Murray Irrigation has called for the new Department for Regional NSW to be based in a regional area and staffed by qualified local residents.
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Chief executive Phil Endley welcomed the NSW government's creation of the department, which will focus on the needs of rural and regional communities and industries.
Mr Endley said he hopes the department will be based regionally.
"After all, the best way to understand regional issues is to experience them first-hand," he said.
Mr Endley said regional Australia had been scarred by ongoing drought and bushfires. He said COVID-19 felt like a kick in the guts for farmers and the communities they support.
"My hope is that the new Department will bring this focus, genuinely hear our concerns and work with us to enact solutions to help secure food and fibre production for the future - regardless of the external challenges thrown at us," he said.
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Deputy Premier and Minister for Regional NSW John Barilaro said the new department would bring together Primary Industries, Local Land Services, Resources and Geoscience and regional coordination across government to form a central agency.
"We are urgently responding to the desperate needs of people in the regions and this new agency will work to ensure community wellbeing, resilient economies and strong key regional industries," Mr Barilaro said.
"The COVID-19 pandemic has made a big impact on what has already been a devastating start to 2020, as farmers continue to suffer through the worst drought in recorded history and towns torn apart by bushfires continue to feel the effects months on.
"The new Department of Regional NSW will be a voice in government for people in the bush and will have a laser-like focus on the challenges and opportunities unique to regional communities, helping them to get through hardships many of us have not seen in our time."