According to the Australian Financial Review, federal assistance to drought-affected farmers and rural businesses through interest rate subsidies and income support has risen from $700 million in 2006/07 to $1.1b last financial year.

"It's easy to see $1b and think farmers may be living on some gravy train funded by taxpayers but that is not the case," National Farmers' Federation chief executive Ben Fargher said.

The new spending figures come as the Rudd Government considers a report into how to overhaul drought assistance, which recommends payments are redesigned to ensure farmers are better prepared for long dry periods.