While meeting with drought-affected landholders in Walgett in the State's north west, NSW Acting Premier and Dubbo MP Troy Grant said the funding would target producers worst hit by the drought.

"Some of our farmers are experiencing extreme drought conditions and are in need of crucial financial assistance to help them cope," he said.

"By allocating additional funding, we will ensure producers can continue running their businesses and local contractors receive a much-needed boost.

"The Emergency Water Infrastructure Rebate is a great scheme as it not only helps producers in drought increase available water for livestock, but enables them to better secure water into the future."

The government will match a farmer's investment in water infrastructure dollar for dollar .

Minister for Primary Industries Katrina Hodgkinson said the government's $20 million boost included key changes since the last scheme.

"Eligibility will be assessed based on one-in-50-year rainfall deficiency or greater, down to the farm level rather than the local government area (LGA) level," Ms Hodgkinson said.

"With the average claim for the last round approximately $14,000, the cap for this round has been set at $20,000.

"Where producers cannot access groundwater to install infrastructure such as pipelines, bores, tanks and troughs, they can now claim for de-silting works.

"These important changes will ensure assistance flows to those most in need, regardless of which council area they live in or if they have access to ground water."

Minister for Western NSW and Barwon MP Kevin Humphries said many communities in Western NSW were struggling to hold on to the very little water they had.

Many required additional storage containers when rain events finally occurred.

"Take up of the scheme in the previous round shows how effective the rebates have been, particularly in the north west," Mr Humphries said.

"About 2200 farm businesses benefited under the scheme in the 2013-14 financial year and this latest injection of money will help deliver more vital preparedness projects on severely drought-affected properties."

The government's Emergency Water Infrastructure Rebate will close on 30 June 2015, or when the $20 million in funding is fully allocated.