Dubbo Regional Council has decided to sponsor the markets by reducing their costs by $10,000 in both 2020 and 2021.

Currently, markets organisers Macquarie Valley Food and Wine pay $12,857 in fees, which includes a per market contribution of $264, as well as $110 to access the Visitor Information Centre's toilets and $185 for waste collection.

Mayor Ben Shields said it was not only the big farmers doing it tough in "the biggest drought in our region's history" but also the smaller producers.

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"In my mind we do charge markets a fair commercial rate in CBDs and areas owned by council. But the unique thing is with the farmers markets it's directly about supporting local people and local businesses," he said.

Cr Shields said reducing the operating costs would encourage the markets to get stronger and more resilient. He siad he hoped the extra money would allow the organisation to promote the markets and draw a wider crowd.

Councillor Stephen Lawrence is a strong supporter of the sponsorship.

"We haven't been able to do a lot and we haven't been able to do a lot that the community has wanted and that really speaks to the restrictions on local government and the realities of our resources and so forth," the deputy mayor said.

"This is something I see as a modest and tailored measure that supports farmers and small producers in a real, tangible way. It's more than just a token but it's not an expensive burden as such as we can't assume it."

While he also supported the sponsorship, councillor David Grant said he also had some concerns.

He said there were a lot of other not-for-profit organisations run by volunteers that would also appreciate sponsorship from council.

"A lot of these organisations are run by volunteers and to apply for money through council, sometimes they think it's too hard," Cr Grant said.

"I'm not knocking the staff, they certainly do a good job working through it, but some people just don't have the time or the capacity to get those done."