Drought-stricken farmers in parts of NSW and Queensland are set to receive a $320 million lifeline from the federal government, which said the drought was “akin to a natural disaster’.

Prime Minister Tony Abbott unveiled an assistance package which includes increasing access to a concessional loan scheme, income support, funding for pest control and mental health support.

Mr Abbott said the drought was “severely affecting many farmers in Australia, but particularly those in western Qld and western NSW”.

As part of the package, the government will fund emergency water infrastructure schemes to the tune of $12 million. A further $10 million will be made available for the eradication of feral animals to ease pressures on cattle and sheep farmers, while $10.7 million will be reserved to increase access for farmers to social and mental health services in drought affected communities.

Mr Abbott denied the package amounted to special treatment for farmers, saying that the drought was “once in a quarter-century drought” and warranted government assistance.

We will “stand by Australians in good times and bad. We can’t work miracles… but we will do what we can to help,” said Abbott.

Agriculture Minister Barnaby Joyce confirmed that the scheme would be distributed “on a needs basis.”

Cabinet met last night to finalise the package.

The Prime Minister toured draught-affected areas in Queensland and NSW earlier this month with the Agriculture Minister Barnaby Joyce. In today’s press conference, the Prime Minster said this visit promoted “tinkering” to the package.

The Government is able to borrow money at 3 per cent interest. The Government has reduced the rate of concessional loans from 5 to 4 per cent.

More to come