An outlook report released by the Federal Government's Department of Agriculture and Water Resources showed that the Far West, North West and Central West regions of NSW are expected to record the largest declines in broadcare farm incomes in 2018-19 compared with the previous year.

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For instance, the average farm cash income for a Far West farmer is expected to decline from $280,000 in 2017-18 to $3000 in 2018-19.

The average Far West farmer is also set to lose $276,000 in profits in 2018-19, which is on top of an $88,000 profit loss in 2017-18.

Similarly, the average farm cash income for a Central West farmer is expected to decline from $164,000 in 2017-18 to $64,000 in 2018-19.

The average Central West farmer is set to lose $81,000 in profits in 2018-19 compared with a $32,000 loss in 2017-18.

"In 2018-19, all five broadacre industries in NSW are projected to record lower average farm incomes compared with 2017-18," the report said. 

"The biggest reduction is expected for farms in the wheat and other crops industry.

"For livestock industries (beef, sheep and sheep-beef), average farm incomes will be lower, due mostly to higher purchased feed costs.

"Wool and lamb prices are forecast to be around 15 per cent higher in 2018-19 compared with 2017-18." 

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Heatwaves have exacerbated the effects of the ongoing drought: DPI

Most parts of the Central West and Far West are completely in drought - which, according to experts, has been the worst in 100 years.

Recent thunderstorms and rainfall have been too fickle to make a difference and the hot summer has worsened the drought in the region, according to the NSW Department of Primary Industries.

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NSW Business Chamber western regional manager Vicki Seccombe says there is an urgent need to help the farming and regional business communities in NSW.

“This is a natural disaster on any definition, not just for the farmers themselves, but for our entire community," Ms Seccombe said.

“These types of events have a catastrophic impact on regional businesses, impacting regional employment and small and local businesses."

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Ms Seccombe said the chamber is calling on the next NSW government to establish a Natural Disaster Recovery Fund, abolish stamp duty on insurance premiums for commercial and business premises to increase insurance coverage and allow flexible payroll tax payment arrangements for businesses affected by natural disasters.