Chile's agriculture ministry will spend 1.6bn pesos (US$3.31mn) on mitigation efforts for drought-stricken central-northern region IV.
The majority of the funds will be distributed to farmers facing difficulties due to the lack of water for irrigation, according to local paper El Mercurio.
The government declared a state of agricultural emergency in parts of the region in mid-January, and has since extended the measure due to the worsening drought.
The river Illapel, the area's main potable water source, has seen its flow shrink to 50l/s from 600l/s, according to the report.
The lack of water has affected 30,000 people in rural Combarbalá, Salamanca, Los Vilos, Illapel, Ovalle, Punitaqui and Monte Patria. Local utility Aguas del Valle is supplying water to the area via trucks.