EXCEPTIONAL Circumstances assistance has been cancelled to a third of the areas receiving it.
Agriculture Minister Tony Burke last week announced southwest Victoria, the Hume region of NSW and 11 areas of South Australia including the upper south east, near the Victorian border, are no longer eligible for the EC payments.
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The news comes as the National Farmers' Federation called for the Government to announce its drought reform plan and launched stinging criticism of the inability of governments to run drought and water programs which complement each other.
"Any new (drought) system must ensure it can 'talk to' policies on water, things like helping with efficiency upgrades," NFF chief executive Ben Fargher said.
"They need to coordinate their programs in agriculture - that's not happening.
"We've been so frustrated with things like infrastructure, water policy, the Carbon Pollution Reduction Scheme, environmental stewardship and drought policy - they need to talk to each other."
Mr Fargher said even the best drought policy would fail if research funding were cut, water infrastructure not invested in and if regional infrastructure were allowed to deteriorate.
A new drought support system should "move towards preparedness, not just relief", he said.
"If it's too complex then they should test it somewhere and get their teeth into how it might look," Mr Fargher said.
The NFF had supported the Government's Murray Darling Basin plan - to buy water from willing sellers, invest in water-saving infrastructure and create a new MDB authority.
However Mr Fargher said Government had "accelerated the buyback. They're stuffing around with infrastructure and the states and Commonwealth are arguing over power - these programs are anything but balanced".
Mr Burke said he had accepted the advice of the National Rural Advisory Council in cancelling the payments to a third of the EC regions and extending the payments to the other two-thirds until March 31 next year.
"We also acknowledge the current system is not working for farmers - we wait until farmers are in crisis to step in and help them - we want to help farmers before the next crisis hits," Mr Burke said.
