Farms are being impacted by a disease called QX, which doesn't affect humans, but kills Sydney rock oysters. In some areas, 100 per cent of the oysters have been lost.

It comes after ongoing intense rain has reduced water quality and hurt growing conditions, particularly over the usually busy Easter period.

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"The situation is desperate," Port Stephens MP Kate Washington said.

"This is coming on the back of difficult times already. A number of farmers are considering walking away, I've heard some already have.

"Port Stephens has a proud history of oyster farming, the roots are long and deep.

"We have some fifth generation farmers and they cannot see a way forward."

NSW Agriculture Minister Dugald Saunders said a working group was set up after an outbreak of the disease in August last year.

Mr Saunders said movement restrictions have been introduced on affected areas to reduce the spread, while work was taking place to introduce disease-resistant varieties. However he said this was difficult to do on a commercial scale. There are also disaster assistance grants available to growers.

However Ms Washington said there was too much red tape to obtain these grants, and farmers needed the help now.

"They're getting pushed around," she said. "The money is not getting to them.

"They don't want hand outs. They're looking to get disease-resistant pacific oysters - that's the path forward.

"But they cannot afford that stock to put in the water. It will be at least a year before they would see any return. If there's any chance of recovery, they need to get stock in the water now.

"The grant applications need to be expedited. We've sought some fees to be waived. It all sit on Crown Lands so that should happen now, not in 12 months time."

Ms Washington said she would continue to pressure the government to get immediate help for the industry and "ensure the survival of the industry".

Mr Saunders acknowledged there was frustration, and urged farmers to contact DPI or a rural financial counsellor to find specific help for individual sitations.

"It's been a really, really ordinary couple of years for oyster growers," he said.

"I know there's significant angst when you're losing oysters and you're not sure what to do.

"I'm continuing to work with Fisheries, who are working as quickly as they can on disease resistant material. The main thing is to keep the working group going so we can keep everyone in touch at the same time."

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