VICTORIA'S peak farmer organisation is bleeding money and members amid a surge in demand for its services from fire and drought-ravaged communities.

The number of farm businesses that are members of the Victorian Farmers Federation has slumped by almost 30 per cent, to less than 10,000, since 2004.

Yet government agencies estimate there are about 26,000 farming families in Victoria.

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VFF president Simon Ramsay said federation members were doing their bit, but there were too many "free loaders".

"All these free loaders, who enjoy the benefits, should have a serious think about giving it (the VFF) some support," Mr Ramsay said.

He said the VFF also faced a loss on its 2008 finances that amounted to a "horror set of figures".

"It won't be pretty," Mr Ramsay said. "We've shaved about $700,000 off the expenditure but income is taking a pounding."

Mr Ramsay said the VFF played a crucial role in battling to protect farmers' rights and assisting rural communities in recovering from fire, drought and floods. In the past fortnight alone, it co-ordinated the collection of 10,500 tonnes of fodder for fire-ravaged properties.

While the VFF used some government-funded regional coordinators, it also activated its own network of members, volunteers and staff to ensure a quick response.

But the future of the organisation is under a cloud, with VFF chief executive Wayne Harvey warning the dramatic slump in membership and revenue had prompted fears about the future.

"There's recognition across the board that the VFF operations at the moment are not sustainable," Mr Harvey said.

VFF Grains Group president Geoff Nalder backed Mr Ramsay and called on all farmers and the Victorian Government to consider the consequences of losing the VFF.

"They need to ask what happens when the doors are locked and lights turned off for the last time," Mr Nalder said.

"It's not just the VFF we'd lose, but potentially peak councils and the NFF (National Farmers' Federation)."

The VFF has already been forced to cut its payments to the federal peak councils by 20 per cent.

The VFF's greatest loss of members has been among livestock and dairy producers.

Livestock Group president Ailsa Fox said the VFF could not survive without more members.

"We need to tap into the corporate farm base," Ms Fox said. "Maybe we should even get the lifestyle/amenity farmers on board - given they've been the main beneficiaries of our work with fodder."

Ms Fox said the whole farming sector needed to consolidate, given the large number of breed, commodity and lobby groups that existed in regional Australia.

United Dairyfarmers of Victoria president Doug Chant said while he supported eliminating duplication, VFF members needed to feel they were tied to a commodity group.

The issue of commodity control has been a contentious issue within the VFF, with Mr Ramsay stating constitutional reforms introduced in 2002 had still not been fully implemented.

The reforms gave the VFF board corporate control over all commodity staff and finances.

"There's been resistance in certain commodities to that change," Mr Ramsay said.

"Some still want their own control of everything, from staff to bank accounts, which results in wasteful duplication.

"We can't have seven commodity groups doing their own thing."

The VFF is also struggling financially due to a loss of sponsorships and is trying to simplify its complex levy and subscription system.

Each commodity has its own fee structure, ranging from a flat annual subscription of $302.50 for fruit and vegetable growers to a tiered subscription for livestock producers, based on sales, starting at $385.

Last year's VFF conference voted to set a minimum subscription of $500.

But Mr Ramsay said there were concerns that it could exacerbate the loss of members.

"The drop in membership, drop in commodities and the drought has had a horrible impact on income," he said.

Mr Ramsay said the average membership fee was just $365.