The chairperson of the Walcha chapter of the NSW Farmers Association Sonia O'Keefe said she was pleased the government had maintained continuity and certainty for farmers by extending the funding for the Farm Innovation Fund, transport subsidies and levy waivers.

"These measures have been very effective during this drought," Ms O'Keefe said.

"I am also pleased to see the fast-tracking of local government infrastructure. The issue of declining rural towns is always on the table, but especially so during extended and widespread drought.

"It is not an easy problem to address, as all communities are different. It is very difficult to find alternate local employment for rural workers, and while this program may not reach that far, it will increase the liveability of rural communities, which has a positive flow-on effect."

The Emergency Drought Relief package includes increased transport subsidies, more flexible conditions on drought assistance and extra cash for drought-proofing infrastructure.

Ms O'Keefe said she was especially pleased to see funding for water infrastructure.

"That is absolutely critical to rural communities and should have been addressed before this drought," she said.

This week the Minister for Agriculture Adam Marshall said the measures would help reduce pressure on farmers and rural communities feeling the sting of drought.

"More than 97 per cent of NSW is in drought, or intense drought and conditions show no sign of abating," Mr Marshall said.

"That's why the NSW Government has introduced a new drought assistance package that kicks in from today, which delivers much-needed cost of living pressure relief and more funding for critical measures like transport subsidies and drought-proofing infrastructure.

"The best drought support is rain and lots of it, but while it continues to stay dry, this new and additional funding is the next best thing we as a Government can do."

Walcha Mayor Eric Noakes said any assistance that is available to farmers and rural communities at this time would ease the financial and mental pressure.

"The uncertainty around what decisions are made under the current environment is made easier with these funding announcements," Mr Noakes said.

"The State Government is to be congratulated on its ongoing support in these testing times for all sections of the community.

However, Mr Noakes said he felt the needs of small business in rural areas affected by the drought were still to be addressed.

"These businesses seem to fly under the radar of assistance measures, with cash flows and staffing levels impacted," he said.

"This is a difficult area to target, but I believe as this current drought continues some form of assistance will be required to save country towns."

The new drought assistance package includes:$350 million boost to the Farm Innovation Fund, with loans up to $1 million;; $70 million for transport subsidies (stock, fodder, water, chemical, seed and other farm inputs); $50 million to waive Local Land Services rates for 2020; $30 million to waive fixed charges for NSW Water and bore licences; $15 million for emergency water carting; $10 million to waive interest charges for Farm Innovation Fund loans; $8.5 million for mental health support, including rural counsellors; $5 million for Farm Business Skills programs; $10 million for donated fodder transport; $5.2 million for rural preschool and long daycare centre fee subsidies.

Mr Marshall said as the drought had evolved, so had the NSW Government's response.

"That's why this package has a number of new components such as no new paperwork, more generous transport subsidies and better flexibility in how farmers can use funding," he said.

To apply for assistance or for more information visit www.droughthub.nsw.gov.au