Coles has announced $5 million in grants and interest-free loans from its Nurture Fund, while funds raised in supermarkets will be given to the Country Women's Association to support farm families affected by the drought.
He conceded the extra payment would barely pay for a load of hay, but said National Farmers' Federation president Fiona Simson had labelled the package as generous.
Drought-affected producers will be able to receive cash payments of up to $12,000 for couples or $7,200 for singles.
The payments to eligible farmers, to help put food on the table and meet essential household expenses, will be made through the Farm Household Allowance (FHA) scheme.
The commonwealth aid measures include more money for mental health as farmers grapple with the emotional fallout from their barren properties.
The cash payments help form a drought relief package of 190 million Australian dollars (140.6 million US dollars) for the dry spell that has cut across large parts of the country's east and south including New South Wales, Queensland and Victoria. The state government of New South Wales has also provided more than A$1 billion in assistance for farmers. We admire their courage and we stand with them. "We hope the forecast to prove wrong but the prospects are not great at the moment", Turnbull said during a press conference on August 5.More news: Bray fire uncovers massive 'EIRE' sign from World War 2
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"It is created to keep body and soul together, not created to pay for fodder", the Prime Minister said.
The NSW Farmers' Association and Queensland's AgForce both welcomed the federal government's announcement.
"We live in a country where farmers have built this country".
"It has been extremely heartening to see Australians rally around our farmers and rural communities during these tough times", he said.
The Australian Bureau of Meteorology has forecast still drier conditions and says there is no end in sight to the drought. You should never regard Australian farmers as being helpless at all in the face of the climate.
"(But) we haven't got the same urban or town water shortage challenges we had in the millennium drought", he told the ABC.