Queensland and New South Wales have accused the Federal Government of abandoning a popular drought assistance scheme.

The Emergency Water Infrastructure Rebate scheme is meant to reimburse farmers 25 per cent of their costs to improve on-farm water infrastructure - desilting dams, drilling new bores.

Queensland and South Australia also contributed funds to boost the scheme.

But Federal Government funding for the rebate scheme has been exhausted, and the states want it topped up again.

“The Commonwealth has delivered exactly what it said it would in terms of the quantum; that it's a $50 million scheme which we put on the table and we have delivered $50 million,” Federal Water Minister Keith Pitt said.

Mr Pitt says he has told state governments that the Commonwealth will not be providing any more funds to continue the scheme.

“Now, I completely recognise that this is very popular [scheme] and that the drought continues to bite, but no one is interested in stoushes between state and federal governments,” he said.

“This is about delivery and we have done exactly what we said we would and have allocated every single dollar that was in the budget for it.

“The scheme was administered by the states and the decisions they make is a matter for them.

“The idea that we have taken anything away is simply wrong.”

Queensland Agriculture Minister Mark Furner says the funding has not run out.

“It's quite clear from [Mr Pitt's] correspondence that they have taken a huge back step and have walked away and turned their backs on Queensland farmers,” Mr Furner said.

“In some locations, we are entering the eighth year of drought … this is horrendous, [the Federal Government] should be ashamed of themselves.”

Queensland farmers will be able to continue accessing funds for the scheme put aside by the State Government.

“What that means for growers is a reduction from 75 per cent to 50 per cent because the Federal Government have taken out 25 per cent,” said Mr Furner.

“But we have committed to that 50 per cent so we'll continue paying that.”

NSW Agriculture Minister Adam Marshall also said the Federal Government ended the scheme prematurely.

“The Federal Government did commit an additional $50 million, but they also publicly committed to keeping the scheme going until the end of the financial year,” he said.

“It's disappointing for the farmers that have, in good faith, undertaken the work and made application because of the Commonwealth's public commitment to keep the scheme going until the end of the financial year, and [now] won't be getting their rebate.”

Mr Marshall said the NSW Government is considering assisting about 600 farmers across NSW that are missing out on their rebate. 

But Mr Pitt said NSW should have put in money when the other states were doing so.

“South Australia and Queensland actually matched the funding provided by the Commonwealth, New South Wales did not, but [it] has been the chief beneficiary of this program by an overwhelming amount,” Mr Pitt said.