Despite being told the money was coming, drought-struck Moira Shire in northern Victoria has again been told it is missing out on a $1-million grant from the Federal Government.

Key points: Nationals MP Damian Drum has said he 'jumped the gun' in October and should not have announced that Moira Shire would be receiving federal drought funding

The decision has angered those battling drought in the Shire, frustrated with the Government's handling of the drought grant.

"Yet again this is bitterly disappointing," Cobram East dairy farmer, Paul Mundy said.

He has been frustrated that a lot of headline-grabbing announcements have not been making it to his region.

"You've got to wonder what on earth is going on at our senior federal bureaucracy level," Mr Mundy said.

"So many of their announcements that they make now appear to be almost shallow, or hollow, and then you find out as always that the devil is in the detail and it is all reactionary."

Drum announces drought funding

Moira Shire has been at the centre of controversy surrounding the drought support measure, where the Federal Government awards $1 million to drought affected shires.

When the program was first announced in late September the Moyne Shire in south-west Victoria, which was not in drought, was declared successful yet the Moira Shire, which was in drought, missed out.

This prompted the Moyne Shire to vote to hand the money back.

The Federal Department of Infrastructure told Senate Estimates that the Moira Shire had missed out because its agricultural employment rate of 16.9 per cent just short of the required 17 per cent.

That surprised the shire, which runs along the Murray River in northern Victoria and has numerous fruit, vegetable, livestock, dairy and cropping farming operations.

A visit from the Deputy Prime Minister, Michael McCormack, and the Agriculture Minister, Bridget McKenzie, followed on October 31.

At a press conference the local Nationals MP, Damian Drum, announced that the shire would be receiving the grant thanks to Drought Minister David Littleproud's ministerial discretion.

"I have already informed the Moira Shire — they are going to be included in this drought assistance package," Mr Drum said.

'I got it wrong': Drum

But the shire did not have a grant.

Mr Littleproud had not stepped-in to declare the shire as eligible and, as a result, in the latest round of drought assistance the shire has once again missed out.

"Yes, I got it wrong by jumping the gun," Mr Drum said today.

"I've said that to the Minister, I shouldn't have piped up."

Mr Drum said he had had assurances that the shire would get the grant and thought the formal declaration was days away.

He explained that at the October 31 press conference he wanted to protect his leaders from questions as to why the shire was missing out.

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"I wasn't going to stand there and let my leader and deputy leader get put under the pump on a certain issue, that I was under the impression, had been already addressed," Mr Drum said.

The lack of drought assistance for the shire has continued to frustrate farmers in the region who want the Government to do more.

"It's an ongoing debacle as far as this whole drought strategy from the Federal Government," Mr Mundy said.

"It appears it is absolutely nothing more than reactive and surely they should have had enough time and effort to be proactive."

'Moira will be included'

Mr Drum has been assuring the people of the shire that they will get the grant.

He has blamed Labor's scrutiny on the grant process as the reason why Mr Littleproud cannot step-in and declare the shire as eligible for the funding, saying the Government will have to do extra work to make sure the grant will be "above board".

"We are still 99.9 per cent certain that Moira [Shire] will be included [for the funding], we just have to do additional work," Mr Drum said.

The Department of Infrastructure has confirmed in a statement that the Minister for Drought can use his discretion to immediately declare the shire eligible.

"Under the Grant Guidelines, the Minister has discretion to make any LGA [Local Government Area] eligible for DCP [Drought Communities Program] extension at any time."

When contacted by the ABC for comment Mr Littleproud's office released the following statement:

"The government has announced a review of the DCP and is expecting the outcomes of that review before January. Any additional councils will be announced after that."

Labor calls for apology

In response to Mr Drum's comments that the opposition's scrutiny has played a role in the debacle, the Shadow Minister for Infastructure, Transport and Regional Development, Catherine King, has called on the Prime Minister to apologise.

"Scott Morrison must step-in, right this wrong, and apologise to the people of Moira Shire," Ms King said.

"Labor continues to offer to work with the Prime Minister in a bipartisan manner to support our farmers and rural communities who are suffering through this drought.

"However, the lack of transparency, lack of oversight, and lack of detail in the Morrison Government's so-called drought stimulus package is leaving drought-affected communities worse off."