If enough people did not take up the exit grants, further increases to the asset test could be made, he said.

University of Adelaide water expert Mike Young said measures to assist farmers move off the land represented a significant shift in attitudes to primary production.

"An important signal is being sent to everybody to make them think about whether or not it is appropriate to remain in agriculture," he said.

"We're now trying to farm and irrigate in a drier regime. A lot of the practices that have been in place won't work in the future unless it rains again."

James Stacey, a dairy farmer from Langhorne Creek in South Australia, said the asset limit was unrealistic for farmers in the Murray-Darling Basin who might want the exit grants but had valuable water licenses putting them above the $350,000 mark.

"I think a lot of people along the Murray system would think about it seriously, and that includes dairy farmers from NSW, Victoria and South Australia," he said. "The problem is, everyone is asset rich and cash poor."

Mr Stacey, who has applied for an exceptional circumstances interest rate subsidy, has been forced to sell his calves born this year because of high feed costs. [More]

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