A TRANSPORT subsidy for drought-stricken farmers will be extended until the end of June, the NSW Government says. 

The subsidy provides farmers with a 50 per cent rebate on the cost of transporting water for domestic use, water and fodder for stock and stock to and from agistment, sale and slaughter.

NSW Primary Industries Minister Ian Macdonald said extending the scheme came at a cost of $5.5 million.

"Our farmers are battling another long, dry summer and this assistance will help ease the pain and make it possible for many to transport fodder to stock or take their stock to agistment," Mr Macdonald said in a statement on Friday.

"This subsidy is extremely popular with farmers, since the drought began, the NSW Department of Primary Industries has processed more than 125,000 transport subsidy claims from across NSW."

According to government figures, 56.6 per cent of NSW is in drought and a further 15.7 per cent of the state is considered marginal.

AAP