* Australia to offer loans to drought-hit farmers
* Australian cattle farmers worst hit, record slaughter
* Farmers battle wild animals for scarce water and feed (Adds details of package, PM and farmer quotes)
By Colin Packham
SYDNEY, Feb 26 (Reuters) - The Australian government will provide a A$320 million ($289 million) assistance package to help farmers ravaged by years of drought across the east coast, Australian Prime Minister Tony Abbott said on Wednesday.
With pockets of Queensland and New South Wales recording the lowest ever rainfall levels, farmers in the world's third-biggest beef exporter have been forced to slaughter starving cows at record rates, pushing prices to lows, and adding political pressure for federal assistance.
"We can't work miracles, there is no magic wand but we will do what we can to help in difficult times," said Abbott. "Plainly for a large number of farmers right now, these are very difficult times."
The Australian federal government will make around A$280 million available in drought concession loans to give eligible farm businesses a chance to survive the drought, which has lasted two years in some parts of Australia.
Farmers in New South Wales and Queensland will also have access to an extended emergency water infrastructure scheme, allowing graziers to reclaim the cost of building dams or irrigation channels needed to keep animals alive, to which the government committed a further A$12 million dollars.
The package also includes about A$10 million for pest control in drought-hit areas. Farmers are competing with wild animals for scarce water supplies and feed, with feral pigs and kangaroo numbers soaring in parts of Queensland.
The package will make around A$11 million available to help increase access to social and mental health services in communities affected by this drought, the government said.
Farmer industry bodies welcomed the package, but stressed long-term strategy to tackle drought was needed.
"Since the millennium drought (broke), we have probably had three or four years and we still don't have that long-term solution," said Matt Linnegar, chief executive officer, National Farmers Federation. "We can not wait four more years for a long-term solution."
With a scorching drought withering pastures, farmers in Queensland state -- home to half of Australia's 28 million strong livestock herd -- have been forced to slaughter cattle, while the unfavourable weather has curbed summer crop production.
Meat and Livestock Australia, an industry body, said over 167,000 head of cattle were culled nationwide in the week ending Feb. 21 - the third straight weekly kill record.
With ample supply, Australia's benchmark Eastern Young Cattle Indicator, closed at A$3.11 per kg on Tuesday, near a four-year low of A$2.78-1/2 kg hit on Jan. 22.
($1 = 1.1078 Australian dollars) (Editing by Miral Fahmy and Michael Perry)
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