Thousands of drought-stricken farmers are set to benefit from a largely-welcomed multi-million dollar government assistance package.

The farmers’ fight for survival has been made a little easier but they still fear for the long term.

Thousands of farmers are set to benefit from the government’s $320 million drought package which includes income support, cheaper and easier accessible loans, water management, pest control schemes and mental health services.

But they’ve warned the government there’s more work ahead on longer-term reform that addresses future drought periods.

NSW farmer Wayne Newton says the package announced on Wednesday isn’t going to quickly solve financial problems in the bush.

Under the surface, mental health issues are hitting the limits and testing farmers’ resilience.

“Make no mistake: this is a fight for survival out here,” he told AAP.

Bourke grazier Phil Ridge said farmers and communities would have liked more but the package was sufficient to address immediate issues.

He had spoken to Prime Minister Tony Abbott, who visited Mr Ridge’s property on his recent listening tour, about the need for “big picture” drought policy.

“It’s a three-way conversation that needs to happen between the banks and government and farmers, because no-one’s really getting ahead enough,” he told AAP.

The National Farmers Federation (NFF) said the package included many of the measures it was asking for, except wage assistance and professional advice.

The next step was to work on drought policy reform, focused on preparedness and recovery support.

“The long-term policy void is not good for farmers, the government or the broader community,” NFF president Brent Finlay said.

Mr Abbott said the package was a hand-up, not a hand-out but admitted it was a short-term measure.

He has vowed the government will look at long term policy once a white paper on agriculture is complete by the end of the year.

If new difficulties arise, it’s the job of the government to respond.

“That’s what I would hope to do at all times,” he said.

Mr Abbott defended the package after the government knocked back support for manufacturers such as SPC Ardmona and Holden.

“A farmer in trouble is in a very difficult situation and a rather different situation to most of us when we are in trouble,” he said.

“If your farm is in dire drought, you can’t sell, you can’t borrow, you can’t leave, but you’ve got no money.”

The prime minister is confident the wider public supports farmers in times of need.

More than 70 per cent of Queensland and half of NSW is in drought, with the weather bureau forecasting a dry autumn.

Farming families without an income, but holding farm assets of up to $2.5 million, will be able to access support payments from March 3 under the new plan.

Drought concessional loans totalling $280 million will go to potentially hundreds of farm businesses struggling to pay off debt.

The loans of up to $1 million or 50 per cent of a farm business debt, will only go to farm businesses deemed viable, while NSW and Queensland farmers will also have access to a $12 million fund for emergency water infrastructure and $10 million will go to tackling weeds and pest animals such as wild dogs.

A further $10.7 million will go to social and mental health services to deal with the family and personal stress of drought.

The federal opposition backed the package but sought more details on loan eligibility criteria and how many farmers stand to benefit.