Walgett town - centre of one of NSW's serious drought areas - has only 70 days of water supply left.
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The Walgett Shire Council is working on urgent measures including pumping directly from the Barwon River, dualising the exiting artesian bore or sinking a brand new bore in a different location.
There are about 2200 people living in the town and about 7300 in the Walgett shire.
It is armed with $2.2 million in funds from the NSW government to stabilise supply.
The grant was announced by NSW Minister for Natural Resources, Lands and Water, Kevin Humphries last week.
Walgett Shire Council general manager, Don Ramsland, told the Daily Liberal on Tuesday the current drought situation in the Walgett region was dire.
Mr Ramsland said the council members were looking for alternatives to aid the community's water supply, which could be addressed as soon as the funding was finalised.
"There are a few alternatives in the works to drought-proof the town completely," Mr Ramsland said.
With the option to pump water directly from the Barwon River popular among council members, Mr Ramsland said there was also an idea to dualise the existing artesian bore or sink a brand new one in a different location.
He said there would be no challenge to strike water for a new bore in the district.
Mr Ramsland said the council was working to access the funds immediately so they would be able to decide which alternative to pursue. Farmers across the region could be facing their third year without a crop, Mr Ramsland said.
Although the past three years had been riddled with scattered rainfall, Mr Ramsland said it had not been nearly enough to improve conditions.
"In those few times we saw some rain, it was only between 10 to 15 millimetres," he said.
Even if farmers were able to sow a crop this coming season, Mr Ramsland said they were not likely to see the return cash flow in the near future.
But, that was not the worse case scenario for the Walgett farmers, Mr Ramsland said.
"Those with stock on land are in a worse situation."