DESPERATE Victorian farmers are demanding help from state and federal governments.

They want governments to deliver $20,000 cash grants to irrigators and 50 per cent subsidies on municipal rates to help them survive the worst drought on record.

The grants and subsidies played a crucial role in helping drought-stricken farmers get through the 2007-08 season.

But so far neither Victorian Agriculture Minister Joe Helper nor Federal Water Minister Penny Wong have made any moves to deliver another round of state grants and subsidies or Federal Government $20,000 irrigation grants for this season.

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The Weekly Times understands the 50 per cent municipal rate subsidy was in the pipeline a fortnight ago, but the Victorian Government's Department of Premier and Cabinet has delayed making a final decision.

Drought-stricken farmers have already been hit with massive hikes in their municipal rates and must pay water bills in full, despite receiving a fraction of their water allocations.

Farmers have already received their municipal rate bills, with many facing hikes of up to 68 per cent at a time when they are struggling to survive.

The season is shaping up as one of the worst in the state's history as northern grain growers start cutting crops for hay, dairy farmers feedlot their herds and horticulture growers ponder their viability.

Inflows into the Grampians and northern Victoria's irrigation storages are at record lows following a failed autumn and disastrous September.

Victorian Farmers Federation president Simon Ramsay called on the State Government to immediately reinstate its drought support programs.

"I'm of the view that (Premier) John Brumby has always been supportive of regional Victoria, so I can't understand why he's dragged this (decision) out," Mr Ramsay said.

"It's just creating more angst, as if there wasn't enough angst already in regional Victoria with the river red gum and pipeline issues.'

The Victorian Government has defended its decision arguing it has waited until the end of October before announcing the continuation of its drought assistance programs in the past.

A spokeswoman said the Victorian Government understood the pressures facing farmers and was in the process of reviewing its drought assistance measures "in the context of winter and spring inflows as it has done at this time of year for the last two seasons".

"We have a strong record in providing targeted and efficient drought support measures to farmers and their communities with $300 million delivered to drought-affected areas across the state in the past two years," the spokeswoman said.

The VFF also wants more support from the Federal Government, with Water Council chairman Richard Anderson calling on Senator Wong to deliver a second round of $20,000 grants to Murray Darling Basin irrigators.

Mr Anderson said the grants were more effective and equitable than the South Australian Government's proposal to buy water for its irrigators.

Former Federal Agriculture Minister Peter McGauran launched the grants in September last year in a bid to help irrigators whose crops and permanent plantings were under serious threat from drought.

The Federal Government paid out an average of $18,414 to each of 9017 irrigators across the Murray Darling Basin at a total cost of about $166 million.

Irrigators were able to use the $20,000 grant to cover fixed water charges, stock and domestic systems, pruning and other activities that minimised the impact of low water allocations, reconfiguration, piping pumps and irrigation equipment replacement, laser levelling and costs associated with implementing water efficient crop options. The money could not be spent on buying water, fodder, grain or refinancing.

A state-by -tate breakdown of the grant payments shows 3040 irrigators in NSW received $57m, 4695 in Victoria received $86 million, 1168 in South Australia received $21 million and 110 in Queensland received $2 million.

"We believe the minister (Wong) should be focused on the whole of the basin and not just endeavoring to get water for the environment," Mr Anderson said.

Senator Wong's office refused to comment specifically on the $20,000 grants.

Senator Wong's spokeswoman simply stated "the Rudd Government has committed to investing $3.7 billion towards projects that enhance the long-term viability of irrigated agriculture in the Murray Darling Basin, and support irrigation communities in adjusting to a new basin cap".

Meanwhile, the VFF is trying to support its members in a battle over massive municipal rate hikes.

The Loddon Shire has hit farmers with an average rate rise of 35 per cent, exacerbating the financial crisis for farmers.