A South Australian council says it is likely to accept $1 million in drought assistance funding from the Federal Government despite many farmers saying the area is not in drought.

The slogan of the Tatiara District Council, in the south-east of South Australia, is 'The Good Country' — and to many farmers it still is.

The council was one of six new 'drought-affected' councils to receive the drought assistance funding offer through the Federal Drought Communities Extension Program yesterday.

The funding was announced as part of the Government's latest drought stimulus package.

Yet Tatiara council Mayor Graham Excell said compared to other areas further north, they were not in drought.

"That's a little bit awkward because we have had low rainfall, but it all fell at the right time. So it's looking pretty good up here," the mayor said.

Local Federal MP Tony Pasin said the Tatiara was chosen because it has experienced a 60 per cent rainfall deficiency over the last 12 months to September this year.

"What you need to do when you're dealing with something as emotive as drought from a government perspective is a. act generously, and b. act in a way that's not subjective," Mr Pasin said.

Federal Member for Barker Tony Pasin says the Tatiara District Council should accept the drought funding. ( Supplied: Tony Pasin )

He said he had recently visited the Tatiara and while there were crops that were looking very good, it came down to the innovation of local farmers.

"The rainfall we have had has been exactly what you would prescribe, that is, the right amount at the right time. Sometimes you get lucky," he said.

"Any rainfall that has occurred since the first of October isn't included in this calibration that will be considered in the next quarter."

The criteria is based on Bureau of Meteorology data and requires that 17 per cent of all employment in the local government area is directly linked to agriculture.

Use the funding or lose it

It is not the first time the awarding of the funding has been questioned.

The Federal Government was recently criticised for providing the grant to the Moyne Shire in Victoria which rejected it on the basis its farmers were experiencing one of their best seasons in decades.

It was also forced to overturn a decision not to provide the grant to Victoria's Moira Shire which is heavily dependent on agriculture and was experiencing dry conditions.

Tatiara Mayor Graham Excell said if they did not accept the money, other grant applications could be in jeopardy.

"If we reject this, we reject our Building Better Regions fund application," he said.

"We also reject the farmers being able to apply for a small grant."

He said council would consider whether to accept the funding at its monthly meeting next week and that it could be used to start projects in the area.

"We've got quite a few of our sporting bodies that are looking for grant funding, which we will be able to make sure they get support on that," the mayor said.

"We'll be able to upgrade a couple of roads. We've got one bad intersection we might be able to look at."

Mr Pasin believed the council should accept the funding.

"I've got every confidence, knowing the council well, that they will use this funding incredibly well to ensure a more resilient and stronger Tatiara community," Mr Pasin said.

'Won't be shouting it from the rooftops'

Local farmers have been caught by surprise at the announcement.

They took to social media and talkback lines to voice their dismay.

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"It's been a tough year in the Tatiara, but the prices we're getting and the feed and the crops and everything we've got — we're living in luxury compared to the rest of the country," ABC talkback caller Anthony said.

"I think it's a joke. The Tatiara's never been better. We've had two of the best years ever combined with the best prices," talkback caller Tony said.

The news also took Michael Hunt, a sheep and crop farmer from Keith, by surprise.

"I think there's a cautious optimism, as there always is this time of year until the harvesters get in the paddock. But there is a lot of hay on the ground that ironically is getting a bit damp at the moment," Mr Hunt said.

He said the funding should be put aside in case they experience drier conditions next year.

"I'm on a committee with 15 farmers from around Australia and I think that eight of them are in really serious drought areas," Mr Hunt said.