States need to build more dams: minister

The federal cabinet minister on Tuesday levelled a pointed warning about Australia's future water security as prolonged drought devastates regional communities.

"The states have been responsible for urban water since federation and should be taking the lead. They're just not keeping up with their growing populations," Mr Littleproud said.

Federal government analysis found at current rates water storage per person in NSW, Victoria and Queensland will fall by more than 30 per cent by 2030.

Of the 20 dams completed in Australia since 2003, 16 of them have been built in Tasmania.

"Building dams will make sure we still have clean drinking water in regional towns and bring down the price of water to produce food," Mr Littleproud said.

"I want to see bulldozers digging holes for new water storage as soon as possible."

The water minister said despite $1.3 billion being put on the table through the National Water Infrastructure Development Fund in 2015, most states had to be dragged "kicking and screaming" to build dams.

"This is not just about agriculture, it's about water security and food prices in our towns and capital cities."

Nationals leader Michael McCormack, who holds the infrastructure portfolio, has put $100 million into a National Water Grid to guide dam building.

Mr Littleproud also announced former National Farmers' Federation president Brent Finlay would chair a committee to decide how the $100 million a year Future Drought Fund would spend its money.

Mr Finlay will be joined on the committee by Wendy Craik, Kate Andrews, Elizabeth Peterson and Caroline Welsh.

The consultative committee will develop the drought resilience funding plan, which will determine what types of programs are eligible for funding through the $3.9 billion kitty, predicted to rise to $5 billion over a decade.

Australian Associated Press