NSW officially in drought after an extremely dry July

The entire state of New South Wales has been declared in drought, with almost one-quarter classified as being in intense drought, the NSW Department of Primary Industries announced on Wednesday.

The announcement comes after months of concern about water shortages, particularly in rural NSW. July marked the state’s seventh consecutive month with below average rainfall, while some areas had their lowest July rainfall on record, according to the Bureau of Meteorology.

While the Federal Government has rolled out $1 billion in drought relief, increasingly desperate farmers are concerned that it doesn’t go far enough, and experts remain concerned that more extreme weather conditions could be here to stay.

Farmers in rural NSW have felt the effects of the water shortages for some time, with many saying the conditions are some of the worst in recent memory.

"It's gone on for so long, it's like back-to-back droughts … everybody is a bit shocked, horrified, because we never thought it could get as bad as this," Coonabarabran sheep and cattle farmer Tony Knight told the ABC.

"We've had droughts over the years, numerous times – in the 60s, 80s, the Millennial Drought – but a lack of rain combined with record temperatures has just decimated everything.”

Many farmers have said they are unable to feed their livestock and are facing a long-term loss of income. They are also concerned about the long-term future of NSW’s livestock industry, which contributes more than $14 billion to the state’s economy and employs approximately 77,000 people.

NSW Minister for Primary Industries Niall Blair has voiced his support for struggling farmers.

"There isn't a person in the state that isn't hoping to see some rain for our farmers and regional communities," he said.

In addition to the $500 million currently devoted to drought support, an additional $500 million Emergency Relief Package will be made available to provide support for farmers.

Among other services, the package includes Drought Transport Subsidies, which is said to cover 50% of the full cost of transporting livestock, as well as water for stock. It also includes funding for the use of domestic water, which many families have been importing.

The scheme also hopes to help rural communities by waiving Local Land Services rates, fixed water charges in rural and regional areas, and class one agricultural vehicle registration costs.

While urban dwellers are largely inoculated against the many effects of the drought, residents of Australia’s largest city, Sydney, might soon begin to feel some pressure from the water shortage.

"All Sydney storage levels have fallen as water is used to provide for Sydney’s water supply, while record low rainfall in catchment areas [has resulted] in minimal replenishing inflows," a WaterNSW spokesperson said.

Experts have also noted that NSW experienced similarly dry periods in the past, but cases of extreme weather are increasing.

"Across Australia, the last five years were all in the top seven years on record. That's quite a striking signal," the Australian Bureau of Meteorology's Dr Blair Trewin said in January, following a slew of record high temperatures in NSW.

While touring some of the worst-hit areas in June, Prime Minister Malcolm Turnbull said: "I don't know many people in rural New South Wales that ... don't think the climate is getting drier and rainfall is becoming more volatile."