Gunnedah Chamber of Commerce says the announcement of a Hay and Harvest Festival is a "welcome contribution" to the community.
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The new event is scheduled for March 2020 and will showcase Gunnedah's regional produce in a location directly tied to the shire - the Namoi River.
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Chamber president Stacey Cooke said the March 2020 event was "fantastic for the business community".
"It is great to see funds being distributed to Gunnedah to assist in projects that will bring our community together," Mrs Cooke said.
"[It will] entice visitors to our town to showcase our local produce and what a great location, the banks of our Namoi River.
"With the effects of the drought ever-present in our small business community, this event is a welcome contribution to our local economy."
The Gunnedah Shire Council event will be funded by the Building Better Regions Fund.