Farmers in Gippsland and north-east Victoria to receive $31 million in drought funding

Premier Daniel Andrews said the grants would help producers pay for household bills, easing the financial burden for people in East Gippsland, Wellington and Mildura shire councils.

Mr Andrews and Agriculture Minister Jaclyn Symes made the announcement in Bairnsdale today, which included funding for drought infrastructure and business planning and $2 million for mental health services.

"No drought package can make it rain but we are there to support each and every farming family and farming community," he said.

"[This] immediate cash grant of $3000 to those families that are really doing it very, very tough ... will be welcomed I know just to deal with the extreme financial hardship many farming families are dealing with.

"It will be administered in partnership with the CWA ... they've got that connection to the local communities that is second to none so they're the perfect partner to deliver those hardship grants."

Off-farm employment and training will also receive a boost with $4.6 million allocated towards farmers and their employees in the event they choose to up-skill.

Ms Symes said the government would work with community organisations like the CWA to develop framework to identify families in need of the $3000 grants.

"We're going to be working through [the] eligibility criteria but what I can say is that previous cash payments have been restricted to [Farm Household Alliance] recipients," she said.

"The feedback has been that that has missed some people in need ... we want targetted payments to those most in need and we think those community charitable organisations are very well placed to identify those people."

The government stopped short of promising rate relief for the regions' farmers, however, Victorian Farmers Federation president David Jochinke said the $5.4 million allocated to the three councils under the plan should be spent to give farmers "urgent and immediate relief".

"These councils must give relief to the farmers in drought in terms of any fixed costs and rates are the one we've been asking for," he said.

"We will keep an eye on those funds when it goes to these local governments and we need that to go to the farmers who are hurting."

East Gippsland Shire Council mayor Natalie O'Connell said the councils would work together to determine how best to spend the $5.4 million.

"We're not in a position to make a decision right now but we'll consult with the rest of the council in conjunction with each other and our drought reference groups to work out how best we can spend that money," she said.

"We've heard loud and clear that rate relief is on the top of that list ... but we want to make sure we consult and get that money to where it is needed most."