An extra A$560 million (US$420 million) in drought assistance will be extended to a further 44 farming regions scorched by the six-year "big dry", Deputy Prime Minister Mark Vaile said.
That’s on top of $350 million dollars announced last week and takes the total relief provided since 2001 to $2.16 billion.
"We don't believe the day will ever come when the Australian community would be prepared to turn its back on its farming community given the significant contribution that they make to our economy and certainly to the culture of Australia," Mr Vaile said.
The decision to expand the exceptional circumstances funding means more than half of Australia's farmland was now eligible for financial help, Mr Vaile said.
The assistance was needed to encourage farming families to stay on the land, he added.
The announcement involves 16 Exceptional Circumstance areas in New South Wales, nine in Victoria, 16 in Queensland, two in South Australian and one in Western Australia.
Agriculture Minister Peter McGauran said he was in discussions with his WA counterpart Kim Chance to finalise an additional EC area in that state.
Farmers will no longer have to have operated without government support for two of the past five years to qualify for interest rate subsidies under the EC program, and those subsidies will increase from $300,000 to $500,000.
The deposit cap on the Farm Management Deposits (FMD) scheme will be lifted to $400,000, and the non-primary production income test to $65,000.
Professional business and financial planning grants of up to $5,000 will be eligible farmers in areas that have been EC-declared for more than three years, and $9 million for family and emotional counselling.
The Country Women's Association will receive a further $4 million to provide emergency grants to individuals and communities.
Treausurer Peter Costello told a separate news conference the drought would hit economic growth.
"The drought is worse than was expected. The drought will detract from growth," he said, adding that a "farm production recession" was on the way but Mr Costello added that farming was less important to the Australian economy than in the past.