Moira Shire in the state's northeast didn't receive the cash because 16.9 per cent of its residents were employed through farming, rather than the 17 per cent threshold.

But Moyne Shire, which rejected the $1 million grant, was eligible, despite healthy spring rain fuelling lush paddocks in the southwest Victorian council.

Another 14 shires were not tested against the criteria, which were selected for the program during the election campaign earlier in the year.

Labor senator Murray Watt used a Senate estimates hearing in Canberra on Monday to pursue the issue.

"What do we say to poor old Moira Shire who misses out because even though they're drought affected, they miss out because 16.9 per cent of their population are employed in agriculture rather than 17?" he asked.

"But we've got 14 other councils who we wouldn't know if they meet the criteria. How do we justify that?"

Infrastructure department bureaucrats told the committee Moyne council qualified because half of the shire received a one-in-20 year rainfall deficiency over one of a two-year period.

It also had at least 17 per cent of the shire employed in agriculture, forestry and fisheries, meeting the grant's other threshold.

But Moira was slightly under that mark and miss out on the money.

Agriculture Minister Bridget McKenzie said the decision around the 14 councils was based on Australian Bureau of Statistics and Bureau of Meteorology data.

Senator Watt asked the minister if she was happy with a drought-affected area missing out because of a 0.1 per cent shortfall.

She said the government was continually assessing eligible councils and adding to the list as needed.

Senator Watt also questioned why drought-affected NSW councils missed out including Singleton, Eurobodalla, Kiama, Shoalhaven and Yass.

More than 120 councils have received $1 million grants through the program, which is designed to stimulate local economies grappling with drought.

Senator Watt also questioned the role of former drought envoy Barnaby Joyce, who argued he sent the prime minister reports via text message.

"Has anyone in the department seen these amazing text messages from the drought envoy with his advice?"

The officials said they had not.

Drought Minister David Littleproud said the government would continue to tackle the drought, likening relief efforts to climbing stairs.

"This drought has spread like cancer," he told parliament during question time.

Australian Associated Press