Currently, 99 per cent of the state has been declared in drought or drought-affected and the lack of rain has led to crippling conditions for many primary producers.

NSW Premier Gladys Berejiklian visited the Kelly family farm in Newbridge, near Bathurst on Monday to announce the funding package and said it would focus on a number of key areas.

The three major elements of the package include: transport subsidies; cutting fees and charges for farmers including a waiver of Local Land Service rates; and a boost to the Farm Innovation Fund infrastructure program. Freight subsidies will be backdated to January 1 this year.

Funds will also be available for: counselling and mental health; critical services including transporting water and drought-related road upgrades and repairs; animal welfare and stock disposal.

“This has been an unforgivingly dry winter, we knew as a government we had to do more,” Ms Berejiklian said. “Conditions have not relented, conditions are getting worse. If there’s more we need to do, we will.”

Walcha Mayor Eric Noakes said the current dry weather pattern obviously had far reaching consequences for towns like Walcha.

“The flow on effects from farms through to small businesses and workers who rely on rural industries complicates any calls for government assistance,” he said.

“The state and federal governments are between a rock and a hard place in working out what assistance to apply and who should be the beneficiaries.”

Mr Noakes said the package announced on Monday goes some way to assisting with the financial burden of drought.

“However the needs are so varied and far reaching that it is difficult for any relief to be all encompassing,” he said.

“Whatever the outcome of this the only real solution is a lot of rainfall over a long period.”

Rural Aid founder Charles Alder praised the funding announcement.

“We need to acknowledge that the drought assistance the NSW Government has put out today is a great step and it will provide some relief for farmers in terms of their ability to claim back to the first of January, but  but also claim $20,000 worth of freight subsidy,” he said.

Mr Alder said it was a “significant gift from the NSW Government” that interest had been waived on the Drought Innovation fund loans.

For help in a crisis, call Lifeline on 13 11 14.