Organisers of a banana festival in northern New South Wales say the cost of implementing new anti-terror 'hostile vehicle' measures mean they have had to cancel their annual street parade.

Key points: Organisers of an annual street parade say it will cost them $10,000 to meet the requirements of anti-terror rules

Organisers of an annual street parade say it will cost them $10,000 to meet the requirements of anti-terror rules The measures include the installation of safety barriers, a traffic control plan and the deployment of security officers

The measures include the installation of safety barriers, a traffic control plan and the deployment of security officers NSW police have defended the regulations, saying organisers, council and police have a duty of care to ensure the safety of attendees

The Tweed Valley Banana Festival at Murwillumbah has been held for 64 years, with the parade of floats through the town considered by many locals a festival highlight.

Festival co-coordinator Carol Mudge said for the first time, police have told organisers to implement hostile vehicle mitigation measures, aimed at stopping terrorists from ploughing into the parade's spectators.

Ms Mudge said the festival could not afford the $10,000 it would cost to meet the requirements which involved installing barriers.

"It has decimated us," Ms Mudge said.

Banana Jim in the Tweed Valley Banana Festival parade in 1959, captured by Rosslyn Studios. ( Supplied: Tweed Regional Museum )

"As a small festival in a small town, we cannot financially get a traffic control plan, then get cement bollards and then have security officers patrolling the streets, so this year we'll have the floats at the showground, it might be our last year."

Ms Mudge said while she understood public safety concerns about the use of vehicles as weapons, she believed the requirements were an overreach.

"Do we really think that ISIS is going to come to Murwillumbah because they don't like bananas and try to run our 6-foot banana Jim off the street? I don't think so," she said.

A float from the 1981 Banana Festival parade features Banana Queen candidate Rosslyn McDonald. ( Supplied: Tweed Regional Museum )

In a statement to the ABC, New South Wales police defended the hostile vehicle guidelines for crowded places, which were developed by the Australian-New Zealand Counter-Terrorism Committee.

"Police, council, and event organisers have a duty of care to take all steps to ensure the safety of attendees," the statement said.

A spokesperson for Tweed Shire Council — which signs off on the banana festival — said the hostile vehicle guidelines were developed in 2017 but only started being rolled out in regional areas this year.

At nearby Richmond Valley Council, general manager Vaughan MacDonald said the council has used creative measures to comply with police requirements, including placing council garbage trucks along the parade route of this year's Anzac Day and Beef Week parades.

He said while questions needed to be asked about the guidelines, he believed there was a heightened risk.

"If you put all these tightening of requirements in the Sydney CBD and other areas, obviously there may come a point in time when those people who feel inclined to terrorism, they might target a festival in a regional area to make a point," Mr MacDonald said.

Carol Mudge with the festival's mascot Banana Jim. ( Supplied: Carol Mudge )

However Murwillumbah local Carmen Stewart, who has convened a community meeting to try to save the banana festival parade, believed the rules were tearing at the fabric of regional towns.

"It's a great concern that possibly, nationally, this legislation is having an impact on street parades, on community events because if you stop people gathering, you lose just not things that have a heritage, but that's when trust breaks down in the community," she said.