In an admission of the size and scope of the current drought crisis gripping parts of the nation, the Federal Government has announced a significant increase in the funding available for struggling communities.

The majority of that additional funding will be offered in the form of low-interest loans, which will need to be repaid and in the long term do not cost the budget.

The Government will fast track about a billion dollars for the loans, which was initially spread over four years.

Of the $1.8 billion global figure, there will be $250 million in new money announced today.

Prime Minister Malcolm Turnbull travelled to Forbes in New South Wales to confirm the Government has increased its drought spend to $1.8 billion, with funding direct to farmers, local councils and businesses dealing with one of the worst droughts in a century.

The ABC understands Cabinet signed off on new measures late last week.

The Coalition is also expected to appoint Major General Stephen Day to the position of national drought coordinator.

The retired senior member of the Australian Army was one of the key generals responsible for Australia's operations in Iraq and Afghanistan.

His role is likely to involve engaging with governments, charities, donors and communities to coordinate drought assistance and look at possible gaps or risks.

Farmers offered more to feed their animals

The Federal Government will try to encourage farmers to invest in more infrastructure to store feed by allowing them to immediately deduct the cost of building silos, hay sheds and other storage facilities.

Under previous arrangements the depreciation spanned a three-year period.

Farmers in many parts of New South Wales and Queensland have been struggling to source hay, grain and cottonseed to feed their animals, with supplies coming from as far as Western Australia and freight costs skyrocketing.

As a further measure to increase cashflow for struggling producers, the current $1 million cap for low-interest loans will be doubled to $2 million.

"These loans will assist with financing immediate needs such as purchasing feed and fodder," the Government said in a statement to ABC News.

"The first five years of these loans will remain interest-only.

"Farmers with existing government loans will also be able to refinance to take advantage of the interest-only concessional period."

Government steps in to keep the taps running

Local councils dealing with the prospect of towns running out of water will have access to a pool of $75 million to fund projects, including the provision of emergency water supplies.

Individual councils in affected areas will initially be able to access $1 million each.

Without rain soon, some communities will be facing the expensive task of carting water as they search for viable bores. In the meantime an increasing number of towns are already facing very high-level water restrictions.

The Great Artesian Basin bore-capping program will also get additional funding worth $23.7 million.

The Government described this as a "drought resilience" measure that plugs abandoned bores and provides for "water efficient piping".

Another $72 million will be made available in a special drought round of the National Water Infrastructure Development Fund.

Amid continuing criticism of the patchy forecasting accuracy in areas of western New South Wales and Queensland, the Bureau of Meteorology will be handed an extra $2.7 million towards refining the climate guides that can determine when crops are planted and when farmers de-stock.

Farm unemployment benefits to be simplified

The Prime Minister had foreshadowed a significant additional package of measures a fortnight ago, when he visited Trangie in western New South Wales and announced extra cash payments for farmers with little or no income.

The additional payments were offered through the Farm Household Allowance program, which provides a payment equivalent to the unemployment benefit.

The extra $12,000 for couples that was announced then was criticised by many farmers in financial difficulty as too little, too late.

The size of the payment, which Mr Turnbull said was designed to help "put food on the table" and pay household bills, was also seen as a pittance for those spending thousands of dollars every week in freight and fodder costs for their animals.

The Farm Household Allowance (FHA) has also been notoriously difficult to access, with many eligible farmers not on the payment.

A number of primary producers have told the ABC it took months for them to be approved, and the paperwork was onerous and confusing.

The Government recently conceded only a third of eligible farmers were actually on the FHA, and privately some MPs acknowledged it had not been properly promoted.

The Prime Minister is now pledging to significantly simplify that application process.

Deputy Prime Minister Michael McCormack said today's announcement was a clear signal to farmers and regional communities the Government understands how serious the drought situation is and "has their backs".

Labor agriculture spokesman Joel Fitzgibbon said the drought announcement was more about saving Malcolm Turnbull's leadership than the needs of drought affected farming families.

Mr Fitzgibbon said the announcement did not do enough to get farmers the help they need.

"After five years of policy inaction, the Turnbull Government has announced its third drought policy in eight weeks. It is looking more and more like chaotic catch up," Mr Fitzgibbon said in a statement.

"But missing still is: the restoration of the COAG drought policy reform process the Government [Mr Turnbull] is a part of destroyed in 2013; action to help more farmers better adapt to climate change and to embrace best-practice regenerative farming methods to combat drought; and the option to give farmers the $12,000 assistance in one lump sum, rather than having to wait for payments.

"Labor will support the measures announced today but the Turnbull Government's reactive, ad hoc and clumsy response to drought is no alternative to a coordinated, collaborative, science-based approach focused on climate adaptation."