Government sources say federal Agriculture Minister Gerry Ritz approved a cost-sharing plan with the Ontario government last week to help pay for the shipments of winter hay.
The plan would see Ottawa pick up 60 per cent of the shipment costs, with Ontario paying the rest, up to a maximum of $3 million.
The federal portion of the funding would come from the government's Growing Forward initiative.
But Ritz says no decisions have been made and the government is still calculating what's needed.
"Our assessment is ongoing on what further assistance may be required and we are considering all options under existing programs," Ritz said in an email to The Canadian Press.
Ontario's agriculture minister, Ted McMeekin, meanwhile, could announce provincial funding as early as this weekend.
"It's very frustrating," says Dave Campbell, president of the Lanark Federation of Agriculture, who is helping to organize an event Saturday to raise private donations for the shipments.
"I know the provincial government that everybody is criticizing has been on side all along," said Campbell. "Even Conservative farmers ... are concerned."
Farmers in Ontario and western Quebec were left short of hay to feed their livestock when a severe drought hit the area over the summer.
"Hay East 2012" is a sequel of sorts to the "Hay West" assistance program that saw eastern farmers send more than 100,000 tonnes of hay to farmers in Western Canada when that region faced a similar drought in 2002.
Some farmers in eastern Ontario have already received more than 200 bales of donated hay from Western Canada through deliveries organized by the Mennonite Disaster Service. While grateful, they say they need a whole lot more.
Hay East 2012 organizers say they've received 235 applications from farmers in Ontario and the Pontiac region of Quebec who are hoping to see 70,000 large hay bales delivered so their livestock can survive the winter.
The federal government has also been speaking with Quebec's agriculture ministry about that province's hay shortfall.
But sources say the new Quebec agriculture minister wants money from Agricovery, a last-resort federal program designed to provide disaster assistance.
Waiting to go through the Agricovery process will take too long, said Mark Wales of the Ontario Federation of Agriculture.
"The reality is we don't have time to wait for Agricovery any longer," said Wales.
"It's already winter in Western Canada, and it's just a fact of life that you're not going to move any volume of hay any distance in winter."
Ritz applauded Hay East campaign organizers for their efforts to get hay moving from Alberta and Saskatchewan to farms in southern and eastern Ontario, but said the drought sends a message to producers that they need to have non-government sources of money available in tough times.
"It is encouraging to see western farmers pulling together to help their fellow farmers in Ontario," said Ritz.
"Situations like the drought in Ontario highlight the importance for producers to have crop insurance."
Western farmers have contributed thousands of bales of hay to pay back their eastern cousins for their generosity of a decade ago, but organizers say transporting the bales east takes money.
"Farmers in Western Canada have stepped up to donate thousands of round bales of hay to our eastern neighbours in need, but we need cash donations to help us transport it across the country," said Nial Kuyek, general manager of the Agricultural Producers Association of Saskatchewan.
Hay being collected for delivery by the Ontario Federation of Agriculture and the Mennonite Disaster Service will go to commercial farmers. Hobby farms, owners of race horses and farm animal rescue organizations don't qualify.
Lynne Rowe operates a wildlife and farm animal refuge in Dunrobin, Ont., where the drought had a huge impact. Her organization, the Constance Creek Wildlife Refuge, has been struggling to find hay for the dozens of goats, horses and other animals under its care.
She is disappointed that her farm operation won't qualify for hay relief.
"I understand that people whose livelihood depends on raising livestock that it's important that we support them," said Rowe.
"However, we provide a community service and it's important that we care for these animals."