The bureaucrat's anxiety over the deal is recorded in a file note taken in January and tabled in the NSW upper house last week.

The note reveals the bureaucrat raised questions with a colleague about what the agreement was for.

They were told Mr Barilaro had visited Monaro Farming Systems (MFS) and promised the company money for "extension services", but that this information could not be put in the contract.

The $50,000 was set to come from the Department of Primary Industries.

MFS would issue an invoice and putting a contract in place would give the invoice legitimacy, the note records.

"I am concerned about the nature of this agreement," the bureaucrat wrote.

"I am concerned about the ethics of this - is it favouritism? Is it bribery? This does not sit well with me. Would I be complicit?"

The public servant thought that the payment was really a grant and asked their colleague whether that was being disguised.

"(The colleague) said it was preferential that it was a contractual agreement not grant because if it came out, every grower group would want a grant," the notes read.

A Department of Primary Industries email the week before, also presented to the parliament, suggests Mr Barilaro was instrumental in the contract establishment.

"We need to get in touch with the CEO of Monaro Farming Systems to send them a contract ... we have been directed by the deputy premier to provide them with $50K to provide 'outreach services and support industry adoption'," the email says.

"I have nothing that I can send in terms of a schedule of work - you will just need to keep it high level and vague."

Monaro Farming Systems is an agricultural cooperative in Mr Barilaro's electorate of Monaro.

It researches how to improve farming and grazing systems in the area.

It was established by Richard Taylor, brother of the federal energy minister Angus Taylor.

Richard Taylor was the company's chair until 2019.

A spokeswoman for Mr Barilaro said in a statement that he was not the agriculture minister and had no jurisdiction over the Department of Primary Industries.

"As local member it is standard practice for the deputy premier to advocate for projects within the Monaro electorate.

"A personal file note written by an unidentified bureaucrat does not reflect government process."

Mr Barilaro said in parliamentary question time on Thursday that he would keep advocating for the people of Monaro.

"Don't always believe what you read," he said.

In a statement to AAP, MFS Chair John Murdoch said he had lobbied for federal and state government support for years and was frustrated by the "innuendo" in media reporting of the contract.

"I'm not sure what the link that is being proposed is," he said.

"(I) have no connection to the National party."

Mr Murdoch says MFS contacted Mr Barilaro's office numerous times, as he was the local member, to raise funding issues and the ramifications to the farming community and environment should MFS run out of money.

"I made the same attempts with federal (Labor) members Mike Kelly and Kristy McBain," he said.

Mr Murdoch says the funds haven't been received yet, but would be spent on research and development projects, administration and extension services.

Opposition rural affairs spokesman Mick Veitch said on Thursday that Mr Barilaro still had questions to answer.

"Is this a grant? Or is it a bribe? And just how did the money come about?" Mr Veitch said.

"The people of NSW want an open and transparent process when it comes to allocating funds."

Mr Veitch said the documents showed Mr Barilaro was "happily spending money" from other ministerial departments.

Agriculture Minister Adam Marshall has been contacted for comment.

Australian Associated Press