ACTIVE CFA volunteers should be exempt from paying the fire services levy, according to farmers.

At the Victorian Farmers Federation's annual conference in Ballarat this week members will debate a resolution that calls for CFA volunteers called out for more than eight hours, three times a year, to gain an FSL exemption.

Denison dairy farmer Dale Scott said the proposal would boost CFA membership at a time when the service was struggling to recruit good active volunteers.

"The idea came from a local dairy farmer who is a brigade captain," Mr Scott said.

"We're in a dairying area and he said farmers found it difficult and expensive to go off and fight fires."

On the issue of paying volunteers, Mr Scott said it was a matter of covering their costs, not paying them a wage.

Mr Scott said volunteering and the FSL went hand-in-hand, given the FSL paid for the CFA.

The Victorian Government has promised to replace the FSL on property insurance with a direct tax on property from July 2013, to which an exemption could still apply.

The conference is also set to debate drought assistance reform, with a resolution casting doubt on the Federal Government's West Australian pilot project offering alternative one-off grants of up to $60,000.

The resolution from the VFF's Farm Business and Regional Development Committee warned extending the pilot nationally risked leaving farmers with no assistance during prolonged drought.

Meanwhile, the VFF this week released its financial report, which showed revenue had fallen from $7.5 million on the back of Black Saturday donations flowing through the federation in 2009 to $6.9 million last year.

VFF president Andrew Broad said the key financial indicators were strong, with levy and subscription revenue rising from $3.26 million in 2009 to $3.73 million in 2010.

Mr Broad said much of the increase was due to drought recovery in the grains sector and the United Dairyfarmers of Victoria raising levies last year.

Mr Broad said the VFF Livestock Group annual meeting, to be held this morning, would vote on a resolution to raise its subscriptions from $575 to a minimum of $750.