will also make a $350 million increase to the Farm Innovation Fund, so farmers can access low-interest loans to help them 'drought proof' their farm through infrastructure.

NSW Agriculture Minister Adam Marshall said one of the best things the government could do to help was limiting the money they took from farmers.

"This drought has lasted far longer than anyone expected and farmers are starting to feel the sting of dwindling cash reserves and lower than normal cash flow," he said.