THE Victorian Government has excluded the bulk of the state's drought-affected farmers from gaining its $2000 irrigator and $1000 general farm-improvement grants.
Unlike previous grants, the latest round restricts payments to those who receive Centrelink drought income support between October this year and next June.
However, Victorian Farmers Federation president Andrew Broad said many farmers were ineligible for the Centrelink payments.
"It's fundamentally flawed," Mr Broad said.
Under the old grants scheme, all farmers within Victoria's 25 drought-declared municipalities were eligible for on-farm grants of up to $3000, based on them matching the grant dollar for dollar.
Colac Rural Financial Counsellor Wayne Stephen said changing the criteria meant fewer farmers would be eligible.
"Eligibility is based on projected income for the 2009-10 financial year, so a lot of clients are unaware where that figure will be, they're holding back," Mr Stephen said.
Agriculture Minister Joe Helper said the grants were for those farmers most in need of help and had been welcomed by the VFF.
