Murray River water destined for Adelaide will be reallocated to farmers upstream so they can grow feed for their livestock, as part of a federal drought stimulus package announced in Canberra on Thursday.

Key points: The Government has committed drought stimulus worth hundreds of millions of dollars and cheap loans for farmers in drought

The Government has committed drought stimulus worth hundreds of millions of dollars and cheap loans for farmers in drought It also struck a $100m deal with SA so water for Adelaide can be used by farmers to grow fodder

It also struck a $100m deal with SA so water for Adelaide can be used by farmers to grow fodder The Government also released drought coordinator Stephen Day's long-awaited report

The Government has struck a deal worth almost $100 million so that the South Australian Government can turn on its desalination plant to service Adelaide, leaving 100 gigalitres to be used to grow fodder upstream.

Drought Minister David Littleproud said it was a "unique deal" that would provide up to 6,000 farmers with access to 25 megalitres each, which must be used to grow feed for livestock.

The water will be offered to irrigators at $100 per megalitre and delivered by the end of April.

"We understand and appreciate it will be somewhere between $600 - $900 per megalitre to produce out of the desal, depending on energy costs," Mr Littleproud said.

Mr Littleproud expected the deal, which does not affect the Murray Darling Basin Plan, could produce 120,000 tonnes of animal feed.

"This is one step towards making sure that we think outside the square, bringing new water into the [Murray-Darling] Basin, to make sure that we use it wisely, to ensure that all our breeding herd is protected," Mr Littleproud said.

The Government has also announced $15 million in education support for drought-affected communities.

This includes $10 million to be provided through the Education Department's Special Circumstances Program and $5 million for childcare centres in drought-affected areas.

The ABC on Wednesday revealed the drought package would contain funding for local councils, road building and cheap loans with two years interest free for farmers and agriculture dependent businesses.

Thursday's announcements increase the most recent drought spend to more than $700 million, but that includes $200 million of funding reallocated from the Building Better Regions Fund.

Government defends drought loans

Mr Littleproud defended the extension of the loan scheme, saying it would not give debt-stricken farmers false hope.

"There's a viability test, simply you have to be able to prove in a normal year, when it rains, and under normal circumstances, you can repay that debt under your business model," he said.

"We're not going to put people in debt who can't afford it."

He also said the Government was prepared to take further action if the drought did not break.

"If it doesn't rain, we're going to do more," he said.

"We've got a track record, we've done umpteen drought tours with going back from prime minister [Malcolm] Turnbull right through to Prime Minister [Scott] Morrison and myself.

"I mean every time we've gone out and we've listened, we've acted and if it doesn't rain, we'll act again."

The Government has also released drought coordinator Major General Stephen Day's final report, having faced months of pressure to make the report public.

It has accepted 14 of 18 recommendations from the report.

Mr Morrison's Government had kept Major General Day's report confidential, despite Labor attempts to make it, and former drought envoy Barnaby Joyce's reports, public.

Mr Joyce has said his reports, sent via text message, were for the Prime Minister to release.

Mixed reaction to drought stimulus

The National Farmers' Federation (NFF) has long called for a comprehensive national drought policy to better prepare for drought, and welcomed the Government's response to the immediate drought.

"Drought is complex, it is different for every farmer, business and community," NFF president Fiona Simson said.

"There is now a suite of measures available to a large degree, to address these varying needs."

Ms Simson said the deal to provide water for fodder would help Australia maintain its breeding livestock.

"We are keen to understand more of the detail around exactly how the 100 gigalitres of new water will be allocated and managed for southern basin fodder producers," she said.

Others have been critical of the federal package, in particular the cheap loans.

University of Canberra politics professor Linda Botterill said giving farmers more debt may not help.

"Although the loans are interest and repayment free for the first couple of years, ultimately farmers will have to pay it back eventually," Professor Botterill said.

"We can't predict whether or not we will be in drought in a decade's time, so we might find ourselves in a situation where farmers have been given these concessional loans for the current drought and find themselves having to repay it, when facing difficulty again," she said.

Professor Botterill said HECS-style loans, which farmers would pay back to either the bank or the government once they reached a certain income, would provide better support.

She said Australia was severely lacking a national drought policy.

"This is ad hoc and reactive and we're seeing the same thing at a state level as well," she said.

"There's no underpinning cohesive rationale to drought policy in Australia at the moment."