A MAN has been arrested in New South Wales over a widespread hay bale scam targeting farmers in drought-stricken communities.

Police had been investigating reports a man was advertising hay bales for a discounted price on social media and taking initial deposits "but not delivering any product".

A number of people have lost money as a result of the fake sales.

Police nabbed a 27-year-old man at 7.40am today in Villawood, in Sydney's west, and he was taken to nearby Fairfield Police Station where he is expected to be charged.

The alleged victims are from all pockets of the state including the Mid North Coast, the Hunter Valley, the Southern Highlands, the Hills, and the Oxley, Nepean and Port Stephens areas.

The scam, allegedly orchestrated by this man, was labelled "pathetic" earlier this week by Police Minister David Elliott.

"This is a pathetic act and the government will continue to back our police in their efforts to keep these online criminals away from communities struggling during these hard times," he said.

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Detective Inspector Cameron Whiteside, from the Rural Crime Prevention Team, on Tuesday announced Strike Force Woden would be investigating the fraud and urged people to come forward if they too had fallen victim.

He said it was important "not to be embarrassed" as some scams can seem extremely realistic and "catch people off guard".

"These are difficult times, and it's disgusting to think anyone would seek to take advantage of people who have already been through so much," he said.

"I would encourage anyone buying supplies online to only deal with people and businesses that have proven to be genuine in the past.

"Where possible, it is best to only hand over money once the goods are in your possession.

"And of course, the age-old saying applies - if it sounds too good to be true, it usually is."

Det Insp Whiteside further encouraged farmers and landholders to take extra care when purchasing supplies, fodder and water to get them through the drought.

He will hold a press conference in Dubbo later on Thursday.