A fungal disease that can decimate rice crops and is regarded as a serious threat to the industry has been identified in northern New South Wales.

Rice blast is considered the most significant fungal disease for rice crops worldwide.

It was detected in a crop near Lismore earlier this month and the NSW Department of Primary Industries (DPI) issued an alert to farmers on February 10.

Growers say crops will have to be destroyed to control its spread.

Rice blast is already present in the tropical wetlands of northern Australia.

It was found in 2011 on a rice crop in northern Western Australia and has subsequently been detected in the Northern Territory and Queensland.

Crops destroyed

The DPI said it was working with growers to limit the risk of the disease spreading beyond the outbreak.

North Coast based Natural Rice Company general manager Steve Rogers has rice blast in his crop.

He said the industry tested for blast last year but tests came back negative.

Mr Rogers said the disease had been found in 12 paddocks so far.

"We'll destroy the paddocks that are affected," he said.

"We'll burn all that material and keep the rest underground, so it decomposes."

About 170 hectares of rice, or 30 per cent of the region's crops, has been affected and the outbreak is only impacting the Sherpa rice variety.

The Northern Rivers region produces only a small proportion of Australia's rice, with the NSW Riverina producing 98 per cent of the national crop.

Cyclone may be to blame

DPI Plant Biosecurity Prevention and Preparedness manager Chris Anderson said the disease might have been blown into the region by a monsoonal weather system.

"There was a cyclone in January that brought weather down from the north, in areas where there is naturally occurring rice blast, and we expect that spores have come in through that weather system and been dumped in that area," he said.

Mr Anderson said it was also possible that the disease had been present in the area's weed species for quite some time and jumped over to rice because of favourable weather conditions. 

Some Northern Rivers growers say rice blast has been present in the region for years.

In a budget estimates hearing on Wednesday, Greens MP Sue Higginson asked NSW Agriculture Minister Tara Moriarty if the DPI was aware that the disease was in the Northern Rivers a decade ago, but did not tell the industry.

"I don't know what information was available 10 years ago," Ms Moriarty said.

"If there is an allegation that you're putting, I'm happy to … ask the department."

Claims of a 'significant failure'

Ms Higginson is also a rice grower on the Northern Rivers and said the outbreak had been "very distressing".

She was angry that the department did not tell people the disease was present in other crops and plants in the area years ago.

"Rice growers were forming a collective. It was an emerging industry, big investments [were being made] in the area with a new grain facility, and there was no explanation or passing of knowledge that blast was in the area many years ago."

But Mr Anderson rejected claims that growers were not told about blast being present prior to the current outbreak and said information had been published in growing guides from that period.

Growers on the Northern Rivers will now look at using different varieties of rice that are resistant to rice blast and the industry will work to prevent the disease spreading to bigger rice growing areas in the Riverina.